EXHIBIT 10.31
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$710,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF OCTOBER 28, 1997
Among
FCN HOLDING, INC.,
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
and
SABAN ENTERTAINMENT, INC.,
as Borrowers,
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and
FOX KIDS HOLDINGS, LLC,
as a Guarantor,
-- - ---------
and
THE INITIAL LENDERS NAMED HEREIN,
as Initial Lenders,
-- ------- -------
and
CITICORP USA, INC.,
as Administrative Agent,
-- -------------- -----
and
CITICORP SECURITIES, INC., CHASE SECURITIES, INC.
AND BANKBOSTON, N.A.,
as Co-Arrangers
-- ------------
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..................................... 2
SECTION 1.02. Computation of Time Periods............................... 45
SECTION 1.03. Accounting Terms.......................................... 45
SECTION 1.04. Currency Equivalents Generally............................ 46
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances.............................................. 46
SECTION 2.02. Making the Advances....................................... 47
SECTION 2.03. Repayment of Advances..................................... 49
SECTION 2.04. Termination or Reduction of the Commitments............... 50
SECTION 2.05. Prepayments............................................... 52
SECTION 2.06. Interest on Advances...................................... 54
SECTION 2.07. Fees...................................................... 55
SECTION 2.08. Conversion of Advances.................................... 55
SECTION 2.09. Increased Costs, Etc...................................... 57
SECTION 2.10. Payments and Computations................................. 59
SECTION 2.11. Taxes..................................................... 62
SECTION 2.12. Sharing of Payments, Etc.................................. 65
SECTION 2.13. Defaulting Lenders........................................ 66
SECTION 2.14. Use of Proceeds........................................... 68
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of this Agreement... 68
SECTION 3.02. Conditions Precedent to Each Borrowing.................... 74
SECTION 3.03. Determinations Under Section 3.01......................... 75
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties............................ 75
ARTICLE V
COVENANTS OF HOLDINGS AND THE BORROWERS
ii
SECTION 5.01. Affirmative Covenants....................................... 85
SECTION 5.02. Negative Covenants.......................................... 89
SECTION 5.03. Reporting Requirements...................................... 111
SECTION 5.04. Financial Covenants......................................... 117
SECTION 5.05. Covenant of Holdings........................................ 119
ARTICLE VI
GUARANTEE
SECTION 6.01. Guarantee................................................... 120
SECTION 6.02. Guarantee Absolute.......................................... 121
SECTION 6.03. Waivers and Acknowledgments................................. 122
SECTION 6.04. Subrogation................................................. 123
SECTION 6.05. Continuing Guarantee; Assignments........................... 124
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default........................................... 124
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action.................................... 128
SECTION 8.02. Administrative Agent's Reliance, Etc........................ 129
SECTION 8.03. The Administrative Agent, the Co-Arrangers and Affiliates... 130
SECTION 8.04. Lender Credit Decision...................................... 130
SECTION 8.05. Indemnification............................................. 130
SECTION 8.06. Successor Administrative Agent.............................. 131
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc............................................. 132
SECTION 9.02. Notices, Etc................................................ 133
SECTION 9.03. No Waiver; Remedies......................................... 134
SECTION 9.04. Indemnification............................................. 134
SECTION 9.05. Costs and Expenses.......................................... 137
SECTION 9.06. Right of Setoff............................................. 139
SECTION 9.07. Binding Effect.............................................. 139
SECTION 9.08. Assignments and Participations.............................. 139
SECTION 9.09. Confidentiality............................................. 143
SECTION 9.10. Execution in Counterparts................................... 143
SECTION 9.11. Governing Law; Jurisdiction, Etc............................ 143
SECTION 9.12. WAIVER OF JURY TRIAL........................................ 144
iii
SCHEDULES
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Schedule I - Existing Advances/Commitments and Lending Offices
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Governmental Authorizations
Schedule 4.01(p) - Intellectual Property Infringements
Schedule 4.01(y) - Plans and Multiemployer Plans
Schedule 4.01(ff) - Tax Returns and Reports
Schedule 4.01(gg) - Open Years
Schedule 4.01(jj) - Surviving Indebtedness
Schedule 4.01(kk) - Existing Investments
Schedule 5.02(a) - Existing Liens
Schedule 5.02(i) - Existing Dividends and Payment Restrictions
EXHIBITS
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Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Conversion
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Pledge and Assignment Agreement
Exhibit D-2 - Form of U.K./Saban U.K.Pledge Agreement
Exhibit D-3 - Form of U.K./FKE Pledge Agreement
Exhibit E-1 - Form of Fox Kids Guarantee
Exhibit E-2 - Form of Subsidiaries Guarantee
Exhibit F - Form of Assumption Agreement
Exhibit G-1 - Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Exhibit G-2 - Form of Opinion of Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
Exhibit G-3 - Form of Opinion of Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
Exhibit G-4 - Form of Opinion of Westaway & Co.
Exhibit G-5 - Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇
Exhibit H-1 - Form of Intercompany Note
Exhibit H-2 - Form of Permitted Affiliate Subordinated Note
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 28,
1997 among FCN HOLDING, INC., a Delaware corporation ("FCN HOLDING"),
INTERNATIONAL FAMILY ENTERTAINMENT, INC., a Delaware corporation ("IFE"), SABAN
ENTERTAINMENT, INC., a Delaware corporation ("SABAN" and, together with FCN
Holding and IFE, the "BORROWERS"), FOX KIDS HOLDINGS, LLC, a Delaware limited
liability company and the owner of all of the issued and outstanding Equity
Interests (as hereinafter defined) in each of the Borrowers ("HOLDINGS"), the
banks, financial institutions and other institutional lenders set forth on the
signature pages to this Agreement under the caption "The Initial Lenders"
(collectively, the "INITIAL LENDERS"), CITICORP SECURITIES, INC., a Delaware
corporation ("CITICORP SECURITIES"), CHASE SECURITIES, INC., a Delaware
corporation ("CHASE SECURITIES") and BANKBOSTON, N.A., a national banking
association ("BANKBOSTON"), as the co-arrangers (the "CO-ARRANGERS") for the
Facilities (as hereinafter defined), and CITICORP USA, INC., a Delaware
corporation ("CITICORP USA"), as the administrative agent and the collateral
agent (together with any successor thereto appointed pursuant to Article VIII,
the "ADMINISTRATIVE AGENT") for the Lenders and the other Secured Parties (each
as hereinafter defined).
PRELIMINARY STATEMENTS
(1) In connection with the acquisition by Fox Kids Worldwide, Inc., a
Delaware corporation and the owner of all of the issued and outstanding Equity
Interests in Holdings ("FOX KIDS"), through a series of related transactions, of
a majority of the issued and outstanding Equity Interests and Voting Interests
(as hereinafter defined) in International Family Entertainment, Inc., a Delaware
corporation and the predecessor in interest to IFE ("PRE-MERGER IFE"), Fox Kids,
FCN Holdings, Merger Corporation (as hereinafter defined) and Saban (the
"ORIGINAL BORROWERS") entered into the Credit Agreement dated as of August 1,
1997 (the "ORIGINAL CREDIT AGREEMENT") with Citicorp USA, as the sole initial
lender thereunder (the "ORIGINAL LENDER"), Citicorp Securities, as the arranger
and the syndication agent for the credit facilities thereunder, and Citicorp
USA, as the administrative agent and the collateral agent for the Original
Lender and the other secured parties referred to therein. Pursuant to the terms
of the Original Credit Agreement, the Original Lender made advances to Fox Kids
and Saban in an aggregate principal amount of $602,000,000 in order to
consummate such acquisition, to refinance certain Indebtedness (as hereinafter
defined) of Saban outstanding at such time and to pay fees and expenses incurred
in connection with the consummation of such acquisition and refinancing and the
other transactions described in the Original Credit Agreement.
(2) In connection with the consummation of the merger (the "MERGER")
of Pre-Merger IFE with and into Fox Kids Merger Corporation, a Delaware
corporation and a Subsidiary (as hereinafter defined) of Fox Kids organized
thereby to effect the Merger ("MERGER CORPORATION"), with IFE being the
surviving corporation, the Original Borrowers entered into the Amended and
Restated Credit Agreement dated as of September 4, 1997 (the "EXISTING CREDIT
AGREEMENT") with the banks, financial institutional and other institutional
lenders party thereto (the "EXISTING LENDERS"), Citicorp Securities, as the
arranger and the syndication agent for the credit facilities thereunder, and
Citicorp USA, as the administrative agent and the collateral agent for the
Existing Lenders and the other secured parties referred to therein. Pursuant to
the terms of the Existing Credit Agreement, the Existing Lenders made additional
advances to the Original Borrowers in an aggregate principal amount of
$648,000,000 (for an aggregate principal amount outstanding thereunder of
$1,250,000,000) in order to finance in part the cash consideration payable to
the remaining former holders of the outstanding Equity Interests in Pre-Merger
IFE for their
2
shares in the Merger, to refinance certain Indebtedness of IFE outstanding at
such time and to pay certain fees and expenses incurred in connection with the
consummation of the Merger and such refinancing and the other transactions
described in the Existing Credit Agreement.
(3) Fox Kids and the Borrowers have requested that the Lenders amend
and restate the terms of the Existing Credit Agreement in its entirety and agree
to lend the Borrowers from time to time up to $710,000,000 at any time
outstanding in order to refinance (the "REFINANCING") in part the advances
("EXISTING ADVANCES") made by the Existing Lenders to the Original Borrowers
under the terms of the Existing Credit Agreement, to pay certain fees and
expenses incurred in connection with the consummation of the Transaction (as
hereinafter defined) and for other general corporate purposes not otherwise
prohibited under the terms of the Loan Documents (as hereinafter defined). The
Lenders have indicated their willingness to agree to amend and restate the
Existing Credit Agreement in its entirety and to lend such amounts on the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADJUSTED CONSOLIDATED EBITDA" means, for any period, the sum of (a)
Consolidated EBITDA of Fox Kids and its Subsidiaries for such period, (b)
the aggregate amount of all capital contributions made to Fox Kids in cash
by one or more of its Affiliates and (c) the aggregate Net Cash Proceeds
received by Fox Kids from the issuance and sale of any Equity Interests
therein to one or more of its Affiliates or the issuance and sale of one or
more Permitted Affiliate Subordinated Notes, in each case under this clause
(c) so long as (i) such issuance and sale is otherwise expressly permitted
under the terms of the Loan Documents and (ii) all of the Net Cash Proceeds
received by Fox Kids from such issuance and sale are used to repay
Obligations of Fox Kids and its Subsidiaries as they become due and payable
in accordance with their respective terms.
"ADJUSTED FUNDED INDEBTEDNESS" means, with respect to any Person and
its Subsidiaries at any date of determination, all Funded Indebtedness of
such Person and its Subsidiaries outstanding on such date, after excluding
therefrom (solely to the extent otherwise included in the determination of
Funded Indebtedness at such date) all intercompany Indebtedness among such
Person and its Subsidiaries outstanding on such date and, in the case of
Fox Kids and its Subsidiaries, (a) all of the Indebtedness under the shares
of Series A Preferred Stock, the FBC Subordinated Notes and the NAHI
Subordinated Notes outstanding on such date, (b) all of the Funded
Indebtedness of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Productions, Inc. outstanding on any such
date occurring prior to September 30, 1998 and (c) all of the Funded
Indebtedness of Saban International Paris SARL that is 100% collateralized
by cash or Cash Equivalents.
3
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent at its office
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇,
Reference: Fox Kids Worldwide, Inc., Attention: Bank Loan Syndications,
or such other account maintained by the Administrative Agent and designated
by the Administrative Agent as such in a written notice to the each of the
Borrowers and each of the Lenders.
"ADVANCE" means a Revolving Credit Advance or a Term Advance, as the
context may require.
"AFFECTED LENDERS" has the meaning specified in Section 2.09(e).
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person, or is a director or officer of such Person or,
with respect to any individual, has a relationship with such individual by
blood, marriage or adoption not more remote than first cousin. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 10% or more
of the Voting Interests in such Person or to direct or cause the direction
of the management and policies of such Person, whether through the
ownership of Voting Interests, by contract or otherwise.
"AGENTS" means, collectively, the Administrative Agent, the Co-
Arrangers and each of the co-agents or sub-agents appointed by the
Administrative Agent from time to time pursuant to Section 8.01(b).
"APPLICABLE LENDING OFFICE" means, with respect to each of the
Lenders, such Lender's Base Rate Lending Office in the case of a Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"APPLICABLE MARGIN" means (a) at any time during the period from the
date of this Agreement through the earlier of (i) the date on which the
Consolidated financial statements of Holdings and its Subsidiaries for the
Fiscal Quarter ending September 30, 1998 are delivered to the Lenders
pursuant to Section 5.03(b) and (ii) November 30, 1998, 0.500% per annum
for Base Rate Advances and 1.500% per annum for Eurodollar Rate Advances
and (b) at any time and from time to time thereafter, a percentage per
annum equal to the applicable percentage set forth below for the
Performance Level set forth below:
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EURODOLLAR RATE
PERFORMANCE LEVEL BASE RATE ADVANCES ADVANCES
-------------------------------------------------------------
I 0.000% 0.750%
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II 0.125% 1.125%
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III 0.500% 1.500%
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4
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EURODOLLAR RATE
PERFORMANCE LEVEL BASE RATE ADVANCES ADVANCES
-------------------------------------------------------------
IV 0.875% 1.875%
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V 1.250% 2.250%
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provided, however, that if, on or prior to November 18, 1997, the Term
Commitments have not been reduced in accordance with Section 2.04(b)(iv),
and the outstanding Term Advances have not been prepaid pursuant to Section
2.05(b), with at least $15,000,000 in Net Cash Proceeds from the sale,
lease transfer or other disposition of property and assets otherwise
permitted to be sold, leased, transferred or otherwise disposed of under
Section 5.02(d)(vii), then, notwithstanding the terms of clause (a) of this
definition, the Applicable Margin at any time during the period from the
date of this Agreement through the earlier of (A) the date on which the
Consolidated financial statements of Holdings and its Subsidiaries for the
Fiscal Quarter ending September 30, 1998 are delivered to the Lenders
pursuant to Section 5.03(b) and (B) November 30, 1998, shall be 0.875%
per annum for Base Rate Advances and 1.875% per annum for Eurodollar Rate
Advances. For purposes of clause (b) of the immediately preceding sentence,
the Applicable Margin for each Base Rate Advance shall be determined by
reference to the Performance Level in effect from time to time and the
Applicable Margin for each Eurodollar Rate Advance shall be determined by
reference to the Performance Level in effect on the first day of each
Interest Period for such Advance.
"APPLICABLE PERCENTAGE" means, with respect to the Commitment Fee, (a)
at any time during the period from the date of this Agreement through the
earlier of (i) the date on which the Consolidated financial statements of
Holdings and its Subsidiaries for the Fiscal Quarter ending September 30,
1998 are delivered to the Lenders pursuant to Section 5.03(b) and (ii)
November 30, 1998, 0.375% per annum and (b) at any time and from time to
time thereafter, a percentage per annum equal to the applicable percentage
set forth below for the Performance Level set forth below:
=================================================
PERFORMANCE LEVEL COMMITMENT FEE
-------------------------------------------------
I 0.250%
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II 0.250%
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III 0.375%
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IV 0.500%
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V 0.500%
=================================================
provided, however, that if, on or prior to November 18, 1997, the Term
Commitments have not been reduced in accordance with Section 2.04(b)(iv),
and the outstanding Term Advances have not been prepaid pursuant to Section
2.05(b), with at least $15,000,000 in Net Cash Proceeds from the sale,
lease transfer or other disposition of property and assets otherwise
permitted to be sold, leased, transferred or otherwise disposed of under
Section 5.02(d)(vii), then, notwithstanding the terms of clause (a) of this
definition, the Applicable Percentage at any time
5
during the period from the date of this Agreement through the earlier of
(A) the date on which the Consolidated financial statements of Holdings and
its Subsidiaries for the Fiscal Quarter ending September 30, 1998 are
delivered to the Lenders pursuant to Section 5.03(b) and (B) November 30,
1998, shall be 0.500% per annum. For purposes of clause (b) of the
immediately preceding sentence, the Applicable Percentage for the
Commitment Fee shall be determined by reference to the Performance Level in
effect from time to time.
"APPLICATION DATE" has the meaning specified in Section 2.04(b)(v)(A).
"APPROPRIATE BORROWER" means (a) with respect to the Revolving Credit
Facility, FCN Holding, IFE and Saban and (b) with respect to the Term
Facility, IFE.
"APPROPRIATE BORROWER'S ACCOUNT" means (a) with respect to FCN
Holding, the account of FCN Holding maintained thereby with Imperial Bank
at its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
ABA#▇▇▇▇▇▇▇▇▇, Account No. ▇▇-▇▇▇-▇▇▇, (b) with respect to IFE, the
account of IFE maintained thereby with Imperial Bank at its office at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA#▇▇▇▇▇▇▇▇▇,
Account No. ▇▇-▇▇▇-▇▇▇, and (c) with respect to Saban, the account of
Saban maintained thereby with Imperial Bank at its office at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA#▇▇▇▇▇▇▇▇▇,
Account No. ▇▇-▇▇▇-▇▇▇, or (d) with respect to any of the Borrowers, such
other account of such Borrower as is agreed from time to time in writing
between such Borrower and the Administrative Agent.
"APPROPRIATE LENDER" means, with respect to either of the Facilities
at any time, a Lender that has a Commitment with respect to such Facility
at such time.
"APPROVED COMPLETION GUARANTEE" means, with respect to any of the
items of Product, a guarantee in support of the completion of such item of
Product issued by any Person that has a claims paying ability rating of at
least "A-" (or the then equivalent rating) from A.M. Best Company or S&P or
an insurance financial strength rating of at least A3 from ▇▇▇▇▇'▇ or that
is approved in writing by the Lenders (such approval not to be unreasonably
withheld or delayed) in favor of the Borrower or the Subsidiary of any of
the Borrowers that is producing such item of Product, in each case together
with a "cut-through" endorsement issued by the reinsurer of such Person
reasonably acceptable to the Lenders in favor of such Borrower or such
Subsidiary as beneficiary thereunder, naming the Administrative Agent, on
behalf of the Secured Parties, as the direct beneficiary of all proceeds
thereunder, and otherwise in form and substance reasonably satisfactory to
the Lenders.
"ASSET SWAP" means, with respect to the sale, transfer or other
disposition of all of the Equity Interests in, or all of the operating
assets comprising a business unit, division or branch (or any other
distinct unit of operation that contributes a discrete and readily
discernable amount of Consolidated EBITDA) of, any Person by any of the
Borrowers or any of their respective Subsidiaries, the application of the
Net Cash Proceeds received directly or indirectly by or on behalf of such
Borrower or any such Subsidiary within 90 days of such sale, transfer or
other disposition to the purchase or other acquisition of:
6
(a) an amount and class of Equity Interests in any other Person
(i) having cash flows and value that are substantially the same in
amount, contingency, quality and timing as the cash flows and value of
the Equity Interests being so sold, transferred or otherwise disposed
of, (ii) that will entitle such Borrower or such Subsidiary to
distributions that are substantially the same in amount, contingency,
quality and timing as the distributions received by such Borrower or
such Subsidiary from the Equity Interests being so sold, transferred
or otherwise disposed of and (iii) that will subject or expose such
Borrower or such Subsidiary to contingent liabilities that are no
greater in amount, contingency, quality or timing than the contingent
liabilities being assigned or otherwise transferred with the Equity
Interests being so sold, transferred or otherwise disposed of, all as
determined in good faith by the board of directors of the applicable
Borrower (and, in the case of subclause (a)(iii) of this definition,
taking into account, among other things, all appropriate and adequate
reserves that would be established for such contingent liabilities in
accordance with GAAP in effect at the time of such purchase or other
acquisition); provided that, if the Equity Interests being so sold,
transferred or otherwise disposed of comprise all or any part of the
Equity Interests in a Restricted Subsidiary, the Person purchased or
otherwise acquired in the related transaction shall constitute a
Restricted Subsidiary; or
(b) operating assets (i) having cash flows, value and use that
are substantially the same in amount, contingency, quality and timing
as the cash flows, value and use of the operating assets that are
being so sold, transferred or otherwise disposed of and (ii) having
contingent liabilities (or being sold together with the assumption of
contingent liabilities) that are no greater in amount, contingency,
quality or timing than the contingent liabilities being assigned or
otherwise transferred with the operating assets so sold, transferred
or otherwise disposed of, all as determined in good faith by the board
of directors of the applicable Borrower (and, in the case of subclause
(b)(ii) of this definition, taking into account, among other things,
all appropriate and adequate reserves that would be established for
such contingent liabilities in accordance with GAAP in effect at the
time of such purchase or other acquisition).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by and between a Lender and an Eligible Assignee, and accepted by the
Administrative Agent and, if required, Holdings, in accordance with Section
9.08 and in substantially the form of Exhibit C hereto.
"ASSUMPTION AGREEMENT" has the meaning specified in Section
3.01(i)(xii).
"ATTRIBUTABLE ASSET EBITDA" means, with respect to the sale, transfer
or other disposition of any of the property or assets of any of the
Borrowers or any of their Subsidiaries, an amount equal to that portion of
Consolidated EBITDA of Holdings and its Subsidiaries for the most recently
completed Measurement Period prior to the date of such sale, transfer or
other disposition for which Holdings and/or the Borrowers have delivered
Consolidated financial statements of Holdings and its Subsidiaries pursuant
to Section 5.03(b) or 5.03(c) that was directly contributed thereto by such
property or asset.
7
"AVAILABLE CASH FLOW" means, with respect to Holdings and its
Subsidiaries for any period, (a) Consolidated EBITDA of Holdings and its
Subsidiaries for such period less (b) the sum (without duplication) of (i)
all Consolidated Cash Interest Expense of Holdings and its Subsidiaries for
such period, (ii) all Consolidated Cash Taxes paid by or on behalf of
Holdings or any of its Subsidiaries during such period, (iii) the aggregate
amount of all Capital Expenditures made by Holdings and its Subsidiaries
during such period, (iv) the aggregate amount of all Required Principal
Payments made by Holdings and its Subsidiaries during such period and (v)
the aggregate amount of all Cash Distributions made by or on behalf of
Holdings during such period.
"BANKBOSTON" has the meaning specified in the recital of parties to
this Agreement.
"BANK HEDGE AGREEMENT" means any interest rate Hedge Agreement
permitted under Article V that is entered into by and between any of the
Borrowers and any of the Lenders.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum plus (ii) the rate obtained by dividing (A) the latest three-
week moving average of secondary market morning offering rates in the
United States of America for three-month certificates of deposit of
major United States money market banks, such three-week moving average
(adjusted on the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor thereto) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits in the
United States of America plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by Citibank to
the Federal Deposit Insurance Corporation (or any successor thereto)
for insuring U.S. dollar deposits of Citibank in the United States of
America; and
(c) 0.50% per annum above the Federal Funds Rate.
8
"BASE RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.06(a)(i).
"BASE RATE LENDING OFFICE" means, with respect to each of the Lenders,
the office of such Lender specified as its "Base Rate Lending Office"
opposite its name on Part B of Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, as the case may be, or
such other office of such Lender as such Lender may from time to time
specify to each of the Appropriate Borrowers and the Administrative Agent
for such purpose.
"BORROWERS" has the meaning specified in the recital of parties to
this Agreement.
"BORROWING" means a Revolving Credit Borrowing or a Term Borrowing, as
the context may require.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in New York, New York, and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings in
U.S. dollar deposits are carried on in the London interbank market.
"CAPITAL ASSETS" means, with respect to any Person, all equipment,
fixed assets and real property or improvements of such Person, or
replacements or substitutions therefor or additions thereto, that, in
accordance with GAAP, have been or should be reflected as additions to
property, plant or equipment on the balance sheet of such Person or that
have a useful life of more than one year.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, (a) all expenditures made directly or indirectly by such Person
during such period for Capital Assets (whether paid in cash or other
consideration or accrued as a liability and including, without limitation,
all expenditures for maintenance and repairs which are required, in
accordance with GAAP, to be capitalized on the books of such Person) and
(b) solely to the extent not otherwise included in clause (a) of this
definition, the aggregate principal amount of all Indebtedness (including,
without limitation, Obligations in respect of Capitalized Leases) assumed
or incurred during such period in connection with any such expenditures for
Capital Assets.
"CAPITALIZED LEASE" means any lease with respect to which the lessee
is required to recognize concurrently the acquisition of property or an
asset and the incurrence of a liability in accordance with GAAP.
"CASH COLLATERAL ACCOUNT LETTERS" has the meaning specified in Section
5(a) of the Pledge and Assignment Agreement.
"CASH COLLATERAL ACCOUNTS" has the meaning specified in Preliminary
Statement (6) of the Pledge and Assignment Agreement.
"CASH DISTRIBUTIONS" means, with respect to any Person for any period,
all dividends and distributions on any of the outstanding Equity Interests
in such Person, all purchases, redemptions, retirements, defeasances or
other acquisitions of any of the outstanding Equity
9
Interests in such Person and all returns of capital to the stockholders,
partners or members (or the equivalent persons) of such Person, in each
case to the extent paid in cash by or on behalf of such Person during such
period.
"CASH EQUIVALENTS" means any of the following types of Investments, to
the extent owned by Fox Kids or any of its Subsidiaries free and clear of
all Liens (other than Liens created under the Collateral Documents):
(a) readily marketable obligations issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 360 days
from the date of acquisition thereof; provided that the full faith and
credit of the United States of America is pledged in support thereof;
(b) time deposits with, or insured certificates of deposit or
bankers' acceptances of, any commercial bank that (i) (A) is a Lender
or (B) is organized under the laws of the United States of America,
any state thereof or the District of Columbia or is the principal
banking subsidiary of a bank holding company organized under the laws
of the United States of America, any state thereof or the District of
Columbia and is a member of the Federal Reserve System, (ii) issues
(or the parent of which issues) commercial paper rated as described in
clause (c) of this definition and (iii) has combined capital and
surplus of at least $1,000,000,000, in each case with maturities of
not more than 180 days from the date of acquisition thereof;
(c) commercial paper issued by any Person organized under the
laws of any state of the United States of America and rated at least
"Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ or at least "A-1"
(or the then equivalent grade) by S&P, in each case with maturities of
not more than 180 days from the date of acquisition thereof; and
(d) Investments, classified in accordance with GAAP as current
assets of Fox Kids or any of its Subsidiaries, in money market
investment programs registered under the Investment Company Act of
1940, as amended, which are administered by financial institutions
that have the highest rating obtainable from either ▇▇▇▇▇'▇ or S&P,
and the portfolios of which are limited solely to Investments of the
character and quality described in clauses (a), (b) and (c) of this
definition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the United States
Environmental Protection Agency.
"CHANGE OF CONTROL" means, at any time:
(a) the TNCL Group shall cease to own and control legally and
beneficially, either directly or indirectly, (i) Voting Interests in
Fox Kids representing at least 30% of the combined voting power of all
of the Voting Interests in Fox Kids (on a fully diluted
10
basis) and (ii) Equity Interests in Fox Kids representing at least 30%
of the issued and outstanding Equity Interests in Fox Kids (on a fully
diluted basis);
(b) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
(A) Voting Interests in Fox Kids (including through securities
convertible into or exchangeable for such Voting Interests)
representing a percentage of the combined voting power of all of the
Voting Interests in Fox Kids (on a fully diluted basis) that is equal
to or greater than the percentage of such combined voting power
legally and beneficially owned, directly or indirectly, by the TNCL
Group (on a fully diluted basis) or (B) Equity Interests in Fox Kids
representing a percentage of the aggregate Equity Interests in Fox
Kids (on a fully diluted basis) outstanding at such time that is equal
to or greater than the aggregate Equity Interests in Fox Kids legally
and beneficially owned directly or indirectly by the TNCL Group (on a
fully diluted basis) at such time; provided, however, that ▇▇▇▇ ▇▇▇▇▇
and/or one or more of his Affiliates may own (1) Voting Interests in
Fox Kids (including through securities convertible into or
exchangeable for such Voting Interests) representing a percentage of
the combined voting power of all of the Voting Interests in Fox Kids
(on a fully diluted basis) that is equal to (but not greater than) the
percentage of such combined voting power legally and beneficially
owned, directly or indirectly, by the TNCL Group (on a fully diluted
basis) and/or (2) Equity Interests in Fox Kids representing not more
than 55% of the aggregate Equity Interests in Fox Kids (on a fully
diluted basis) outstanding at such time;
(c) (i) the TNCL Group shall cease to have the ability, directly
or indirectly, to elect at least one-half of the members of the board
of directors of Fox Kids or (ii) any "person" or "group" (each as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the
TNCL Group otherwise acquires the ability, directly or indirectly, to
elect a majority of the board of directors of Fox Kids;
(d) any Person or two or more Persons acting in concert other
than the TNCL Group shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence on
the management or policies of Fox Kids;
(e) with respect to any pledge or other security agreement
covering all or any portion of the Equity Interests in Fox Kids, any
secured party or pledgee thereunder shall become the holder of record
of any such shares (except in the case of a registration of the pledge
of such Equity Interests to such secured party or pledgee solely in
its capacity as a pledgee) or shall receive dividends or other cash or
cash equivalent distributions (including, without limitation, stock
repurchases) in respect thereof, or shall proceed to exercise voting
or other consensual rights in respect thereof (whether by proxy,
voting or other similar arrangement or otherwise), or shall otherwise
commence to realize upon such shares;
(f) Fox Kids shall cease, directly or indirectly, to own and
control legally and beneficially all of the Equity Interests in
Holdings; or
11
(g) Holdings shall cease, directly or indirectly, to own and
control legally and beneficially all of the Equity Interests in each
of the Borrowers.
"CHASE SECURITIES" shall have the meaning specified in the recital of
parties to this Agreement.
"CITIBANK" means Citibank, N.A., a national banking association and an
affiliate of Citicorp Securities and Citicorp USA.
"CITICORP SECURITIES" has the meaning specified in the recital of
parties to this Agreement.
"CITICORP USA" has the meaning specified in the recital of parties to
this Agreement.
"CO-ARRANGERS" has the meaning specified in the recital of parties to
this Agreement.
"COLLATERAL" means all of the "Collateral" referred to in the
Collateral Documents and all of the other property and assets that are or
are intended under the terms of the Collateral Documents to be subject to
Liens in favor of the Administrative Agent for the benefit of the Secured
Parties.
"COLLATERAL DOCUMENTS" means, collectively, the Pledge and Assignment
Agreement, the Foreign Subsidiary Pledge Agreements, the Cash Collateral
Account Letters and each of the other agreements that creates or purports
to create a Lien in favor of the Administrative Agent for the benefit of
the Secured Parties.
"COMMITMENT" means a Revolving Credit Commitment or a Term Commitment,
as the context may require.
"COMMITMENT DATE" has the meaning specified in Section 2.04(b)(v)(A).
"COMMITMENT FEE" has the meaning specified in Section 2.07(a).
"CONFIDENTIAL INFORMATION" means information that is furnished to the
Administrative Agent or any of the Lenders by or on behalf of Fox Kids,
Holdings or any of the Borrowers that either is conspicuously marked as
confidential or that a reasonable person would believe is confidential or
proprietary in nature, but does not include any such information that (a)
is or becomes generally available to the public (other than as a result of
a breach by the Administrative Agent or such Lender of its confidentiality
obligations under this Agreement) or (b) is or becomes available to the
Administrative Agent or such Lender from a source other than Fox Kids,
Holdings or any of the Borrowers that is not, to the best of the
Administrative Agent's or such Lender's knowledge, acting in violation of a
confidentiality agreement with Fox Kids, Holdings or any of the Borrowers
or otherwise legally prohibited from disclosing such information.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.
"CONSOLIDATED CASH INTEREST EXPENSE" means, with respect to any Person
for any period, all interest expense paid or payable on all Indebtedness of
such Person and its Subsidiaries for
12
such period, determined on a Consolidated basis and in accordance with GAAP
for such period, including, without limitation, (a) in the case of each of
the Borrowers, (i) interest expense paid or payable in respect of
Indebtedness resulting from Advances and (ii) all fees paid or payable
pursuant to Section 2.07(a), (b) the interest component of all Obligations
in respect of Capitalized Leases, (c) commissions, discounts and other fees
and charges paid or payable in connection with letters of credit and (d)
the net payment, if any, paid or payable in connection with Hedge
Agreements less the net credit, if any, received in connection with Hedge
Agreements, but excluding, in each case, (A) any amortization of original
issue discount, (B) the interest portion of any deferred payment obligation
and (C) any other interest not payable in cash.
"CONSOLIDATED CASH TAXES" means, with respect to any Person for any
period, (a) the aggregate amount of all payments in respect of income taxes
made in cash by such Person and its Subsidiaries to any applicable
Governmental Authority during such period less (b) the aggregate amount of
all cash refunds in respect of income taxes received by such Person and its
Subsidiaries from any applicable Governmental Authority during such period,
after giving effect, to the extent available, to the application of net
operating losses available to such Person or any such Subsidiary.
"CONSOLIDATED EBITDA" means, with respect to any Person for any
period, (a) the Consolidated Net Income of such Person and its Subsidiaries
for such period plus (b) the sum of each of the following expenses that
have been deducted from the determination of the Consolidated Net Income of
such Person and its Subsidiaries for such period: (i) all interest expense
of such Person and its Subsidiaries for such period, (ii) all income tax
expense (whether federal, state, local, foreign or otherwise) of such
Person and its Subsidiaries for such period, (iii) all depreciation expense
of such Person and its Subsidiaries for such period, (iv) all amortization
expense of such Person and its Subsidiaries (other than any such
amortization expense attributable to programming costs, Participations and
Residuals) for such period and (v) all extraordinary losses deducted in
determining the Consolidated Net Income of such Person and its Subsidiaries
for such period less all extraordinary gains added in determining the
Consolidated Net Income of such Person and its Subsidiaries for such
period, in each case determined on a Consolidated basis and in accordance
with GAAP for such period.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the net income (or net loss) of such Person and its Subsidiaries
for such period, determined on a Consolidated basis and in accordance with
GAAP for such period.
"CONSOLIDATED NET WORTH" means, with respect to any Person at any date
of determination, the sum of (a) the capital stock and additional paid-in
capital of such Person and its Subsidiaries plus (b) retained earnings (or
less accumulated deficits) of such Person and its Subsidiaries, determined
on a Consolidated basis and in accordance with GAAP for such period.
"CONSTITUTIVE DOCUMENTS" means, with respect to any Person, the
certificate of incorporation or registration (including, if applicable,
certificate of change of name), articles of incorporation or association,
memorandum of association, charter, bylaws, partnership agreement, trust
agreement, joint venture agreement, limited liability company operating or
members agreement, joint venture agreement or one or more similar
agreements, instruments or documents constituting the organization or
formation of such Person.
13
"CONSULTING AGREEMENT" means the Letter Employment Agreement dated June 11,
1997 between Fox Kids and M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, as such agreement may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, but to the extent permitted under the terms of the
Loan Documents.
"CONSULTING AGREEMENT GUARANTY" means the Guaranty dated as of June
11, 1997 made by TNCL in favor of M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, as such guaranty
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but to the extent permitted under the
terms of the Loan Documents.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
obligation of such Person to guarantee or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, (a) the
direct or indirect guaranty, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a
primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.06 or 2.08.
"CURRENT ASSETS" means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets
on the balance sheet of a company conducting a business the same as or
similar to that of such Person, after deducting appropriate and adequate
reserves therefrom in accordance with GAAP.
"CURRENT LIABILITIES" means, with respect to any Person, (a) all
Indebtedness of such Person that by its terms is payable on demand or
matures within one year after the date of determination (excluding any
Indebtedness renewable or extendible, at the option of such Person, to a
date more than one year from such date or arising under a revolving credit
or similar agreement that obligates the lender or lenders to extend credit
during a period of more than one year from such date), (b) all amounts of
Funded Indebtedness of such Person required to be paid
14
or prepaid within one year after such date and (c) all other items
(including, without limitation, taxes accrued as estimated, Programming
Liabilities, Participations and Residuals otherwise excluded from Funded
Indebtedness under the proviso to the definition thereof and trade payables
otherwise excluded from Indebtedness under clause (b) of the definition
thereof) that, in accordance with GAAP, would be classified on the balance
sheet of such Person as current liabilities of such Person.
"DEFAULT" means any Event of Default or any event or condition that
would constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULTED ADVANCE" means, with respect to any of the Lenders at any
time, the portion of any Advance required to be made by such Lender to any
of the Borrowers pursuant to Section 2.01 at or prior to such time that has
not been made by such Lender or by the Administrative Agent for the account
of such Lender pursuant to Section 2.02(d) as of such time. If a portion
of a Defaulted Advance shall be deemed made pursuant to Section 2.13(a),
the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.01
on the same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any of the Lenders at any
time, any amount required to be paid by such Lender to the Administrative
Agent or any of the other Lenders under this Agreement or any of the other
Loan Documents at or prior to such time that has not been so paid as of
such time, including, without limitation, any amount required to be paid by
such Lender to (a) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender, (b) any of the
other Lenders pursuant to Section 2.12 to purchase any participation in
Advances owing to such other Lender and (c) the Administrative Agent
pursuant to Section 8.05 to reimburse the Administrative Agent for such
Lender's ratable share of any amount required to be paid by the Lenders to
the Administrative Agent as provided therein. If a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.13(b), the remaining
portion of such Defaulted Amount shall be considered a Defaulted Amount
originally required to be paid under this Agreement or any of the other
applicable Loan Documents on the same date as the Defaulted Amount so
deemed paid in part.
"DEFAULTING LENDER" means, at any time, any of the Lenders that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 7.01(f).
"DOMESTIC SUBSIDIARY" means, at any time, any of the direct or
indirect Subsidiaries of Holdings (other than any of the other Borrowers)
that is incorporated or organized under the laws of any state of the United
States of America or the District of Columbia.
"ECF PERCENTAGE" means (a) at any date of determination on which the
Total Leverage Ratio for the most recently completed Measurement Period
prior to such date is less than 6.00:1, 0% and (b) at any date of
determination on which the Total Leverage Ratio for the most recently
completed Measurement Period prior to such date is greater than or equal
to 6.00:1, 50%.
15
"EFFECTIVE DATE" has the meaning specified in Section 3.01.
"ELIGIBLE ASSIGNEE" means:
(a) a Lender;
(b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United
States of America or any state thereof and having total assets in
excess of $5,000,000,000;
(d) a commercial bank organized under the laws of any country
other than the United States of America that is a member of the OECD
or a political subdivision of any such country and having total assets
in excess of $5,000,000,000, so long as such bank is acting through a
branch or agency located in the United States of America;
(e) the central bank of any country that is a member of the OECD;
(f) any finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or
other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business
and has total assets in excess of $300,000,000; or
(g) any other Person approved by the Administrative Agent and
Holdings (in each case such approval not to be unreasonably withheld
or delayed);
provided, however, that, notwithstanding any of the foregoing provisions of
this definition, neither any of the Loan Parties nor any Affiliate of any
of the Loan Parties shall qualify as an Eligible Assignee.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of noncompliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement, abatement order or other order or directive (conditional or
otherwise) relating in any way to any Environmental Law, any Environmental
Permit or any Hazardous Materials or arising from alleged injury or threat
to health, safety, natural resources or the environment, including, without
limitation, (a) by any Governmental Authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
applicable Governmental Authority or other third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"ENVIRONMENTAL LAW" means any Requirement of Law, or any judicial or
agency interpretation, policy, guideline or other requirement of any
Governmental Authority, relating to (a) the generation, use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials, (b) pollution or the protection of the environment,
health, safety or natural resources or (c) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal
health or welfare, including CERCLA, the Hazardous Materials Transportation
Act (49 U.S.C. (S) 1801 et seq.), the Resource Conservation and
16
Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S)
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S)
136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), in
each case as amended from time to time, and including the regulations
promulgated and the rulings issued from time to time thereunder.
"ENVIRONMENTAL PERMIT" means any permit, approval, license,
identification number or other authorization required under any
Environmental Law.
"EQUITY INTERESTS" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests
in such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued from time to time thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any of the Loan Parties, or
under common control with any of the Loan Parties, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA EVENT" means:
(a) (i) the occurrence of a reportable event, within the meaning
of Section 4043(c) of ERISA, with respect to any Plan unless the 30-
day notice requirement with respect to such event has been waived by
the PBGC or (ii) the requirements of paragraph (1) of Section 4043(b)
of ERISA are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
could reasonably be expected to occur with respect to such Plan within
the following 30 days;
(b) the application for a minimum funding waiver with respect to
a Plan;
(c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred
to in Section 4041(e) of ERISA);
17
(d) the cessation of operations at a facility of any of the Loan
Parties or any of the ERISA Affiliates under the circumstances
described in Section 4062(e) of ERISA;
(e) the withdrawal or partial withdrawal by any of the Loan
Parties or any of the ERISA Affiliates from a Plan or a Multiemployer
Plan;
(f) the conditions for the imposition of a Lien under Section
302(f) of ERISA shall have been met with respect to any Plan;
(g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA;
or
(h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event
or condition described in Section 4042 of ERISA, that constitutes
grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to each of the
Lenders, the office of such Lender specified as its "Eurodollar Lending
Office" opposite its name on Part B of Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender, as the case
may be (or, if no such office is specified, its Base Rate Lending Office),
or such other office of such Lender as such Lender may from time to time
specify to each of the Appropriate Borrowers and the Administrative Agent
for such purpose.
"EURODOLLAR RATE" means, for any Interest Period for all of the
Eurodollar Rate Advances comprising part of the same Borrowing, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars are offered by the principal office of each
of the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Advance (or, in the case of Citibank,
Citicorp USA's Eurodollar Rate Advance) comprising part of such Borrowing
to be outstanding during such Interest Period (or, if any Reference Bank
(or, in the case of Citibank, Citicorp USA) shall not have such a
Eurodollar Rate Advance, $1,000,000) and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar Rate for any
Interest Period for each of the Eurodollar Rate Advances comprising part of
the same Borrowing shall be determined by the Administrative Agent on the
basis of applicable rates furnished to and received by the Administrative
Agent from the Reference Banks two Business Days before the first day of
such Interest Period, subject, however, to the provisions of Section
2.06(c).
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
18
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest Period for all
of the Eurodollar Rate Advances comprising part of the same Borrowing, the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor thereto)
for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York,
New York with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 7.01.
"EXCESS CASH FLOW" means, for any period (without duplication):
(a) Consolidated pre-tax income (or pre-tax loss) of Fox
Kids and its Subsidiaries for such period, less
(b) Consolidated income tax expense of Fox Kids and its
Subsidiaries for such period, plus
(c) an amount equal to the aggregate amount of all noncash
charges deducted in determining the Consolidated Net Income of Fox
Kids and its Subsidiaries for such period, plus
(d) an amount (whether positive or negative) equal to the
change in Consolidated Current Liabilities of Fox Kids and its
Subsidiaries during such period, less
(e) an amount equal to the aggregate amount of all noncash
credits included in determining the Consolidated Net Income of Fox
Kids and its Subsidiaries for such period, less
(f) an amount (whether positive or negative) equal to the
change in Consolidated Current Assets (excluding cash and Cash
Equivalents) of Fox Kids and its Subsidiaries during such period, less
(g) to the extent not otherwise excluded from the
calculation of Excess Cash Flow for such period, an amount equal to
the net gain, if any, attributable to the sale, lease, transfer or
other disposition of property and assets of Fox Kids and its
Subsidiaries and included in determining the Consolidated Net Income
of Fox Kids and its Subsidiaries for such period, less
(h) to the extent not otherwise excluded from the
calculation of Excess Cash Flow for such period, an amount equal to
all programming costs of the Subsidiaries of Holdings paid in cash
during such period, less
19
(i) an amount equal to the aggregate amount of all
Capital Expenditures made in cash by Fox Kids and its Subsidiaries
during such period, less
(j) an amount equal to the aggregate amount of all
Required Principal Payments made by Fox Kids and its Subsidiaries
during such period, less
(k) an amount equal to the aggregate amount of all Cash
Distributions paid by Fox Kids during such period.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.
"EXCHANGE AGREEMENT" means the Exchange Agreement dated as of August
1, 1997 among NPAL, Liberty Media Corporation and Liberty IFE, Inc., as
such agreement may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof, but to the extent permitted
under the terms of the Loan Documents.
"EXCLUDED FOX KIDS SUBSIDIARIES" means any of the Subsidiaries of Fox
Kids other than Holdings or any of its direct or indirect Subsidiaries.
"EXISTING ADVANCES" has the meaning specified in Preliminary Statement
(3) to this Agreement.
"EXISTING CREDIT AGREEMENT" has the meaning specified in Preliminary
Statement (2) to this Agreement.
"EXISTING LENDERS" has the meaning specified in Preliminary Statement
(2) to this Agreement.
"EXISTING NAHI SUBORDINATED NOTES" has the meaning ascribed to the
term "NAHI Subordinated Notes" under the Existing Credit Agreement.
"EXISTING REVOLVING CREDIT ADVANCES" means the Existing Advances which
constitute "Revolving Credit Advances" under the Existing Credit Agreement.
"EXISTING REVOLVING CREDIT LENDER" means any of the Existing Lenders
that is owed an Existing Revolving Credit Advance at any time prior to the
consummation by such Existing Lender of the sales and assignments referred
to in Section 2.01(a).
"EXISTING TERM ADVANCES" means the Existing Advances which constitute
"Term Advances" under the Existing Credit Agreement.
"EXISTING TERM LENDER" means any of the Existing Lenders that is owed
an Existing Term Advance at any time prior to the consummation by such
Existing Lender of the sales and assignments referred to in Section
2.01(b).
20
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person other than in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and payments in respect of judgments or settlements of litigation
or proceedings; provided, however, that Extraordinary Receipts shall not
include cash receipts received from proceeds of insurance, condemnation
awards (or payments in lieu thereof), indemnity payments or payments in
respect of judgments or settlements of litigation or proceedings to the
extent that such proceeds, awards or payments (a) are in respect of loss or
damage to any Capital Asset or reimbursements of liabilities previously
paid by such Person or promptly paid thereafter to any third party that is
not an Affiliate of such Person and (b) are applied (or are in respect of
expenditures that were previously incurred) to replace or repair such
Capital Asset or to reimburse such amounts previously paid or to be paid
promptly to any such third party, in each case in accordance with the terms
of the Loan Documents and so long as such application is commenced within
90 days after the receipt of such proceeds, awards or payments.
"FACILITY" means the Revolving Credit Facility or the Term Facility,
as the context may require.
"FAIR MARKET VALUE" means, with respect to any property or assets
(including, without limitation, any of the Equity Interests) of any Person
on any date of determination, the value of the consideration obtainable in
a sale of such property or asset in the open market on such date assuming
an arm's-length sale that has been arranged without duress or compulsion
between a willing seller and a willing and knowledgeable purchaser in a
commercially reasonable manner over a reasonable period of time under all
conditions necessary or desirable for a fair sale (taking into account the
nature and characteristics of such property or asset); provided that the
Fair Market Value of any of the property or assets of any of the Loan
Parties or any of their respective Subsidiaries shall be determined in good
faith by the board of directors (or persons performing similar functions)
of such Loan Party or such Subsidiary, as the case may be, and certified by
a Responsible Officer of such Loan Party or such Subsidiary in a
certificate delivered to the Administrative Agent, on behalf of the
Lenders; and provided, however, that any determination of the Fair Market
Value of any such property (whether real or personal) or asset that is
customarily appraised shall be based upon an appraisal by an independent
qualified appraiser when such property or asset is determined in good faith
by the board of directors (or persons performing similar functions) of such
Loan Party or such Subsidiary to have a Fair Market Value in excess of
$25,000,000.
"FBC" means Fox Broadcasting Company, a Delaware corporation and the
owner of a portion of the issued and outstanding Equity Interests in Fox
Kids.
"FBC SUB" means Fox Broadcasting Sub, Inc., a Delaware corporation and
the owner of a portion of the issued and outstanding Equity Interests in
Fox Kids.
"FBC SUBORDINATED NOTES" means, collectively the subordinated note of
Fox Kids due May 1, 2008 and issued in an aggregate principal amount of
$104,573,000 and the subordinated note of Fox Kids due May 1, 2008 and
issued in aggregate principal amount of $4,099,000, in
21
each case pursuant to the FBC Subordinated Notes Documents, and any note or
notes issued in replacement or substitution therefor.
"FBC SUBORDINATED NOTES DOCUMENTS" means the Subordinated Note
Agreement dated as of July 31, 1997 (as amended by the First Amendment to
the Subordinated Note Agreement dated September 4, 1997 and the Second
Amendment to the Subordinated Note Agreement dated October 28, 1997) by and
among FBC, Fox Kids and the Administrative Agent, on behalf of the Secured
Parties, the FBC Subordinated Notes and all of the other instruments,
agreements or other documents pursuant to which the FBC Subordinated Notes
are issued or otherwise setting forth the terms of the FBC Subordinated
Notes, in each case as such agreement, instrument or other document may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but to the extent permitted under the
terms of the Loan Documents.
"FCC" means the Federal Communications Commission of the United States
of America or any successor thereto.
"FCN HOLDING" has the meaning specified in the recital of parties to
this Agreement.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York
or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day for such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"FINAL OFFERING MEMORANDUM" means the Final Offering Memorandum for
the Senior Notes dated October 22, 1997 used in connection with the
offering and sale thereof pursuant to an exemption from the registration
requirements under the Securities Act.
"FISCAL QUARTER" means, with respect to Fox Kids or any of its
Subsidiaries, the period commencing July 1 in any Fiscal Year and ending on
the next succeeding September 30, the period commencing October 1 in any
Fiscal Year and ending on the next succeeding December 31, the period
commencing January 1 in any Fiscal Year and ending on the next succeeding
March 31, or the period commencing April 1 in any Fiscal Year and ending on
the next succeeding June 30, as the context may require, or, if any such
Subsidiary was not in existence on the first day of any such period, the
period commencing on the date on which such Subsidiary is incorporated,
organized, formed or otherwise created and ending on the last day of such
period.
"FISCAL YEAR" means, with respect to Fox Kids or any of its
Subsidiaries, the period commencing on July 1 in any calendar year and
ending on the next succeeding June 30 or, if any such Subsidiary was not in
existence on July 1 in any calendar year, the period commencing on the date
on which such Subsidiary is incorporated, organized, formed or otherwise
created and ending on the next succeeding June 30.
22
"FIXED CHARGE COVERAGE RATIO" means, with respect to Fox Kids and its
Subsidiaries for any Measurement Period, the ratio of (a) Adjusted Consolidated
EBITDA for such period to (b) the sum (without duplication) of (i) all
Consolidated Cash Interest Expense of Fox Kids and its Subsidiaries for such
period, (ii) all Consolidated Cash Taxes paid by or on behalf of Fox Kids or any
of its Subsidiaries during such period,(iii) the amount by which (A) the
aggregate amount of all programming costs of the Subsidiaries of Fox Kids paid
in cash during such period exceeds (B) the aggregate Programming Amortization
during such period, (iv) the aggregate amount of all Capital Expenditures made
by Fox Kids and its Subsidiaries during such period, (v) the aggregate amount of
all Required Principal Payments made by Fox Kids and its Subsidiaries during
such period and (vi) the aggregate amount of all Cash Distributions made by or
on behalf of Fox Kids during such period.
"FKE HOLDINGS" means Fox Kids Europe Holdings, Inc., a California
corporation and a direct wholly owned Subsidiary of Saban.
"FOREIGN CORPORATION" means any Foreign Subsidiary that constitutes a
"controlled foreign corporation" under Section 957 of the Internal Revenue
Code.
"FOREIGN SUBSIDIARY" means, at any time, any of the direct or indirect
Subsidiaries of Holdings that is not a Borrower or a Domestic Subsidiary at
such time.
"FOREIGN SUBSIDIARY PLEDGE AGREEMENTS" means, collectively, (a) the
U.K./FKE Pledge Agreement, (b) the U.K./Saban U.K. Pledge Agreement, (c)
the Deed of Pledge dated the Phase II Closing Date among FKE Holdings,
T.V.10 and the Administrative Agent, (d) the Amended and Restated Pledge
Agreement of Shares dated the Phase II Closing Date among Saban, Saban
International, N.V. and the Administrative Agent, (e) the Pledge Agreement
dated the Phase II Closing Date between Saban and the Administrative Agent,
(f) the Deed of Pledge of Shares dated the Phase II Closing Date among FKE
Holdings, Fox Kids Network, Fox Kids France SARL and the Administrative
Agent, (g) the Deed of Pledge of Shares dated the Phase II Closing Date
among Saban, Saban International Paris SARL and the Administrative Agent
and (h) each of the other pledge agreements, assignment agreements (or
other similar documents) governed by the laws of a jurisdiction outside of
the United States of America that is delivered pursuant to Section 5.02(j),
in each of the foregoing cases as amended, supplemented or otherwise
modified hereafter from time to time in accordance with the terms hereof
and Section 9.01.
"FOX KIDS" has the meaning specified in Preliminary Statement (1) to
this Agreement.
"FOX KIDS GUARANTEE" has the meaning specified in Section 3.01(i)(x).
"FOX KIDS NETWORK" means Fox Kids Network-Europe, Inc., a California
corporation and a direct wholly owned Subsidiary of Saban.
"FOX KIDS OPTIONHOLDERS" means, collectively, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ and any permitted transferees thereof.
"FUNDED INDEBTEDNESS" means, with respect to any Person (without
duplication), Indebtedness in respect of the Advances in the case of the
Borrowers, and all other Indebtedness
23
of such Person that by its terms matures more than one year after any date
of determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year
after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of
more than one year after such date, in each case determined on a
Consolidated basis in accordance with GAAP; provided, however, that the
term "Funded Indebtedness" shall not include (a) any Programming
Liabilities, Participations or Residuals of any of the Borrowers or any of
their respective Subsidiaries incurred in the ordinary course of business
or (b) any Contingent Obligations of such Person (if and to the extent such
Contingent Obligations would otherwise be included in such term on any date
of determination) that are incurred solely to support Indebtedness of one
or more Subsidiaries of such Person to the extent such Contingent
Obligations are otherwise expressly permitted to be incurred under Section
5.02(b).
"FUNDING AGREEMENT" means the Funding Agreement dated as of June 11,
1997 by and among TNCL, NPAL and Fox Kids, as such agreement may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, but to the extent permitted under the terms of the
Loan Documents.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America and applied on a consistent
basis, subject, however, to the terms of Section 1.03.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof,
and any governmental, executive, legislative, judicial, administrative or
regulatory agency, department, authority, instrumentality, commission,
board or similar body, whether ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
local or foreign.
"GOVERNMENTAL AUTHORIZATION" means any authorization, approval,
consent, franchise, license, covenant, order, ruling, permit,
certification, exemption, notice, declaration or similar right, undertaking
or other action of, to or by, or any filing, qualification or registration
with, any Governmental Authority.
"GUARANTEE" has the meaning specified in Section 6.01(a).
"GUARANTEE SUPPLEMENT" has the meaning specified in Section 8(b) of
the Subsidiaries Guarantee.
"GUARANTEED OBLIGATIONS" has the meaning specified in Section 6.01(a).
"HAZARDOUS MATERIALS" means: (a) any chemical, material or substance
at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste",
"biohazardous waste", "pollutant", "toxic pollutant", "contaminant",
"restricted hazardous waste", "infectious waste", "toxic substances", or
any other term or expression intended to define, list or classify
substances by reason of properties harmful to health, safety or the indoor
or outdoor environment (including, without limitation, harmful properties
such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP
24
toxicity" or "EP toxicity" or words of similar import under any applicable
Environmental Laws); (b) any oil, petroleum, petroleum fraction or
petroleum derived substance; (c) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (d) any flammable
substances or explosives; (e) any radioactive materials; (f) any asbestos-
containing materials; (g) any urea formaldehyde foam insulation; (h) any
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (i) any pesticides; (j) any radon gas; and (k)
any other chemical, material or substance designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law or which could pose a hazard to health, safety or the
environment.
"HEDGE AGREEMENTS" means, collectively, interest rate swap, cap or
collar agreements, interest rate future or option contracts, commodity
future or option contracts, currency swap agreements, currency future or
option contracts and other similar agreements.
"HEDGE BANK" means any Person that is a Lender, in its capacity as a
party to a Bank Hedge Agreement.
"HOLDINGS" has the meaning specified in the recital of parties to this
Agreement.
"IFE" has the meaning specified in the recital of parties to this
Agreement.
"IMPLIED DEBT RATING" means, at any date of determination, the
"implied" statistical rating that has been most recently assigned by either
S&P or ▇▇▇▇▇'▇ to any class of long term senior secured debt issued by the
Borrowers. For purposes of the foregoing:
(a) each such assignment of a statistical rating by S&P or
▇▇▇▇▇'▇ shall be set forth in a written notice therefrom to the
Borrowers (a copy of which shall be delivered to the Administrative
Agent);
(b) if any rating established by S&P or ▇▇▇▇▇'▇ shall be changed,
such change shall be effective as of the date on which the
Administrative Agent receives a copy of the notice from S&P or ▇▇▇▇▇'▇
referred to in clause (a) of this definition, setting forth such
change; and
(c) if either S&P or ▇▇▇▇▇'▇ shall change the basis on which
ratings are established by it, each reference to the Implied Debt
Rating assigned by S&P or ▇▇▇▇▇'▇ shall refer to the then equivalent
rating by S&P or ▇▇▇▇▇'▇, as the case may be.
"INDEBTEDNESS" means, with respect to any Person (without
duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all Obligations of such Person for the deferred purchase
price of property and assets or services (other than trade payables or
other accounts payable incurred in the ordinary course of such
Person's business and not past due for more than 90 days after the
date on which each such trade payable or account payable was created);
25
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, or upon which interest
payments are customarily made;
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property or assets acquired by such Person (even though the rights and
remedies of the seller or the lender under such agreement in the event
of default are limited to repossession or sale of such property or
assets);
(e) all Obligations of such Person as lessee under Capitalized
Leases;
(f) all Obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities (other than
letters of credit given in support of trade payables incurred in the
ordinary course of such Person's business and with an expiration date
of not more than 90 days after the date on which such letter of credit
was issued);
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity
Interests in such Person or in any other Person valued, in the case of
any Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends
(but excluding (i) any such Obligation arising solely as a result of
the declaration of a dividend (or similar distribution) on any such
Equity Interest of such Person and (ii) in the case of Fox Kids, any
such Obligation in respect of the shares of Permitted Preferred Stock
issued from time to time thereby);
(h) all Obligations of such Person in respect of Hedge
Agreements, take-or-pay agreements or other similar arrangements;
(i) all Obligations of such Person under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-
balance sheet financing if the transaction giving rise to such
Obligation is considered indebtedness for borrowed money for tax
purposes but is classified as an operating lease in accordance with
GAAP;
(j) all Contingent Obligations; and
(k) all Indebtedness referred to in clauses (a) through (j) above
of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property or assets (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Indebtedness, valued, in the case of any such Indebtedness as to
which recourse for the payment thereof is expressly limited to the
property or assets on which such Lien is granted, at the lesser of (i)
the stated or determinable amount of the Indebtedness that is so
secured or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) and (ii) the Fair Market Value of such
property or assets.
26
The Indebtedness of any Person shall include (i) all Obligations of the
types described in clauses (a) through (k) above of any partnership in
which such Person is a general partner and (ii) all Obligations of the
types described in clauses (a) through (k) above of such Person to the
extent such Person remains legally liable in respect thereof,
notwithstanding that any such Obligation is deemed to be extinguished under
GAAP at any date of determination.
"INDEMNIFIABLE MATTERS" has the meaning specified in Section 9.04(a).
"INDEMNIFIED PARTY" has the meaning specified in Section 9.04(a).
"INFORMATION MEMORANDUM" means the information memorandum dated July
1997 used in connection with the syndication of the Commitments.
"INITIAL LENDERS" has the meaning specified in the recital of parties
to this Agreement.
"INITIAL PLEDGED INDEBTEDNESS" has the meaning specified in Section
1(a)(iii) of the Pledge and Assignment Agreement.
"INITIAL PLEDGED INTERESTS" has the meaning specified in Section
1(a)(i) of the Pledge and Assignment Agreement.
"INTERCOMPANY NOTES" means the promissory notes, in each case in
substantially the form of Exhibit H-1 hereto, evidencing the intercompany
Indebtedness outstanding from time to time pursuant to Section
5.02(b)(iii)(C) or 5.02(f)(i).
"INTEREST COVERAGE RATIO" means, with respect to Fox Kids and its
Subsidiaries for any Measurement Period, the ratio of (a) Adjusted
Consolidated EBITDA for such period to (b) Consolidated Cash Interest
Expense of Fox Kids and its Subsidiaries for such period.
"INTEREST PERIOD" means, for each of the Eurodollar Rate Advances
comprising part of the same Borrowing, the period commencing on the date of
such Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, as the case may be, and ending
on the last day of the period selected by the Borrower requesting such
Borrowing or Conversion pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected
by such Borrower pursuant to the provisions set forth below. The duration
of each such Interest Period shall be one, two, three or six months and,
subject to clause (c) of this definition, nine months as the Borrower
requesting such Borrowing or Conversion may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) such Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance comprising part of a Term Borrowing
that ends after any principal repayment installment date for the Term
Facility or any Eurodollar Rate Advance comprising part of a Revolving
Credit Borrowing that ends after any scheduled commitment reduction
date for the related Revolving Credit Facility unless, after giving
27
effect to such selection, the aggregate principal amount of all Base
Rate Advances and of all Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date or such scheduled commitment reduction date, as the case may be,
shall be at least equal to the aggregate principal amount of Advances
under the Term Facility or the applicable Revolving Credit Facility,
respectively, due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) the Borrower requesting such Borrowing or Conversion shall
not be entitled to select an Interest Period having a duration of nine
months unless, by 2:00 P.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, each of the
Appropriate Lenders notifies the Administrative Agent that such
Appropriate Lender will be providing funding for such Borrowing with
such Interest Period (the failure of any Appropriate Lender to so
respond by such time being deemed for all purposes of this Agreement
as an objection by such Appropriate Lender to the requested duration
of such Interest Period); provided that if any of the Appropriate
Lenders objects (or is deemed to have objected) to the requested
duration of such Interest Period, the duration of the Interest Period
for such Borrowing shall be one, two, three or six months, as
specified by such Borrower in the applicable Notice of Borrowing or
Notice of Conversion as the desired alternative to an Interest Period
of nine months therefor;
(d) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next succeeding
calendar month, the last day of such Interest Period shall occur on
the immediately preceding Business Day; and
(e) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"INVESTMENT" means, with respect to any Person, any loan or advance to
such Person, any purchase or other acquisition of Equity Interests in, or
other obligations or other securities of, such Person, any capital
contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the
investor incurs Indebtedness of the types referred to in clause (j) or (k)
of the definition of "Indebtedness" set forth in this Section 1.01 in
respect of such Person.
28
"INVESTMENT GRADE PERFORMANCE TEST" means at any date of
determination, either (a) the long term senior secured debt of the Borrowers
shall have an Implied Debt Rating in effect on such date of at least BBB- by S&P
and Baa3 by Moody's or (b) the Total Leverage Ratio for the most recently
completed Measurement Period prior to such date shall be less than 4.00:1;
provided, however, that, with respect to clause (a) of this definition at any
such date:
(i) if, as of such date, only one of S&P and Moody's
shall have Implied Debt Rating in effect, the satisfaction of the
Investment an Grade Performance Test shall be determined by reference
to the available rating on such date; and
(ii) if, as of such date, both S&P and ▇▇▇▇▇'▇ shall
have an Implied Debt Rating in effect, the satisfaction of the
Investment Grade Performance Test shall be determined by reference to
the higher of such Implied Debt Ratings unless the Implied Debt Rating
of S&P or Moody's in effect on such date shall differ from the
corresponding Implied Debt Rating of Moody's or S&P, respectively, in
effect on such date by at least two levels, in which case the
satisfaction of the Investment Grade Performance Test shall be
determined by reference to the rating of such statistical rating
organization that has the lower of such Implied Debt Ratings in effect
on such date and shall be deemed to be the rating of such statistical
rating organization that is one level above such lower Implied Debt
Rating.
"LENDER INDEMNIFIED COSTS" has the meaning specified in Section 8.05.
"LENDERS" means, collectively, the Initial Lenders and each Person
that becomes a Lender pursuant to Section 9.08.
"LIEN" means, with respect to any Person, (a) any mortgage, lien
(statutory or other), pledge, hypothecation, security interest, charge or
other preference or encumbrance of any kind (including, without limitation,
any agreement to give any of the foregoing), (b) any sale of accounts
receivable or chattel paper, or any assignment, deposit arrangement or
lease intended as, or having the effect of, security, (c) any easement,
right of way or other encumbrance on title to real property or (d) any
other interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other title
retention agreement or any Capitalized Lease or upon or with respect to any
property or asset of such Person (including, in the case of Equity
Interests, voting trust agreements and other similar arrangements).
"LOAN DOCUMENTS" means, collectively, (a) for all purposes of this
Agreement (other than Article VI) and the Notes and any amendment,
supplement or other modification hereof or thereof and for all other
purposes other than for purposes of Article VI, the Fox Kids Guarantee, the
Subsidiaries Guarantee, the Collateral Documents, the Intercompany Notes
and the TNCL Group Subordinated Notes, (i) this Agreement, (ii) the Notes,
(iii) the Fox Kids Guarantee, (iv) the Subsidiaries Guarantee, (v) the
Collateral Documents, (vi) the Assumption Agreement and (vii) each of the
other agreements evidencing any of the Obligations of any of the Loan
Parties secured by the Collateral Documents and (b) for all purposes of
Article VI, the Fox Kids Guarantee, the Subsidiaries Guarantee, the
Collateral Documents, the Intercompany Notes and the TNCL Group
Subordinated Notes, (i) this Agreement, (ii) the Notes, (iii) the Fox Kids
Guarantee, (iv) the Subsidiaries Guarantee, (v) the Collateral Documents,
(vi) the Assumption
29
Agreement, (vii) the Bank Hedge Agreements and (viii) each of the other
agreements evidencing any of the Obligations of any of the Loan Parties
secured by the Collateral Documents, in each case as amended, supplemented
or otherwise modified hereafter from time to time in accordance with the
terms thereof and Section 9.01.
"LOAN PARTIES" means, collectively, Fox Kids, Holdings, each of the
Borrowers and each of the Restricted Subsidiaries.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Fox Kids and its Subsidiaries, taken as a whole,
(b) the rights and remedies of the Administrative Agent or any of the
Lenders under any of the Loan Documents or any of the Related Documents
(unless the material adverse effect on any such rights and remedies, either
individually or in the aggregate, would apply solely to an immaterial
portion of the Collateral and could not reasonably be expected to impair
the repayment of the Advances and the payment of all other amounts owing
under or in respect of the Loan Documents in a timely manner) or (c) the
ability of any of the Loan Parties to perform any of their respective
Obligations under any of the Loan Documents or any of the Related Documents
to which it is or is to be a party (unless the material adverse effect on
any such ability, either individually or in the aggregate, would apply
solely to the immaterial nonpayment Obligations of any of the Subsidiaries
of Fox Kids (other than any of the other Borrowers)).
"MEASUREMENT PERIOD" means, at any date of determination, the most
recently completed four consecutive Fiscal Quarters on or immediately prior
to such date or, if less than four consecutive Fiscal Quarters have been
completed since the Phase II Closing Date, the Fiscal Quarters that have
been completed since the Phase II Closing Date; provided, however, that any
calculation of Consolidated EBITDA and Consolidated Cash Interest Expense
for the first Measurement Period ending after the Effective Date shall be
multiplied by two and any calculation of Consolidated EBITDA and
Consolidated Cash Interest Expense for the second Measurement Period ending
after the Effective Date shall be multiplied by 1.33.
"MERGER" has the meaning specified in Preliminary Statement (2) to
this Agreement.
"MERGER CORPORATION" has the meaning specified in Preliminary
Statement (2) to this Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MTM ENTERTAINMENT" means MTM Entertainment, Inc., a Delaware
corporation and an indirect Subsidiary of IFE.
"MULTIEMPLOYER PLAN" means a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) to which any of the Loan Parties or any of the ERISA
Affiliates (a) is making or accruing an obligation to make contributions or
(b) has within any of the preceding five plan years made or accrued an
obligation to make contributions and with respect to which any of the Loan
Parties or any of the ERISA Affiliates could reasonably be expected to have
liability.
30
"MULTIPLE EMPLOYER PLAN" means a single employer plan (as defined in
Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any
of the Loan Parties or any of the ERISA Affiliates and at least one Person
other than the Loan Parties and the ERISA Affiliates or (b) was so
maintained and in respect of which any of the Loan Parties or any of the
ERISA Affiliates could reasonably be expected to have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"▇▇▇▇▇▇▇ FAMILY" means one or more of (a) K. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, his wife,
parents, children or more remote issue, or brothers or sisters or children
or more remote issue of a brother or sister, (b) any Person directly or
indirectly controlled by one or more of the Persons referred to in clause
(a) of this definition or (c) a trust in which the majority of the trustees
are Persons referred to in clause (a) or (b) of this definition or can be
removed or replaced by one or more of the Persons referred to in clause (a)
or (b) of this definition.
"NAHI" means News America Holdings Incorporated, a Delaware
corporation and an indirect wholly owned Subsidiary of TNCL.
"NAHI SUBORDINATED NOTES" means the subordinated note of Fox Kids due
May 1, 2008 and issued in an aggregate principal amount of $345,513,865
pursuant to the NAHI Subordinated Notes Documents, and any note or notes
issued in replacement or substitution therefor.
"NAHI SUBORDINATED NOTES DOCUMENTS" means the Subordinated Note
Agreement dated August 29, 1997 (as amended by the First Amendment to the
Subordinated Note Agreement dated October 28, 1997) by and among NAHI, Fox
Kids and the Administrative Agent, on behalf of the Secured Parties, the
NAHI Subordinated Notes and all of the other instruments, agreements or
other documents pursuant to which the NAHI Subordinated Notes are issued or
otherwise setting forth the terms of the NAHI Subordinated Notes, in each
case as such agreement, instrument or other document may be further
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, but to the extent permitted under the terms of the
Loan Documents.
"NCP PERCENTAGE" means (a) at any date of determination on which the
Investment Grade Performance Test is satisfied, 0% with respect to any sale,
lease, transfer or other disposition of any property or assets, 50% with respect
to the incurrence or issuance of any Indebtedness, 0% with respect to the sale
or issuance of any Equity Interests in any Person by such Person and 0% with
respect to any Extraordinary Receipts received by or paid to or for the account
of any Person and (b) at any date of determination on which the Investment Grade
Performance Test is not satisfied, 100% with respect to any sale, lease,
transfer or other disposition of any property or assets, the incurrence or
issuance of any Indebtedness, the sale or issuance of any Equity Interests in
any Person by such Person and any Extraordinary Receipts received by or paid to
or for the account of any Person.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer
or other disposition of any property or asset, or the incurrence or
issuance of any Indebtedness, or the sale or issuance of any Equity
Interests in any Person, or any Extraordinary Receipt received by or paid
to or for the account of any Person, as the case may be, the aggregate
amount of cash received from time to time (whether as initial consideration
or through payment or disposition of deferred
31
consideration) by or on behalf of such Person for its own account in
connection with any such transaction, after deducting therefrom only:
(a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees, filing and registration
fees with the Securities and Exchange Commission (or any similar
Governmental Authority or any national or international securities
exchange) and other similar fees and commissions;
(b) the amount of taxes payable in connection with or as a result
of such transaction;
(c) in the case of any sale, lease, transfer or other disposition
of any property or asset, the outstanding principal amount of, the
premium or penalty, if any, on, and any accrued and unpaid interest
on, any Indebtedness (other than the Indebtedness under or in respect
of the Loan Documents) that is secured by a Lien on the property and
assets subject to such sale, lease, transfer or other disposition and
is required to be repaid under the terms thereof as a result of such
sale, lease, transfer or other disposition; and
(d) in the case of any sale, lease, transfer or other disposition
of any property or asset, the amount required to be reserved, in
accordance with GAAP as in effect on the date on which the Net Cash
Proceeds from such sale, lease, transfer or other disposition are
determined, and so reserved, against liabilities under indemnification
obligations, liabilities related to environmental matters or other
similar contingent liabilities associated with the property and assets
subject to such sale, lease, transfer or other disposition that are
required to be so provided for under the terms of the documentation
for such sale, lease, transfer or other disposition;
in each case to the extent, but only to the extent, that the amounts so
deducted are properly attributable to such transaction or to the property
or asset that is the subject thereof and (i) in the case of clauses (a) and
(c) of this definition, are actually paid at the time of receipt of such
cash to a Person that is not an Affiliate of such Person or any of the Loan
Parties or of any Affiliate of any of the Loan Parties and (ii) in the case
of clauses (b) and (d) of this definition, are actually paid at the time of
receipt of such cash to a Person that is not an Affiliate of such Person or
any of the Loan Parties or any Affiliate of any of the Loan Parties or, so
long as such Person is not otherwise indemnified therefor, are reserved for
in accordance with GAAP at the time of receipt of such cash based upon such
Person's reasonable estimate of such taxes or contingent liabilities, as
the case may be; provided, however, that if, at the time such taxes or such
contingent liabilities are actually paid or otherwise satisfied, the amount
of the reserve therefor exceeds the amount paid or otherwise satisfied,
then the Borrowers shall reduce the Commitments in accordance with the
terms of Section 2.04(b)(iv), and shall prepay the outstanding Advances in
accordance with the terms of Section 2.05(b), in an amount equal to the
amount of such excess reserve.
"NEW SUBSIDIARY" has the meaning specified in Section 5.02(j).
"NOTE" means a Revolving Credit Note or a Term Note, as the context
may require.
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
32
"NOTICE OF CONVERSION" has the meaning specified in Section 2.08(a).
"NPAL" means News Publishing Australia Limited, a Delaware
corporation.
"NPAL CHARTER AMENDMENT" means the Certificate of Amendment of the
Certificate of Incorporation of NPAL, which, among other things, authorizes
NPAL to issue up to 500,000 shares of NPAL Preferred Stock, par value
$0.001 per share, and describes the designations, voting powers,
preferences and relative, participating, optional and other special rights
of such NPAL Preferred Stock and the qualifications, limitations and
restrictions thereof.
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding of the type referred to in Section 7.01(f). Without limiting
the generality of the immediately preceding sentence, the Obligations of
the Loan Parties under or in respect of the Loan Documents include (a) the
obligation to pay principal, interest, commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any of the Loan Parties under or in respect of any of the Loan
Documents and (b) the obligation of any of the Loan Parties to reimburse
any amount in respect of any of the items described above in clause (a) of
this definition that the Administrative Agent or any of the Lenders, in its
sole discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPEN YEAR" means, with respect to any Person, any year for which a
United States federal income tax return has been filed by or on behalf of
such Person and for which the expiration of the applicable statute of
limitations for assessment, reassessment or collection has not occurred
(whether by reason of extension or otherwise).
"ORIGINAL BORROWERS" has the meaning specified in Preliminary
Statement (1) to this Agreement.
"ORIGINAL CREDIT AGREEMENT" has the meaning specified in Preliminary
Statement (1) to this Agreement.
"ORIGINAL LENDER" has the meaning specified in Preliminary Statement
(1) to this Agreement.
"OTHER TAXES" has the meaning specified in Section 2.11(b).
"PARTICIPATIONS" means all amounts (other than Residuals) payable to
any Person other than any of the Loan Parties or any of their respective
Affiliates in connection with the development, acquisition, production,
exhibition, syndication, exploitation or distribution of any
33
item of Product, the payment of which is contingent upon and payable only
to the extent of the receipt by the obligor of revenues from the
exhibition, syndication or exploitation of such item of Product.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PERFORMANCE LEVEL" means Performance Level I, Performance Level II,
Performance Level III, Performance Level IV or Performance Level V, as the
context may require. For purposes of determining the Performance Level at
any date of determination:
(a) not more than one decrease in the Performance Level
(thereby resulting in a decrease in the Applicable Margin and the
Applicable Percentage) shall occur in any three-month period; and
(b) no change in the Performance Level shall be effective until
five Business Days after the date on which the Administrative Agent
receives Consolidated financial statements of Holdings and its
Subsidiaries pursuant to (and satisfying all of the requirements of)
Section 5.03(b) or 5.03(c) reflecting such change and the related
certificate pursuant to Section 5.03(d); provided, however, that if
Holdings or the Borrowers have not submitted to the Administrative
Agent all of the information required under this clause (b) within
five Business Days after the date on which such information is
otherwise required under Section 5.03(b) or 5.03(c) and Section
5.03(d), as the case may be, the Performance Level shall be deemed to
be at Performance Level V for so long as such information has not been
submitted.
"PERFORMANCE LEVEL I" means, at any date of determination, that
Holdings and its Subsidiaries shall have maintained a Senior Leverage Ratio
of less than 3.00:1 for the most recently completed Measurement Period
prior to such date.
"PERFORMANCE LEVEL II" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level I
and (b) Holdings and its Subsidiaries shall have maintained a Senior
Leverage Ratio of less than 3.50:1 for the most recently completed
Measurement Period prior to such date.
"PERFORMANCE LEVEL III" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level I
or Performance Level II and (b) Holdings and its Subsidiaries shall have
maintained a Senior Leverage Ratio of less than 4.00:1 for the most
recently completed Measurement Period prior to such date.
"PERFORMANCE LEVEL IV" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level
I, Performance Level II or Performance Level III and (b) Holdings and its
Subsidiaries shall have maintained a Senior Leverage Ratio of less than
4.25:1 for the most recently completed Measurement Period prior to such
date.
34
"PERFORMANCE LEVEL V" means, at any date of determination, that the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II, Performance Level III or Performance Level IV.
"PERMITTED AFFILIATE INVESTMENT" means (a) any capital contribution
to Holdings made directly or indirectly by Fox Kids or any of the direct or
indirect owners of any of the Equity Interests therein or (b) the Net Cash
Proceeds received by Holdings from the issuance and sale of shares of the
Permitted Preferred Stock or one or more Permitted Affiliate Subordinated Notes;
provided that on the date on which any such Permitted Affiliate Investment is
made, Fox Kids shall deliver to the Administrative Agent, on behalf of the
Lenders, a certificate of a Responsible Officer of Fox Kids, certifying that
such capital contribution or the Net Cash Proceeds received by Fox Kids from
such issuance and sale are intended to constitute, and are to be used for, one
or more Investments in accordance with the terms of Section 5.02(e)(xii).
"PERMITTED AFFILIATE SUBORDINATED NOTES" means one or more notes, in
each case in the form of Exhibit H-2 hereto, issued from time to time by
Fox Kids to any of the members of the TNCL Group or the Saban Group and
having a maturity date that is not earlier than (and no scheduled or
mandatory redemption or repurchase date prior to) the tenth anniversary of
the date of issuance of any such note; provided that on the date on which
each of the Permitted Affiliate Subordinated Notes is issued, Fox Kids
shall deliver to the Administrative Agent, on behalf of the Lenders, a
certificate of a Responsible Officer of Fox Kids, certifying in reasonable
detail the intended use by Fox Kids and/or any of its Subsidiaries of the
proceeds of such issuance.
"PERMITTED FILM FINANCING" means, with respect to any of the Special
Purpose Vehicles, financing received by such Special Purpose Vehicle (whether
through the issuance or incurrence of Indebtedness or the issuance and sale of
Equity Interests) from any other Person that is not an Affiliate thereof or of
any of the Loan Parties, the proceeds of which will be used solely for the
acquisition, production, exhibition, syndication, exploitation or distribution
of television films or other programming and as to which none of the Loan
Parties has incurred or will incur any Indebtedness or other Obligations other
than the obligation to pay for any item of Product of such Special Purpose
Vehicle (or any or all of the rights in such item of Product) that is the
subject of such Permitted Film Financing and is (or which rights are) acquired
by any such Loan Party in the ordinary course of business upon the completion
and delivery thereto of such item of Product.
"PERMITTED LIENS" means the following types of Liens (excluding any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA or any such Lien relating to or imposed in connection
with any Environmental Action), in each case as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been
commenced:
(a) Liens for taxes, assessments and governmental charges
or levies to the extent not otherwise required to be paid under
Section 5.01(b);
(b) Liens imposed by law, such materialmen's, mechanics',
carriers', workmen's, storage and repairmen's Liens and other similar
Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money)
35
(i) that are not overdue for a period of more than 60 days or (ii) the
amount, applicability or validity of which are being contested in good
faith and by appropriate proceedings diligently conducted and with
respect to which Fox Kids or any of its Subsidiaries, as the case may
be, has established reserves in accordance with GAAP;
(c) pledges or deposits to secure obligations incurred in
the ordinary course of business under workers' compensation laws,
unemployment insurance or other similar social security legislation
(other than in respect of employee benefit plans subject to ERISA) or
to secure public or statutory obligations;
(d) Liens securing the performance of, or payment in
respect of, bids, tenders, government contracts (other than for the
repayment of borrowed money), surety and appeal bonds and other
obligations of a similar nature incurred in the ordinary course of
business;
(e) any interest or title of a lessor or sublessor and
any restriction or encumbrance to which the interest or title of such
lessor or sublessor may be subject that is incurred in the ordinary
course of business and, either individually or when aggregated with
all other Permitted Liens in effect on any date of determination,
could not be reasonably expected to have a Material Adverse Effect;
(f) Liens in favor of customs and revenue authorities
arising as a matter of law or pursuant to a bond to secure payment of
customs duties in connection with the importation of goods;
(g) customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions in which such cash is
maintained in the ordinary course of business;
(h) Liens arising out of judgments or awards that do not
constitute an Event of Default under Section 7.01(g) or 7.01(h) and in
respect of which Fox Kids or any of its Subsidiaries subject thereto
shall be prosecuting an appeal or proceedings for review in good faith
and, pending such appeal or proceedings, shall have secured within ten
days after the entry thereof a subsisting stay of execution and shall
be maintaining reserves, in accordance with GAAP, with respect to any
such judgment or award; and
(i) easements, rights of way, zoning restrictions and
other encumbrances and minor survey exceptions, minor title
irregularities and other similar minor restrictions on title to, or
the use of, real property that do not, either individually or in the
aggregate, materially and adversely affect the use of such real
property for its intended purposes or the conduct of the business of
Holdings and its Subsidiaries in the ordinary course and that were not
incurred in connection with and do not secure Indebtedness or other
extensions of credit.
"PERMITTED PREFERRED STOCK" means Preferred Interests in Fox Kids
issued from time to time to one or more of its Affiliates that have (a) no
dividends required to be paid in cash, and no scheduled or mandatory
redemption or repurchase dates, in whole or in part, prior to the
36
payment in full in cash of all of the Obligations of the Loan Parties under
or in respect of the Loan Documents and any extension, refinancing or
replacement thereof, and the termination of all commitments to extend
credit under any of the foregoing, (b) no voting rights and (c) no other
conditions, covenants or events of default; provided that on the date on
which each of the shares of Permitted Preferred Stock is issued, Fox Kids
shall deliver to the Administrative Agent, on behalf of the Lenders, a
certificate of a Responsible Officer of Fox Kids, certifying in reasonable
detail the intended use by Fox Kids and/or any of its Subsidiaries of the
proceeds of such issuance.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, unlimited liability company,
joint stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency
thereof.
"PHASE II CLOSING DATE" means September 4, 1997, the date on which the
initial borrowing under the Existing Credit Agreement occurred following
the satisfaction or waiver of all of the conditions precedent to such
borrowing set forth in Sections 3.01 and 3.03 of the Existing Credit
Agreement.
"PLAN" means a Single Employer Plan and/or a Multiple Employer Plan,
as the context may require.
"PLEDGE AGREEMENT SUPPLEMENT" has the meaning specified in Section
18(b) of the Pledge and Assignment Agreement.
"PLEDGE AND ASSIGNMENT AGREEMENT" has the meaning specified in Section
3.01(i)(viii).
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"PRE-MERGER IFE" has the meaning specified in Preliminary Statement
(1) to this Agreement.
"PREPRINT MATERIALS" means, with respect to any item of Product, the
original motion picture negative for such item of Product, the optical
soundtrack negative for such item of Product, the magnetic soundtrack
(consisting of separate mixed dialogue and separate mixed music and effects
tracks) for such item of Product and/or such other materials as are
necessary to duplicate such Product (including interpositives, negatives,
duplicate negatives, internegatives, color reversals, intermediates,
lavenders, fine grain master prints and matrices, and all other forms of
preprint materials that may be necessary or useful to produce prints or
other copies or additional preprint materials), whether now known or
hereafter devised.
"PRIMARY OBLIGATION" has the meaning specified in the definition of
"Contingent Obligation" set forth in this Section 1.01.
37
"PRIMARY OBLIGOR" has the meaning specified in the definition of
"Contingent Obligations" set forth in this Section 1.01.
"PRO FORMA CONSOLIDATED EBITDA" means, at any date of determination,
an amount equal to the Consolidated EBITDA of Holdings and its Subsidiaries
for the most recently completed Measurement Period prior to such date for
which Holdings and/or the Borrowers have delivered Consolidated financial
statements of Holdings and its Subsidiaries pursuant to Section 5.03(b) or
5.03(c); provided that with respect to any sale, transfer or other
disposition of any property or assets of any of the Borrowers or any of
their respective Subsidiaries pursuant to Section 5.02(d)(viii) or
5.02(d)(ix), if any of the Borrowers or any of their respective
Subsidiaries shall have purchased or otherwise acquired or shall have sold,
transferred or otherwise disposed of any other property or assets at any
time on or after the first day of such Measurement Period and prior to such
date, such Consolidated EBITDA shall be increased (in the case of each such
purchase or other acquisition) or reduced (in the case of each such sale,
transfer or other disposition) by the Consolidated EBITDA of Holdings and
its Subsidiaries that would have been directly contributed thereto by such
other property or assets during such Measurement Period, determined in good
faith by the board of directors of the applicable Borrower on a pro forma
basis as though such Borrower or the Subsidiary of such Borrower that is
effecting such transaction had purchased or otherwise acquired or had sold,
transferred or otherwise disposed of such other property or assets on the
first day of such Measurement Period.
"PRO RATA SHARE" of any amount means, with respect to any of the
Lenders at any time, the product of (a) a fraction the numerator of which
is the amount of such Lender's Commitment under the applicable Facility or
Facilities at such time and the denominator of which is the aggregate
amount of such Facility or Facilities at such time and (b) such amount.
"PRODUCT" means any feature or nonfeature motion picture, television
program, series, miniseries, pilot, movie-of-the-week, special, animated
cartoon, interactive game, short or other type of recorded audiovisual
production (whether now existing or hereafter created, devised, developed
or acquired) (including, without limitation, the film and television
libraries of the Borrowers and their respective Subsidiaries), whether made
for or distributed in any market, including, without limitation,
theatrical, nontheatrical, television, home video or exhibition in any
other market or medium, whether now existing or hereafter created, devised
or developed and whether produced, recorded, distributed, performed or
exhibited on or by photographic film, videotape, wire, disc, cartridge,
cassette or any other means, methods or devices now existing or hereafter
created, devised or developed and further including, without limitation,
all exposed and developed negative film, soundtracks, positive prints,
cutouts and trims connected with any such Product, whether or not in
completed form or in a state of completion, and all related goods and
physical properties, including, without limitation, exposed film, developed
film, positives, negatives, prints, answer prints, special effects,
Preprint Materials, soundtracks, recordings, audio and video tape and discs
of all types and gauges, cutouts, trims and any and all other physical
properties of every kind and nature relating to any such Product in
whatever state of completion, and all duplicates, drafts, versions,
variations and copies of each thereof, all rights to produce, release,
sell, distribute, lease, perform, market, license, promote, merchandise,
exhibit, broadcast, reproduce, record, publicize or otherwise exploit the
foregoing and all Special Assets and any and all rights therein, in any
manner and in any media whatsoever throughout any territory, including,
without limitation, free, pay, toll, cable, sustaining, subscription,
sponsored
38
and direct satellite broadcast, in theaters, nontheatrically, on 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.
"PROGRAMMING AMORTIZATION" means, for any period, that portion of all
of the Programming Rights of the Subsidiaries of Fox Kids that are expensed
on the Consolidated statement of operations of Fox Kids and its
Subsidiaries for such period.
"PROGRAMMING LIABILITIES" means all outstanding Indebtedness of the
type described in clause (b) of the definition of "Indebtedness" set forth
in this Section 1.01 that is incurred by any of the Borrowers or any of
their respective Subsidiaries to acquire, produce, exhibit, syndicate,
exploit, license or distribute television films or other programming in the
ordinary course of business.
"PROGRAMMING RIGHTS" means the rights to distribute, exhibit,
syndicate and exploit television films and other programming acquired by
any of the Subsidiaries of Fox Kids under license agreements and other
similar arrangements for use on the cable networks of IFE or any of the
other Subsidiaries of Fox Kids and for distribution and relicensing to
other Persons, which rights shall include the costs of programming
(including films-in-progress) and allocated overhead (which shall be
capitalized as incurred).
"REDEEMABLE" means, with respect to any Equity Interest, any
Indebtedness or any other right or Obligation, any such Equity Interest,
Indebtedness, right or Obligation that (a) the issuer has undertaken to
redeem at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of the
holder.
"REFERENCE BANKS" means Citibank, Chase Manhattan Bank and BankBoston
or, in the event that any of such commercial banks ceases to be a Lender at
any time, any other commercial bank designated by Holdings and approved by
the Required Lenders as constituting a "Reference Bank" hereunder.
"REFINANCING" has the meaning specified in Preliminary Statement (3)
to this Agreement.
"REGISTER" has the meaning specified in Section 9.08(d).
"RELATED DOCUMENTS" means the Exchange Agreement, the Funding
Agreement, the NPAL Charter Amendment, the Stockholders Agreement, the
Series A Certificate of Designation, the FBC Subordinated Notes Documents
and the NAHI Subordinated Notes Documents and each of the other
instruments, agreements or documents (other than correspondence) setting
forth the terms of or otherwise relating to the Refinancing.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding not
less than a majority in interest of the sum of (a) the aggregate principal
amount of all Advances outstanding at such time, (b) the aggregate unused
Term Commitments at such time and (c) the aggregate Unused Revolving Credit
Commitments at such time; provided, however, that if any of the Lenders
shall be a Defaulting Lender at such time, there shall be excluded from the
determination
39
of Required Lenders at such time (i) the aggregate principal amount of all
Advances owing to such Defaulting Lender and outstanding at such time, (ii)
the unused portion of the Term Commitment of such Defaulting Lender at such
time and (iii) the Unused Revolving Credit Commitment of such Defaulting
Lender at such time.
"REQUIRED PRINCIPAL PAYMENTS" means, with respect to any Person for
any period, the sum of all regularly scheduled principal payments or
redemptions and all required prepayments, repurchases, redemptions or
similar acquisitions for value of outstanding Funded Indebtedness made
during such period, but excluding any such payments to the extent
refinanced through the incurrence of additional Indebtedness otherwise
expressly permitted under Section 5.02(b)(iii)(N).
"REQUIREMENTS OF LAW" means, with respect to any Person, all laws,
constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, judgments, determinations or awards of
an arbitrator, a court or any other Governmental Authority, and all
Governmental Authorizations, binding upon or applicable to such Person or
to any of its properties, assets or businesses.
"RESIDUALS" means all amounts payable by any of the Borrowers or any
of their respective Subsidiaries pursuant to guild agreements or collective
bargaining agreements in connection with the exhibition, syndication,
exploitation or distribution of any item of Product.
"RESPONSIBLE OFFICER" means, with respect to Fox Kids or any of its
Subsidiaries, the chief executive officer, the president, the chief
financial officer, the principal accounting officer or the treasurer (or
the equivalent of any of the foregoing) or any other officer, partner or
member (or person performing similar functions) of Fox Kids or any such
Subsidiary responsible for overseeing the administration of, or reviewing
compliance with, all or any portion of this Agreement or any of the other
Loan Documents.
"RESTRICTED SUBSIDIARY" means (a) any of the wholly owned Domestic
Subsidiaries or (b) at the option of Holdings, any of the other
Subsidiaries of Holdings (other than any of the other Borrowers) (i) that
executes and delivers a Guarantee Supplement and a Pledge Agreement
Supplement, (ii) in which 100% of the issued and outstanding Equity
Interests are pledged to the Administrative Agent, on behalf of the Secured
Parties, pursuant to the applicable Collateral Documents and (iii) that
delivers such other agreements, opinions, certificates and other documents
as the Administrative Agent, or the Required Lenders through the
Administrative Agent, shall reasonably request; provided, however, that
none of the Special Purpose Vehicles shall constitute a Restricted
Subsidiary.
"REVOLVING CREDIT ADVANCES" has the meaning specified in Section
2.01(a).
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by (or, in the
case of the Existing Revolving Credit Advances, deemed to have been made
by) the Revolving Credit Lenders.
"REVOLVING CREDIT COMMITMENT" means, with respect to any of the
Revolving Credit Lenders at any time, the amount set forth opposite such
Revolving Credit Lender's name on Part B of Schedule I hereto under the
caption "Revolving Credit Commitment" or, if such Revolving
40
Credit Lender has entered into one or more Assignments and Acceptances, the
amount set forth for such Revolving Credit Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.08(d) as such
Revolving Credit Lender's "Revolving Credit Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.04.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate
Revolving Credit Commitments of all of the Revolving Credit Lenders at such
time.
"REVOLVING CREDIT LENDER" means, at any time, any of the Lenders that
has a Revolving Credit Commitment at such time.
"REVOLVING CREDIT NOTE" means a promissory note of an Appropriate
Borrower payable to the order of any of the Revolving Credit Lenders, in
substantially the form of Exhibit A-1 hereto, evidencing the aggregate
indebtedness of such Appropriate Borrower to such Revolving Credit Lender
resulting from the Revolving Credit Advances made by (or, in the case of
the Existing Revolving Credit Advances, deemed to have been made by) such
Revolving Credit Lender.
"RIGHTS IN PRODUCT" means (a) any right, whether arising under written
contracts or otherwise, to sell, produce, distribute, subdistribute,
exhibit, syndicate, lease, sublease, license, sublicense or otherwise
exploit any item of Product, including rights under so-called "pick up"
arrangements and other contracts and agreements relating to the acquisition
of any item of Product or any interest therein in any market, including the
theatrical, nontheatrical, stage, television (including broadcast, cable
and pay television) and home markets, whether by film, videotape, cassette
cartridge or disc or by any other means, method, process or device now
known or hereafter developed, (b) any right to sell trailer and advertising
accessories relating to any item of Product, (c) any sequel, series,
serial, reissue or re-make rights relating to any item of Product and (d)
any rights to exploit any element or component of any item of Product or
any ancillary rights relating to any item of 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 any item of Product, including the right to grant licenses to
print, perform or mechanically reproduce such music.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SABAN" has the meaning specified in the recital of parties to this
Agreement.
"SABAN GROUP" means, collectively, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Enterprises L.P.,
a California limited partnership, Merlot Investments, a California general
partnership, Silverlight Enterprises, L.P., a California limited
partnership, and Quartz Enterprises L.P., a California limited partnership.
"SECURED OBLIGATIONS" has the meaning specified in Section 2 of the
Pledge and Assignment Agreement.
41
"SECURED PARTIES" means, collectively, the Agents, the Lenders, the
Hedge Banks and the other Persons, if any, the Obligations owing to which
are or are purported to be secured by the Collateral under the terms of the
Collateral Documents.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
regulations promulgated and the rulings issued thereunder.
"SENIOR LEVERAGE RATIO" means, with respect to Holdings and its
Subsidiaries at any date of determination, the ratio of (a) Adjusted Funded
Indebtedness of Holdings and its Subsidiaries at such date to (b)
Consolidated EBITDA of Holdings and its Subsidiaries for the most recently
completed Measurement Period prior to such date.
"SENIOR NOTES" means, collectively, (a) the 9-1/4% senior notes due
2007 in an aggregate principal amount of $475,000,000 to be issued and sold
by Fox Kids on or prior to the Effective Date pursuant to the terms of the
applicable Senior Notes Indenture and (a) the 10-1/4% senior discount notes
due 2007 having an accreted value on the date of purchase of $375,000,634
(and an aggregate principal amount at maturity of $618,670,000) to be
issued and sold by Fox Kids on or prior to the Effective Date pursuant to
the terms of the applicable Senior Notes Indenture.
"SENIOR NOTES DOCUMENTS" means the Senior Notes Indentures, the Senior
Notes and all of the other agreements, instruments and other documents
pursuant to which the Senior Notes will be issued or otherwise setting
forth the terms of the Senior Notes, in each case as such agreement,
instrument or other document may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, but to the
extent permitted under the terms of the Loan Documents.
"SENIOR NOTES INDENTURES" means, collectively, (a) the Indenture dated
on or about the Effective Date between Fox Kids and The Bank of New York,
as Trustee, and (b) the Indenture dated on or about the Effective Date
between Fox Kids and The Bank of New York, as Trustee, in each case as such
agreement, instrument or document may be amended, supplemented or otherwise
modified hereafter from time to time in accordance with the terms thereof,
but to the extent permitted under the terms of the Loan Documents.
"SERIES A CERTIFICATE OF DESIGNATION" means the Certificate of
Designation of the Series A Preferred Stock, which describes the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of
such series and the qualifications, limitations and restrictions thereof,
as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but to the extent permitted under the
terms of the Loan Documents.
"SERIES A PREFERRED STOCK" means the 345,000 shares of Series A
Preferred Stock of Fox Kids, par value $0.001 per share, issued to Liberty
IFE, Inc. in exchange for all of the Equity Interests in Pre-Merger IFE
owned thereby and all Indebtedness of Pre-Merger IFE owing thereto.
"SINGLE EMPLOYER PLAN" means a single employer plan (as defined in
Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any
of the Loan Parties or any of the ERISA
42
Affiliates and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any of the Loan
Parties or any of the ERISA Affiliates could reasonably be expected to have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"SOLVENT" means, with respect to any Person on any date of
determination, that, on such date:
(a) the fair value of the property and assets of such Person is
greater than the total amount of liabilities (including, without
limitation, contingent liabilities) of such Person;
(b) the present fair salable value of the property and assets of
such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become
absolute and matured;
(c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature; and
(d) such Person is not engaged in business or in a transaction,
and is not about to engage in business or in a transaction, for which
such Person's property and assets would constitute an unreasonably
small capital.
The amount of contingent and unliquidated liabilities at any time shall be
computed as the amount that, in the light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability. In
addition, unmatured Obligations of any Person under any executory contract
(including, without limitation, leases) shall, subject to the limitations
set forth in the immediately preceding sentence, be considered a "net
liability" to the extent that, at any date of determination, the Fair
Market Value of the consideration to be received by such Person pursuant to
such executory contract is less than the Fair Market Value of the
consideration to be given by such Person pursuant to such executory
contract and shall be considered a "net asset" to the extent that, at any
date of determination, the Fair Market Value of the consideration to be
received by such Person pursuant to such executory contract is greater than
the Fair Market Value of the consideration to be given by such Person
pursuant to such executory contract.
"SPECIAL ASSETS" means rights of every kind and nature in and to
literary, trademark, service ▇▇▇▇, literary property, personal property,
photograph, name, likeness, character, motion picture, musical, dramatic or
other literary material of any kind or nature upon which, in whole or in
part, any item of Product is or may be based or from which it is or may be
adapted or inspired, or which may be or have been used or included in such
item of Product, including, without limitation, the screenplays therefor
and all other scripts, scenarios, screenplays, bibles, scores, treatments,
novels, outlines, books, play titles, characters, concepts, manuscripts,
music, musical compositions, and sound and related rights and copyrights of
every kind or nature in such literary or music property, in whatever state
of completion, and all drafts, versions and variations
43
thereof, and merchandising and licensing rights therefor, including,
without limitation, in trademarks.
"SPECIAL PURPOSE VEHICLE" means any Person that is not, and is not
required under the terms of the Loan Documents to be, a Loan Party (a)
which has been organized for the sole purpose of effecting one or more
Permitted Film Financings and acquiring, producing, exhibiting,
syndicating, exploiting or distributing television films and other
programming with the proceeds thereof, (b) which has no property, assets or
liabilities other than those directly acquired or incurred in connection
with such Permitted Film Financings, (c) all of the liabilities and other
Obligations of which are nonrecourse for the payment or performance thereof
to any other Person (including, without limitation, any of the Loan
Parties) and (d) the legal structure and capitalization of which has been
approved by the Administrative Agent, such approval not to be unreasonably
withheld or delayed.
"STOCKHOLDERS AGREEMENT" means the Amended and Restated Strategic
Stockholders Agreement dated as of August 1, 1997 by and among ▇▇▇▇ ▇▇▇▇▇,
each of the Persons listed on Schedule A thereto, FBC, FBC Sub and ▇▇▇▇▇ &
Company Incorporated, as such agreement may be further amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, but to the extent permitted under the terms of the Loan
Documents.
"SUBSIDIARIES GUARANTEE" has the meaning specified in Section
3.01(i)(xi).
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, joint venture, limited liability company, unlimited liability
company, trust or estate of which (or in which) more than 50% of:
(a) the issued and outstanding shares of capital stock having
ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time shares of
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency);
(b) the interest in the capital or profits of such partnership,
joint venture, limited liability company or unlimited liability
company; or
(c) the beneficial interest in such trust or estate,
is at the time, directly or indirectly, owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries.
"SUBSTITUTE RATE" has the meaning specified in Section 2.09(e).
"SURVIVING INDEBTEDNESS" means all of the Indebtedness of the Loan
Parties and their Subsidiaries in existence on the Effective Date and not
prepaid, redeemed, defeased or otherwise satisfied in full on such date.
"TAXES" has the meaning specified in Section 2.11(a).
44
"TERM ADVANCE" has the meaning specified in Section 2.01(b).
"TERM BORROWING" means a borrowing consisting of simultaneous Term
Advances of the same Type made by (or, in the case of the Existing Term
Advances, purchased and assumed by) the Term Lenders.
"TERM COMMITMENT" means, with respect to any of the Term Lenders at
any time, the amount set forth opposite such Term Lender's name on Part B
of Schedule I hereto under the caption "Term Commitment" or, if such Term
Lender has entered into one or more Assignments and Acceptances, the amount
set forth for such Term Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.08(d) as such Term Lender's
"Term Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.04.
"TERM FACILITY" means, at any time, the aggregate Term Commitments of
all of the Term Lenders at such time.
"TERM LENDER" means, at any time, any of the Lenders that has a Term
Commitment at such time.
"TERM NOTE" means a promissory note of IFE payable to the order of any
of the Term Lenders, in substantially the form of Exhibit A-2 hereto,
evidencing the aggregate indebtedness of IFE to such Term Lender resulting
from the Term Advances made by (or, in the case of the Existing Term
Advances, purchased and assumed by) such Term Lender.
"TERMINATION DATE" means the earlier of (a) September 29, 2004 and (b)
the date of termination in whole of the Revolving Credit Commitments and
the Term Commitments pursuant to Section 2.04 or 7.01.
"TNCL" means The News Corporation Limited, a corporation organized and
existing under the laws of South Australia, Australia.
"TNCL GROUP" means TNCL and its Subsidiaries; provided that, for
purposes of this definition, the Subsidiaries of TNCL shall also include
Twentieth Holdings Corporation and its Subsidiaries and any other Person in
which more than a majority in interest of the combined voting power of all
of the Voting Interests in such Person (on a fully diluted basis) are owned
directly or indirectly by the ▇▇▇▇▇▇▇ Family.
"TNCL GROUP SUBORDINATED NOTES" means, collectively, the FBC
Subordinated Notes, the NAHI Subordinated Notes and the Permitted Affiliate
Subordinated Notes.
"TOTAL LEVERAGE RATIO" means, with respect to Fox Kids and its
Subsidiaries at any date of determination, the ratio of (a) Adjusted Funded
Indebtedness of Fox Kids and its Subsidiaries at such date to (b)
Consolidated EBITDA of Fox Kids and its Subsidiaries for the most recently
completed Measurement Period prior to such date.
"TRANSACTION" means, collectively, (a) the organization of Holdings
and the issuance of all of the Equity Interests therein to Fox Kids, (b)
the issuance and sale of the Senior Notes, (c)
45
the consummation of the Refinancing, (d) the entering into by Fox Kids and
certain of its Subsidiaries of the Loan Documents and the Related Documents
to which they are or are intended to be a party, (e) the repayment of
certain outstanding principal of, and accrued and unpaid interests on, the
Existing NAHI Subordinated Notes and (f) the payment of the fees and
expenses incurred in connection with the consummation of the foregoing.
"T.V.10" means T.V.10 B.V., a Netherlands limited company and an
indirect Subsidiary of Saban.
"TYPE" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"U.K./FKE PLEDGE AGREEMENT" has the meaning specified in Section
3.01(i)(ix)(B).
"U.K./SABAN U.K. PLEDGE AGREEMENT" has the meaning specified in
Section 3.01(i)(ix)(A).
"UNRESTRICTED SUBSIDIARY" means, at any time, any of the Subsidiaries
of Holdings that does not constitute a Borrower or a Restricted Subsidiary
at such time; provided, however, that none of the Special Purpose Vehicles
shall constitute an Unrestricted Subsidiary.
"UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to any of the
Revolving Credit Lenders at any time, (a) the Revolving Credit Commitment
of such Revolving Credit Lenders at such time less (b) the aggregate
principal amount of all Revolving Credit Advances made by (or, in the case
of the Existing Revolving Credit Advances, deemed to have been made by)
such Revolving Credit Lender and outstanding at such time.
"VOTING EQUITY INTERESTS" has the meaning specified in Section
5.02(j)(iv).
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including", the word "through" means "through
and including" and the words "to" and "until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with GAAP;
provided, however, that, if any changes in accounting principles from those used
in the preparation of the Consolidated financial statements of Fox Kids and its
Subsidiaries or Holdings and its Subsidiaries for the Fiscal Quarter ending
December 31, 1997 (as are
46
delivered to the Lenders pursuant to Section 7(i)(i) of the Fox Kids Guarantee
or Section 5.03(b) hereof, respectively) occur by reason of the promulgation of
rules, regulations, pronouncements, opinions or other requirements of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions)
and such changes would affect (or would result in a change in the method of
calculation of) any of the covenants set forth in Section 8(b)(ii)(D) of the Fox
Kids Guarantee or Section 5.02 or 5.04 hereof, or any of the defined terms
related thereto contained in Section 1.01 hereof, then Fox Kids or Holdings, as
applicable, shall enter into negotiations in good faith with the Administrative
Agent and the Lenders, if and to the extent necessary, to amend in accordance
with Section 9.01 all such covenants or terms as would be affected by such
changes in GAAP in such a manner as would maintain the economic terms of such
covenants as in effect under the Fox Kids Guarantee or this Agreement, as the
case may be, prior to giving effect to the occurrence of any such changes; and
provided further, however, that, until the amendment of the covenants and the
defined terms referred to in the immediately preceding proviso becomes
effective, all covenants and defined terms shall be performed, observed and
determined, and any determination of compliance with any such covenant shall be
made, as though no such changes in accounting principles had been made.
SECTION 1.04. Currency Equivalents Generally. Any amount specified in
------------------------------
this Agreement (other than in Articles II, VIII and IX) or any of the other Loan
Documents to be in U.S. dollars shall also include the equivalent of such amount
in any currency other than U.S. dollars, such equivalent amount to be determined
at the rate of exchange quoted by Citibank in New York, New York, at the close
of business on the Business Day immediately preceding any date of determination
thereof, to prime banks in New York, New York for the spot purchase in the New
York foreign exchange market of such amount in U.S. dollars with such other
currency.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Revolving Credit Advances.
------------ -----------------------------
Each of the Existing Revolving Credit Lenders will, as of the Effective Date,
sell and assign to the other Revolving Credit Lenders an interest in and to all
of its respective rights and obligations under and in respect of the Existing
Revolving Credit Advances set forth opposite such Existing Revolving Credit
Lender's name on Part A of Schedule I hereto under the caption "Existing
Revolving Credit Advances", and each of the other Revolving Credit Lenders will
purchase and assume that portion of such Existing Revolving Credit Advances set
forth opposite such other Revolving Credit Lender's name on Part A of Schedule I
hereto under the caption "Existing Revolving Credit Advances". Each of the
Revolving Credit Lenders severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each, a "REVOLVING CREDIT ADVANCE") in
U.S. dollars to the Borrowers from time to time on any Business Day during the
period from the date of this Agreement until the Termination Date in an amount
for each such Revolving Credit Advance not to exceed the Unused Revolving Credit
Commitment of such Revolving Credit Lender at such time. The Existing Revolving
Credit Advances referred to opposite the name of such Revolving Credit Lender on
Part A of Schedule I hereto and outstanding on the Effective Date shall be
deemed to be Revolving Credit Advances for all purposes of this Agreement. Each
of the Revolving Credit Borrowings shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if
less, the amount of the aggregate Unused Revolving Credit Commitments). Each
47
of the Revolving Credit Borrowings shall consist of Revolving Credit Advances
made simultaneously by the Revolving Credit Lenders in accordance with their
respective Pro Rata Shares of the Revolving Credit Facility. Within the limits
of the Unused Revolving Credit Commitment of each of the Revolving Credit
Lenders in effect from time to time, each of the Borrowers may borrow under this
Section 2.01(a), prepay pursuant to Section 2.05(a) and reborrow under this
Section 2.01(a).
(b) The Term Advances. Each of the Existing Term Lenders will, as of
-----------------
the Effective Date, sell and assign to the other Term Lenders an interest in and
to all of its respective rights and obligations under and in respect of the
Existing Term Advances set forth opposite such Existing Term Lender's name on
Part A of Schedule I hereto under the caption "Existing Term Advances", and each
of the other Term Lenders will purchase and assume that portion of such Existing
Term Advances set forth opposite such other Term Lender's name on Part A of
Schedule I hereto under the caption "Existing Term Advances". Each of the Term
Lenders severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "TERM ADVANCE") in U.S. dollars to IFE on the Effective
Date in an amount not to exceed the excess, if any, of (i) the Term Commitment
of such Term Lender on the Effective Date over (ii) the aggregate principal
amount of the Existing Term Advances retained, or purchased and assumed, by such
Term Lender on the Effective Date. The Existing Term Advances set forth
opposite such Term Lender's name on Part A of Schedule I hereto and outstanding
on the Effective Date shall be deemed to be Term Advances for all purposes of
this Agreement. The Term Borrowing made on the Effective Date shall consist of
Term Advances made simultaneously by the Term Lenders in accordance with their
respective Pro Rata Shares of the Term Facility. Amounts borrowed under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.
SECTION 2.02. Making the Advances. (a) Notices of Borrowing. Each
------------------- --------------------
of the Borrowings shall be made on notice, given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing comprised of Eurodollar Rate Advances or on
the first Business Day prior to the date of the proposed Borrowing in the case
of a Borrowing comprised of Base Rate Advances by an Appropriate Borrower to the
Administrative Agent, which shall give prompt notice thereof to each of the
Appropriate Lenders by telex or telecopier. Each notice of a Borrowing (a
"NOTICE OF BORROWING") shall be delivered by telephone, confirmed immediately in
writing, or by telex or telecopier, in substantially the form of Exhibit B-1
hereto, shall be duly executed by a Responsible Officer of such Appropriate
Borrower, and shall specify therein:
(i) the requested date of such Borrowing (which shall be a Business
Day);
(ii) the Facility under which such Borrowing is requested to be made;
(iii) the Type of Advances requested to comprise such Borrowing;
(iv) the requested aggregate amount of such Borrowing; and
(v) in the case of a Borrowing comprised of Eurodollar Rate Advances,
the requested duration of the initial Interest Period for each such Advance
(and, if the requested duration of such initial Interest Period is
specified to be nine months, the desired alternative Interest Period for
each such Eurodollar Rate Advance).
48
Each of the Appropriate Lenders shall, before 1:00 P.M. (New York City time) on
the date of each Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative Agent's
Account, in same day funds, such Lender's Pro Rata Share of such Borrowing.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower that requested such Borrowing by
crediting the Appropriate Borrower's Account.
(b) Limitations on Borrowings. Anything in Section 2.02(a) to the
-------------------------
contrary notwithstanding, none of the Borrowers may select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation of the Appropriate Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or
2.09. In addition, the Revolving Credit Advances may not be outstanding as part
of more than eight separate Revolving Credit Borrowings and the Term Advances
may not be outstanding as part of more than eight separate Term Borrowings.
(c) Binding Effect of Notices of Borrowing. Each Notice of Borrowing
--------------------------------------
shall be irrevocable and binding on the Borrower that requested such Borrowing.
In the case of any Borrowing that the related Notice of Borrowing specifies is
to be comprised of Eurodollar Rate Advances, the Borrower that requested such
Borrowing shall indemnify each of the Appropriate Lenders against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in the Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits other than any amount
attributable solely to the Applicable Margin), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(d) Assumption of Administrative Agent. Unless the Administrative
----------------------------------
Agent shall have received notice from an Appropriate Lender prior to the date of
any Borrowing under a Facility under which such Lender has a Commitment that
such Lender will not make available to the Administrative Agent such Lender's
Pro Rata Share of such Borrowing, the Administrative Agent may assume that such
Lender has made such Pro Rata Share available to the Administrative Agent on the
date of such Borrowing in accordance with subsection (a) of this Section 2.02
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower that requested such Borrowing on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Pro Rata Share available to the Administrative Agent, such Lender and
the Borrower that requested such Borrowing severally agree to repay or to pay to
the Administrative Agent forthwith on demand such corresponding amount, together
with interest thereon, for each day from the date such amount is made available
to such Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of such Borrower, the interest rate
applicable at such time under Section 2.06 to Advances comprising part of such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Advance as part of such Borrowing
for all purposes under this Agreement.
(e) Failure to Make Advances. The failure of any Lender to make the
------------------------
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the date of
such Borrowing, but no Lender shall be responsible for
49
the failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.
SECTION 2.03. Repayment of Advances. (a) Revolving Credit Advances.
--------------------- -------------------------
Each of the Borrowers shall repay to the Administrative Agent for the ratable
account of the Revolving Credit Lenders on the Termination Date the aggregate
principal amount of all of the Revolving Credit Advances made to such Borrower
and outstanding on such date.
(b) Term Advances. IFE shall repay to the Administrative Agent for
-------------
the ratable account of the Term Lenders the aggregate principal amount of the
Term Advances outstanding on the following dates in an amount equal to the
percentage of the aggregate principal amount of all of the Term Advances
outstanding on the Effective Date (after giving effect to the Term Borrowing, if
any, made on the Effective Date) set forth opposite such dates (in each case
which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.05):
DATE PERCENTAGE
---- ----------
December 30, 1999 2.50%
March 30, 2000 2.50%
June 29, 2000 2.50%
September 29, 2000 2.50%
December 28, 2000 5.00%
March 29, 2001 5.00%
June 28, 2001 5.00%
September 27, 2001 5.00%
December 28, 2001 5.00%
March 28, 2002 5.00%
June 27, 2002 5.00%
September 27, 2002 5.00%
December 30, 2002 6.25%
March 29, 2003 6.25%
June 27, 2003 6.25%
September 29, 2003 6.25%
December 30, 2003 6.25%
March 30, 2004 6.25%
June 29, 2004 6.25%
September 29, 2004 6.25%
provided, however, that, notwithstanding the foregoing provisions of this
Section 2.03(b), the final principal repayment installment of the Term Advances
shall be repaid in full on the Termination Date and in any event shall be in an
amount equal to the aggregate principal amount of all Term Advances outstanding
on such date.
50
SECTION 2.04. Termination or Reduction of the Commitments. (a)
-------------------------------------------
Optional. The Appropriate Borrowers, upon at least three Business Days' notice
--------
to the Administrative Agent, may terminate in whole or reduce in part the unused
portion of the Term Commitments or the Unused Revolving Credit Commitments;
provided, however, that each partial reduction of either of the Facilities shall
be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or, if less, the aggregate amount of such Facility. Each
reduction of the unused portions of the Term Commitments pursuant to this
Section 2.04(a) shall be applied first, to the next two succeeding principal
repayment installments of the Term Facility in direct order of maturity until
such principal repayment installments are repaid in full and second, to the
remaining principal repayment installments of the Term Facility on a pro rata
basis. Each reduction of the Unused Revolving Credit Commitments pursuant to
this Section 2.04(a) shall be applied first, to the next two succeeding
scheduled commitment reduction installments of the Revolving Credit Facility in
direct order of maturity until such scheduled commitment reduction installments
are reduced in full and second, to the remaining scheduled commitment reduction
installments of the Revolving Credit Facility on a pro rata basis.
(b) Mandatory. (i) On the Effective Date, after giving effect to the Term
---------
Borrowing, if any, to be made on such date, and from time to time thereafter
upon each repayment or prepayment of the Term Advances, the Term Facility shall
be automatically and permanently reduced by an amount equal to the amount by
which the Term Facility immediately prior to such reduction exceeds the
aggregate unpaid principal amount of the Term Advances outstanding at such
time.
(ii) The Revolving Credit Facility shall be automatically and permanently
reduced on the following dates in an amount equal to the percentage of the
aggregate Revolving Credit Commitments of the Revolving Credit Lenders on the
Effective Date set forth opposite such dates (after giving effect to all
reductions in such amounts on or prior to any such date as a result of the
application of commitment reductions in accordance with the order of priority
set forth in subsection (a) of this Section 2.04 or clause (iii), (iv) or (v) of
this Section 2.04(b)).
DATE PERCENTAGE
---- ----------
December 28, 2001 3.75%
March 28, 2002 3.75%
June 27, 2002 3.75%
September 27, 2002 3.75%
December 30, 2002 3.75%
March 29, 2003 3.75%
June 27, 2003 3.75%
September 29, 2003 3.75%
December 30, 2003 17.50%
March 30, 2004 17.50%
June 29, 2004 17.50%
September 29, 2004 17.50%
51
provided, however, that, notwithstanding the foregoing provisions of this
clause (ii), all of the Revolving Credit Commitments of the Revolving Credit
Lenders shall be terminated in whole on the termination Date
(iii) The Facilities shall be automatically and permanently reduced,
on the tenth day following each date on which Fox Kids deliver to the Lenders
the audited Consolidated financial statements of Fox Kids and its Subsidiaries
referred to in Section 7(i)(ii) of the Fox Kids Guarantee (but in any event
within 130 days after the end of each Fiscal Year), commencing with such audited
Consolidated financial statements for the Fiscal Year ending June 30, 1998, by
an amount equal to the product of (A) the ECF Percentage in effect on the last
day of the related Fiscal Year and (B) the amount of Excess Cash Flow for such
Fiscal Year. Each reduction of the Facilities pursuant to this clause
(iii) shall be applied in the manner set forth in clause (i) of Section 2.04(c).
(iv) The Facilities shall be automatically and permanently reduced, on
the date of receipt of the Net Cash Proceeds by Fox Kids or any of its
Subsidiaries from:
(A) the sale, lease, transfer or other disposition of any property or
assets of Fox Kids or any of its Subsidiaries (other than (1) any property
or assets expressly permitted to be sold, leased, transferred or disposed
of under any of clauses (i) through (v) of Section 5.02(d) or, solely to
the extent provided therein, clause (vi), (viii) or (ix) of Section 5.02(d)
or (2) any property or assets of any of the Excluded Fox Kids
Subsidiaries);
(B) the incurrence or issuance by Fox Kids or any of its Subsidiaries
of any Indebtedness (other than (1) Indebtedness expressly permitted to be
incurred or issued pursuant to clause (i) or (ii), or subclause
(iii)(A),(iii)(C) or (iii)(G), of Section 5.02(b) or, to the extent the
aggregate amount of gross proceeds from all Indebtedness of the Borrowers
and their respective Subsidiaries issued or incurred under subclause
(iii)(L) of Section 5.02(b) on or prior to such date does not exceed
$20,000,000, subclause (iii)(L) of Section 5.02(b) and (2) the Senior Notes
and Permitted Affiliated Subordinated Notes (unless all or any portion of
the proceeds thereof are specified in the related certificate of a
Responsible Officer of Fox Kids to be so applied));
(C) the issuance or sale by Fox Kids or any of its Subsidiaries of
any Equity Interests therein (other than any such issuance or sale of
Equity Interests in Fox Kids or any of its Subsidiaries pursuant to
subclause (v), (vi) or (vii) of Section 5.02(f) hereof or subsection (iii)
or (vi) (unless all or any portion of the proceeds of the issuance and sale
of such permitted Preferred Stock are specified in the related certificate
of a Responsible Officer of Fox Kids to be so applied) of Section 8(c) of
the Fox Kids Guarantee); and
(D) any Extraordinary Receipts received by or paid to or for the
account of Fox Kids or any of its Subsidiaries and not otherwise included
in subclause (iv)(A),(iv)(B) or (iv)(C) of this Section 2.04(b),
by an amount equal to the product of (1) the NCP Percentage in effect on the
date of receipt of such Net Cash Proceeds and (2) the amount of such Net Cash
Proceeds. Each reduction of the Facilities pursuant to this clause (iv) shall be
applied in the manner set forth in clause (i) of Section 2.04(c).
(v) Notwithstanding any of the other provisions of this Section 2.04,
52
(A) if, following the occurrence of any "Asset Sale" (as defined in
the applicable Senior Notes Indenture), Fox Kids is required to commit by a
particular date (a "Commitment Date") to apply or to cause any of its
Subsidiaries to apply an amount equal to any of the "Net Cash Proceeds" (as
defined in the applicable Senior Notes Indenture) thereof in a particular
manner, or to apply or to cause any of its Subsidiaries to apply by a particular
date (an "Application Date") an amount equal to any such "Net Cash Proceeds" in
a particular manner, in either case in order to excuse Fox Kids from being
required to make an offer to redeem or to repurchase all or a portion of the
Senior Notes as a result of such "Asset Sale", and Fox Kids shall have failed to
so commit or to so apply, or to have caused any of its Subsidiaries to so commit
or to so apply, an amount equal to such "Net Cash Proceeds" at least 30 days
before the Commitment Date or the Application Date, as the case may be, or
(B) if Fox Kids at any other time shall have failed to apply or to
commit, or to have caused any of its Subsidiaries to apply or to commit, an
amount equal to any such "Net Cash Proceeds", and within 30 days thereafter
assuming no further application or commitment of an amount equal to such "Net
Cash Proceeds", Fox Kids would otherwise be required to make an offer to redeem
or to repurchase all or a portion of the Senior Notes as a result of such "Asset
Sale",
then, in either such case, the Facilities shall be automatically and permanently
reduced on such date by an amount equal to the product of (1) the NCP Percentage
in effect on such date and (2) the amount of such "Net Cash Proceeds" required
to excuse Fox Kids from making any such offer of redemption or repurchase. Each
reduction of the Facilities pursuant to this clause (v) shall be applied in the
manner set forth in clause (i) of Section 2.04(c).
(c) Application of Commitment Reductions. (i) Each reduction of the
------------------------------------
Facilities pursuant to clause (iii), (iv) or (v) of Section 2.04(b) shall be
applied first, to the next two succeeding principal repayment installments of
the Term Facility in direct order of maturity until such principal repayment
installments are repaid in full, second, to the remaining principal repayment
installments of the Term Facility on a pro rata basis, third, to the next two
succeeding scheduled commitment reduction installments of the Revolving Credit
Facility in direct order of maturity until such scheduled commitment reduction
installments are reduced in whole and fourth, to the remaining scheduled
commitment reduction installments of the Revolving Credit Facility on a pro rata
basis.
(ii) Upon each reduction of either of the Facilities pursuant to this
Section 2.04, the Commitment of each of the Appropriate Lenders under such
Facility shall be reduced by such Lenders Pro Rata Share of the amount by which
such Facility is reduced.
SECTION 2.05. Prepayments. (a) Optional. Each of the Appropriate
----------- --------
Borrowers may, upon at least three Business Days' notice to the Administrative
Agent stating the Facility under which Advances are proposed to be prepaid and
the proposed date and aggregate principal amount of the prepayment, and if such
notice is given such Borrower shall, prepay the aggregate principal amount of
Advances comprising part of the same Borrowing and outstanding on such date, in
whole or ratably in part; provided, however, that (i) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (ii) in the case of any such prepayment of a
Eurodollar Rate Advance on a date other than the last day of an Interest Period
therefor, the Borrower making such prepayment shall also pay any amounts owing
in respect of such Eurodollar
53
Rate Advance pursuant to Section 9.05(b). Each such prepayment of any Term
Advances shall be applied first, to the next two succeeding principal repayment
installments of the Term Facility in direct order of maturity until such
principal repayment installments are repaid in full and second, to the remaining
principal repayment installments of the Term Facility on a pro rata basis.
(b) Mandatory. (i) The Appropriate Borrowers shall, on each Business
---------
Day, prepay:
(A) an aggregate principal amount of the Term Advances comprising part
of the same Term Borrowings equal to the amount by which (1) the aggregate
principal amount of all Term Advances outstanding on such Business Day
exceeds (2) the Term Facility on such Business Day (after giving effect to
any permanent reduction thereof pursuant to Section 2.04 on such Business
Day), each such prepayment to be applied first, to the next two succeeding
principal repayment installments of the Term Facility in direct order of
maturity until such principal repayment installments are repaid in full and
second, to the remaining principal repayment installments of the Term
Facility on a pro rata basis; and
(B) an aggregate principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowings equal to the amount
by which (1) the aggregate principal amount of all Revolving Credit
Advances outstanding on such Business Day exceeds (2) the Revolving Credit
Facility on such Business Day (after giving effect to any permanent
reduction thereof pursuant to Section 2.04 on such Business Day), each such
prepayment to be applied first, to the next two succeeding scheduled
commitment reduction installments of the Revolving Credit Facility in
direct order of maturity until such scheduled commitment reduction
installments are reduced in full and second, to the remaining scheduled
commitment reduction installments of the Revolving Credit Facility on a pro
rata basis.
Any Excess Cash Flow or Net Cash Proceeds remaining after the application
thereof to the prepayment of Advances outstanding on the date of receipt thereof
pursuant to clause (iii), (iv) or (v) of Section 2.04(b) and this Section
2.05(b) may be retained by the applicable Borrower for use in its businesses and
operations in the ordinary course or as otherwise permitted under the terms of
this Agreement.
(ii) Notwithstanding any of the other provisions of this Section
2.05(b), so long as no Default under Section 7.01(a) or 7.01(f) or Event of
Default shall have occurred and be continuing, if any prepayment of Eurodollar
Rate Advances is required to be made under this Section 2.05(b) other than on
the last day of the Interest Period therefor, the Borrower to which such
Eurodollar Rate Advances were made may, in its sole discretion, deposit the
amount of any such prepayment otherwise required to be made hereunder into the
Cash Collateral Account of such Borrower until the last day of such Interest
Period, at which time the Administrative Agent shall be authorized (without any
further action by or notice to or from such Borrower) to apply such amount to
the prepayment of such Advances in accordance with this Section 2.05(b).
(c) Prepayments to Include Accrued Interest. All prepayments under
---------------------------------------
this Section 2.05 shall be made together with (i) accrued and unpaid interest to
the date of such prepayment on the principal amount so prepaid and (ii) in the
case of any such prepayment of a Eurodollar Rate Advance on a date other than
the last day of an Interest Period therefor, any amounts owing in respect of
such Eurodollar Rate Advance pursuant to Section 9.05(b).
54
SECTION 2.06. Interest on Advances. (a) Scheduled Interest. Each
-------------------- ------------------
of the Borrowers shall pay interest on the unpaid principal amount of each
Advance made to such Borrower from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
------------------
Rate Advance, a rate per annum equal at all times to the sum of (A) the
Base Rate in effect from time to time and (B) the Applicable Margin for
such Advance in effect from time to time, payable in arrears quarterly on
the second Business Day prior to the last day of each December, March, June
and September during such periods and on the date such Base Rate Advance
shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
------------------------
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Advance for such Interest Period and (B) the Applicable Margin for
such Advance in effect on the first day of such Interest Period, payable in
arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
----------------
of a Default under Section 7.01(a) or 7.01(f) or an Event of Default, the
Borrowers shall pay interest on (i) the unpaid principal amount of each Advance
owing to each of the Lenders, payable in arrears on the dates referred to in
clause (i) or (ii) of Section 2.06(a), as applicable, and on demand, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (i) or (ii) of Section 2.06(a), as
applicable, and (ii) to the fullest extent permitted by applicable law, the
amount of any interest, fee or other amount payable under this Agreement or any
of the other Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (i) or (ii) of Section 2.06(a), as applicable, and, in all
other cases, on Base Rate Advances pursuant to clause (i) of Section 2.06(a).
(c) Information from Reference Banks. Each of the Reference Banks
--------------------------------
hereby agrees to furnish to the Administrative Agent timely information for the
purpose of determining each Eurodollar Rate. If any one of the Reference Banks
shall not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks. If fewer than two Reference Banks furnish timely
information to the Administrative Agent for the purpose of determining the
Eurodollar Rate for any Eurodollar Rate Advances:
(i) the Administrative Agent shall forthwith notify the Borrower that
requested the Borrowing to have been comprised of such Eurodollar Rate
Advances and the Appropriate Lenders that the interest rate cannot be
determined for such Eurodollar Rate Advances;
55
(ii) each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance (or, if such Advance is then a Base Rate Advance, will continue as
a Base Rate Advance); and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances,
or to Convert Advances into Eurodollar Rate Advances, shall be suspended
until the Administrative Agent shall notify the Borrowers and the Lenders
that the circumstances causing such suspension no longer exist.
(d) Notice of Interest Rate. Promptly after receipt of a Notice of
-----------------------
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower that delivered such Notice of Borrowing and each of the
Appropriate Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of clause (i) or (ii) of Section 2.06(a), as
applicable. If any Notice of Borrowing delivered pursuant to Section 2.02(a)
specifies that the requested duration of the initial Interest Period for the
Eurodollar Rate Advances to comprise the Borrowing requested therein is nine
months, then the Administrative Agent shall send written confirmation, given not
later than 11:00 A.M. (New York City time) on the second Business Day prior to
the date of such Borrowing, to each of the Appropriate Lenders, by telex or
telecopier, confirming the actual duration of the initial Interest Period for
all such Eurodollar Rate Advances determined in accordance with clause (c) of
the definition of "Interest Period" set forth in Section 1.01.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrowers jointly and
---- --------------
severally agree to pay to the Administrative Agent for the account of the
Lenders a commitment fee (the "Commitment Fee"), from the Effective Date in the
case of each of the Initial Lenders and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each of the other Lenders until the Termination Date, payable in arrears
quarterly on the second Business Day prior to the last day of each December,
March, June and September, commencing December 30, 1997, and on the Termination
Date, at a rate per annum equal to the Applicable Percentage in effect from time
to time on the average daily unused portion of the Term Commitment of each of
the Term Lenders during such quarter and on the average daily Unused Revolving
Credit Commitment of each of the Revolving Credit Lenders during such quarter;
provided, however, that no Commitment Fee shall accrue on any of the Commitments
of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(b) Administrative Agent's and Co-Arranger's Fees. The Borrowers
---------------------------------------------
shall pay to the Administrative Agent, for its own account and, if applicable,
the account of the Co-Arrangers, such fees as have been agreed in the fee letter
dated June 6, 1997 between Fox Kids, on behalf of itself and the other
Borrowers, and Citicorp Securities, on behalf of itself and the Administrative
Agent, and as may hereafter from time to time be agreed among one or more of the
Borrowers, on the one hand, and the Administrative Agent, on the other hand.
SECTION 2.08. Conversion of Advances. (a) Optional. Each of the
---------------------- --------
Borrowers may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion in the case of a Conversion of Base Rate
Advances into Eurodollar Rate Advances or of Eurodollar Rate Advances of one
Interest Period into Eurodollar Rate Advances of another Interest Period, or
11:00 A.M. (New York City time) on the Business Day immediately preceding the
date of the proposed Conversion in the case of a Conversion of Eurodollar Rate
Advances into Base Rate Advances, and subject to the provisions of
56
Sections 2.06(c) and 2.09, Convert all or any portion of the Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided,
however, that:
(i) any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances;
(ii) any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be made only if no Default under Section 7.01(a) or 7.01(f)
or Event of Default shall have occurred and be continuing on the date of
such Conversion and shall be in an amount not less than the minimum amount
specified in Section 2.02(b); and
(iii) each Conversion of Advances comprising part of the same
Borrowing under any Facility shall be made among the Appropriate Lenders in
accordance with their respective Pro Rata Shares of such Borrowing.
Each notice of a Conversion (a "NOTICE OF CONVERSION") shall be delivered by
telephone, confirmed immediately in writing, or by telex or telecopier, in
substantially the form of Exhibit B-2 hereto, shall be duly executed by a
Responsible Officer of such Appropriate Borrower, and shall, within the
restrictions set forth in the immediately preceding sentence, specify therein:
(A) the requested date of such Conversion (which shall be a Business
Day);
(B) the Advances requested to be Converted; and
(C) if such Conversion is into Eurodollar Rate Advances, the requested
duration of the Interest Period for such Eurodollar Rate Advances (and, if
the requested duration of such Interest Period is specified to be nine
months, the desired alternative Interest Period therefor).
The Administrative Agent shall give each of the Appropriate Lenders prompt
notice of each Notice of Conversion received by it, by telex or telecopier.
Each Notice of Conversion shall be irrevocable and binding on the Borrower that
requested such Conversion.
(b) Mandatory. (i) On the date on which the aggregate unpaid
---------
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment, prepayment or otherwise, to less than $5,000,000, such
Eurodollar Rate Advances shall automatically Convert into Base Rate Advances.
(ii) If any of the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" set forth in Section
1.01, the Administrative Agent will forthwith so notify such Borrower and the
Appropriate Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Eurodollar Rate Advance with an Interest Period of one month.
(iii) Upon the occurrence and during the continuance of any Default
under Section 7.01(a) or 7.01(f) or any Event of Default, (A) each Eurodollar
Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (B) the
57
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
--------------------
introduction of or any change (other than any change by way of the imposition of
or increase in reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation or application of any Requirement of Law
after the date of this Agreement or (ii) the compliance with (A) any official
directive, guideline or request from any central bank or other Governmental
Authority or (B) any change therein or in the interpretation, application,
implementation, administration or enforcement thereof, that, in the case of
subclause (ii)(A) or (ii)(B) of this Section 2.09(a), becomes effective or is
issued or made after the date of this Agreement (whether or not having the force
of law), there shall be any increase in the cost to any of the Lenders of
agreeing to make or making, agreeing to participate in or participating in,
agreeing to renew or renewing or funding or maintaining any Advances of either
Type, or any reduction in the amount owing to any of the Lenders or their
respective Applicable Lending Offices under this Agreement in respect of any
Advances of either Type (excluding, for purposes of this Section 2.09, any such
increased costs resulting from (1) Taxes or Other Taxes (as to which Section
2.11 shall govern) and (2) changes in the basis of taxation of overall net
income or overall gross income by the United States of America or the
jurisdiction under the laws of which such Lender is organized or has either of
its Applicable Lending Offices or any political subdivision thereof), then the
Borrowers hereby jointly and severally agree to pay, from time to time upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
to the Administrative Agent for the account of such Lender additional amounts
sufficient to compensate or to reimburse such Lender for all such increased
costs or reduced amounts. A certificate of the Lender requesting such
additional compensation pursuant to this Section 2.09(a), submitted to the
Borrowers by such Lender and specifying therein the amount of such additional
compensation (including the basis of calculation thereof), shall be conclusive
and binding for all purposes, absent manifest error.
(b) If any of the Lenders determines that compliance with any
Requirement of Law, or (i) any official directive, guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) or (ii) any change therein or in the interpretation, application,
implementation, administration or enforcement thereof, that, in the case of
clause (i) or (ii) of this Section 2.09(b), is enacted or becomes effective, or
is implemented or is first required or expected to be complied with, after the
date of this Agreement affects the amount of capital required or expected to be
maintained by such Lender (or either of the Applicable Lending Offices of such
Lender) or by any Person controlling such Lender and that the amount of such
capital is increased by or is based upon the existence of the commitment of such
Lender to lend hereunder and other commitments of this type, then the Borrowers
hereby jointly and severally agree to pay, upon demand by such Lender (with a
copy of such demand to the Administrative Agent), to the Administrative Agent
for the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such Person in light
of such circumstances, to the extent that such Lender or such Person reasonably
determines such increase in capital to be allocable to the existence of the
commitment of such Lender to lend hereunder. A certificate of the Lender
requesting such additional compensation pursuant to this Section 2.09(b),
submitted to the Borrowers by such Lender and specifying therein the amount of
such additional compensation (including the basis of calculation thereof), shall
be conclusive and binding for all purposes, absent manifest error.
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(c) If, with respect to any Eurodollar Rate Advances under either of
the Facilities, Lenders owed or holding not less than a majority in interest of
the aggregate principal amount of all Advances outstanding under such Facility
at any time notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, participating in or renewing, or funding or maintaining,
their Eurodollar Rate Advances for such Interest Period, the Administrative
Agent shall forthwith so notify the Appropriate Borrowers and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under such Facility
will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Appropriate Borrowers (promptly following notice from the Appropriate Lenders)
that such Appropriate Lenders have determined that the circumstances causing
such suspension no longer exist.
(d) Notwithstanding any of the other provisions of this Agreement, if
any Lender shall notify the Administrative Agent that the introduction of or any
change in or in the interpretation or application of any Requirement of Law
makes it unlawful, or any central bank or other Governmental Authority asserts
that it is unlawful, for such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make, to participate in or to renew, or to fund or
maintain, Eurodollar Rate Advances hereunder, then (i) each Eurodollar Rate
Advance of such Lender will automatically, on the last day of the then existing
Interest Period therefor, if permitted by applicable law, or otherwise upon
demand, Convert into a Base Rate Advance of such Lender and (ii) the obligation
of such Lender to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrowers
(promptly following notice from such Lender) that the circumstances causing such
suspension no longer exist. If the obligation of a Lender to make Eurodollar
Rate Advances is suspended pursuant to this Section 2.09(d), then, subject to
subsection (e) of this Section 2.09, until the circumstances that gave rise to
such suspension no longer apply to such Lender, all Eurodollar Rate Advances
that would otherwise be made by such Lender as part of any Borrowing shall be
made instead as Base Rate Advances and all payments of principal of and interest
on such Base Rate Advances shall be made at the same time as payments on the
Eurodollar Rate Advances otherwise comprising part of such Borrowing.
(e) If, at any time, the Administrative Agent shall notify any of the
Borrowers of the suspension of the obligations of Lenders owed or holding not
less than a majority in interest of the aggregate principal amount of all
Advances outstanding at any time (the "AFFECTED LENDERS") to make, participate
in or renew, or to fund or maintain, their Eurodollar Rate Advances pursuant to
Section 2.09(c) or 2.09(d), then the Administrative Agent (in consultation with
each of the Affected Lenders) and the Borrowers shall enter into negotiations in
good faith with a view to agreeing upon an alternative basis acceptable to the
Borrowers and the Affected Lenders for determining a substitute rate of interest
(the "SUBSTITUTE RATE") for the Eurodollar Rate that shall be applicable to the
Affected Lenders during the period of time that such suspension continues, which
Substitute Rate shall reflect the cost to each of the Affected Lenders of
making, participating in or renewing, or funding or maintaining, such Advances
under the circumstances that gave rise to such suspension from alternative
sources plus the Applicable Margin in effect from time to time for Eurodollar
Rate Advances under the applicable Facility; provided that if any of the
Affected Lenders shall be a Defaulting Lender at any such time, then such
Defaulting Lender shall not be entitled to participate in the negotiations for
determining a Substitute Rate and the approval of such Defaulting Lender shall
not be required for an alternative rate of interest to become a Substitute Rate.
If a Substitute Rate is so agreed to among the Borrowers and the Affected
Lenders, then,
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until the circumstances that gave rise to such suspension no longer apply to the
Affected Lenders, all Eurodollar Rate Advances that would otherwise be made by
the Affected Lenders as part of any Borrowing shall be made instead as Advances
bearing interest at the Substitute Rate and all payments of principal of and
interest on such Advances shall be made at the same time as payments of
principal of and interest on the Eurodollar Rate Advances otherwise comprising
part of such Borrowing. If at any time during which a Substitute Rate is in
effect the cost to any of the Affected Lenders of making, participating in or
renewing, or funding or maintaining, such Advances from alternative sources
increases, the Affected Lenders shall promptly notify the Borrowers of the
amount of such increase and the Borrowers shall have the option either (i) to
pay to the Administrative Agent for the account of each such Affected Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Affected Lender for such increase or (ii) to Convert each such
Advance bearing interest at the Substitute Rate into a Base Rate Advance. A
certificate of any of the Affected Lenders pursuant to this Section 2.09(e),
submitted to the Borrowers by such Affected Lender and specifying therein the
cost to such Affected Lender of making, participating in or renewing, or funding
or maintaining, Eurodollar Rate Advances from alternative sources and the
circumstances that gave rise to the related suspension thereof, shall be
conclusive and binding for all purposes, absent manifest error.
(f) Each of the Lenders hereby agrees that, upon the occurrence of any
circumstances entitling such Lender to additional compensation or to cease
making, participating in or renewing, or funding or maintaining, Eurodollar Rate
Advances under any of the foregoing provisions of this Section 2.09, such Lender
shall use reasonable efforts (consistent with its existing internal policy
applied on a nondiscriminatory basis and with applicable legal and regulatory
restrictions) to designate a different Applicable Lending Office for any
Advances affected by such circumstances and/or to take any other reasonable
actions requested by the Borrowers if the making of such designation or the
taking of such actions, in the case of Section 2.09(a) or 2.09(b), would avoid
the need for such additional compensation or, in the case of Section 2.09(c) or
2.09(d), would allow such Lender to continue to perform its obligations to make,
to participate in or renew, or to fund or maintain, Eurodollar Rate Advances,
and, in any such case, would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. If any of the Lenders entitled to
additional compensation under any of the foregoing provisions of this Section
2.09 shall fail to designate a different Applicable Lending Office or to take
such reasonable actions as provided in this Section 2.09(f) or if the inadequacy
or illegality contemplated under Section 2.09(c) or 2.09(d), respectively, shall
continue with respect to such Lender notwithstanding such designation or such
reasonable actions, then, subject to the terms of Section 9.08(a), Holdings may
cause such Lender to (and, if Holdings so demands, such Lender shall) assign all
of its rights and obligations under this Agreement in accordance with Section
9.08(a); provided that if, upon such demand by Holdings, such Lender elects to
waive its request for additional compensation pursuant to Section 2.09(a) or
2.09(b), the demand by Holdings for such Lender to so assign all of its rights
and obligations under the Agreement shall thereupon be deemed withdrawn.
Nothing in this Section 2.09(f) shall affect or postpone any of the rights of
any of the Lenders or any of the obligations of the Borrowers under any of the
foregoing provisions of this Section 2.09 in any manner.
SECTION 2.10. Payments and Computations. (a) Each of the Borrowers
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shall make each payment under this Agreement and under the Notes, irrespective
of any right of counterclaim or setoff (except as otherwise provided in Section
2.13), not later than 12:00 Noon (New York City time) on the day when due (or,
in the case of payments made by Holdings or any of the Borrowers pursuant to
Section 6.01, on the date of demand therefor) in U.S. dollars to the
Administrative Agent at the Administrative Agent's Account in same day funds,
with payments received by the Administrative Agent
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after 12:00 Noon (New York City time) on any such day being deemed to have been
received on the next succeeding Business Day. The Administrative Agent will
promptly thereafter cause like funds to be distributed (i) if such payment by
Holdings or any of the Borrowers is in respect of principal, interest,
Commitment Fees or any other Obligation then payable under this Agreement and
under the Notes to more than one of the Lenders, to such Lenders for the account
of their respective Applicable Lending Offices in accordance with their
respective Pro Rata Shares of the amounts of such respective Obligations payable
to such Lenders at such time and (ii) if such payment by Holdings or any of the
Borrowers is in respect of any Obligation payable under this Agreement to one of
the Lenders at such time, to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon the acceptance of an Assignment and Acceptance by the
Administrative Agent and the recording of the information contained therein in
the Register pursuant to Section 9.08(d), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
under this Agreement and the Notes in respect of the interest assigned thereby
to the Lender assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.
(b) All computations of interest based on clause (a) of the definition
of "Base Rate" set forth in Section 1.01 shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or the Federal Funds Rate
and all computations of fees (including, without limitation, fees payable under
Section 2.07) shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable. Each determination by the Administrative Agent of an interest
rate or fee hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(c) Whenever any payment under this Agreement or the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from
the applicable Borrower prior to the date on which any payment is due from such
Borrower to any of the Lenders under this Agreement that such Borrower will not
make such payment in full, the Administrative Agent may assume that such
Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to such Lender on such date an amount equal to the amount due to
such Lender on such date. If and to the extent such Borrower shall not have so
made such payment in full to the Administrative Agent, each such Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender, together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(e) Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Agents and the Lenders under or in respect of
this Agreement and the other Loan Documents on
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any date, such payment shall be distributed by the Administrative Agent and
applied by the Agents and the Lenders in the following order of priority:
(i) first, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Agents (solely
in their respective capacities as Agents) under or in respect of this
Agreement or any of the other Loan Documents on such date, ratably based
upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Agents on such date;
(ii) second, to the payment of all of the indemnification payments,
costs and expenses that are due and payable to the Lenders under Sections
9.04 and 9.05 hereof, Section 13 of the Fox Kids Guarantee, Section 12 of
the Subsidiaries Guarantee, Section 21 of the Pledge and Assignment
Agreement or the applicable section of any of the other Loan Documents on
such date, ratably based upon the respective aggregate amounts of all such
indemnification payments, costs and expenses owing to the Lenders on such
date;
(iii) third, to the payment of all of the amounts that are due and
payable to the Administrative Agent and the Lenders under Sections 2.09 and
2.11 hereof, Section 5 of the Fox Kids Guarantee or Section 5 of the
Subsidiaries Guarantee on such date, ratably based upon the respective
aggregate amounts thereof owing to the Administrative Agent and the Lenders
on such date;
(iv) fourth, to the payment of all of the fees that are due and
payable to the Lenders under Section 2.07(a) on such date, ratably based
upon the respective aggregate Commitments of the Lenders under both of the
Facilities on such date;
(v) fifth, to the payment of all of the accrued and unpaid interest on
the Obligations of the Borrowers under or in respect of the Loan Documents
that is due and payable to the Administrative Agent and the Lenders under
Section 2.06(b) on such date, ratably based upon the respective aggregate
amounts of all such interest owing to the Administrative Agent and the
Lenders on such date;
(vi) sixth, to the payment of all of the accrued and unpaid interest
on the Advances that is due and payable to the Administrative Agent and the
Lenders under Section 2.06(a) on such date, ratably based upon the
respective aggregate amounts of all such interest owing to the
Administrative Agent and the Lenders on such date;
(vii) seventh, to the payment of the principal amount of all of the
outstanding Advances that is due and payable to the Administrative Agent
and the Lenders on such date, ratably based upon the respective aggregate
amounts of all such principal owing to the Administrative Agent and the
Lenders on such date; and
(viii) eighth, to the payment of all other Obligations of the Loan
Parties owing under or in respect of the Loan Documents that are due and
payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured Parties
on such date.
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If the Administrative Agent receives funds for application to the Obligations of
the Loan Parties under or in respect of the Loan Documents under circumstances
for which the Loan Documents do not specify the Advances or the Facility to
which, or the manner in which, such funds are to be applied, the Administrative
Agent may, but shall not be obligated to, elect to distribute such funds to each
of the Lenders in accordance with such Lender's Pro Rata Share of the aggregate
principal amount of all Advances outstanding at such time, in repayment or
prepayment of such of the outstanding Advances or other Obligations owing to
such Lender, and, in the case of the Term Facility, for application to such
principal repayment installments thereof, as the Administrative Agent shall
direct, and, in the case of the Revolving Credit Facility, for application to
such scheduled commitment reduction installments thereof, as the Administrative
Agent shall direct.
SECTION 2.11. Taxes. (a) Any and all payments by Holdings or any of
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the Borrowers under or in respect of this Agreement or any of the other Loan
Documents to which Holdings or such Borrower is a party shall be made, in
accordance with Section 2.10 (or the applicable provisions of such other Loan
Document), free and clear of and without deduction for any and all present or
future taxes, levies, imposts, duties, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each of the
Lenders and each of the Agents, taxes that are imposed on its overall net income
by the United States of America and taxes that are imposed on its overall net
income (and franchise taxes that are imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender or such Agent, as the
case may be, is organized or is a resident, or has a fixed place of business or
a permanent establishment, or any political subdivision of any of the foregoing,
and, in the case of each of the Lenders, taxes that are imposed on its overall
net income (and franchise taxes that are imposed in lieu thereof) by the state
or foreign jurisdiction of either of the Applicable Lending Offices of such
Lender or any political subdivision thereof (all such nonexcluded taxes, levies,
imposts, duties, deductions, charges, withholdings and liabilities in respect of
payments by Holdings or any of the Borrowers under or in respect of this
Agreement or any of the other Loan Documents to which Holdings or any such
Borrower is a party being, collectively, "TAXES"). If Holdings or any of the
Borrowers shall be required by applicable Requirements of Law to deduct any
Taxes from or in respect of any sum payable under or in respect of this
Agreement or any of the other Loan Documents to which Holdings or such Borrower
is a party to any of the Lenders or any of the Agents, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.11) such Lender or such Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Holdings
or such Borrower shall make such deductions and (iii) Holdings or such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
Governmental Authority in accordance with the applicable Requirements of Law.
(b) In addition, Holdings and each of the Borrowers hereby agree to
pay any present or future stamp, recording, documentary, excise, property or
similar taxes, charges or levies that arise from any payment made under or in
respect of this Agreement or any of the other Loan Documents to which Holdings
or such Borrower is a party, or from the execution, delivery or registration of,
or any performance under, or otherwise with respect to, under or in respect of
this Agreement or any of the other Loan Documents to which Holdings or such
Borrower is a party (collectively, "OTHER TAXES").
(c) Holdings and each of the Borrowers hereby agree to indemnify each
of the Lenders and each of the Agents for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any jurisdiction on amounts
payable under this Section 2.11, imposed on or paid by
63
such Lender or such Agent, as the case may be, and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. The indemnity by Holdings and the Borrowers provided for in
this subsection (c) shall apply and be made whether or not the Taxes or Other
Taxes for which indemnification hereunder is sought have been correctly or
legally asserted; provided, however, that such Lender or such Agent seeking such
indemnification shall take all reasonable actions (consistent with its existing
internal policy applied on a nondiscriminatory basis and legal and regulatory
restrictions) requested by Holdings or any of the Borrowers to assist Holdings
or such Borrower in recovering the amounts paid thereby pursuant to this
subsection (c) from the relevant taxation authority or other Governmental
Authority. Amounts payable by Holdings or any of the Borrowers under the
indemnity set forth in this subsection (c) shall be paid within 30 days from the
date on which the applicable Lender or Agent, as the case may be, makes written
demand therefor. With respect to each payment by Holdings or any of the
Borrowers under or in respect of this Agreement or any of the other Loan
Documents to which Holdings or such Borrower is a party, the amount of Taxes due
from Holdings or such Borrower pursuant to this subsection (c) shall only be
payable to the extent such amount exceeds the amount of Taxes paid by Holdings
or such Borrower pursuant to subsection (a) of this Section 2.11 with respect to
such payment.
(d) Within 30 days after the date of any payment of Taxes, Holdings or
the Borrower making such payment (or on whose behalf such payment was made)
shall furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing payment thereof,
to the extent such a receipt is issued therefor, or other written proof of
payment thereof that is reasonably satisfactory to the Administrative Agent. In
the case of any payment under or in respect of this Agreement or any of the
other Loan Documents by or on behalf of Holdings or any of the Borrowers through
an account or branch outside the United States, or on behalf of Holdings or such
Borrower by a payor that is not a United States person, if Holdings or such
Borrower determines that no Taxes are payable in respect thereof, Holdings or
such Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at its address referred to in Section 9.02, an opinion of
counsel reasonably acceptable to the Administrative Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e) of this Section 2.11, the terms "UNITED STATES" and "UNITED
STATES PERSON" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each of the Lenders organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each of the Initial Lenders, and on
the date of the Assignment and Acceptance pursuant to which it becomes a Lender
in the case of each of the other Lenders, and from time to time thereafter as
reasonably requested in writing by Holdings or the Administrative Agent (but
only so long thereafter as such Lender remains lawfully able to do so), provide
Holdings and the Administrative Agent with two original Internal Revenue Service
forms 1001 or 4224 or, in the case of any of the Lenders that is claiming
exemption from United States withholding tax under Section 871(h) or 881(c) of
the Internal Revenue Code with respect to payments of "portfolio interest", form
W-8 (and, if such Lender delivers a form W-8, a certificate representing that
such Lender is not (i) a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, (ii) a ten-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of Holdings or any of the Borrowers
or (iii) a controlled foreign corporation related to Holdings or any of the
Borrowers (within the meaning of Section 864(d)(4) of the Internal Revenue
Code), as appropriate), or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments pursuant to this
Agreement or the other Loan Documents or, in the case of a Lender
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delivering a form W-8, certifying that such Lender is a foreign corporation,
partnership, estate or trust. If the forms referred to above in this subsection
(e) that are provided by a Lender at the time such Lender first becomes a party
to this Agreement indicate a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate shall be
considered excluded from Taxes solely for the periods governed by such form.
However, if, at the date of the Assignment and Acceptance pursuant to which a
Lender assignee becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection (a) of this Section 2.11 in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent (and only to such extent), the term "Taxes" shall include (in
addition to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to such Lender assignee on such date. If any of the forms,
certificates or other documents referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001, 4224 or W-8 (or the related certificate described above), that a
Lender reasonably considers to be confidential, such Lender shall give notice
thereof to Holdings and the Administrative Agent and shall not be obligated to
include in such form, certificate or document such confidential information.
None of the Lenders shall be entitled to payment pursuant to subsection (a), (b)
or (c) of this Section 2.11 with respect to any additional Taxes that resulted
solely and directly from the change in either of the Applicable Lending Offices
of such Lender (other than any such additional Taxes that are imposed as a
result of a change in the applicable Requirements of Law, or in the
interpretation or application thereof, occurring after the date of such change),
unless such change is made pursuant to the terms of Section 2.09(f) or 2.11(g)
or as a result of a request therefor by Holdings or any of the Borrowers.
(f) For any period with respect to which any of the Lenders has failed
(i) to provide Holdings with the appropriate form, certificate or other document
described in subsection (e) of this Section 2.11 (other than if such failure is
due to a change in the applicable Requirements of Law, or in the interpretation
or application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided or if such form otherwise
is not required under subsection (e) of this Section 2.11) or (ii) to notify the
Appropriate Borrowers of any change in either of the Applicable Lending Offices
of such Lender pursuant to the definition of "Base Rate Lending Office" or
"Eurodollar Lending Office" set forth in Section 1.01, as applicable (other than
any such change that is made pursuant to the terms of Section 2.09(f) or 2.11(g)
or as a result of a request therefor by Holdings or any of the Borrowers), such
Lender shall not be entitled to any payment or indemnification under subsection
(a) or (c) of this Section 2.11 with respect to Taxes imposed by the United
States by reason of such failure; provided, however, that should any of the
Lenders become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, Holdings and each of the
Borrowers hereby agree to take such steps as such Lender shall reasonably
request to assist such Lender in recovering such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.11 hereby agrees to use reasonable efforts (consistent with its
existing internal policy applied on a nondiscriminatory basis and legal and
regulatory restrictions) to change the jurisdiction of either of its Applicable
Lending Offices and/or to take any other reasonable actions requested by
Holdings if the making of such a change or the taking of such reasonable actions
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable
65
judgment of such Lender, be otherwise disadvantageous to such Lender. If any
Lender entitled to additional compensation under any of the foregoing provisions
of this Section 2.11 shall fail to change the jurisdiction of either of its
Applicable Lending Offices or to take such reasonable actions as provided in
this subsection (g), or if the failure of such Lender to disclose information
which such Lender has determined to be confidential in the form, certificate or
other document delivered by such Lender pursuant to subsection (e) of this
Section 2.11 would increase the liability of Holdings or any of the Borrowers
under this Section 2.11, then, subject to the terms of Section 9.08(a), Holdings
may cause such Lender to (and, if Holdings so demands, such Lender shall) assign
all of its rights and obligations under this Agreement in accordance with
Section 9.08(a); provided that if, upon such demand by Holdings, such Lender
elects to waive its right to additional amounts payable pursuant to this Section
2.11, the demand by Holdings for such Lender to so assign all of its rights and
obligations under this Agreement shall thereupon be deemed withdrawn. Nothing
in this subsection (g) shall affect or postpone any of the rights of any of the
Lenders or any of the obligations of Holdings or any of the Borrowers under any
of the foregoing provisions of this Section 2.11 in any manner.
(h) All payments made by any of the Borrowers pursuant to subsection
(a), (b) or (c) of this Section 2.11 shall, to the fullest extent permitted by
applicable law, be treated by such Borrower as additional interest.
SECTION 2.12. Sharing of Payments, Etc. If any of the Lenders shall
------------------------
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of setoff or otherwise) on account of (a) Obligations due
and payable to such Lender under or in respect of this Agreement and the other
Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time (other than pursuant to Section 2.09, 2.11, 9.04, 9.05 or 9.08) to
(ii) the aggregate amount of the Obligations due and payable to all of the
Lenders under or in respect of this Agreement and the other Loan Documents at
such time) of payments on account of the Obligations due and payable to all of
the Lenders under or in respect of this Agreement and the other Loan Documents
at such time obtained by all of the Lenders at such time or (b) Obligations
owing (but not due and payable) to such Lender under or in respect of this
Agreement and the other Loan Documents at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations owing
(but not yet due and payable) to such Lender at such time (other than pursuant
to Section 2.09, 2.11, 9.04, 9.05 or 9.08) to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all of the Lenders under or in
respect of this Agreement and the other Loan Documents at such time) of payments
on account of the Obligations owing (but not due and payable) to all of the
Lenders under or in respect of this Agreement and the other Loan Documents at
such time obtained by all of the Lenders at such time, such Lender shall
forthwith purchase from the other Lenders such participations in the Obligations
due and payable or owing to them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each of the
other Lenders shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such other Lender's
ratable share (according to the proportion of (A) the purchase price paid to
such other Lender to (B) the aggregate purchase price paid to all of the
Lenders) of such recovery, together with an amount equal to such other Lender's
ratable share (according to the proportion of (1) the amount of such other
Lender's required repayment to (2) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Holdings and
each of the Borrowers hereby agree that any Lender so purchasing a
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participation from another Lender pursuant to this Section 2.12 may, to the
fullest extent permitted by applicable law, exercise all of its rights of
payment (including, without limitation, the right of setoff) with respect to
such participation as fully as if such Lender were the direct creditor of
Holdings or such Borrower in the amount of such participation.
SECTION 2.13. Defaulting Lenders. (a) If, at any time, (i) any of
------------------
the Lenders shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe
one or more Defaulted Advances to any of the Borrowers and (iii) such Borrower
or any of the other Borrowers shall be required to make any payment under this
Agreement or any of the other Loan Documents to or for the account of such
Defaulting Lender, then the paying Borrower may, so long as no Default shall
have occurred and be continuing at such time and to the fullest extent permitted
by applicable law, set off and otherwise apply the obligation of such Borrower
and the other Borrowers to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advances. If, on any date, any of the Borrowers shall so set off and
otherwise apply its obligation or the obligation of any of the other Borrowers
to make any such payment against the obligation of such Defaulting Lender to
make any such Defaulted Advance on or prior to such date, the amount so set off
and otherwise applied by such Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance under each of the Facilities
pursuant to which, and made on the respective dates on which, each such
Defaulted Advance was originally required to have been made by such Defaulting
Lender pursuant to Section 2.01 (and, in doing so, such setoff shall satisfy the
obligation of such Borrower to such Defaulting Lender to the extent of the
aggregate amount so set off or otherwise applied). Each such Advance shall be a
Base Rate Advance and shall be considered for all purposes of this Agreement to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01, even if the
other Advances comprising such Borrowing shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this Section 2.13(a).
Each of the Borrowers shall promptly notify the Administrative Agent at any time
that such Borrower exercises its right of setoff or otherwise reduces the amount
of its obligation or the obligation of any of the other Borrowers to any
Defaulting Lender pursuant to this Section 2.13(a) and shall set forth in such
notice (A) the name of the Defaulting Lender and the Defaulted Advance required
to be made by such Defaulting Lender, (B) the obligation of the Borrowers to
such Defaulting Lender against which such Defaulted Advance was so set off and
applied and (C) the amount set off and otherwise applied in respect of such
Defaulted Advance pursuant to this Section 2.13(a). Any portion of such payment
otherwise required to be made by any of the Borrowers to or for the account of
such Defaulting Lender that is paid by such Borrower, after giving effect to the
amount set off and otherwise applied by such Borrower or any of the other
Borrowers pursuant to this Section 2.13(a), shall be applied by the
Administrative Agent as specified in Section 2.13(b) or 2.13(c).
(b) If, at any time, (i) any of the Lenders shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to the
Administrative Agent or any of the other Lenders and (iii) any of the Borrowers
shall make any payment under or in respect of this Agreement or any of the other
Loan Documents to the Administrative Agent for the account of such Defaulting
Lender, then the Administrative Agent may, on its behalf or on behalf of such
other Lenders and to the fullest extent permitted by applicable law, apply at
such time the amount so paid by such Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. If the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such
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extent, of such Defaulted Amount on such date. Any such amount so applied by
the Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lenders in accordance with
the respective Pro Rata Shares of such Defaulted Amounts payable at such time to
the Administrative Agent and such other Lenders and, if the amount of such
payment made by such Borrower shall at such time be insufficient to pay all of
the Defaulted Amounts owing to the Administrative Agent and the other Lenders at
such time, in the following order of priority:
(A) first, to the Administrative Agent for any Defaulted Amount owing
to the Administrative Agent (solely in its capacity as Administrative
Agent) at such time; and
(B) second, to the Lenders for any Defaulted Amounts owing to the
Lenders at such time, ratably based upon the respective Defaulted Amounts
owing to the Lenders at such time.
Any portion of such amount paid by any of the Borrowers for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this Section 2.13(b), shall be applied by the
Administrative Agent as specified in Section 2.13(c).
(c) If, at any time, (i) any of the Lenders shall be a Defaulting
Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a
Defaulted Amount and (iii) any of the Borrowers, the Administrative Agent or any
of the other Lenders shall be required to pay or to distribute any amount under
or in respect of this Agreement or any of the other Loan Documents to or for the
account of such Defaulting Lender, then such Borrower or such other Lender shall
pay such amount to the Administrative Agent to be held by the Administrative
Agent, to the fullest extent permitted by applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this Section 2.13(c) shall be deposited by
the Administrative Agent in an account with Citibank, in the name and under the
control of the Administrative Agent, but subject to the provisions of this
Section 2.13(c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be Citibank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the terms of, this
Section 2.13(c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow by it from time
to time to the extent necessary to make any Advances required to be made by such
Defaulting Lender to any of the Borrowers and to pay any other amounts payable
by such Defaulting Lender under this Agreement or any of the other Loan
Documents to the Administrative Agent, any of the other Agents or any of the
other Lenders, as and when such Advances or other amounts are required to be
made or paid and, if the amount so held in escrow shall at any time be
insufficient to make all such Advances and to pay all such other amounts
required to be made or paid at such time, in the following order of priority:
(A) first, to the Agents for any Advances and any other amounts due
and payable by such Defaulting Lender to the Agents (solely in their
respective capacities as Agents) under or in respect of this Agreement and
the other Loan Documents at such time, ratably based upon the respective
aggregate Advances and other amounts due and payable to the Agents at such
time;
(B) second, to the other Lenders for any amounts due and payable by
such Defaulting Lender to the other Lenders under or in respect of this
Agreement and the other Loan Documents
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at such time, ratably based upon the respective aggregate amounts due and
payable to the other Lenders at such time; and
(C) third, to the Appropriate Borrower for any Advances required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
If any of the Lenders that is a Defaulting Lender shall, at any time, cease to
be a Defaulting Lender, any funds held by the Administrative Agent in escrow at
such time with respect to such Lender shall be distributed by the Administrative
Agent to such Lender and applied by such Lender to the Obligations owing to such
Lender under or in respect of this Agreement and the other Loan Documents at
such time, ratably based upon the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.13 are in addition to other rights and remedies that any of the
Borrowers may have against such Defaulting Lender with respect to any Defaulted
Advances and that the Administrative Agent, any of the other Agents or any of
the other Lenders may have against such Defaulting Lender with respect to any
Defaulted Amount.
SECTION 2.14. Use of Proceeds. The proceeds of the Revolving Credit
---------------
Advances shall be (or, in the case of the Existing Revolving Credit Advances,
shall remain) available on and from time to time after the Effective Date, and
each of the Borrowers hereby agrees to use such proceeds, solely to finance in
part the Refinancing, to pay certain fees and expenses incurred in connection
with the consummation of the Transaction and for other general corporate
purposes not otherwise prohibited under the terms of the Loan Documents. The
proceeds of the Term Advances shall be (or, in the case of the Existing Term
Advances, shall remain) available on the Effective Date, and IFE hereby agrees
to use such proceeds solely to finance in part the Refinancing and to pay
certain fees and expenses incurred in connection with the consummation of the
Transaction.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of this
---------------------------------------------
Agreement. This Agreement shall become effective on and as of the first date
(the "EFFECTIVE DATE") on which all of the following conditions precedent shall
have been satisfied:
(a) The Lenders shall be reasonably satisfied with (i) the
organizational and legal structure and capitalization of Fox Kids and
Holdings and (ii) all changes in the organizational and legal structure and
capitalization of each of the other Loan Parties and their respective
Subsidiaries since the Phase II Closing Date (including, in the case of
clauses (i) and (ii) of this subsection (a), without limitation, the terms
and conditions of the Constitutive Documents and each class of Equity
Interests in Fox Kids, Holdings, each such other Loan Party and each such
Subsidiary and of each agreement or instrument relating to such structure
or capitalization). All of the Related Documents shall be in full force
and effect in the form received by the Lenders on or prior to the Effective
Date.
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(b) All of the Governmental Authorizations, and all of the consents,
approvals and authorizations of, notices and filings to or with, and other
actions by, any other Person necessary in connection with any aspect of the
Transaction, any of the Loan Documents or the Related Documents or any of
the other transactions contemplated thereby shall have been obtained
(without the imposition of any conditions that are not reasonably
acceptable to the Lenders) and shall remain in full force and effect; all
applicable waiting periods shall have expired without any action being
taken by any competent authority; and no Requirement of Law shall be
applicable in the reasonable judgment of the Lenders that restrains,
prevents or imposes materially adverse conditions upon any aspect of the
Transaction, any of the Loan Documents or the Related Documents or any of
the other transactions contemplated thereby.
(c) Before giving effect and immediately after giving pro forma effect
to the Transaction, no material adverse change shall have occurred in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Fox Kids and its Subsidiaries, taken as a whole,
since December 31, 1996.
(d) There shall exist no action, suit, investigation, litigation,
arbitration or proceeding pending or, to the best knowledge of Holdings and
each of the Borrowers, threatened against or affecting any of the Loan
Parties or any of their respective Subsidiaries or any of the property or
assets thereof in any court or before any arbitrator or by or before any
Governmental Authority of any kind (i) that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
or (ii) in which there is a reasonable likelihood of an adverse
determination and which purports to affect the legality, validity, binding
effect or enforceability of any aspect of the Transaction, any of the Loan
Documents or the Related Documents or any of the other transactions
contemplated thereby.
(e) Each aspect of the Transaction shall have been consummated or
shall be consummated on the Effective Date in compliance with all
applicable Requirements of Law. All of the Collateral shall be owned by
one or more of the Loan Parties, in each case free and clear of any Lien,
other than the liens and security interests created under the Loan
Documents; and the Administrative Agent, on behalf of the Secured Parties,
shall have a valid and perfected first priority lien on and security
interest in all of the Collateral. All of the filings, recordations and
searches necessary or desirable in connection with such liens and security
interests shall have been duly made, and all filing and recording fees and
taxes shall have been duly paid.
(f) All of the Senior Notes Documents shall be on terms and conditions
reasonably satisfactory to the Lenders; and each of the Lenders shall have
received a copy of the Final Offering Memorandum at least two Business Days
prior to the Effective Date. Fox Kids shall have received at least
$725,000,000 in gross proceeds from the issuance and sale of the Senior
Notes, from which at least $615,000,000 of such gross proceeds shall have
been used to permanently repay Existing Advances outstanding on the
Effective Date and accrued and unpaid interest thereon and the remainder of
which shall have been used or shall be used to pay fees and expenses
incurred in connection with the consummation of the Transaction and to
repay outstanding principal under, and accrued and unpaid interest on, the
Existing NAHI Subordinated Notes. After giving effect to the Transaction
and all of the Borrowings to be made on the Effective Date, the amount of
the aggregate Unused Revolving Credit Commitments shall be at least
$75,000,000.
70
(g) The representations and warranties contained in each of the Loan
Documents shall be correct in all material respects on and as of the
Effective Date, before and after giving effect to the Borrowings to be made
on the Effective Date and to the application of proceeds therefrom, as
though made on and as of such date (other than any such representation and
warranty that, by its terms, refers to a specific date other than the
Effective Date, in which case, as of such specific date). No event shall
have occurred and be continuing, or shall occur as a result of any of the
Borrowings to be made on the Effective Date or the application of proceeds
therefrom, that would constitute a Default.
(h) All of the accrued reasonable fees and expenses of the Agents and
the Lenders (including, without limitation, all of the accrued reasonable
fees and expenses of counsel for the Administrative Agent and local counsel
for the Lenders) that are required to be paid by Fox Kids or any of its
Affiliates shall have been paid in full.
(i) The Administrative Agent shall have received on or before the
Effective Date the following, each dated such date (unless otherwise
specified), in form and substance reasonably satisfactory to the Lenders
(unless otherwise specified) and (except for the Notes) in sufficient
copies for each of the Lenders:
(i) The Revolving Credit Notes, payable to the order of the
Revolving Credit Lenders, and the Term Notes, payable to the order of
the Term Lenders, respectively.
(ii) Certified copies of the resolutions of the board of
directors (or persons performing similar functions) of each of the
Loan Parties approving each of the Loan Documents and the Related
Documents to which it is or is to be a party, the consummation of each
aspect of the Transaction involving or affecting such Loan Party and
the other transactions contemplated by any of the foregoing, and of
all documents evidencing necessary Governmental Authorizations, or
other necessary consents, approvals, authorizations, notices, filings
or actions, with respect to any of the Loan Documents or the Related
Documents to which it is or is to be a party, the consummation of any
aspect of the Transaction involving or affecting such Loan Party or
any of the other transactions contemplated by any of the foregoing.
(iii) A copy of all of the Constitutive Documents of Holdings,
and each amendment thereto, certified (as of a date reasonably near
the Effective Date) as being a true and complete copy thereof by the
Secretary of State of the State of Delaware.
(iv) A copy of a certificate of the Secretary of State of the
State of Delaware, dated reasonably near the Effective Date, listing
the operating agreement (or similar Constitutive Document) of Holdings
and each amendment thereto on file in the office of such Secretary of
State and certifying that (A) such amendments are the only amendments
to the operating agreement (or similar Constitutive Document) of
Holdings on file in its office, (B) Holdings has paid all franchise
taxes (or the equivalent thereof) to the date of such certificate and
(C) Holdings is duly organized and is in good standing under the laws
of the State of Delaware.
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(v) A copy of the certificate of the Secretary of State (or the
equivalent Governmental Authority) of each jurisdiction in which
Holdings is qualified or licensed as a foreign limited liability
company, in each case dated reasonably near the Effective Date and
stating that Holdings is duly qualified and in good standing as a
foreign limited liability company in such jurisdiction and has filed
all annual reports required to be filed, and has paid all franchise
taxes (or the equivalent thereof) required to be paid, in such
jurisdiction to the date of such certificate.
(vi) A certificate of each of the Loan Parties, signed on behalf
of such Loan Party by its President or a Vice President and its
Secretary or an Assistant Secretary (or persons performing similar
functions), dated the Effective Date (the statements made in which
certificate shall be true on and as of the Effective Date), certifying
as to:
(A) the absence of any amendments to the certificate or
articles of incorporation (or similar Constitutive Document) of
such Loan Party since the date of the Secretary of State's (or
equivalent Governmental Authority's) certificate delivered
pursuant to Section 3.01(i)(iv) of the Existing Credit Agreement,
or any steps taken by the board of directors (or persons
performing similar functions) or the shareholders, partners,
members or equivalent persons of such Loan Party to effect or
authorize any further amendment, supplement or other modification
thereto;
(B) the accuracy and completeness of the bylaws (or similar
Constitutive Documents) of such Loan Party as in effect on the
date on which the resolutions of the board of directors (or
persons performing similar functions) of such Loan Party referred
to in clause (ii) of this Section 3.01(i) were adopted and on the
Effective Date (a copy of which shall be attached to such
certificate);
(C) the due organization and good standing of such Loan
Party as a Person organized under the laws of the jurisdiction of
its organization, and the absence of any proceeding (either
pending or contemplated) for the dissolution, liquidation or
other termination of the existence of such Loan Party or any of
their respective Subsidiaries;
(D) since December 31, 1996, the absence of any change in
the jurisdiction of organization of such Loan Party, any merger,
consolidation or other similar transaction directly or indirectly
involving such Loan Party or any issuance or sale of any Equity
Interests in such Loan Party, except for (i) the Merger and (ii)
the issuance of all of the Equity Interests in Holdings to Fox
Kids in connection with the formation of Holdings on October 21,
1997;
(E) the legal and beneficial ownership by such Loan Party of
all of the Collateral in which it is purported to have granted a
lien and security interest to the Administrative Agent, on behalf
of the Secured Parties, under the Collateral Documents, free and
clear of all Liens, except for the liens and security interests
created under the Loan Documents;
72
(F) the accuracy in all material respects of the
representations and warranties made by such Loan Party in the
Loan Documents to which it is or is to be a party as though made
on and as of the Effective Date, before and after giving effect
to the Borrowings to be made on the Effective Date and to the
application of proceeds therefrom; and
(G) the absence of any event occurring and continuing, or
resulting from any of the Borrowings to be made on the Effective
Date or the application of proceeds therefrom, that would
constitute a Default.
(vii) A certificate of the Secretary or an Assistant Secretary
(or a person performing similar functions) of each of the Loan Parties
certifying the names and true signatures of the officers, partners,
members or equivalent persons of such Loan Party authorized to sign
each of the Loan Documents to which it is or is to be a party and the
other agreements, instruments and documents to be delivered hereunder
and thereunder.
(viii) A pledge and assignment agreement, in substantially the
form of Exhibit D-1 hereto (together with each Pledge Agreement
Supplement and each other pledge agreement, assignment agreement (or
other similar document) delivered pursuant to Section 5.02(j), in each
case as amended, supplemented or otherwise modified hereafter from
time to time in accordance with the terms thereof and Section 9.01,
the "PLEDGE AND ASSIGNMENT AGREEMENT"), duly executed by each of the
Loan Parties, together with (unless otherwise delivered to the
Administrative Agent, in form and substance reasonably satisfactory to
the Lenders, prior to the Effective Date):
(A) certificates representing the Initial Pledged Interests
referred to therein, accompanied by undated stock powers or other
appropriate powers, duly executed in blank;
(B) instruments evidencing the Initial Pledged Indebtedness
referred to therein, duly endorsed in blank;
(C) proper financing statements (Form UCC-1 or a comparable
form) or amendments to existing financing statements (Form UCC-3
or a comparable form) or the equivalent thereof under the Uniform
Commercial Code (or any similar Requirements of Law) of all
jurisdictions that may be necessary or that the Administrative
Agent may reasonably deem desirable in order to perfect and
protect the liens and security interests created or purported to
be created under the Pledge and Assignment Agreement, covering
the Collateral described therein, in each case completed in a
manner satisfactory to the Lenders and duly executed by the
applicable Loan Party;
(D) each of the Cash Collateral Account Letters, duly
executed by the applicable Borrower and Citibank; and
(E) evidence that all of the other actions (including,
without limitation, the completion of all of the other recordings
and filings of or with
73
respect to the Pledge and Assignment Agreement) that may be
necessary or that the Administrative Agent may reasonably deem
desirable in order to perfect and protect the liens and security
interests created under the Pledge and Assignment Agreement have
been taken or will be taken in accordance with the terms of the
Loan Documents.
(ix) (A) An amended and restated memorandum of deposit of
shares of equity interests, in substantially the form of Exhibit D-2
hereto (as further amended, supplemented or otherwise modified
hereafter from time to time in accordance with the terms thereof and
Section 9.01, the "U.K./SABAN U.K. PLEDGE AGREEMENT"), duly executed
by Saban, and (B) an amended and restated memorandum of deposit of
shares of equity interests, in substantially the form of Exhibit D-3
hereto (as further amended, supplemented or otherwise modified
hereafter from time to time in accordance with the terms thereof and
Section 9.01, the "U.K./FKE PLEDGE AGREEMENT"), duly executed by each
of FKE Holdings, Fox Kids Network and Fox Kids Europe Limited.
(x) A guarantee, in substantially the form of Exhibit E-1
hereto (as amended, supplemented or otherwise modified hereafter from
time to time in accordance with the terms thereof and Section 9.01,
the "FOX KIDS GUARANTEE"), duly executed by Fox Kids.
(xi) An amended and restated guarantee, in substantially the
form of Exhibit E-2 hereto (together with each Guarantee Supplement
delivered pursuant to Section 5.02(j), in each case as amended,
supplemented or otherwise modified hereafter from time to time in
accordance with the terms thereof and Section 9.01, the "SUBSIDIARIES
GUARANTEE"), duly executed by each of the wholly owned Domestic
Subsidiaries and each of the other Subsidiaries of Holdings that are
to constitute Restricted Subsidiaries on the Effective Date.
(xii) An assumption agreement, in substantially the form of
Exhibit F hereto (the "ASSUMPTION AGREEMENT"), duly executed by Fox
Kids and IFE.
(xiii) Certified copies of all of the Related Documents, all of
the Senior Notes Documents and all of the agreements, instruments and
other documents evidencing or setting forth the terms and conditions
of the Surviving Indebtedness that is outstanding or has commitments
for the extension of credit on the Effective Date in an aggregate
amount of at least $1,000,000, in each case duly executed by each of
the parties thereto.
(xiv) Certified copies of (A) each of the employment and other
compensation agreements with each senior executive officer of any of
the Loan Parties in effect on the Effective Date and (B) the
Consulting Agreement and the Consulting Agreement Guaranty.
(xv) Certified copies of forecasts prepared by management of
Fox Kids, in form and substance reasonably satisfactory to the
Lenders, of Consolidated balance sheets, income statements and cash
flow statements of Fox Kids and its Subsidiaries on an annual basis
for each Fiscal Year from the Fiscal Year in which the Effective Date
occurs through the scheduled Termination Date.
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(xvi) Evidence of all of the insurance of Fox Kids and its
Subsidiaries required to be maintained thereby under Section 5.01(d)
hereof or Section 7(c) of the Fox Kids Guarantee.
(xvii) A duly completed and executed Notice of Borrowing for
each of the Borrowings to be made on the Effective Date.
(xviii) A favorable opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General
Counsel of IFE, in substantially the form of Exhibit G-1 hereto, and
addressing such other matters as any of the Lenders through the
Administrative Agent may reasonably request.
(xix) (A) A favorable opinion of Squadron, Ellenoff, Plesent &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Loan Parties, in substantially the
form of Exhibit G-2 hereto, and addressing such other matters as any
of the Lenders through the Administrative Agent may reasonably
request, and (B) a letter from Squadron, Ellenoff, Plesent &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Loan Parties, addressed to the
Administrative Agent and each of the Lenders and otherwise in form and
substance reasonably satisfactory to the Administrative Agent, stating
that the Administrative Agent and each such Lender may rely upon the
favorable opinion of such counsel being delivered in connection with
the issuance and sale of the Senior Notes, together with a copy of
such opinion.
(xx) (A) A favorable opinion of Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Pasich, LLP, special counsel for the Loan Parties, in substantially
the form of Exhibit G-3 hereto, and addressing such other matters as
any of the Lenders through the Administrative Agent may reasonably
request, and (B) a letter from Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
special counsel for the Loan Parties, addressed to the Administrative
Agent and each of the Lenders and otherwise in form and substance
reasonably satisfactory to the Administrative Agent, stating that the
Administrative Agent and each such Lender may rely upon the favorable
opinion of such counsel being delivered in connection with the
issuance and sale of the Senior Notes, together with a copy of such
opinion.
(xxi) (A) A favorable opinion of Westaway & Co., special
United Kingdom counsel for Saban, in substantially the form of Exhibit
G-4 hereto and (B) a favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇, special United
Kingdom counsel for FKE Holdings, Fox Kids Network and Fox Kids Europe
Limited, in substantially the form of Exhibit G-5 hereto and, in each
case addressing such other matters as any of the Lenders through the
Administrative Agent may reasonably request.
(xxii) A favorable opinion of Shearman & Sterling, counsel for
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation
--------------------------------------
of each of the Appropriate Lenders to make an Advance on the occasion of each
Borrowing (including each Borrowing made on the Effective Date) shall be subject
to the further conditions precedent that on the date of such Borrowing (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing by any of the Borrowers and the acceptance by the Borrower
that requested such Borrowing of the proceeds of such Borrowing shall constitute
a representation and warranty by such
75
Borrower that, both on the date of such notice and on the date of such
Borrowing, such statements are true):
(i) the representations and warranties contained in each of the Loan
Documents are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date (other than
any such representation and warranty that, by its terms, refers to a
specific date other than the date of such Borrowing, in which case as of
such specific date); and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, that
constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
authorizations, opinions, documents and information as any of the Appropriate
Lenders through the Administrative Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
---------------------------------
determining compliance with the conditions specified in Section 3.01, each of
the Lenders shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by, or acceptable or satisfactory to, the Lenders unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the Effective Date specifying its objection thereto and, if such Lender
has a Commitment on the Effective Date under any of the Facilities under which a
Borrowing is to be made on such date, such Lender shall not have made available
to the Administrative Agent such Lender's Pro Rata Share of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. Holdings and each of
------------------------------
the Borrowers represent and warrant as follows:
(a) Each of the Loan Parties and each of their respective Subsidiaries
(i) are corporations, partnerships or limited liability companies duly
organized and validly existing under the laws of the jurisdictions of their
respective organization and, in the case of each such Loan Party and each
such Subsidiary organized under the laws of any state of the United States
of America, are in good standing under the laws of such state and (ii) are
duly qualified as foreign corporations, partnerships or limited liability
companies and are in good standing in each other jurisdiction in which the
ownership, lease or operation of their respective property and assets or
the conduct of their respective businesses require them to so qualify or be
licensed, except, solely in the case of this clause (ii), where the failure
to so qualify or be licensed or to be in good standing, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Each of the Loan Parties and each of their respective
Subsidiaries have all of the requisite power and authority, and the legal
right, to own or lease and to operate all of the property and assets they
purport to own, lease or operate and to conduct all of their respective
76
businesses as now conducted and as proposed to be conducted. Each of the
Loan Parties has all of the requisite power and authority, and the legal
right, to execute and deliver each of the Loan Documents and the Related
Documents to which it is or is to be a party, to perform all of its
Obligations hereunder and thereunder and to consummate the Transaction and
all of the other transactions contemplated hereby and thereby.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all of the Subsidiaries of Fox Kids, showing, as of the date of
this Agreement, as to each such Subsidiary, the correct legal name thereof,
the legal structure thereof, the jurisdiction of its organization, the
number and type of each class of its Equity Interests authorized and the
number outstanding, and the percentage of each such class of its Equity
Interests outstanding on such date that are owned by any of the Loan
Parties. All of the outstanding Equity Interests in Holdings are owned
directly by Fox Kids, free and clear of all Liens (including, without
limitation, preemptive or other similar rights of the holders thereof),
except for the liens and security interests created under the Pledge and
Assignment Agreement. All of the outstanding Equity Interests in each of
the Borrowers are owned directly by Holdings, free and clear of all Liens
(including, without limitation, preemptive or other similar rights of the
holders thereof), except for the liens and security interests created under
the Pledge and Assignment Agreement. Except as set forth on Schedule
4.01(b) hereto, all of the outstanding Equity Interests in each of the
Subsidiaries of the Borrowers are owned directly or indirectly by one or
more of the Loan Parties, free and clear of all Liens (including, without
limitation, preemptive or other similar rights of the holders thereof),
except for the liens and security interests created under the Collateral
Documents. All of the outstanding Equity Interests in Holdings and each of
its Subsidiaries have been validly issued and are fully paid and
nonassessable.
(c) The execution, delivery and performance by each of the Loan
Parties of each of the Loan Documents and the Related Documents to which it
is or is to be a party, and the consummation of the Transaction and the
other transactions contemplated hereby and thereby, have been duly
authorized by all necessary action (including, without limitation, all
necessary shareholder, partner, member or other similar action) and do not:
(i) contravene the Constitutive Documents of such Loan Party;
(ii) violate any Requirement of Law;
(iii) conflict with or result in the breach of, or constitute a
default under, any loan agreement, indenture, mortgage, deed of trust,
lease, instrument, contract or other agreement binding on or affecting
such Loan Party, any of its Subsidiaries or any of their respective
property or assets; or
(iv) except for the Liens created under the Loan Documents,
result in or require the creation or imposition of any Lien upon or
with respect to any of the property or assets of such Loan Party or
any of its Subsidiaries.
Neither any of the Loan Parties nor any of their respective Subsidiaries is
in violation of any Requirement of Law or in breach of any loan agreement,
indenture, mortgage, deed of trust, lease, instrument, contract or other
agreement referred to in the immediately preceding sentence,
77
the violation or breach of which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(d) Each of the Loan Parties and each of their respective Subsidiaries
own or possess all of the Governmental Authorizations that are necessary to
own or lease and operate their respective property and assets and to
conduct their respective businesses as now conducted and as proposed to be
conducted, except where and to the extent that the failure to obtain or
maintain in effect any such Governmental Authorization, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Neither any of the Loan Parties nor any of their
respective Subsidiaries has received any notice relating to or threatening
the revocation, termination, cancellation, denial, impairment or
modification of any such Governmental Authorization, or is in violation or
contravention of, or in default under, any such Governmental Authorization.
No Governmental Authorization, and no consent, approval or authorization
of, or notice to or filing with, or other action by, any other Person is
required for:
(i) the due execution, delivery, recordation, filing or
performance by any of the Loan Parties of any of the Loan Documents or
the Related Documents to which it is or is to be a party, or for the
consummation of any aspect of the Transaction or the other
transactions contemplated hereby or thereby;
(ii) the grant by any of the Loan Parties of the Liens granted
by it pursuant to the Collateral Documents;
(iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature
thereof); or
(iv) the exercise by the Administrative Agent or any of the
Lenders of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents;
except for the Governmental Authorizations, and the consents, approvals,
authorizations, notices, filings and other actions, described on Schedule
4.01(d) hereto. All of the Governmental Authorizations, and the consents,
approvals, authorizations, notices, filings and other actions, described on
Schedule 4.01(d) hereto have been or will have been duly obtained, taken,
given or made on or prior to the Effective Date and are, or on the
Effective Date will be, in full force and effect, or, if expressly provided
for on Schedule 4.01(d) hereto, will be duly obtained, taken, given or made
in accordance with the terms set forth therefor on Schedule 4.01(d) hereto
and, thereafter, will be in full force and effect. All applicable waiting
periods in connection with each aspect of the Transaction and the other
transactions contemplated hereby and thereby have expired without any
action having been taken by any competent authority restraining, preventing
or imposing materially adverse conditions upon any aspect of the
Transaction or the rights of any of the Loan Parties or their respective
Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any property or assets now owned or hereafter acquired by any of
them.
(e) This Agreement has been, and each of the Notes, each of the other
Loan Documents and each of the Related Documents when delivered hereunder
will have been, duly executed and delivered by each of the Loan Parties
intended to be a party thereto. This Agreement is, and each of the Notes,
each of the other Loan Documents and each of the Related
78
Documents when delivered hereunder will be, the legal, valid and binding
obligations of each of the Loan Parties intended to be a party thereto,
enforceable against such Loan Party in accordance with their respective
terms, except to the extent such enforceability may be limited by the
effect of applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally.
(f) The Consolidated balance sheet of FCN Holding and its Subsidiaries
as of March 31, 1997, and the related Consolidated statements of operations
and cash flows of FCN Holding and its Subsidiaries for the three-month
period then ended, duly certified by a Responsible Officer of FCN Holding,
copies of which have been furnished to each of the Lenders, fairly present
(subject to normal year-end audit adjustments) the Consolidated financial
condition of FCN Holding and its Subsidiaries as at such date and the
Consolidated results of operations and cash flows of FCN Holding and its
Subsidiaries for the period ended on such date. All of the Consolidated
financial statements referred to above in this Section 4.01(f) have been
prepared in accordance with generally accepted accounting principles
applied consistently throughout the period covered thereby.
(g) The Consolidated balance sheet of Saban and its Subsidiaries as of
March 31, 1997, and the related Consolidated statements of operations and
cash flows of Saban and its Subsidiaries for the three-month period then
ended, duly certified by a Responsible Officer of Saban, copies of which
have been furnished to each of the Lenders, fairly present (subject to
normal year-end audit adjustments) the Consolidated financial condition of
Saban and its Subsidiaries as at such date and the Consolidated results of
operations and cash flows of Saban and its Subsidiaries for the period
ended on such date. All of the Consolidated financial statements referred
to above in this Section 4.01(g) have been prepared in accordance with
generally accepted accounting principles applied consistently throughout
the period covered thereby.
(h) The Consolidated balance sheets of Pre-Merger IFE and its
Subsidiaries as of December 31, 1995 and December 31, 1996, and the related
Consolidated statements of liabilities, stockholders' equity and cash flows
of Pre-Merger IFE and its Subsidiaries for the fiscal years of Pre-Merger
IFE ended December 31, 1995 and December 31, 1996, in each case including
the schedules and notes thereto and accompanied by an opinion of KPMG Peat
Marwick LLP, the independent accountants of Pre-Merger IFE, and the
Consolidated balance sheet of Pre-Merger IFE and its Subsidiaries as of
June 30, 1997, and the related Consolidated statements of liabilities,
stockholders' equity and cash flows of Pre-Merger IFE and its Subsidiaries
for the six-month period then ended, duly certified by a Responsible
Officer of Pre-Merger IFE, copies of all of which have been furnished to
each of the Lenders, fairly present (subject, in the case of such balance
sheet as of June 30, 1997 and such statements of liabilities, stockholders'
equity and cash flows for the six-month period then ended, to normal year-
end audit adjustments) the Consolidated financial condition of Pre-Merger
IFE and its Subsidiaries as at such dates and the Consolidated results of
operations and cash flows of Pre-Merger IFE and its Subsidiaries for the
respective periods ended on such dates. All of the Consolidated financial
statements referred to above in this Section 4.01(h), including the
schedules and notes thereto, have been prepared in accordance with
generally accepted accounting principles applied consistently throughout
the respective periods covered thereby.
79
(i) The combined balance sheets of Fox Kids and its Subsidiaries as of
June 30, 1996 and June 30, 1997, and the related combined statements of
operations, stockholders' equity and cash flows of Fox Kids and its
Subsidiaries for the eight-month period ended June 30, 1996 and the 12-
month period ended June 30, 1997, respectively, in each case including the
schedules and notes thereto and accompanied by an opinion of Ernst & Young
LLP, the independent accountants of Fox Kids, copies of which have been
furnished to each of the Lenders, fairly present the combined financial
condition of Fox Kids and its Subsidiaries as at such dates and the
combined results of operations and cash flows of Fox Kids and its
Subsidiaries for the respective periods ended on such dates. All of the
combined financial statements referred to above in this Section 4.01(i),
including the schedules and notes thereto, have been prepared in accordance
with generally accepted accounting principles applied consistently
throughout the respective periods covered thereby.
(j) The pro forma Consolidated balance sheet of Fox Kids and its
Subsidiaries as of June 30, 1997, and the related pro forma Consolidated
statements of operations and stockholders' equity of Fox Kids and its
Subsidiaries for the 12-month period ended June 30, 1997, as set forth in
the Final Offering Memorandum, copies of which have been furnished to each
of the Lenders, fairly present the pro forma Consolidated financial
condition of Fox Kids and its Subsidiaries as at such date and the pro
forma Consolidated results of operations and cash flows of Fox Kids and its
Subsidiaries for the period ended on such date, in each case after giving
effect to the Transaction.
(k) The forecasted Consolidated balance sheets, statements of
operation and cash flow statements of Fox Kids and its Subsidiaries
delivered to the Lenders pursuant to Section 3.01(i)(xv) hereof or Section
7(i)(iv) of the Fox Kids Guarantee were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were reasonable in the
light of conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery thereof to the Lenders, the Borrowers'
reasonable estimates of their future financial performance (although the
actual results during the periods covered by such forecasts may differ from
the forecasted results).
(l) No material adverse change has occurred in the business, condition
(financial or otherwise), operations, performance or properties of Fox Kids
and its Subsidiaries, taken as a whole, since December 31, 1996.
(m) The Information Memorandum (as supplemented by the Final Offering
Memorandum) and all of the other written information (other than financial
projections and pro forma information) furnished by or on behalf of any of
the Loan Parties or any of their respective Subsidiaries to the
Administrative Agent or any of the Lenders in connection with the Loan
Documents or the Related Documents or any aspect of the Transaction or any
of the other transactions contemplated hereby or thereby does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in light of the
circumstances in which any such statements were made, not misleading.
(n) There is no action, suit, investigation, litigation, arbitration
or proceeding pending or, to the best knowledge of Holdings and each of the
Borrowers, threatened against or affecting any of the Loan Parties or any
of their respective Subsidiaries or any of the property or assets
80
thereof in any court or before any arbitrator or by or before any
Governmental Authority of any kind (i) that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
or (ii) in which there is a reasonable likelihood of an adverse
determination and which purports to affect the legality, validity, binding
effect or enforceability of any aspect of the Transaction, any of the Loan
Documents or the Related Documents or any of the other transactions
contemplated thereby.
(o) Each of the Loan Parties is the legal and beneficial owner of the
Collateral purported to be owned thereby under the Collateral Documents,
free and clear of all Liens, except for the liens and security interests
created under the Loan Documents. The Collateral Documents create valid
and perfected first priority liens on and security interests in the
Collateral in favor of the Administrative Agent, for the benefit of the
Secured Parties, securing the payment of the Secured Obligations. All of
the Equity Interests in Holdings and its Subsidiaries that are purported to
comprise part of the Collateral have been delivered to the Administrative
Agent as required under the terms of the Collateral Documents, together
with undated stock powers or other appropriate powers duly executed in
blank; all filings and other actions necessary to perfect and protect the
liens and security interests of the Administrative Agent in the Collateral
have been duly made or taken and are in full force and effect or will be
duly made or taken in accordance with the terms of the Loan Documents; and
all filing fees and recording taxes have been paid in full.
(p) Each of the Loan Parties and each of their respective Subsidiaries
own or possess all of the licenses, permits, franchises, authorizations,
consents and approvals, and own or have the legal right to use all of the
patents, copyrights, service marks, trademarks and trade names (or other
rights thereto), that are necessary to own or lease and operate their
respective property and assets and to conduct their respective businesses
as now conducted and as proposed to be conducted, without known conflict
with the rights of any other Person. No action, suit, investigation,
litigation, arbitration or proceeding is pending or, to the best knowledge
of Holdings and each of the Borrowers, is threatened challenging the use by
any of the Loan Parties or any of their respective Subsidiaries of any such
license, permit, franchise, authorization, consent, approval, patent,
copyright, service ▇▇▇▇, trademark, trade name or other right, or the
validity or effectiveness thereof, except for any such action, suit,
investigation, litigation or proceeding that, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect. Except as described on Schedule 4.01(p) hereto:
(i) no product of any of the Loan Parties or any of their
respective Subsidiaries infringes in any material respect on any
license, permit, franchise, authorization, consent, approval, patent,
copyright, service ▇▇▇▇, trademark, trade name or other right owned by
any other Person; and
(ii) there is no material violation by any Person of any right of
any of the Loan Parties or any of their respective Subsidiaries with
respect to any license, permit, franchise, authorization, consent,
approval, patent, copyright, service ▇▇▇▇, trademark, trade name or
other right owned or used by any such Loan Party or any such
Subsidiary.
Neither the Administrative Agent nor any of the Lenders will, solely as a
result of their execution, delivery or performance of this Agreement or any
of the other Loan Documents, or
81
the making of Advances or maintaining their Commitments hereunder, be
subject to the regulation or control of the FCC or any similar Governmental
Authority.
(q) None of the proceeds of any of the Advances will be used to
acquire any Equity Interests in any Person of a class that is registered
pursuant to Section 12 of the Exchange Act.
(r) Neither Fox Kids nor any of its Subsidiaries is engaged in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (within the meaning of Regulation G or U of the Board of
Governors of the Federal Reserve System (12 CFR 207)). Following
application of the proceeds of each Advance made on or after the Effective
Date, not more than 25 percent of the value of the property and assets of
any of the Borrowers, either individually or together with its
Subsidiaries, taken as a whole, subject to the provisions of Section
5.02(a) or 5.02(d) or subject to any restriction contained in any agreement
or instrument between any such Borrower and any of the Lenders or any
Affiliate of any of the Lenders relating to Indebtedness and within the
scope of Section 7.01(e), will be margin stock.
(s) Neither any of the Loan Parties nor any of their respective
Subsidiaries is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" (each as
defined in the Investment Company Act of 1940, as amended). None of the
making of any Advances or the application of the proceeds therefrom, the
repayment of any of the Advances by any of the Borrowers, or the
consummation of the Transaction or any of the other transactions
contemplated hereby, will violate any provision of the Investment Company
Act of 1940, as amended, or any rule, regulation or order of the Securities
and Exchange Commission thereunder.
(t) Holdings and its Subsidiaries, taken as a whole, is Solvent. Each
of the Borrowers and its Subsidiaries, taken as a whole, is Solvent.
(u) Neither any of the Loan Parties nor any of their respective
Subsidiaries is a party to any loan agreement, indenture, mortgage, deed of
trust, lease, instrument, contract or other agreements or is subject to any
restriction in its Constitutive Documents or any other corporate,
partnership, limited liability company or similar restriction that, in each
case either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(v) Neither the business nor the property or assets of any of the Loan
Parties or any of their respective Subsidiaries have been affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo or other act of God or of the public enemy
or other casualty (whether or not covered by insurance) that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(w) There is (i) no unfair labor practice complaint pending or, to the
best knowledge of Holdings and each of the Borrowers, threatened against
any of the Loan Parties or any of their respective Subsidiaries by or
before any Governmental Authority and no grievance or arbitration
proceeding pending or, to the best knowledge of Holdings and each of the
Borrowers, threatened against any of the Loan Parties or any of their
respective Subsidiaries which arises out of or under any collective
bargaining agreement, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or, to the best knowledge of Holdings
and each of the Borrowers, threatened against any of the Loan Parties or
any of their respective Subsidiaries and
82
(iii) to the best knowledge of Holdings and each of the Borrowers, no union
representation question existing with respect to the employees of any of
the Loan Parties or any of their respective Subsidiaries and no union
organizing activity taking place with respect to any of the employees of
any of them that, in the case of any or all of clauses (i), (ii) and (iii)
of this Section 4.01(w), either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(x) There exists no actual or threatened termination, cancellation or
limitation of, or modification to or change in, the business relationship
between (i) any of the Borrowers or any of their respective Subsidiaries,
on the one hand, and any carrier, any customer or any group thereof, on the
other hand, whose agreements with any such Borrower or any such Subsidiary
are, or whose use of the property and assets or services thereof is, either
individually or in the aggregate, material to the business or operations of
Holdings and its Subsidiaries, taken as a whole, or (ii) any of the
Borrowers or any of their respective Subsidiaries, on the one hand, and any
material supplier thereof, on the other hand; and, to the best knowledge of
Holdings and each of the Borrowers, there exists no present state of facts
or circumstances that could reasonably be expected to give rise to or
result in any such termination, cancellation, limitation, modification or
change.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list, as of the date of this Agreement, of all of the Plans and
Multiemployer Plans of the Loan Parties and the ERISA Affiliates. No
circumstances or conditions exist under any scheme or arrangement mandated
by any Governmental Authority other than Governmental Authorities of the
United States of America and the political subdivisions thereof that
require employer or employee contributions or compliance by any of the Loan
Parties or any of their respective Subsidiaries, and neither any of the
Loan Parties nor any of their respective Subsidiaries maintains or
contributes to any employee benefit plan that is not subject solely to the
Requirements of Law of the United States of America or any political
subdivision thereof, that, in any such case either individually or in the
aggregate, could reasonably be expected to result in any material liability
of any of the Loan Parties or any of their respective Subsidiaries. None
of legal or beneficial owners of any of the Equity Interests in Fox Kids is
a member of the "controlled group of corporations" (as defined in Treasury
Regulations 1.414(b) and 1.414(c)) of any of the Loan Parties.
(z) No ERISA Event has occurred or could reasonably be expected to
occur with respect to any Plan that has resulted or could reasonably be
expected to result in any material liability of any of the Loan Parties or
any of the ERISA Affiliates.
(aa) Schedule B (Actuarial Information) to the most recent annual
report (form 5500 series) for each of the Plans, copies of which have been
filed with the Internal Revenue Service and furnished to each of the
Lenders, is complete and accurate and fairly presents the funding status of
such Plan; and, since the date of such Schedule B, there has been no
material adverse change in the funding status of such Plan.
(bb) Neither any of the Loan Parties nor any of the ERISA Affiliates
(i) has incurred or could reasonably be expected to incur any Withdrawal
Liability to any Multiemployer Plan or (ii) has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such
83
Multiemployer Plan could reasonably be expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA, that in any of
the foregoing cases under this Section 4.01(bb), either individually or in
the aggregate, could reasonably be expected to result in any material
liability of any of the Loan Parties or any of the ERISA Affiliates.
(cc) The operations and properties of each of the Loan Parties and
each of their respective Subsidiaries comply in all material respects with
all applicable Environmental Laws and Environmental Permits; all past
noncompliance with such Environmental Laws and Environmental Permits has
been resolved without any material ongoing obligations or costs; all
Environmental Permits that are necessary for the operations or properties
of any of the Loan Parties or any of their respective Subsidiaries have
been obtained and are in full force and effect; and no circumstances exist
that, either individually or in the aggregate, could reasonably be expected
to (i) form the basis of an Environmental Action against any of the Loan
Parties or any of their respective Subsidiaries or any of the properties
thereof that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or (ii) cause any such property
to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(dd) (i) None of the properties owned or operated by any of the Loan
Parties or any of their respective Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state,
provincial or local list or, to the best knowledge of Holdings and each of
the Borrowers, is adjacent to any such property; and (ii) except as, either
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect, (A) there are no and never have been any
underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are being
or have been treated, stored or disposed of on any property owned or
operated by any of the Loan Parties or any of their respective Subsidiaries
or, to the best knowledge of Holdings and each of the Borrowers, on any
property formerly owned or operated by any of the Loan Parties or any of
their respective Subsidiaries, (B) there is no asbestos or asbestos-
containing material on any property owned or operated by any of the Loan
Parties or any of their respective Subsidiaries and (C) Hazardous Materials
have not been released, discharged or disposed of on any property owned or
operated by any of the Loan Parties or any of their respective
Subsidiaries.
(ee) Neither any of the Loan Parties nor any of their respective
Subsidiaries is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at any
site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law.
All Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property owned or operated by any of the Loan
Parties or any of their respective Subsidiaries have been disposed of in a
manner that, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(ff) Each of the Loan Parties and each of their respective
Subsidiaries have filed, have caused to be filed or have been included in
all federal tax returns, reports and statements and all
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other material tax returns, reports and statements (foreign, state, local
and provincial) required to be filed and have paid all taxes, assessments,
levies, fees and other charges shown thereon (or on any assessments
received by any such Person or of which any such Person has been notified)
to be due and payable, together with applicable interest and penalties,
except for any such taxes, assessments, levies, fees and other charges the
amount, applicability or validity of which is being contested in good faith
and by appropriate proceedings diligently conducted and with respect to
which such Loan Party or such Subsidiary, as the case may be, has
established appropriate and adequate reserves in accordance with GAAP.
Except as set forth on Schedule 4.01(ff) hereto, all of the tax returns,
reports and statements referred to in the immediately preceding sentence
have been prepared in good faith and are complete and accurate in all
material respects for the Loan Parties and their Subsidiaries for the
respective periods covered thereby.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list, as of the date of this Agreement, of each Open Year of each of the
Loan Parties and each of their respective Subsidiaries. There are no
adjustments to (i) the federal income tax liability (including, without
limitation, interest and penalties) of any of the Loan Parties or any of
their respective Subsidiaries proposed in writing by the Internal Revenue
Service with respect to Open Years or (ii) any foreign, state, local or
provincial tax liability (including, without limitation, interest and
penalties) of any of the Loan Parties or any of their respective
Subsidiaries proposed in writing by any foreign, state, local or provincial
taxation authority that, in the aggregate for subclauses (A) and (B) of
this sentence, would exceed $5,000,000. No issues have been raised by the
Internal Revenue Service in respect of Open Years or by any such foreign,
state, local or provincial taxation authorities that, either individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(hh) Neither any of the Loan Parties nor any of their respective
Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations
relating to the assessment, reassessment, payment or collection of taxes of
such Loan Party or any such Subsidiary, or is aware of any circumstances
that would cause the taxable years or other taxable periods of such Loan
Party or any such Subsidiary to no longer be subject to the normally
applicable statute of limitations, except that the taxable years of IFE
ended December 31, 1992 and December 31, 1993 have been extended to June
30, 1998 due to an ongoing audit by the Internal Revenue Service of the
taxable year of IFE ended December 31, 1992 and adjustments expected to be
made in subsequent periods. Neither any of the Loan Parties nor any of
their respective Subsidiaries has provided, with respect to itself or any
property held by it, any consent under Section 341(f) of the Internal
Revenue Code.
(ii) As of June 30, 1997: (i) Fox Kids and its Subsidiaries did not
have any net operating loss carryforwards for U.S. federal income tax
purposes; (ii) FCN Holding and its Subsidiaries had net operating loss
carryforwards for U.S. federal income tax purposes equal to at least
$100,000 in the aggregate; (iii) Saban and its Subsidiaries did not have
any net operating loss carryforwards for U.S. federal income tax purposes;
and (iv) IFE and its Subsidiaries did not have any net operating loss
carryforwards for U.S. federal income tax purposes.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list, as of the date of this Agreement, of all of the Surviving
Indebtedness, showing, as of such date, each of the Loan Parties and/or
each of their respective Subsidiaries party thereto, the principal amount
85
outstanding thereunder, the interest rate thereon, the scheduled maturity
date thereof and the amortization schedule, if any, therefor.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and accurate
list, as of the date of this Agreement, of all of the Investments (other
than Cash Equivalents) held by any of the Loan Parties or any of their
respective Subsidiaries, showing, as of such date, the amount, the obligor
or issuer thereof and the maturity, if any, thereof.
(ll) All of the Subsidiaries of Fox Kids constitute "Restricted
Subsidiaries" (as defined in the Senior Notes Indentures) on the Effective
Date for all purposes of the Senior Notes Documents other than the
Subsidiaries of IFE that are intended, and are expressly permitted, to be
sold, transferred or otherwise disposed of pursuant to Section
5.02(d)(vii).
ARTICLE V
COVENANTS OF HOLDINGS AND THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any of the Advances
---------------------
shall remain unpaid or any of the Lenders shall have any Commitment hereunder,
Holdings and each of the Borrowers will, at all times (unless a specific time
period is specified herein):
(a) Compliance with Laws, Maintenance of Governmental Authorizations,
-----------------------------------------------------------------
Etc. (i) Comply, and cause each of its Subsidiaries to comply, in all
---
material respects, with all applicable Requirements of Law, such compliance
to include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control
Act of 1970, and (ii) except as provided in Section 5.01(e), obtain and
maintain in effect, and cause each of its Subsidiaries to obtain and
maintain in effect, all Governmental Authorizations that are necessary (A)
to own or lease and operate their respective property and assets and to
conduct their respective businesses as now conducted and as proposed to be
conducted, except where and to the extent that the failure to obtain or
maintain in effect any such Governmental Authorization, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect, or (B) for the due execution, delivery, recordation, filing
or performance by Holdings or any of its Subsidiaries of any of the Loan
Documents or the Related Documents to which it is or is to be a party, or
for the consummation of any aspect of the Transaction or any of the other
transactions contemplated hereby and thereby, except in the case of this
subclause (ii)(B) for the Governmental Authorizations, and the consents,
approvals, authorizations, notices, filings and other actions, described on
Schedule 4.01(d) hereto as otherwise being required to be duly obtained,
taken, given or made in accordance with the terms set forth therefor on
Schedule 4.01(d) hereto. This Section 5.01(a) shall not apply to
compliance with Environmental Laws or Environmental Permits (which is the
subject of Section 5.01(c)).
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
---------------------
Subsidiaries to pay and discharge, to the extent due and payable and before
the same shall become delinquent, (i) all taxes, assessments,
reassessments, levies and other governmental charges imposed upon it or
upon its property, assets, income or franchises and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property and assets or
any part thereof; provided, however,
86
that neither Holdings nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, reassessment, levy, charge or claim
the amount, applicability or validity of which is being contested in good
faith and by proper proceedings diligently conducted and as to which
appropriate and adequate reserves are being maintained in accordance with
GAAP, unless and until (i) such contest could subject Holdings or any of
its Subsidiaries to any criminal penalty or liability or the Administrative
Agent or any of the Lenders to any criminal penalty or liability or (except
for nonmaterial fines for which the Administrative Agent or such Lender is
fully indemnified under Section 9.04) any civil penalty or liability or
(ii) any Lien resulting therefrom attaches to any of the Collateral or a
material portion of its other property and assets and enforcement,
collection, execution, levy or foreclosure proceedings shall have been
commenced with respect thereto.
(c) Compliance with Environmental Laws. (i) Comply (and require all
----------------------------------
lessees and other Persons operating or occupying any of its properties to
comply), and cause each of its Subsidiaries to comply (and to require all
lessees and other Persons operating or occupying any of its properties to
comply), in all material respects, with all of the applicable Environmental
Laws and the Environmental Permits applicable to such Person or its
operations or properties; (ii) obtain and renew, and cause each of its
Subsidiaries to obtain and renew, all of the Environmental Permits
necessary for the ownership or operation of their respective properties or
the conduct of their respective businesses as now conducted and as proposed
to be conducted; and (iii) conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling or testing, and undertake, and
cause each of its Subsidiaries to undertake, any cleanup, removal, remedial
or other action, necessary to remove and clean up all of the Hazardous
Materials from any of its properties in accordance with the requirements of
all applicable Environmental Laws, except, in the case of clause (ii) or
(iii) of this Section 5.01(c), where the failure to obtain or renew any
such Environmental Permit, to conduct any such investigation, study,
sampling or testing or to undertake any such cleanup, removal, remedial or
other action, either individually or in the aggregate, could not reasonably
be expected (A) to have a Material Adverse Effect or (B) to subject
Holdings or any of its Subsidiaries to any criminal penalty or liability or
the Administrative Agent or any of the Lenders to any criminal penalty or
liability or (except for nonmaterial fines for which the Administrative
Agent or such Lender is fully indemnified under Section 9.04) any civil
penalty or liability; provided, however, that neither Holdings nor any of
its Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action otherwise required under this Section 5.01(c) to
the extent that the amount, applicability or validity thereof is being
contested in good faith and by proper proceedings diligently conducted and
appropriate and adequate reserves are being maintained in accordance with
GAAP with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Subsidiaries to maintain, insurance for their respective properties, assets
and businesses (i) with insurance companies or associations that have, or
that have directly reinsured such insurance with insurance companies or
associations that have, an A.M. Best Company claims paying ability rating
of at least "A-" (or the then equivalent rating) and (ii) of such types
(including, without limitation, insurance against theft and fraud and
against loss or damage by fire, explosion or hazard of or to property,
errors and omissions insurance and insurance against liability for
defamation, libel, slander and invasion of privacy), in such amounts and
with such deductibles, covering such casualties and contingencies and
otherwise on such terms as are either (A) at least as favorable as those
usually carried by companies of established reputations engaged in similar
businesses and
87
owning similar properties and assets in the same general areas in which
Holdings or the applicable Subsidiary of Holdings operates or (B)
recommended by Alexander & Alexander or another insurance broker of
recognized national standing and, in any case, as may otherwise be required
by applicable Requirements of Law; provided, however, that Holdings and its
Subsidiaries may effect workers' compensation insurance or similar coverage
with respect to their respective operations in any particular jurisdiction
through an insurance fund operated by such jurisdiction or by meeting the
self-insurance requirements of such jurisdiction so long as Holdings or
such Subsidiary establishes and maintains appropriate and adequate reserves
therefor in accordance with GAAP.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
----------------------------------------
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, organization, rights (statutory and pursuant to its
Constitutive Documents), permits, licenses, approvals, privileges and
franchises; provided, however, that Holdings and its Subsidiaries (i) may
consummate any merger or consolidation otherwise expressly permitted under
Section 5.02(c), (ii) may wind up, liquidate or dissolve any of their
respective inactive Subsidiaries to the extent otherwise expressly
permitted under Section 5.02(d)(iv) and (iii) may amend, supplement or
otherwise modify their rights under their respective Constitutive Documents
to the extent otherwise expressly permitted under Section 5.02(l); and
provided further, however, that neither Holdings nor any of its
Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise if the board of directors (or persons
performing similar functions) of Holdings or such Subsidiary shall
determine in good faith that the preservation thereof is no longer
desirable in the conduct of the business of Holdings or such Subsidiary, as
the case may be, and that the loss thereof is not disadvantageous in any
material respect to Holdings, such Subsidiary or the Lenders or, solely in
the case of any such permit, license or approval, that the loss thereof,
either individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to time,
-----------------
upon reasonable notice, permit the Administrative Agent or any of the
Lenders, or any agents or representatives thereof (so long as such agent or
representative is or agrees to be bound by the provisions of Section 9.09),
to examine and make copies of and abstracts from the records and books of
account of, and to visit during normal business hours the properties of,
Holdings or any of its Subsidiaries, and to discuss the affairs, finances
and accounts of Holdings and/or any of its Subsidiaries with any of their
officers or directors and with their independent public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
----------------
keep, proper books of record and account in which full and accurate entries
shall be made of all of the financial transactions and the property, assets
and businesses of Holdings and each of its Subsidiaries (including, without
limitation, the establishment and maintenance of adequate and appropriate
reserves) in accordance with all applicable Requirements of Law and with
GAAP.
(h) Maintenance of Properties, Etc. (i) Maintain and preserve, and
------------------------------
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear and casualty and
condemnation excepted, and (ii) make, and cause each of its Subsidiaries to
make, from time to time, all necessary repairs, renewals, additions,
replacements, betterments and improvements of
88
such properties in order to permit the business and activities carried on
in connection therewith to be properly conducted at all times.
(i) Compliance with Terms of Leaseholds. (i) Make all payments and
-----------------------------------
otherwise perform all obligations in respect of all leases of real property
to which any of the Borrowers or any of their respective Subsidiaries is a
party, keep such leases in full force and effect and not allow such leases
to lapse or to be terminated or any rights to renew such leases to be
forfeited or cancelled, in each case except to the extent that, in the
reasonable business judgment of the Borrower or the Subsidiary of any of
the Borrowers that is the lessee thereof, it is in the best interest of
such Borrower or such Subsidiary, as the case may be, to allow or to cause
such nonperformance, lapse, termination, forfeiture or cancellation, and
such nonperformance, lapse, termination, forfeiture or cancellation, either
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect, and (ii) promptly notify the Administrative
Agent of (A) any default by any party with respect to any such lease that
could impair the interests of any of the Loan Parties or any of their
Subsidiaries therein in any material manner or the rights or interests of
the Administrative Agent or any of the Lenders in any manner, and cooperate
with the Administrative Agent to cure any such default, and (B) any
material nonperformance, or any lapse, termination, forfeiture or
cancellation of any lease otherwise permitted to occur under clause (i) of
this Section 5.01(i), and, in respect of each of the foregoing provisions
of this Section 5.01(i), cause each of its Subsidiaries to do so.
(j) Transactions with Affiliates. Conduct, and cause each of its
----------------------------
Subsidiaries to conduct, directly or indirectly, all transactions or series
of related transactions (including, without limitation, the purchase, sale,
lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to Holdings or any of its Subsidiaries
than it would obtain in a comparable arm's-length transaction with a Person
not an Affiliate thereof, other than:
(i) the consummation of the Refinancing;
(ii) the performance by Holdings or any of its Subsidiaries
of its obligations under the Related Documents, in each case in
accordance with the terms thereof as in effect on the date of this
Agreement;
(iii) any transaction or series of related transactions solely
between or among Holdings and one or more of the Borrowers or the
Restricted Subsidiaries, one or more of the Borrowers, one or more of
the Borrowers and one or more of the Restricted Subsidiaries, one or
more of the Restricted Subsidiaries or one or more of the Unrestricted
Subsidiaries, in each case to the extent such transaction or series of
related transactions is not otherwise prohibited under the terms of
the Loan Documents;
(iv) the payment of management fees to Fox Kids from time to
time by one or more of the Borrowers to the extent otherwise expressly
permitted under Section 5.02(b)(ii)(B);
(v) Investments in Fox Kids made by IFE on the Effective Date
pursuant to, and in accordance with the terms of, Section 5.02(e)(i),
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(vi) loans and advances by Holdings or any of its Subsidiaries to
one or more employees thereof, in each case to the extent otherwise
expressly permitted under Section 5.02(e); and
(vii) the declaration and payment of dividends and the making of
distributions by, and the issuance and sale of Equity Interests in,
Holdings or any of its Subsidiaries, in each case to the extent
otherwise expressly permitted under clause (i), (ii), (iii), (iv),
(vi) or (vii) of Section 5.02(f).
(k) Further Assurances. Promptly upon the request of the
------------------
Administrative Agent, or any of the Lenders through the Administrative
Agent, at any time and from time to time:
(i) correct, and cause each of its Subsidiaries to correct, any
defect or error that may be discovered in any of the Loan Documents or
in the execution, acknowledgment, filing or recordation thereof; and
(ii) do, execute, acknowledge, deliver, record, rerecord, file,
refile, register and reregister, and cause each of its Subsidiaries
promptly to do, execute, acknowledge, deliver, record, rerecord, file,
refile, register and reregister, any and all further acts,
conveyances, pledge agreements, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the
Administrative Agent, or any of the Lenders through the Administrative
Agent, may reasonably require from time to time in order to (A) carry
out more effectively the purposes of this Agreement, the Notes or any
of the other Loan Documents, (B) subject any of the property, assets,
rights or interests of any of the Loan Parties or any of their
respective Subsidiaries included or intended to be included in the
Collateral to the Liens created or now or hereafter intended to be
created under any of the Collateral Documents, (C) perfect and
maintain the validity, effectiveness and priority of any of the
Collateral Documents or any of the Liens created or intended to be
created thereunder and (D) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively to the Administrative
Agent and the other Secured Parties the rights granted or now or
hereafter intended to be granted to the Administrative Agent and the
other Secured Parties under any of the Loan Documents, or under any of
the other instruments executed in connection with any such Loan
Document.
SECTION 5.02. Negative Covenants. So long as any of the Advances
------------------
shall remain unpaid or any of the Lenders shall have any Commitment hereunder,
neither Holdings nor any of the Borrowers will, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
----------
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its property or assets of any character
(including, without limitation, accounts), whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code or any similar Requirements of Law of any jurisdiction, a
financing statement (or the equivalent thereof) that names Holdings or any
of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of
its Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file any such financing
statement (or the equivalent thereof), or sign or suffer to exist, or
permit any
90
of its Subsidiaries to sign or suffer to exist, any agreement or arrangement
for the sale of any of its property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales or accounts receivable with recourse to Holdings or any of its
Subsidiaries), or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions (i) with respect to Holdings, (A) Liens
created under the Loan Documents; and (B) Permitted Liens of the type described
in clauses (a), (g) and (h) of the definition thereof set forth in Section 1.01;
and (ii) with respect to the Borrowers and their respective Subsidiaries, the
following :
(A) Liens created under the Loan Documents;
(B) Permitted Liens;
(C) Liens existing on the date of this Agreement and described on
Schedule 5.02(a) hereto;
(D) purchase money Liens upon or in real property or equipment
acquired or held by any of the Borrowers or any of their respective
Subsidiaries in the ordinary course of business to secure the purchase
price of such real property or equipment or to secure Indebtedness incurred
solely for the purpose of financing the acquisition, construction or
improvement of any such real property or equipment to be subject to such
Liens, or Liens existing on any such real property or equipment at the time
of or within 90 days after its acquisition or the completion of its
construction (other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price of such real property or
equipment); provided, however, that no such Lien shall extend to or cover
any property or assets other than the real property or equipment being so
acquired, constructed or improved; and provided further that (1) the
principal amount of Indebtedness secured by any such Lien shall not exceed
the cost (including all such Indebtedness secured thereby, whether or not
assumed) to the applicable Borrower or the applicable Subsidiary of the
real property or equipment to be subject to any such Lien and (2) and
Indebtedness secured by Liens shall otherwise be expressly permitted under
Section 5.02(b)(iii)(D) and shall not otherwise be prohibited under the
terms of the Loan Documents;
(E) Liens arising in connection with Capitalized Leases otherwise
permitted under Section 5.02(b)(iii)(E) and not otherwise prohibited under
the terms of the Loan Documents; provided that no such Lien shall extend to
or cover any property or assets other than the property or assets subject
to such Capitalized Leases;
(F) Liens upon any of the property and assets (other than any Equity
Interests in any Person) existing at the time such property or asset is
purchased or otherwise acquired by any of the Borrowers or any of their
respective Subsidiaries; provided that any such Lien was not created in
contemplation of such purchase or other acquisition and does not extend to
or cover any property or assets other than the property or asset being so
purchased or otherwise acquired; and provided further that any Indebtedness
or other Obligations secured by such Liens shall otherwise be expressly
permitted under
91
Section 5.02(b)(iii)(J) and shall not otherwise be prohibited under the
terms of the Loan Documents;
(G) Liens upon any of the property and assets (other than any Equity
Interests in any Person) of a Person and its Subsidiaries existing at the time
such Person is merged into or consolidated with any of the Subsidiaries of
Holdings, or otherwise becomes a Subsidiary of Holdings, in accordance with the
terms of the Loan Documents; provided, that such Lien was not created in
contemplation of such merger, consolidation or acquisition and does not extend
to or cover any property or assets other than property and assets of the Person
and its Subsidiaries being so merged into or consolidated with such Subsidiary
or being acquired by Holdings or such Subsidiary, as the case may be; and
provided further that any Indebtedness or other Obligations secured by such
Lien shall otherwise be expressly permitted under Section 5.02(b)(iii)(J) and
shall not otherwise be prohibited under the terms of the Loan Documents;
(H) deposits and letters of credit to secure the performance of leases of
property (whether real, personal or mixed) of the Holdings and its Subsidiaries
(excluding Capitalized Leases) in the ordinary course of business; provided
that no such Lien shall extend to or cover any property or assets other than
such deposit or such letter of credit and the property and assets subject to
such lease, as applicable;
(I) Liens upon any item of Product and the rights directly relating thereto
in favor of the Screen Actors Guild, the Writers Guild of America, the
Directors Guild of America or any other unions, guilds or collective bargaining
units the collective bargaining agreements of which apply to such item of
Product, which Liens are incurred in the ordinary course of business solely to
secure the payment of Residuals and other collective bargaining obligations
required to be paid by any of the Borrowers or any of their respective
Subsidiaries under any such collective bargaining agreement in respect of such
item of Product or such directly related rights; provided that no such Lien
shall extend to or cover any property or assets other than the item or items of
Product giving rise to such Lien, the rights directly relating thereto and the
proceeds thereof;
(J) Liens arising in connection with Approved Completion Guarantees entered
into in the ordinary course of business and consistent with then current
industry practices, securing Obligations (other than indebtedness for borrowed
money) of any of the Borrowers or any of their respective Subsidiaries not yet
due and payable; provided that, with respect to each Approved Completion
Guarantee covering one or more items of Product of any of the Borrowers or any
of the Restricted Subsidiaries, each such Lien shall be subject to an
intercreditor agreement, in form and substance reasonably satisfactory to the
Lenders, between the Person providing any such Approved Completion Guarantee
and the Administrative Agent, on behalf of the Secured Parties, pursuant to
which such Person irrevocably agrees not to interfere with or otherwise disturb
the exploitation, exhibition, syndication, distribution or disposition of the
related items of Product by any of the Borrowers or any of their respective
Subsidiaries or by the Administrative Agent or any of the Lenders or to
exercise any rights with respect to such Lien, in each case so long as the
applicable Borrower or the applicable Restricted Subsidiary (or the
Administrative Agent on its behalf) does not wrongfully reject delivery
92
of such item of Product or fail to pay as and when due and payable by such
Borrower or such Restricted Subsidiary the contractual amounts that are related
to such item of Product and are required to be paid in order for all of the
rights, title and interest in such item of Product to fully vest in such
Borrower or such Restricted Subsidiary; and provided further that if the Person
providing any such Approved Completion Guarantee pays off upon the abandonment
of any of the items of Product covered by such Approved Completion Guarantee,
such Person shall have the right to take all of the rights, title and interest
in such item of Product in accordance with the terms set forth in such Approved
Completion Guarantee;
(K) Liens upon any or all of the property and assets of any Special Purpose
Vehicle to secure Indebtedness arising under one or more Permitted Film
Financings otherwise permitted to be incurred under Section 5.02(b)(iii)(G) and
not otherwise prohibited under the terms of the Loan Documents;
(L) Liens upon any item of Product and the rights directly relating
thereto in favor of suppliers and/or producers of such item of Product that are
incurred in the ordinary course to business solely to secure the purchase price
of such item of Product and such directly related rights or the rendering of
services necessary for the production of such item of Product; provided,
however, that no such Lien shall extend to or cover any property or assets
other than the item of Product and the rights directly related thereto being so
acquired or produced; and provided further that any payment Obligations secured
by such Liens shall by their terms be payable solely from the revenues of the
applicable Borrower or Subsidiary of any of the Borrowers that are derived
directly from the exhibition, syndication, exploitation, distribution or
disposition of such item of Product and/or such directly related rights;
(M) Liens upon any item of Product and rights directly relating thereto in
favor of distributors of such item of Product that are incurred in each case in
the ordinary course of business solely to secure delivery of such item of
Product and the licensing of the rights in such item of Product directly
related thereto; provided, however, that no such Lien shall extend to or cover
any property or assets other than the item of Product being so delivered and
the rights directly related thereto; and provided further that any payment
Obligations secured by such Liens shall by their terms be payable solely from
the revenues of the applicable Borrower or Subsidiary of any of the Borrowers
(or the applicable distributor) that are derived directly from the exhibition,
syndication, exploitation, distribution or disposition of such item of Product
and/or such directly related rights; and
(N) the replacement, extension or renewal of any Lien otherwise permitted
to be created or to exist under subclauses (ii)(C) (except to the extent
Schedule 5.02(a) hereto provides that such Liens shall not be replaced,
extended or renewed), (ii)(D), (ii)(E) or (ii)(K) of this Section 5.02(a) upon
or in the same property and assets theretofore subject thereto; provided that
no such extension, renewal or replacement shall extend to or cover any property
or assets not theretofore subject to the Lien being extended, renewed or
replaced; and provided further that any Obligations secured by such Liens shall
otherwise be expressly permitted under the terms of the Loan Documents.
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(b) Indebtedness. Create, incur, assume or suffer to exist, or permit
------------
any of its Subsidiaries to create, incur, assume or suffer to exist, directly
or indirectly, any Indebtedness other than:
(i) in the case of Holdings, Indebtedness under the Loan
Documents;
(ii) in the case of the Borrowers,
(A) Indebtedness in respect of interest rate Hedge
Agreements entered into from time to time by one or more of the
Borrowers with counterparties that are Lenders at the time any
such interest rate Hedge Agreement is entered into in an aggregate
notional amount not to exceed (A) 100% of the aggregate
Commitments under both of the Facilities at the time any such
interest rate Hedge Agreement is entered into less (B) the
aggregate notional amount of all interest rate Hedge Agreements
that constitute Investments made under Section 5.02(e)(iv) at such
time, provided that all such interest rate Hedge Agreements shall
be nonspeculative in nature (including, without limitation, with
respect to the term and purpose thereof), and
(B) Indebtedness comprised of management fees payable to Fox
Kids from time to time by one or more of the Borrowers in an
aggregate amount for any Fiscal Year not to exceed (1) $10,000,000
less (2) the aggregate amount of all dividends and other
distributions paid by Holdings to Fox Kids pursuant to Section
5.02(f)(ii)(D) during such Fiscal Year; provided that all such
management fees shall be subordinated in right of payment and
otherwise to all of the Obligations of the Borrowers under or in
respect of the Loan Documents on the same terms as the terms set
forth in the applicable Intercompany Notes, and all of the other
terms and conditions of such management fees (and each agreement
entered into in connection therewith) shall in form and substance
reasonably satisfactory to the Administrative Agent; and provided
further that the terms and conditions of any such management fees
(and copies of each agreement setting forth such terms and
conditions) shall be delivered to the Administrative Agent at
least ten Business Days prior to the date on which such terms and
conditions (or any such agreement) become effective; and
(iii) in the case of the Borrowers and their Subsidiaries,
(A) Indebtedness under the Loan Documents,
(B) Surviving Indebtedness,
(C) Indebtedness of (1) any of the Borrowers owing to any of
the other Borrowers or any of the Restricted Subsidiaries, (2) any
of the Restricted Subsidiaries owing to any of the Borrowers or
any of the other Restricted Subsidiaries, (3) any of the
Unrestricted Subsidiaries owing to any of the Borrowers or any of
the Restricted Subsidiaries to the extent the related
94
Investment in such Unrestricted Subsidiary is otherwise expressly permitted
under Section 5.02(e)(xii) and (4) any of the Unrestricted Subsidiaries to any
of the other Unrestricted Subsidiaries, provided that all such intercompany
Indebtedness owing to any of the Borrowers or any of the Restricted
Subsidiaries shall be evidenced by an Intercompany Note, which shall be pledged
under the terms of the Collateral Documents to the Administrative Agent, on
behalf of the Secured Parties, immediately upon the creation thereof,
(D) Indebtedness secured by Liens expressly permitted under Section
5.02(a)(ii)(D) in an aggregate principal amount not to exceed, when aggregated
with the principal amount of all Indebtedness incurred under subclause (iii)(E)
of this Section 5.02(b), $25,000,000 at any time outstanding,
(E) Capitalized Leases that, when aggregated with the principal amount of
all Indebtedness incurred under subclause (iii)(D) of this Section 5.02(b), do
not exceed $25,000,000 at any time outstanding,
(F) Indebtedness arising from Programming Liabilities, and from
Participations and Residuals incurred in connection with items of Product and
Rights in Product that are produced or acquired by any of the Borrowers or any
of their respective Subsidiaries, in each case incurred in the ordinary course
of business,
(G) Indebtedness of one or more Special Purpose Vehicles arising under one
or more Permitted Film Financings in an aggregate principal amount not to
exceed $50,000,000 at any time outstanding, provided that the aggregate
principal amount of all Indebtedness incurred under this subclause (iii)(G) by
one or more Special Purpose Vehicles organized under the laws of, or having its
principal place of business in, the United States of America or any state
thereof shall not exceed $30,000,000 at any time outstanding,
(H) Indebtedness comprised of trade payables or other accounts payable to
trade creditors incurred in the ordinary course of business to the extent
otherwise included in the definition of "Indebtedness" set forth in Section
1.01,
(I) Contingent Obligations of any of the Borrowers or any of their
respective Subsidiaries issued in favor of one or more producers of items of
Product in the ordinary course of business to assure the right of any such
Borrower or any such Subsidiary to purchase or otherwise acquire any such item
of Product and the rights directly relating thereto upon the completion and
delivery thereof, provided, however, that no such producer shall be any
Affiliate of any of the Loan Parties or any of their respective Affiliates, and
provided further, however, that (1) no amounts shall be payable under any such
Contingent Obligation if such item of Product is not completed and delivered to
the applicable Borrower or Subsidiary of any of the Borrowers in accordance
with the terms of the agreement pursuant to which such Contingent Obligation
was
95
incurred and (2) such Contingent Obligation shall not guarantee or otherwise
support any other Indebtedness of any of the Loan Parties or any of their
Subsidiaries,
(J) Indebtedness existing at the time that any property or asset is
purchased or otherwise acquired by any of the Borrowers or any of their
respective Subsidiaries and secured solely by such property or asset, or that
any Person (other than any of the other Borrowers or any of their respective
Subsidiaries) is merged into or consolidated with any of the Subsidiaries of
Holdings, or otherwise becomes a Subsidiary of Holdings, in accordance with the
terms of the Loan Documents, in an aggregate principal amount not to exceed (1)
if the Investment Grade Performance Test is not satisfied on the date on which
any such Indebtedness is incurred, $25,000,000 at any time outstanding and (2)
if the Investment Grade Performance Test is satisfied on the date on which any
such Indebtedness is incurred, $50,000,000 at any time outstanding, provided
that (x) no such Indebtedness shall be incurred in contemplation of any such
purchase or other acquisition or any such merger, consolidation or acquisition
and (y) immediately before and immediately after giving pro forma effect to
such Indebtedness, no Default shall have occurred and be continuing,
(K) Contingent Obligations of any of the Borrowers or any of the Restricted
Subsidiaries guaranteeing all or any portion of the outstanding Obligations
of any of the other Borrowers or any of the other Restricted Subsidiaries;
provided that such Obligations are not otherwise prohibited under the terms of
the Loan Documents,
(L) unsecured Indebtedness not otherwise permitted under this Section
5.02(b) incurred in the ordinary course of business and in an aggregate amount
not to exceed (1) if the Investment Grade Performance Test is not satisfied on
the date on which any such Indebtedness is incurred, $25,000,000 at any time
outstanding and (2) if the Investment Grade Performance Test is satisfied on
the date on which any such Indebtedness is incurred, $50,000,000 at any time
outstanding, provided that, with respect to any such Indebtedness issued or
incurred pursuant to this subclause (iii)(L), (w) such Indebtedness shall have
a stated maturity or redemption date of either (I) less than one year from
the date of creation thereof or (II) at least one year after the scheduled
Termination Date, (x) such Indebtedness shall not be guaranteed or otherwise
supported by any of the Loan Parties or any of their respective Subsidiaries,
(y) the other terms and conditions of such Indebtedness (and of any agreement
entered into and of any instrument issued in connection therewith) shall be no
less favorable to Fox Kids and its Subsidiaries or to the Administrative Agent
and Lenders than the terms of the Loan Documents and (z) immediately before and
immediately after giving pro forma effect to such Indebtedness, no Default
shall have occurred and be continuing.
(M) endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business, and
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(N) Indebtedness extending the maturity of, or refunding or
refinancing, in whole or in part, any Indebtedness incurred under
any of subclauses (iii)(B) (except to the extent Schedule 4.01(jj)
hereto provides that such Indebtedness shall not be replaced,
extended or renewed), (iii)(D), (iii)(E), (iii)(G) or (iii)(L) of
this Section 5.02(b), provided, however, that (1) the aggregate
principal amount of such extended, refunding or refinancing
Indebtedness shall not be increased above the principal amount
thereof and the premium, if any, thereon outstanding immediately
prior to such extension, refunding or refinancing, (2) the direct
and contingent obligors therefor shall not be changed as a result
of or in connection with such extension, refunding, replacement or
refinancing, (3) such extended, refunding or refinancing
Indebtedness shall not mature prior to the earlier of (x) the
stated maturity or redemption date of such extended, refunding or
refinancing Indebtedness and (y) one year after the scheduled
Termination Date, (4) if the Indebtedness being so extended,
refunded or refinanced is subordinated in right of payment or
otherwise to the Obligations of Fox Kids or any of its
Subsidiaries under or in respect of the Loan Documents, such
extended, refunded or refinanced Indebtedness shall be
subordinated to such Obligations to at least the same extent, (5)
the terms of any such extending, refunding or refinancing
Indebtedness (and of any agreement entered into and of any
instrument issued in connection therewith) shall be no less
favorable to Fox Kids and its Subsidiaries or to the
Administrative Agent and the Lenders than the terms of the
Indebtedness being so extended, refunded or refinanced, and (6)
immediately before and immediately after giving pro forma effect
to any such extension, refunding or refinancing, no Default shall
have occurred and be continuing.
(c) Mergers, Etc. Merge into or consolidate with any Person or permit
------------
any Person to merge into or consolidate with it, or permit any of its
Subsidiaries to do so, except that:
(i) any of the Borrowers may merge into or consolidate with
any of the other Borrowers;
(ii) any of the Restricted Subsidiaries may merge into or
consolidate with any of the Borrowers; provided that such Borrower is
the surviving corporation;
(iii) any of the Subsidiaries of the Borrowers may merge into or
consolidate with any of the Restricted Subsidiaries; provided that the
Person formed by such merger or consolidation is a Restricted
Subsidiary;
(iv) any of the Unrestricted Subsidiaries may merge into or
consolidate with any of the other Unrestricted Subsidiaries; and
(v) any of the Subsidiaries of the Borrowers may merge into or
consolidate with any Person; provided that (A) if such Subsidiary is a
Restricted Subsidiary, the Person formed by such merger or
consolidation shall be a Restricted Subsidiary, (B) if such Subsidiary
is a non-wholly owned Domestic Subsidiary, the Person formed by such
merger or consolidation shall be a Domestic Subsidiary and (C) if such
Subsidiary is a
97
Foreign Subsidiary, the Person formed by such merger or consolidation
shall be a Subsidiary of Fox Kids; and provided further that the
Person into which or with which such Subsidiary is merging or
consolidating (1) shall be engaged in one or more of the existing
principal lines of business of the Borrowers and their Subsidiaries,
considered as a whole, in the ordinary course and (2) shall not have
any material contingent liabilities (as determined in good faith by
the board of directors (or persons performing similar functions) of
such Subsidiary).
In all cases under this Section 5.02(c), (1) such merger or consolidation
shall be effected in compliance with all applicable Requirements of Law,
(2) all Governmental Authorizations, and all consents, approvals and
authorizations of, notices and filings to or with, and other actions by,
any other Person necessary in connection with such merger or consolidation
shall have been obtained or made, (3) the Consolidated Net Worth of the
Borrower or the Subsidiary thereof that is the surviving entity of such
merger shall, after giving pro forma effect to such merger or
consolidation, be at least equal to the Consolidated Net Worth of such
Borrower or such Subsidiary immediately prior to giving effect thereto, (4)
(x) immediately before and immediately after giving pro forma effect to
such merger or consolidation, no Default shall have occurred and be
continuing and (y) immediately after giving effect to such merger or
consolidation, Fox Kids and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 5.04, such
compliance to be determined on the basis of the Consolidated financial
statements of Fox Kids and its Subsidiaries or Holdings and its
Subsidiaries, as applicable, most recently delivered to the Lenders
pursuant to Section 7(i)(i) or 7(i)(ii) of the Fox Kids Guarantee or
Section 5.03(b) or 5.03(c) hereof, respectively, as though such merger or
consolidation had been consummated on the first day of the fiscal period
covered thereby, and (5) one of the Borrowers shall notify the
Administrative Agent of the proposed merger or consolidation at least ten
Business Days prior to effecting such merger or consolidation and shall
deliver to the Administrative Agent, on behalf of the Lenders, at the time
such notice is delivered, a certificate of a Responsible Officer of such
Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in
subclauses (1), (2), (3) and (4) of this paragraph have been satisfied and,
in the case of any merger or consolidation proposed to be effected pursuant
to clause (v) of this Section 5.02(c), that all of the matters described in
the provisos to such clause (v) have been satisfied and, in any event,
including a schedule that sets forth in reasonable detail all of the
computations used by such Borrower in determining its compliance with such
requirements.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any property or assets (including, without limitation,
substantially all of the property and assets constituting the business of a
division, branch or other unit of operation and any Equity Interests), or
grant any option or other right to purchase, lease or otherwise acquire any
property or assets, except that:
(i) the Borrowers and their respective Subsidiaries may sell,
distribute, license or otherwise exploit Product and Rights in Product
and may sell other inventory, all in the ordinary course of business;
98
(ii) Fox Kids and its Subsidiaries may sell, lease, transfer or otherwise
dispose of property and assets in a transaction otherwise permitted by Section
5.02(a), 5.02(c), 5.02(e) or 5.02(f);
(iii) (A) Holdings or any of the Borrowers may sell, lease, transfer or
otherwise dispose of any of its property or assets (other than any Equity
Interests in the Borrowers) to any of the other Borrowers or any of the
Restricted Subsidiaries, (B) any of the Restricted Subsidiaries may sell, lease,
transfer or otherwise dispose of any of its property or assets to any of the
Borrowers or any of the other Restricted Subsidiaries and (C) any of the
Unrestricted Subsidiaries may sell, lease, transfer or otherwise dispose of any
of its property or assets for Fair Market Value to any of the Borrowers or any
of their respective Subsidiaries; provided that immediately before and
immediately after giving pro forma effect to such sale, lease, transfer or other
disposition, no Default shall have occurred and be continuing;
(iv) any of the Subsidiaries of the Borrowers that is no longer actively
engaged in any business or activities and does not have property and assets with
an aggregate book value or Fair Market Value in excess of $5,000,000 may be
wound up, liquidated or dissolved by the applicable Borrower so long as such
winding up, liquidation or dissolution is determined in good faith by the board
of directors of such Borrower (as evidenced in a resolution set forth in a
certificate of a Responsible Officer of such Borrower delivered to the
Administrative Agent, on behalf of the Lenders, prior to effecting such winding
up, liquidation or dissolution) to be in the best interests of Holdings and its
Subsidiaries;
(v) the Borrowers and their Subsidiaries may lease or sublease real
property to the extent required for their respective businesses and operations
in the ordinary course so long as such lease or sublease is not otherwise
prohibited under the terms of the Loan Documents;
(vi) the Borrowers and their respective Subsidiaries (A) may sell tangible
property and assets and apply the Net Cash Proceeds received by any such
Borrower or Subsidiary of any of the Borrowers therefrom within 90 days after
the date of such sale to the purchase or other acquisition of replacement
property and assets therefor having equal or greater value (as determined in
good faith by the board of directors of the applicable Borrower) and (B) may
sell, lease, transfer or otherwise dispose of any obsolete, damaged or worn out
equipment that is no longer useful in the conduct of their businesses and
operations in the ordinary course of business; provided, however, that in the
case of subclause (vi)(A), if such tangible property and assets are not replaced
within such 90-day period, then the Net Cash Proceeds of such sale shall be
applied on the last day of such period to reduce the Commitments in accordance
with, and to the extent required under, Section 2.04(b)(iv) and to prepay the
Advances outstanding at such time in accordance with, and to the extent required
under, Section 2.05(b);
(vii) IFE and its applicable Subsidiaries may sell, lease, transfer or
otherwise dispose of all or a portion of (A) their Equity Interests in, or the
property and assets of, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Production, Inc., ▇▇▇▇▇▇▇ Acquisition
Corp., Cable Health TV, Inc., FiT TV Partnership or MTM Holding Company, Inc. or
any of its Subsidiaries at any time
99
prior to September 30, 1998 and (B) the Indebtedness owed by Del ▇▇▇▇▇▇
Associates, Inc. to IFE on the date of this Agreement and described on Schedule
4.01(kk) hereto; provided that:
(1) the gross proceeds received from any such sale, lease, transfer or
other disposition are at least equal to the Fair Market Value of the
property and assets so sold, leased, transferred or disposed of, determined
at the time of such sale, lease, transfer or other disposition;
(2) at least 90% of the value of the aggregate consideration received
from any such sale, lease, transfer or other disposition shall be in cash;
(3) immediately before and immediately after giving pro forma effect to
any such sale, lease, transfer or other disposition, no Default shall have
occurred and be continuing; and
(4) all of the noncash consideration received in any such sale, lease
transfer or other disposition that is comprised of Equity Interests in, or
other securities of, any Person shall be pledged as Collateral to the
Administrative Agent, on behalf of the Secured Parties, under, and in
accordance with the terms of, the Collateral Documents promptly upon receipt
thereof;
(viii) the Borrowers and their respective Subsidiaries may sell, transfer or
otherwise dispose of all of the Equity Interests in, or all of the operating
assets comprising a business unit, division or branch (or any other distinct
unit of operation that contributes a discrete and readily discernable amount of
Consolidated EBITDA) of, any of its Subsidiaries or any other Person; provided
that in the case of any such sale, transfer or other disposition:
(A) the Attributable Asset EBITDA of all of the Equity Interests or
operating assets being so sold, transferred or otherwise disposed of, when
aggregated with the Attributable Asset EBITDA of all of the other Equity
Interests and operating assets of the Borrowers and their Subsidiaries that
have been sold, transferred or otherwise disposed of pursuant to this clause
(viii) and clause (ix) of this Section 5.02(d) during the one-year period
ending on the date of such sale, transfer or other disposition (or, if
shorter, the period commencing on the Effective Date and ending on such
date), shall not exceed an amount equal to 10% of Pro Forma Consolidated
EBITDA as of such date;
(B) the Attributable Asset EBITDA of all of the Equity Interests or
operating assets being so sold, transferred or otherwise disposed of, when
aggregated with the Attributable Asset EBITDA of all of the other Equity
Interests and operating assets of the Borrowers and their Subsidiaries that
have been sold, transferred or otherwise disposed of pursuant to this clause
(viii) and clause (ix) of this Section 5.02(d) since the date of this
Agreement, shall not exceed an amount equal to 20% of Pro Forma Consolidated
EBITDA as of such date;
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(C) at least 85% of the value of the aggregate consideration received
from any such sale, transfer or other disposition shall be in cash;
(D) immediately before and immediately after giving pro forma effect
to any such sale, transfer or other disposition, no Default shall have
occurred and be continuing;
(E) all of the noncash consideration received in any such sale,
transfer or other disposition that is comprised of Equity Interests in, or
other securities of, any Person shall be pledged as Collateral to the
Administrative Agent, on behalf of the Secured Parties, under, and in
accordance with the terms of, the Collateral Documents promptly upon receipt
thereof;
(F) subject to the next succeeding proviso, all of the Net Cash
Proceeds from such sale, transfer or other disposition shall be applied to
reduce the Commitments in accordance with, and to the extent required under,
Section 2.04(b)(iv) and to prepay the Advances outstanding at such time in
accordance with, and to the extent required under, Section 2.05(b); and
(G) the applicable Borrower shall deliver to the Administrative Agent,
on behalf of the Lenders, on the date of consummation of such sale, transfer
or other disposition, a certificate of a Responsible Officer of such
Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in
subclauses (A) through (F) of this clause (viii) have been satisfied and
including a schedule that sets forth in reasonable detail all of the
computations used by such Borrower in determining its compliance with such
requirements;
provided, however, that up to $50,000,000 of Net Cash Proceeds received by or on
behalf of the Borrowers and their Subsidiaries from one or more sales, transfers
or other dispositions of Equity Interests or operating assets of the Borrowers
and their Subsidiaries effected pursuant to this clause (viii) (or deemed to
have been effected pursuant to this clause (viii) under the proviso to clause
(ix) of this Section 5.02(d)) may, at the option of the Borrowers, be reinvested
within 270 days of the date of receipt thereof in the businesses and operations
of the Borrowers and their Subsidiaries in the ordinary course of business
(although any such Net Cash Proceeds not so reinvested within such 270-day
period shall be applied on the last day of such 270-day period to reduce the
Commitments in accordance with, and to the extent required under, Section
2.04(b)(iv) and to prepay the Advances outstanding at such time in accordance
with, and to the extent required under, Section 2.05(b)); and
(ix) the Borrowers and their Subsidiaries may consummate one or more Asset
Swaps; provided that in the case of any such Asset Swap:
(A) the Attributable Asset EBITDA of all of the Equity Interests and
operating assets being sold, transferred or otherwise disposed of in such
Asset Swap, when aggregated with the Attributable Asset EBITDA of all of
the other Equity Interests and operating assets of the Borrowers and their
Subsidiaries that
101
have been sold, transferred or otherwise disposed of pursuant to this
clause (ix) and clause (viii) of this Section 5.02(d) during the one-year
period ending on the date on which such Asset Swap is commenced (or, if
shorter, the period commencing on the Effective Date and ending on such
date), shall not exceed an amount equal to 10% of Pro Forma Consolidated
EBITDA as of such date;
(B) the Attributable Asset EBITDA of all of the Equity Interests and
operating assets being sold, transferred or otherwise disposed of in such
Asset Swap, when aggregated with the Attributable Asset EBITDA of all of
the other Equity Interests and operating assets of the Borrowers and their
Subsidiaries that have been sold, transferred or otherwise disposed of
pursuant to this clause (ix) and clause (viii) of this Section 5.02(d)
since the date of this Agreement, shall not exceed an amount equal to 20%
of Pro Forma Consolidated EBITDA as of such date;
(C) immediately before and immediately after giving pro forma effect
to any such Asset Swap, no Default shall have occurred and be continuing;
(D) all of the noncash consideration received in any such Asset Swap
that is comprised of Equity Interests in, or other securities of, any
Person shall be pledged as Collateral to the Administrative Agent, on
behalf of the Secured Parties, under, and in accordance with the terms of,
the Collateral Documents promptly upon receipt thereof; and
(E) the applicable Borrower shall deliver to the Administrative Agent,
on behalf of the Lenders, on the date of consummation of such Asset Swap, a
certificate of a Responsible Officer of such Borrower, in form and
substance reasonably satisfactory to the Administrative Agent, certifying
that all of the requirements set forth in subclauses (A) through (D) of,
and in the next succeeding proviso to, this clause (ix) and in the
definition of "Asset Swap" set forth in Section 1.01 have been satisfied
and including a schedule that sets forth in reasonable detail all of the
computations used by such Borrower in determining its compliance with such
requirements;
provided, however, that if all of the Net Cash Proceeds retained by the
applicable Borrower or Subsidiary of any of the Borrowers from the sale, lease,
transfer or other disposition of any their Equity Interests or operating assets
are not applied to the purchase or other acquisition of Equity Interests or
operating assets otherwise satisfying the requirements of the definition of
"Asset Swap" set forth in Section 1.01 and this clause (ix) within 90 days after
the date of receipt of such Net Cash Proceeds, then the sale, transfer or other
disposition of the Equity Interests or operating assets resulting in such Net
Cash Proceeds shall cease to constitute part of an Asset Swap and, instead,
shall be deemed to be a sale, transfer or other disposition of Equity Interests
or operating assets by such Borrower or such Subsidiary made pursuant to clause
(viii) of this Section 5.02(d) on and as of the date on which such Equity
Interests or operating assets were actually sold, transferred or otherwise
disposed of (and such sale, transfer or other disposition shall be required to
have satisfied the requirements of clause (viii) of this Section 5.02(d) as of
such date).
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(e) Investments in Other Persons. Make or hold, permit any of its
----------------------------
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments made by IFE in Fox Kids on the Effective Date as
part of the Refinancing; provided that all of the Indebtedness of Fox Kids
resulting from such Investments shall be evidenced by an Intercompany Note,
which shall be pledged under the terms of the Collateral Documents to the
Administrative Agent, on behalf of the Secured Parties, immediately upon the
creation thereof;
(ii) Investments existing on the date of this Agreement and described
on Schedule 4.01(kk) hereto;
(iii) Investments by Holdings and its Subsidiaries in cash and Cash
Equivalents;
(iv) in the case of the Borrowers, Investments in respect of interest
rate Hedge Agreements entered into from time to time by one or more of the
Borrowers with one or more counterparties that are Lenders at the time any such
interest rate Hedge Agreement is entered into in an aggregate notional amount
not to exceed (A) 100% of the aggregate Commitments under both of the
Facilities at the time any such interest rate Hedge Agreement is entered into
less (B) the aggregate notional amount of any interest rate Hedge Agreements
that constitute Indebtedness incurred under Section 5.02(b)(ii)(A) at such
time; provided that all such interest rate Hedge Agreements shall be
nonspeculative in nature (including, without limitation, with respect to the
term and purpose thereof);
(v) Investments by (A) Holdings or any of the Borrowers in any of the
other Borrowers or any of the Restricted Subsidiaries, (B) any of the
Subsidiaries of any of the Borrowers in any of the Borrowers or any of the
Restricted Subsidiaries or (C) any of the Unrestricted Subsidiaries in any of
the other Unrestricted Subsidiaries;
(vi) loans and advances by the Borrowers and their Subsidiaries to
their respective employees in an aggregate principal amount not to exceed at any
time outstanding the lesser of (A) (1) the aggregate principal amount of all
such loans and advances outstanding on the date of this Agreement plus (2)
$5,000,000 and (B) $8,000,000;
(vii) Investments by the Borrowers and their Subsidiaries in account
debtors received in connection with the bankruptcy or reorganization, or in
settlement of the delinquent obligations of suppliers or customers, in the
ordinary course of business and in accordance with applicable collection and
credit policies established by such Borrower or such Subsidiary, as the case may
be;
(viii) the acceptance of promissory notes, contingent payment obligations
and other noncash consideration received as partial payment of the purchase
price of any property or assets sold, leased, transferred or otherwise disposed
of in accordance with clause (vii), (viii) or (ix) of Section 5.02(d);
103
(ix) capital contributions by Holdings to one or more of the
Borrowers solely in exchange for additional shares of common stock thereof;
provided that all such additional shares shall be pledged as Collateral under
the Pledge and Assignment Agreement to the Administrative Agent, on behalf of
the Secured Parties, promptly upon receipt thereof;
(x) the assumption of Indebtedness of any Person existing at the time
that any property or asset of such Person is purchased or otherwise acquired by
any of the Borrowers or any of their respective Subsidiaries, or that such
Person is merged into or consolidated with any of the Subsidiaries of Holdings,
or becomes a Subsidiary of Holdings; provided that such Indebtedness is
otherwise expressly permitted to be incurred under Section 5.02(b)(iii)(J) and
such purchase or other acquisition or such merger, consolidation or acquisition
is not otherwise prohibited under the terms of the Loan Documents;
(xi) The purchase or other acquisition by the Borrowers and their
Subsidiaries of all of the Equity Interests in, or all of the operating assets
comprising a business unit, division or branch (or any other distinct unit of
operation that contributes a discrete and readily discernable amount of
Consolidated EBITDA) of, any Person as part of an Asset Swap otherwise expressly
permitted under Section 5.02(d)(ix); and
(xii) Investments by the Borrowers and their Subsidiaries not otherwise
permitted under this Section 5.02(e) (A) in an aggregate amount not to exceed
(1) if the Investment Grade Performance Test is not satisfied on the date on
which any such Investment is made, $100,000,000 at any time outstanding and (2)
if the Investment Grade Performance Test is satisfied on the date on which any
such Investment is made, $200,000,000 at any time outstanding or (B) made solely
with the proceeds of Permitted Affiliate Investments, provided that, with
respect to any such Investment made pursuant to this clause (xii):
(1) any business acquired or invested in shall be one or
more of the existing principal lines of business of the Borrowers and
their Subsidiaries, considered as a whole, in the ordinary course;
(2) any Subsidiary of any of the Borrowers acquired or
created as a result of or in connection with such Investment shall not
have any material contingent liabilities (as determined in good faith by
the board of directors (or persons performing similar functions) of the
applicable Borrower); and
(3) (x) immediately before and after giving pro forma effect
to such Investment, no Default shall have occurred and be continuing and
(y) immediately after giving effect to such Investment, Fox Kids and its
Subsidiaries shall be in pro forma compliance with all of the covenants
set forth in Section 5.04, such compliance to be determined on the basis
of the Consolidated financial statements of Fox Kids and its Subsidiaries
or Holdings and its Subsidiaries, as applicable, most recently delivered
to the Lenders pursuant to Section 7(i)(i) or 7(i)(ii) of the Fox Kids
Guarantee or Section
104
5.03(b) or 5.03(c) hereof, respectively, as though such
Investment had been made on the first day of the fiscal period
covered thereby, and all of the requirements set forth in this
subclause (3) shall be certified by a Responsible Officer of the
applicable Borrower in a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and
delivered to the Administrative Agent, on behalf of the Lenders,
prior to making such Investment (which certificate shall also
include a schedule in reasonable detail of the computations used
by such Borrower in determining such compliance);
provided that, for purposes of this clause (xii), the determination of
the amount of any Investment comprised of the acquisition of any
Person or any property or assets of any Person shall be the aggregate
cash and noncash purchase price of such acquisition (including,
without limitation, all indemnities and other contingent payment
obligations to the sellers thereof, all write-downs of property and
assets and reserves for liabilities with respect thereto and all
assumptions of debt, liabilities and other obligations in connection
therewith).
(f) Dividends, Repurchases, Etc. Declare or pay any dividends on, or
---------------------------
purchase, redeem, retire, defease or otherwise acquire for value, any of
its Equity Interests, whether now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent persons
thereof) as such, make any distribution of property, assets, Equity
Interests, obligations or securities to its stockholders, partners or
members (or the equivalent persons thereof) as such, or issue or sell any
of its Equity Interests, or permit any of its Subsidiaries to do any of the
foregoing, or permit any of its Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any Equity Interests in Holdings or
any of the Borrowers, or to issue or sell any of its Equity Interests in
order to acquire any such Equity Interests, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described in clause (ii), (iii), (iv)(A), (iv)(C), (v), (vi), (vii) or
(viii) of this Section 5.02(f) or shall occur as a result thereof:
(i) Holdings or any of its Subsidiaries may declare and make
dividends and other distributions payable only in shares of its common
stock (or the equivalent Equity Interests thereto); provided that such
shares of common stock (or equivalent Equity Interests) shall, to the
extent required under the terms of the applicable Collateral
Documents, be pledged as Collateral thereunder to the Administrative
Agent, on behalf of the Secured Parties, promptly following the
issuance thereof;
(ii) Holdings may declare and pay dividends and make
distributions in cash to Fox Kids solely to the extent necessary in
order for Fox Kids (A) to pay scheduled interest on the outstanding
Senior Notes when due and payable in accordance with their terms in an
aggregate amount not to exceed the amount set forth below for each of
the Fiscal Years set forth below.
FISCAL YEAR ENDING AMOUNT
------------------ ------
June 1998 $29,536,000
June 1999 43,938,000
June 2000 43,938,000
105
Fiscal Year Ending Amount
------------------ ------
June 2001 43,938,000
June 2002 43,938,000
June 2003 86,037,000
June 2004 107,350,000
(B) to declare and pay scheduled ordinary dividends on the outstanding shares of
Series A Preferred Stock to the extent permitted under, and then only in
accordance with the terms of, Section 8(c)(ii) of the Fox Kids Guarantee, (C) to
repurchase shares of its common stock and options therefor held by any of the
Fox Kids Optionholders upon the termination of the employment of such Fox Kids
Optionholder to the extent permitted under, and then only in accordance with the
terms of, Section 8(c)(iv) of the Fox Kids Guarantee and (D) to pay compensation
to its employees in an aggregate amount for any Fiscal Year not to exceed (1)
$10,000,000 less (2) the aggregate amount of all management fees paid by one or
more of the Borrowers to Fox Kids pursuant to Section 5.02(b)(ii)(B) during such
Fiscal Year;
(iii) commencing at any time after the Fiscal Quarter ending
September 30, 2000 and from time to time thereafter so long as the Total
Leverage Ratio for the most recently completed Measurement Period prior to any
date of determination under this clause(iii) is less than 4.50:1, Holdings may
declare and pay dividends and make other distributions in cash to Fox Kids for
any purpose not otherwise prohibited under the terms of the Loan Documents if,
after giving effect thereto, the aggregate amount of all such dividends and
distributions paid or made pursuant to this clause (iii) during the immediately
preceding 12 months would not exceed the lesser of (A) $50,000,000 and (B) 75%
of Available Cash Flow for the most recently completed Fiscal Year prior to such
declaration; provided that (1) immediately after giving effect to any such
declaration, Fox Kids and its Subsidiaries shall be in pro forma compliance with
all of the covenants set forth in Section 5.04, such compliance to be determined
on the basis of the Consolidated financial statements of Fox Kids and its
Subsidiaries or Holdings and its Subsidiaries, as applicable, most recently
delivered to the Lenders pursuant to Section 7(i)(i) or 7(i)(ii) of the Fox Kids
Guarantee or Section 5.03(b) or 5.03(c) hereof, respectively, as though payment
on such declaration had been made on the first day of the fiscal period covered
thereby, and (2) the Administrative Agent, on behalf of the Lenders, shall have
received a certificate from a Responsible Officer of Holdings, in form and
substance reasonably satisfactory to the Administrative Agent, at least ten
Business Days prior to the date of any such declaration, certifying that all of
the requirements set forth in this clause (iii) have been satisfied and
including a schedule that sets forth in reasonable detail all of the
computations used by Holdings in determining its compliance with such
requirements; and provided further that any dividend or other distribution
declared by Holdings pursuant to this clause (iii) shall be paid to Fox Kids
within 30 days of the date of declaration thereof;
(iv) (A) any of the Subsidiaries of Holdings may declare and make
dividends and distributions to Holdings to the extent necessary from
time to time in order for Holdings (1) to pay administrative and
operating expenses incurred thereby in the ordinary course of business
or (2) to dividend or otherwise distribute cash to Fox Kids
106
pursuant to clause (ii) or (iii) of this Section 5.02(f), (B) any of
the Subsidiaries of Holdings may declare and make dividends and
distributions to any of the Borrowers or any of the Restricted
Subsidiaries and (C) any of the Unrestricted Subsidiaries may declare
and make dividends and distributions to any of the other Unrestricted
Subsidiaries;
(v) any of the non-wholly owned Subsidiaries of Holdings may
declare and make dividends and distributions, and may issue and sell
additional Equity Interests therein, to its shareholders, partners or
members (or the equivalent persons thereof) generally so long as each
of the Loan Parties and/or each of their respective Subsidiaries that
own any of the Equity Interests in such non-wholly owned Subsidiary
receive at least their respective proportionate shares of any such
dividend, distribution or issuance of Equity Interests (based upon
their relative holdings of the Equity Interests therein and taking
into account the relative preferences, if any, of the various classes
of the Equity Interests therein);
(vi) MTM Entertainment may issue shares of its common stock to
▇▇▇▇▇▇▇ Thomopolous upon the exercise of his options therefor
outstanding on the date of this Agreement and described on Schedule
III to the Pledge and Assignment Agreement, which shares shall not
represent in the aggregate more than 4.76% of the Equity Interests in
MTM Entertainment (on a fully diluted basis) on the date of any such
issuance thereof;
(vii) Cable Health TV, Inc. may issue shares of its common stock
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ or Liberty CHC, Inc. upon the exercise of their
respective options therefor outstanding on the date of this Agreement
and described on Schedule III to the Pledge and Assignment Agreement,
which shares shall not represent in the aggregate more than 12.5% of
the Equity Interests in Cable Health TV, Inc. (on a fully diluted
basis) on the date of any such issuance thereof; and
(viii) T.V.10 may grant an option to Holland Media Group, S.A. to
acquire newly issued shares of common stock of T.V.10 representing not
more than 50% of the Equity Interests in T.V.10 (on a fully diluted
basis) and, upon the exercise of such option, may issue such shares to
Holland Media Group, S.A.; provided that:
(A) the gross proceeds received from the sale of
such option, and from the issuance of any such shares upon the
exercise of such option, shall be at least equal to the Fair
Market Value therof, determined at the time of such sale; and
(B) all of the consideration received from the sale of
such option and, if applicable, from the issuance of such shares
shall be in cash.
(g) Prepayments, Etc. of Indebtedness. (i) Prepay, redeem, purchase,
---------------------------------
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness other than:
107
(A) the prepayment of Advances outstanding from time to time
in accordance with the terms of this Agreement,
(B) so long as no Default shall have occurred and be
continuing or shall occur as a result thereof, any regularly scheduled
or required redemption, repurchase or repayment of Surviving
Indebtedness,
(C) the satisfaction of any Indebtedness incurred under
Sections 5.02(b)(iii)(D) and 5.02(b)(iii)(E) that is secured by a Lien
on the property or assets of the Borrower or the Subsidiary of any of
the Borrowers that incurred such Indebtedness, which property or
assets are otherwise permitted to be disposed of under Section
5.02(d),
(D) the regularly scheduled payment or required prepayment of
any Indebtedness that is refunded or refinanced in accordance with
Section 5.02(b)(iii)(N), and
(E) the prepayment, redemption, purchase, defeasance or other
satisfaction of Indebtedness of any Person existing at the time such
Person is being acquired by Holdings or any of its Subsidiaries to the
extent that such prepayment, redemption, purchase, defeasance or other
satisfaction is required by the terms of such Indebtedness; provided
that the acquisition of such Person is otherwise expressly permitted
under the terms of the Loan Documents;
(ii) Amend, modify or change in any manner any of the terms or
conditions of any of the Surviving Indebtedness, except as otherwise
expressly permitted under Section 5.02(b)(iii)(N); and
(iii) Permit any of its Subsidiaries to do any of the foregoing, other
than to prepay any Indebtedness payable to any of the Borrowers or, subject
to the terms of the applicable Intercompany Notes, the Restricted
Subsidiaries.
(h) Negative Pledge. Enter into or suffer to exist, or permit any
---------------
of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than:
(i) any such agreement with or in favor of the Secured Parties
or the Administrative Agent, on behalf of the Secured Parties;
(ii) any such agreement with or in favor of the holders of the
Senior Notes or either of the trustees for the Senior Notes, on behalf
of the holders thereof, in each case as such agreement is in effect
under the Senior Notes Indentures on the date of this Guarantee;
(iii) in connection with (A) any Surviving Indebtedness to the
extent such agreement is in effect on the date of this Agreement, (B)
any Indebtedness otherwise
108
permitted to be incurred under Section 5.02(b)(iii)(N) to the extent
such agreement is on terms that are no less favorable to Fox Kids or
any of its Subsidiaries or the Administrative Agent or the Lenders
than the terms in effect for the Indebtedness being refunded or
refinanced immediately prior to effecting such refunding or
refinancing and (C) any Indebtedness outstanding on the date any
Person first becomes a Subsidiary of any of the Borrowers; provided
that such agreement was not created in contemplation of the
acquisition of such Person and does not extend to or cover any
property or assets other than property and assets of the Person
becoming such Subsidiary;
(iv) any such agreement prohibiting other encumbrances on
specific property and assets of any of the Borrowers or any of their
respective Subsidiaries, which agreement secures the payment of
Indebtedness incurred solely to acquire, construct or improve such
property or assets or to finance the purchase price therefor and which
Indebtedness is otherwise expressly permitted to be incurred under the
terms of this Agreement;
(v) any agreement setting forth customary restrictions on the
subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract of similar property or assets;
and
(vi) any restriction or encumbrance imposed pursuant to an
agreement that has been entered into by Holdings or any of its
Subsidiaries for the sale, lease, transfer or other disposition of any
of its property or assets so long as such sale, lease, transfer or
other disposition is otherwise expressly permitted to be made under
Section 5.02(d).
(i) Dividends and Other Payment Restrictions Affecting Subsidiaries.
---------------------------------------------------------------
Enter into, create, assume or otherwise suffer to exist or become
effective, or permit any of its Subsidiaries to enter into, create, assume
or otherwise suffer to exist or become effective, directly or indirectly,
any encumbrance or restriction of any kind on the ability of any of its
Subsidiaries (i) to pay dividends or to make any other distributions on any
of the Equity Interests in such Subsidiary owned or otherwise held by
Holdings or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to Fox Kids or any of its Subsidiaries,
(iii) to make loans or advances to Fox Kids or any of its Subsidiaries or
(iv) to transfer any of its property or assets to Fox Kids or any of its
Subsidiaries; provided, however, that nothing in any of clauses (i) through
(iv) of this Section 5.02(i) shall prohibit or restrict:
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this Agreement and
described on Schedule 5.02(i) hereto;
(C) any applicable law, rule or regulation (including, without
limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);
109
(D) in the case of clause (iv) of this Section 5.02(i), any
agreement setting forth customary restrictions on the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract of similar property or assets;
(E) in the case of clause (iv) of this Section 5.02(i), any
agreement with the holder of a Lien otherwise permitted to exist under
Section 5.02(a)(ii)(D) or 5.02(a)(ii)(E) restricting on customary
terms the transfer of any property or assets subject thereto;
(F) any agreement evidencing Indebtedness outstanding on the date
a Person first becomes a Subsidiary of any of the Borrowers; provided
that such agreement was not created in contemplation of the
acquisition of such Person by such Borrower and does not extend to or
cover any property or assets other than the property or assets of the
Person becoming such Subsidiary; and
(G) any agreement evidencing or setting forth the terms of any
refunding or refinancing Indebtedness otherwise permitted to be
incurred under Section 5.02(b)(iii)(N) that contains any such
restrictions to the extent such restrictions are no less favorable to
Fox Kids or any of its Subsidiaries or the Administrative Agent or the
Lenders than the terms in effect in the Indebtedness being so refunded
or refinanced immediately prior to effecting such refunding or
refinancing.
(j) New Subsidiaries. Create, organize, incorporate or acquire any
----------------
Subsidiary other than a Special Purpose Vehicle (any such newly created,
organized, incorporated or acquired Subsidiary other than a Special Purpose
Vehicle being a "NEW SUBSIDIARY"), or permit any of its Subsidiaries to
create, organize, incorporate or acquire any New Subsidiary, unless:
(i) the Administrative Agent shall have approved the legal
structure and capitalization of such New Subsidiary, such approval not
to be unreasonably withheld or delayed;
(ii) such New Subsidiary shall execute and deliver to the
Administrative Agent, on behalf of the Secured Parties, promptly
following the date of its creation, organization, incorporation or
acquisition, (A) if such New Subsidiary constitutes (or is required or
intended to constitute) a Restricted Subsidiary, a Guarantee
Supplement and a Pledge Agreement Supplement and/or, if necessary or
in the reasonable opinion of the Administrative Agent desirable to
properly create and perfect a lien and security interest in the Equity
Interests in such New Subsidiary, or the Equity Interests owned or
otherwise held by (or to be owned or otherwise held by) or the
intercompany Indebtedness owed (or to be owed) to such New Subsidiary,
one or more other pledge agreements, assignment agreements (or other
similar documents), in form and substance reasonably satisfactory to
the Lenders, (B) if such New Subsidiary constitutes an Unrestricted
Subsidiary, such documentation as may be necessary or in the
reasonable opinion of the Administrative Agent desirable to properly
create and perfect a lien and security interest in the Equity
Interests of such Unrestricted Subsidiary referred to in clause (iv)
of this Section 5.02(j) and (C) in each case, such other agreements.
110
instruments, certificates or documents as the Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to the Lenders;
(iii) if such New Subsidiary constitutes (or is required or
intended to constitute) a Restricted Subsidiary, such New Subsidiary
and the owners of all of the Equity Interests therein shall have taken
or shall take all of the other actions that may be necessary or that
the Administrative Agent may reasonably deem desirable in order (A) to
perfect and protect any Liens granted under the Collateral Documents
and the Pledge Agreement Supplement and, if applicable, the other
pledge agreements, assignment agreements (or other similar documents)
referred to in clause (ii) of this Section 5.02(j) and (B) to enable
the Administrative Agent and the Lenders to exercise and enforce their
rights and remedies under the Loan Documents;
(iv) if such New Subsidiary constitutes an Unrestricted
Subsidiary, such New Subsidiary and each of the Borrowers and the
Restricted Subsidiaries that own any of the Equity Interests therein
shall have taken or shall take all of the other actions that may be
necessary or that the Administrative Agent may reasonably deem
desirable in order to perfect and protect any Liens granted or
intended to be granted under the Collateral Documents in (A) if such
New Subsidiary is not a Foreign Corporation, all of the Equity
Interests in such New Subsidiary that are owned or otherwise held by,
and all of the Indebtedness of such New Subsidiary owing from time to
time to, Fox Kids, Holdings, any of the Borrowers or any of the
Restricted Subsidiaries and (B) if such New Subsidiary is a Foreign
Corporation, 66% of the Equity Interests in such New Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section
1.956-2(c)(2) promulgated under the Internal Revenue Code) (the
"VOTING EQUITY INTERESTS") (on a fully diluted basis) or, if less, all
of the Voting Equity Interests in such New Subsidiary owned by Fox
Kids, Holdings, the Borrowers and/or the Restricted Subsidiaries, and
all of the Equity Interests in such New Subsidiary not entitled to
vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2)
promulgated under the Internal Revenue Code) now or hereafter owned by
Fox Kids, Holdings, the Borrowers and/or the Restricted Subsidiaries;
provided, however, that, if, as a result of any changes in the tax
laws of the United States of America after the date of this Agreement,
the pledge by any of the Loan Parties or any of their respective
wholly owned Subsidiaries of any additional Equity Interests in any
such Foreign Corporation to the Administrative Agent, on behalf of
itself and the other Secured Parties, would not result in an increase
in the aggregate net consolidated tax liabilities of Fox Kids and its
Subsidiaries, then, promptly after the changes in such laws, all such
additional Equity Interests shall be pledged to the Administrative
Agent, on behalf of the Secured Parties, pursuant to the terms and
conditions of the Collateral Documents and/or one or more additional
pledge agreements, assignment agreements (or other similar documents),
in form and substance reasonably acceptable to the Lenders; and
(v) upon the reasonable request of the Administrative Agent,
signed copies of one or more favorable opinions of special and
appropriate local and/or foreign counsel for such New Subsidiary and,
if appropriate, counsel for each of the owners of the Equity Interests
therein as the Administrative Agent shall reasonably request,
addressed to the
111
Administrative Agent, on behalf of the Secured Parties, and reasonably
acceptable to the Administrative Agent and each of the other Secured
Parties, as to the Guarantee Supplement, the Pledge Agreement
Supplement and, if applicable, the other pledge agreements, assignment
agreements (or other similar documents) referred to in clause (ii) of
this Section 5.02(j) being the legal, valid and binding obligations of
such New Subsidiary or such owners of the Equity Interests therein, as
the case may be, enforceable against such New Subsidiary or each such
owner in accordance with their respective terms, as to the creation,
perfection and priority of the liens and security interests created or
purported to be created therein, as to the choice of New York law
being recognized in the courts of the jurisdiction in which such New
Subsidiary is organized and as such other matters as the
Administrative Agent, or any of the Lenders through the Administrative
Agent, may reasonably request.
(k) Change in Nature of Business. Make, or permit any of its
----------------------------
Subsidiaries to make, any change in the nature of its business that would
cause Holdings and its Subsidiaries, considered as a whole, to cease to be
primarily engaged in the businesses and activities they are engaged in on
the date of this Agreement.
(l) Amendments to Constitutive Documents. Amend, or permit any of its
------------------------------------
Subsidiaries to amend, its Constitutive Documents, except that Holdings or
any of its Subsidiaries may amend its bylaws (or other similar
organizational documents) in such a manner as, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect; provided that copies of any such amendment to the bylaws (or other
similar organizational document) of Holdings or any such Subsidiary shall
be delivered to the Administrative Agent at least ten Business Days prior
to the date on which such amendments are intended to become effective.
(m) Accounting Changes, Etc. Make or permit, or permit any of its
-----------------------
Subsidiaries to make or permit, any change in (i) its accounting policies
or reporting practices, except as required by applicable Requirements of
Law or by GAAP, or (ii) its Fiscal Year.
(n) Partnerships, Etc. Become a general partner in any general or
-----------------
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(o) Speculative Transactions. Engage, or permit any of its
------------------------
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
SECTION 5.03. Reporting Requirements. So long as any of the Advances
----------------------
shall remain unpaid or any of the Lenders shall have any Commitment hereunder,
Holdings and the Borrowers will furnish to the Lenders:
(a) Default Notices. As soon as possible and in any event within
---------------
three Business Days after the occurrence of each Default or any event,
development or occurrence that, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect
112
continuing on the date of such statement, a statement of a Responsible
Officer of such Borrower setting forth the details of such Default, event,
development or occurrence (including, without limitation, the anticipated
effect thereof) and the action that Holdings and the Borrowers (or any of
them) have taken and/or propose to take with respect thereto.
(b) Quarterly Financials. As soon as available and in any event
--------------------
within 60 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, a Consolidated balance sheet of Holdings and its
Subsidiaries as of the end of such Fiscal Quarter and Consolidated
statements of operations, stockholders' equity and cash flows of Holdings
and its Subsidiaries for the period commencing at the end of the previous
Fiscal Quarter and ending with the end of such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter, setting forth in comparative form for each
Fiscal Quarter occurring after the Fiscal Quarter ending June 30, 1998, in
the case of each such Consolidated balance sheet, the corresponding figures
as of the last day of the corresponding period in the immediately preceding
Fiscal Year from the Consolidated balance sheet of Holdings and its
Subsidiaries for such corresponding period and, in the case of each such
Consolidated statement of operations, stockholders' equity or cash flows,
the corresponding figures for the corresponding period in the immediately
preceding Fiscal Year, all in reasonable detail.
(c) Annual Financials. As soon as available and in any event within
-----------------
120 days after the end of each Fiscal Year, (i) a copy of the annual audit
report for such Fiscal Year for Holdings and its Subsidiaries, including
therein the Consolidated balance sheet of Holdings and its Subsidiaries as
of the end of such Fiscal Year and Consolidated statements of operations,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such Fiscal Year, accompanied by an unqualified opinion or an opinion
otherwise acceptable to the Required Lenders of Ernst & Young LLP or other
independent public accountants of recognized standing reasonably acceptable
to the Required Lenders, and (ii) unaudited Consolidated balance sheets of
each of FCN Holding and its Subsidiaries, Saban and its Subsidiaries and
IFE and its Subsidiaries as of the end of such Fiscal Year and unaudited
Consolidated statements of operations, stockholders' equity and cash flows
of each of FCN Holding and its Subsidiaries, Saban and its Subsidiaries and
IFE and its Subsidiaries for such Fiscal Year, setting forth in comparative
form for each Fiscal Year after the Fiscal Year ending June 30, 1998, in
the case of each such Consolidated balance sheet, the corresponding figures
as of the last day of the immediately preceding Fiscal Year from the
Consolidated balance sheet for such Persons for such immediately preceding
Fiscal Year and, in the case of each such Consolidated statement of
operations, stockholders' equity or cash flows, the corresponding figures
for the immediately preceding Fiscal Year, all in reasonable detail,
together with (A) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the last
paragraph of Section 5.02(c), if applicable, and Sections 5.02(d)(viii),
5.02(d)(ix), 5.02(f)(iii) and 5.04(a) (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Section, and the calculation of the amount, ratio or
percentage then in existence) and (B) in the event of any change in the
generally accepted accounting principles used by such accountants in the
preparation of the audited financial statements referred to in clause (i)
of this Section 5.03(c), a reasonably detailed description of such changes
prepared by such accountants and, if and to the
113
extent necessary for determining compliance with the last paragraph of
Section 5.02(c), if applicable, or any of Section 5.02(d)(viii),
5.02(d)(ix), 5.02(f)(iii) or 5.04(a), a statement of reconciliation
conforming such audited financial statements to the generally accepted
accounting principles applied in the preparation of the Consolidated
financial statements of Holdings and its Subsidiaries for the Fiscal
Quarter ending December 31, 1997.
(d) Compliance Certificate. Together with each delivery to the
----------------------
Lenders of the financial statements of Holdings and its Subsidiaries
referred to in Section 5.03(b) and 5.03(c), a certificate of the Chief
Financial Officer of Holdings, in form and substance reasonably
satisfactory to the Administrative Agent:
(i) duly certifying that, subject, in the case of any such
financial statements delivered to the Lenders pursuant to Section
5.03(b), to normal year-end audit adjustments, the Consolidated
financial statements delivered with such certificate fairly present
the Consolidated financial condition of Holdings and its Subsidiaries
as of the last day of such Fiscal Quarter or such Fiscal Year, as the
case may be, and the Consolidated results of operations and cash flows
of Holdings and its Subsidiaries for the Fiscal Quarter or the Fiscal
Year ended on such date;
(ii) in the case of any such financial statements delivered to
the Lenders pursuant to Section 5.03(c)(ii), duly certifying that the
Consolidated financial statements delivered with such certificate
fairly present the Consolidated financial condition of FCN Holding and
its Subsidiaries, Saban and its Subsidiaries or IFE and its
Subsidiaries, as appropriate, as of the last day of such Fiscal Year
and the Consolidated results of operations and cash flows of FCN
Holding and its Subsidiaries, Saban and its Subsidiaries or IFE and
its Subsidiaries, as appropriate, for the Fiscal Year ended on such
date;
(iii) duly certifying that, subject, in the case of any such
financial statements delivered to the Lenders pursuant to Section
5.03(b), to normal year-end audit adjustments, the Consolidated
financial statements delivered with such certificate have been
prepared in accordance with GAAP for such Fiscal Quarter or such
Fiscal Year, as the case may be;
(iv) duly certifying that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that Holdings and
the Borrowers (or any of them) have taken and/or propose to take with
respect thereto;
(v) in the case of any such financial statements delivered to
the Lenders pursuant to Section 5.03(b), setting forth a schedule of
the computations used by Holdings and the Borrowers in determining
compliance with the last paragraph of Section 5.02(c), if applicable,
and Sections 5.02(d)(viii), 5.02(d)(ix), 5.02(f)(iii) and 5.04(a)
(including with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as
the case may be, permissible
114
under the terms of such Section, and the calculation of the amount,
ratio or percentage then in existence); and
(vi) in the case of any such financial statements delivered to
the Lenders pursuant to Section 5.03(b), (A) setting forth a
description in reasonable detail of all of the changes in the
generally accepted accounting principles applied in the preparation of
such financial statements from the generally accepted accounting
principles applied in the preparation of the Consolidated financial
statements of Holdings and its Subsidiaries for the Fiscal Quarter
ending December 31, 1997 and (B) accompanied by a statement of
reconciliation, if and to the extent necessary for determining whether
any of the changes in the generally accepted accounting principles
applied in the preparation of such financial statements would affect
the calculation of, or compliance with, the last paragraph of Section
5.02(c), if applicable, or any of Section 5.02(d)(viii), 5.02(d)(ix),
5.02(f)(iii) or 5.04(a), conforming such financial statements to the
generally accepted accounting principles applied in the preparation of
the Consolidated financial statements of Holdings and its Subsidiaries
for the Fiscal Quarter ending December 31, 1997.
(e) Licenses, Etc. Promptly and in any event within three Business
-------------
Days after receipt thereof, notice of any actual, pending or threatened
suspension, termination, or revocation of any of the Governmental
Authorizations of any of the Loan Parties or any of their respective
Subsidiaries that are necessary to own or lease and operate their
respective property and assets and to conduct their respective businesses
as now conducted and as proposed to be conducted, or any enjoinment,
barring or suspension of the ability of any such Loan Party or any such
Subsidiary to conduct any of its businesses in the ordinary course.
(f) Litigation. Promptly and in any event within five Business Days
----------
after the commencement thereof, notice of all actions, suits,
investigations, litigation, arbitrations and proceedings against or
affecting any of the Loan Parties or any of their respective Subsidiaries
or any of the property or assets thereof in any court or before any
arbitrator or by or before any Governmental Authority of any kind (i) that,
either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect or (ii) that purports to affect the
legality, validity, binding effect or enforceability of any aspect of the
Transaction, any of the Loan Documents or the Related Documents or any of
the other transactions contemplated thereby; and, promptly after the
occurrence thereof, notice of any adverse change in the status or any
materially adverse financial effect on any of the Loan Parties or any of
their respective Subsidiaries of any such action, suit, investigation,
litigation, arbitration or proceeding; and, in each case, upon the
reasonable request of the Administrative Agent, any other information
available to any of the Loan Parties or any of their respective
Subsidiaries with respect to any of the foregoing that would enable the
Administrative Agent and the Lenders to more fully evaluate such action,
suit, investigation, litigation, arbitration or proceeding.
(g) ERISA Events and ERISA Reports; Plan Terminations, Etc. (i)
------------------------------------------------------
Promptly and in any event within ten days after any of the Loan Parties or
any of the ERISA Affiliates knows or has reason to know that any ERISA
Event has occurred, a statement of a Responsible Officer of Fox Kids,
Holdings or a Borrower describing such ERISA Event and the action, if any,
that such Loan Party or such ERISA Affiliate has taken and/or proposes to
take with respect thereto,
115
together with all materials or information filed or to be filed with any
Governmental Authority or any trustee for any Plan as a result of such
ERISA Event; (ii) on the date on which any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA, a copy of such records, documents and
information; (iii) promptly and in any event within two Business Days after
receipt thereof by any of the Loan Parties or any of the ERISA Affiliates,
copies of each notice from the PBGC stating its intention to terminate any
Plan or to have a trustee appointed to administer any Plan; (iv) promptly
and in any event within 30 days after the filing thereof with the Internal
Revenue Service, a copy of Schedule B (Actuarial Information) to the annual
report (form 5500) with respect to each of the Plans; and (v) promptly and
in any event within five Business Days after receipt thereof by any of the
Loan Parties or any of the ERISA Affiliates from the sponsor of a
Multiemployer Plan, copies of each notice concerning (A) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization
or termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan or (C) the amount of liability incurred, or that could
reasonably be expected to be incurred, by any such Loan Party or any such
ERISA Affiliate in connection with any event described in subclause (v)(A)
or (v)(B) of this Section 5.03(g); provided, however, that, notwithstanding
the foregoing provisions of this Section 5.03(g), none of the Borrowers
shall be required to notify the Administrative Agent or any of the Lenders
of the occurrence of any of the events, developments or circumstances, or
to deliver any of the reports or notices, referred to above under this
Section 5.03(g) unless and until the aggregate liability that could
reasonably be expected to be incurred by the Loan Parties and the ERISA
Affiliates as a result thereof exceeds $2,500,000.
(h) Securities Reports. Promptly and in any event within five
------------------
Business Days after the sending or filing thereof, copies of all proxy
statements, financial statements, material change reports and other
material reports that any of the Loan Parties or any of their respective
Subsidiaries sends to its stockholders, partners or members (or equivalent
persons thereto), copies of all regular, periodic and special reports and
information forms, and all registration statements, prospectuses and
information memoranda, that any of the Loan Parties or any of their
respective Subsidiaries files with the Securities and Exchange Commission
or any Governmental Authority that may be substituted therefor, or with any
national or international securities exchange, and copies of all private
placement or offering memoranda pursuant to which securities of any of the
Loan Parties or any of their respective Subsidiaries that are exempt from
registration under the Securities Act are proposed to be issued and sold
thereby.
(i) Creditor Reports. Promptly and in any event within five Business
----------------
Days after the furnishing or receipt thereof, copies of any statement or
report furnished to or received from any other holder of the securities of
any of the Loan Parties or any of their respective Subsidiaries pursuant to
the terms of any indenture, loan or credit agreement or similar agreement
of any of the Loan Parties or any of their respective Subsidiaries with
amounts outstanding or having commitments to extend credit in an aggregate
principal amount of at least $10,000,000 (including, without limitation,
any amendments, waivers or consents given or requested in respect thereof,
any notices of default, acceleration or redemption delivered thereunder,
any designations of Subsidiaries thereof as "Unrestricted Subsidiaries" or
the equivalent thereof under the terms thereof, and any compliance
certificates or fairness opinions delivered in connection therewith)
116
and not otherwise required to be furnished to the Lenders pursuant to any
other clause of this Section 5.03.
(j) Related Document Notices. Promptly and in any event within five
------------------------
Business Days after the furnishing or receipt thereof, copies of all
notices, requests and other documents furnished to or received by any of
the Loan Parties or any of their Affiliates under or pursuant to any of the
Related Documents and, from time to time upon the reasonable request of the
Administrative Agent, such information and reports regarding the Related
Documents as the Administrative Agent, or any of the Lenders through the
Administrative Agent, may reasonably request.
(k) Tax Reports and Notices. (i) Within ten Business Days after
-----------------------
receipt thereof, copies of all Revenue Agent Reports (Internal Revenue
Service form 886) or other written proposals of the Internal Revenue
Service that propose, determine or otherwise set forth adjustments (whether
positive or negative) to the United States federal income tax liability of
the affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which Holdings and the Borrowers are members
aggregating $5,000,000 or more; (ii) promptly and in any event within five
Business Days after the due date (after giving effect to all applicable
extensions) for filing the final federal income tax return in respect of
each taxable year of Fox Kids, a certificate of Fox Kids, duly executed by
a Responsible Officer thereof, stating that the common parent of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which Holdings and the Borrowers are members has paid to
the Internal Revenue Service or other relevant taxation authority, or to
Holdings or the applicable Borrower, the full amount that such affiliated
group is required to pay in respect of United States federal income taxes
for such taxable year and that Fox Kids and each of its Subsidiaries have
received any amount payable to them, and have not paid amounts in respect
of taxes (federal, state, local or foreign) in excess of the amount Fox
Kids or such Subsidiary is required to pay, under the established tax
sharing arrangements of Fox Kids and its Affiliates in respect of such
taxable year; and (iii) promptly and in any event within ten Business Days
after receipt thereof, copies of the determination of any request for a
ruling or determination letter from the Internal Revenue Service or any
other taxation authority regarding the actual or asserted tax liability or
deficiency of any of the Loan Parties or any of their respective
Subsidiaries.
(l) Environmental Conditions. Promptly and in any event within five
------------------------
Business Days after a Responsible Officer becomes aware of the assertion or
occurrence thereof, notice of:
(i) any condition or occurrence on or arising from any property
owned or operated by any of the Loan Parties or any of their
respective Subsidiaries that resulted or is alleged to have resulted
in noncompliance by any such Loan Party or any such Subsidiary with
any applicable Environmental Law or Environmental Permit in such a
manner as, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect;
(ii) any condition or occurrence on any property owned or
operated by any of the Loan Parties or any of their respective
Subsidiaries that could reasonably be expected to cause such property
to be subject to any restrictions on the ownership,
117
occupancy, use or transferability by any such Loan Party or any such
Subsidiary of such property under any Environmental Law which, either
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect; and
(iii) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Materials on any
property owned or operated by any of the Loan Parties or any of their
respective Subsidiaries as required by any Environmental Law, any
Environmental Permit or any Governmental Authority.
All such notices shall set forth in reasonable detail the nature of the
condition, occurrence, removal or remedial action described therein and, in
the case of each such condition or occurrence, the action that such Loan
Party or such Subsidiary has taken and/or proposes to take with respect
thereto.
(m) Insurance. As soon as available and in any event within 30 days
---------
after the end of each Fiscal Year, a report summarizing the insurance
coverage in effect for each of the Loan Parties and each of their
respective Subsidiaries, specifying therein the type, carrier, amount,
deductibles, co-insurance requirements and expiration dates thereof and
containing such additional information as any of the Lenders, through the
Administrative Agent, may reasonably request.
(n) Implied Debt Rating. As promptly as practicable and in any event
-------------------
within five Business Days after receipt thereof, copies of each notice
received from S&P or ▇▇▇▇▇'▇ assigning an Implied Debt Rating or a change
in any Implied Debt Rating.
(o) Other Information. Such other information respecting the
-----------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of any of the Loan Parties or any of their
respective Subsidiaries as any of the Lenders, through the Administrative
Agent, may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any of the Advances
-------------------
shall remain unpaid or any of the Lenders shall have any Commitment hereunder:
(a) Senior Leverage Ratio. Holdings will maintain a Senior Leverage
---------------------
Ratio at all times during each Measurement Period of not more than the
amount set forth below for each Measurement Period set forth below:
MEASUREMENT PERIOD
ENDING IN RATIO
------------------ -----
December 1997 4.50:1
March 1998 4.50:1
June 1998 4.25:1
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MEASUREMENT PERIOD
ENDING IN RATIO
------------------ -----
September 1998 4.25:1
December 1998 4.25:1
March 1999 4.25:1
June 1999 3.50:1
September 1999 3.50:1
December 1999 3.50:1
March 2000 3.50:1
June 2000 and thereafter 3.00:1
(b) Fixed Charge Coverage Ratio. Fox Kids will maintain a Fixed
---------------------------
Charge Coverage Ratio as of the last day of each Measurement Period of not
less than the amount set forth below for each Measurement Period set forth
below:
MEASUREMENT PERIOD
ENDING IN RATIO
------------------ -----
December 1997 1.00:1
March 1998 1.00:1
June 1998 1.00:1
September 1998 1.00:1
December 1998 1.00:1
March 1999 1.00:1
June 1999 1.00:1
September 1999 and thereafter 1.10:1
(c) Interest Coverage Ratio. Fox Kids will maintain an Interest
-----------------------
Coverage Ratio as of the last day of each Measurement Period of not less
than the amount set forth below for each Measurement Period set forth
below:
119
Measurement Period
Ending In Ratio
----------------------- -------------
December 1997 1.50:1
March 1998 1.50:1
June 1998 1.50:1
September 1998 1.50:1
December 1998 1.50:1
March 1999 1.50:1
June 1999 1.75:1
September 1999 1.75:1
December 1999 1.75:1
March 2000 1.75:1
June 2000 2.25:1
September 2000 2.25:1
December 2000 2.25:1
March 2001 2.25:1
June 2001 and thereafter 3.00:1
SECTION 5.05. Covenant of Holdings. So long as any of the Advances
--------------------
shall remain unpaid or any of the Lenders shall have any Commitment hereunder,
Holdings will not, at any time, enter into or conduct any business or engage in
any activity other than:
(i) the holding of all of the Equity Interests in each of the
Borrowers;
(ii) the performance of its Obligations under each of the Loan
Documents to which it is or is to be a party, in accordance with the
respective terms thereof; and
(iii) the conduct of any business or the engagement in any activity
otherwise expressly permitted to be made or taken by Holdings under this
Agreement and the other Loan Documents.
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ARTICLE VI
GUARANTEE
SECTION 6.01. Guarantee. (a) Holdings and each of the Borrowers
---------
hereby unconditionally and irrevocably guarantee (the undertaking by Holdings
and each of the Borrowers under this Article VI being the "GUARANTEE") the
punctual payment when due, whether at scheduled maturity or at a date fixed for
prepayment or by acceleration, demand or otherwise, of all of the Obligations of
each of the other Loan Parties now or hereafter existing under or in respect of
the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnification payments,
contract causes of action, costs, expenses or otherwise (such Obligations being
the "GUARANTEED OBLIGATIONS"), and agree to pay any and all expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent or any of the other Secured Parties in enforcing any rights
under this Guarantee. Without limiting the generality of the foregoing, the
liability of Holdings and each of the Borrowers shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any of the
other Loan Parties to the Administrative Agent or any of the other Secured
Parties under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) Holdings and each of the Borrowers and, by its acceptance of this
Guarantee, the Administrative Agent and each of the other Secured Parties,
hereby confirm that it is the intention of all such Persons that this Guarantee
and the Obligations of Holdings and each of the Borrowers hereunder not
constitute a fraudulent transfer or conveyance for purposes of the United States
Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state Requirements of Law
covering the protection of creditors' rights or the relief of debtors to the
extent applicable to this Guarantee and the Obligations of Holdings and each of
the Borrowers hereunder. To effectuate the foregoing intention, Holdings, each
of the Borrowers, the Administrative Agent and each of the other Secured Parties
hereby irrevocably agree that, solely with respect to the Guaranteed Obligations
and the other liabilities of (i) Holdings and each of the Borrowers under this
Guarantee which result from or arise out of their respective guarantees under
subsection (a) of this Section 6.01 of the Obligations of Fox Kids under or in
respect of the Loan Documents and (ii) each of the Borrowers under this
Guarantee which result from or arise out of their respective guarantees under
subsection (a) of this Section 6.01 of the Obligations of Holdings under or in
respect of the Loan Documents, such Guaranteed Obligations and other liabilities
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of Holdings or
such Borrower that are relevant under such Requirements of Law, and after giving
effect to any collections from, any rights to receive contributions from, or
payments made by or on behalf of, any of the Subsidiaries of the Borrowers in
respect of the Obligations of such Subsidiary under the Subsidiaries Guarantee
and, in the case of the Borrowers, this Guarantee, result in the Guaranteed
Obligations and all other liabilities of Holdings or such Borrower under this
Guarantee not constituting a fraudulent transfer or conveyance.
(c) Holdings and each of the Borrowers hereby unconditionally and
irrevocably agree that, in the event any payment shall be required to be made to
the Secured Parties under this Guarantee, the Fox Kids Guarantee, the
Subsidiaries Guarantee or any other guarantee, Holdings or such Borrower
121
will contribute, to the fullest extent permitted by applicable law, such amounts
to Fox Kids, each of the Subsidiaries of Fox Kids party to the Subsidiaries
Guarantee or this Guarantee and each other guarantor as would maximize the
aggregate amount payable to the Secured Parties under or in respect of the Loan
Documents.
SECTION 6.02. Guarantee Absolute. (a) Holdings and each of the
------------------
Borrowers guarantee that all of the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Loan Documents, regardless of any
Requirements of Law now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Administrative Agent or any of the other
Secured Parties with respect thereto. The Obligations of Holdings and each of
the Borrowers under this Guarantee are independent of the Guaranteed Obligations
or any other Obligations of any of the other Loan Parties under or in respect of
the Loan Documents, and a separate action or actions may be brought and
prosecuted against Holdings and each of the Borrowers to enforce this Guarantee,
irrespective of whether any action is brought against any of the other Loan
Parties or whether any of the other Loan Parties is joined in any such action or
actions. The liability of Holdings and each of the Borrowers under this
Guarantee shall be absolute, unconditional and irrevocable irrespective of, and
Holdings and each of the Borrowers hereby irrevocably waive any defenses they
may now have or may hereafter acquire in any way relating to, any and all of the
following:
(i) any lack of validity or enforceability of any of the Loan
Documents or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any of the Loan Parties under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any of the Loan Documents (including, without limitation, any increase
in the Guaranteed Obligations resulting from the extension of additional
credit to any of the other Loan Parties or any of their respective
Subsidiaries or otherwise);
(iii) any taking, exchange, release or nonperfection of any of the
Collateral, or any taking, release or amendment or waiver of, or consent to
departure from, the Fox Kids Guarantee, the Subsidiaries Guarantee or any
other guarantee, for all or any of the Guaranteed Obligations;
(iv) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any of the other Loan Parties under or in
respect of the Loan Documents, or any other property and assets of any of
the other Loan Parties or any of their respective Subsidiaries;
(v) any change, restructuring or termination of the legal structure
or existence of any of the other Loan Parties or any of their respective
Subsidiaries;
(vi) any failure of any of the Secured Parties to disclose to any of
the Loan Parties any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects
of any of the other Loan Parties now or hereafter known to such Secured
Party;
122
(vii) the failure of any other Person to execute the Fox Kids
Guarantee, the Subsidiaries Guarantee or any other guarantee or agreement
or the release or reduction of liability of any of the other Loan Parties
or any other guarantor or surety with respect to the Guaranteed
Obligations; or
(viii) any other circumstance (including, without limitation, any
statute of limitations or any existence of or reliance on any
representation by the Administrative Agent or any of the other Secured
Parties) that might otherwise constitute a defense available to, or a
discharge of, Holdings, such Borrower, any of the other Loan Parties or any
other guarantor or surety.
This Guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any of the other
Secured Parties or by any other Person upon the insolvency, bankruptcy or
reorganization of any of the other Loan Parties or otherwise, all as though such
payment had not been made, and Holdings and each of the Borrowers hereby
unconditionally and irrevocably agree that they will indemnify the
Administrative Agent and each of the other Secured Parties, upon demand, for all
of the costs and expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by the Administrative Agent or such other Secured
Party in connection with any such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, a fraudulent transfer or a similar payment
under any bankruptcy, insolvency or similar Requirements of Law.
(b) Holdings and each of the Borrowers hereby further agree that, as
between Holdings or such Borrower, on the one hand, and the Administrative Agent
and the Secured Parties, on the other hand, (i) the Guaranteed Obligations of
Holdings or such Borrower may be declared to be forthwith due and payable as
provided in Section 7.01 (and shall be deemed to have become automatically due
and payable in the circumstances provided in Section 7.01) for purposes of
Section 6.01, notwithstanding any stay, injunction or other prohibition
preventing such declaration in respect of the Obligations of any of the Loan
Parties guaranteed hereunder (or preventing such Guaranteed Obligations from
becoming automatically due and payable) as against any other Person and (ii) in
the event of any declaration of acceleration of such Guaranteed Obligations (or
such Guaranteed Obligations being deemed to have become automatically due and
payable) as provided in Section 7.01, such Guaranteed Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by Holdings or such Borrower for all purposes of this Guarantee.
SECTION 6.03. Waivers and Acknowledgments. (a) Holdings and each of
---------------------------
the Borrowers hereby unconditionally and irrevocably waive promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, protest, dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guarantee, and any requirement that
the Administrative Agent or any of the other Secured Parties protect, secure,
perfect or insure any Lien or any property or assets subject thereto or exhaust
any right or take any action against any of the other Loan Parties or any other
Person or any of the Collateral.
(b) Holdings and each of the Borrowers hereby waive (i) any defense
arising by reason of any claim or defense based upon an election of remedies by
the Administrative Agent or the other Secured Parties which in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of Holdings
or such Borrower or any other rights of Holdings or such Borrower to proceed
against any of the other Loan
123
Parties, any other guarantor or any other Person or any of the Collateral, and
(ii) any defense based on any right of setoff or counterclaim against or in
respect of the Obligations of Holdings or such Borrower under this Guarantee.
(c) Holdings and each of the Borrowers hereby unconditionally and
irrevocably waive any duty on the part of the Administrative Agent or any of the
other Secured Parties to disclose to Holdings or such Borrower any matter, fact
or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any of the other Loan
Parties or any of their respective Subsidiaries or the property and assets
thereof now or hereafter known by the Administrative Agent or such other Secured
Party.
(d) Holdings and each of the Borrowers hereby unconditionally waive
any right to revoke this Guarantee, and acknowledge that this Guarantee is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
(e) Holdings and each of the Borrowers hereby acknowledge that they
will receive substantial direct and indirect benefits from the financing
arrangements contemplated by the Loan Documents and that the waivers set forth
in Section 6.02 and in this Section 6.03 are knowingly made in contemplation of
such benefits.
SECTION 6.04. Subrogation. Holdings and each of the Borrowers hereby
-----------
unconditionally and irrevocably agree not to exercise any rights that they may
now have or may hereafter acquire against any of the other Loan Parties or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Obligations of Holdings or such Borrower under this Guarantee
or any of the other Loan Documents, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Administrative Agent or any
of the other Secured Parties against such other Loan Party or any other insider
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute, common law or any other Requirements of
Law, including, without limitation, the right to take or receive from such other
Loan Party or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until such time as all of the
Guaranteed Obligations and all of the other amounts payable under this Guarantee
shall have been paid in full in cash, all of the Bank Hedge Agreements shall
have expired or been terminated and the Commitments shall have expired or
terminated. If any amount shall be paid to Holdings or any of the Borrowers in
violation of the immediately preceding sentence at any time prior to the latest
of (a) the payment in full in cash of all of the Guaranteed Obligations and all
of the other amounts payable under this Guarantee, (b) the expiration or
termination of all of the Bank Hedge Agreements and (c) the Termination Date,
such amount shall be received and held in trust for the benefit of the
Administrative Agent and the other Secured Parties, shall be segregated from the
other property and funds of Holdings or such Borrower and shall be delivered
forthwith to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and the other amounts payable under this Guarantee,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any of the Guaranteed Obligations or
any of the other amounts payable under this Guarantee thereafter arising. If
(i) Holdings or any of the Borrowers shall pay to the Administrative Agent all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all of the other amounts payable under this Guarantee shall have
been paid in full in cash, (iii) all of the Bank Hedge Agreements shall have
expired or been terminated and (iv) the Termination Date shall
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have occurred, the Administrative Agent and the other Secured Parties will, at
Holdings' or such Borrower's request and expense, execute and deliver to
Holdings or such Borrower appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer of subrogation to
Holdings or such Borrower of an interest in the Guaranteed Obligations resulting
from the payment made by Holdings or such Borrower under this Guarantee.
SECTION 6.05. Continuing Guarantee; Assignments. This Guarantee is a
---------------------------------
continuing guarantee and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of all of the Guaranteed Obligations
and all of the other amounts payable under this Guarantee, (ii) the expiration
or termination of all of the Bank Hedge Agreements and (iii) the Termination
Date, (b) be binding upon Holdings and each of the Borrowers and their
respective successors and assigns and (c) inure to the benefit of, and be
enforceable by, the Administrative Agent and the other Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, any of the Lenders may
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Lender under this
Article VI or otherwise, in each case as provided in Section 9.08.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
-----------------
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) any of the Borrowers shall fail to pay any principal of any
Advance made to it when the same shall become due and payable, whether by
scheduled maturity or at a date fixed for prepayment or by acceleration,
demand or otherwise, or (ii) any of the Borrowers shall fail to pay any
interest on any Advance made to it, or any of the other Loan Parties shall
fail to make any other payment under or in respect of any of the Loan
Documents required to have been made by it, whether by scheduled maturity
or at a date fixed for payment or prepayment or by acceleration, demand or
otherwise, and, in each case under this clause (ii), such default remains
unremedied for at least five consecutive days after the same becomes due
and payable; or
(b) any representation or warranty made by any of the Loan Parties (or
any of their respective officers) under or in connection with any of the
Loan Documents shall prove to have been incorrect in any material respect
on the date as of which it was made or deemed made; or
(c) (i) Holdings or any of the Borrowers shall fail to perform or
observe any term, covenant or agreement contained in Section 2.14,
5.01(a)(ii), 5.01(b),5.01(e), 5.01(f), 5.01(i), 5.01(j) or 5.01(k), 5.02,
5.03, 5.04 or 5.05 on its part to be performed or observed, (ii) Fox Kids
shall fail to perform or observe any term, covenant or agreement contained
in Section 7(a)(ii), 7(b), 7(d), 7(f), 7(g), 7(h) or 7(i) or 8 of the Fox
Kids Guarentee (iii) any of the Subsidiaries of the Borrowers shall fail
to perform any term, covenant or agreement contained in in Section 4 or 7
of the Subsidiaries Guarantee or (iv) any of the Loan Parties shall fail
to
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perform or observe any term, covenant or agreement contained in Section
4,5,6,9,10 or ll of the Pledge and Assignment Agreement or
(d) any of the Loan Parties shall fail to perform any term, covenant
or agreement contained in any of the Loan Documents on its part to be
performed or observed that is not otherwise referred to in Section 7.01(c)
if such failure shall remain unremedied for at least 15 consecutive
Business Days after the earlier of the date on which (i) a Responsible
Officer of any of the Loan Parties first becomes aware of such failure and
(ii) written notice thereof shall have been given to Holdings or any of the
Borrowers by the Administrative Agent or any of the Lenders; or
(e) (i) any of the Loan Parties or any of their respective
Subsidiaries (other than any of the Excluded Fox Kids Subsidiaries) shall
fail to pay any principal of, premium or interest on, or any other amount
payable in respect of, one or more items of Indebtedness of the Loan
Parties and their Subsidiaries (other than any of the Excluded Fox Kids
Subsidiaries) (excluding Indebtedness outstanding hereunder) that is
outstanding (or under which one or more Persons have a commitment to extend
credit) in an aggregate principal or notional amount of at least
$10,000,000 when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified
in the agreements or instruments relating to all such Indebtedness; or (ii)
any other event shall occur or condition shall exist under the agreements
or instruments relating to one or more items of Indebtedness of the Loan
Parties and their Subsidiaries (other than any of the Excluded Fox Kids
Subsidiaries) (excluding Indebtedness outstanding hereunder) that is
outstanding (or under which one or more Persons have a commitment to extend
credit) in an aggregate principal or notional amount of at least
$10,000,000 and such other event or condition shall continue after the
applicable grace period, if any, specified in all such agreements or
instruments, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Indebtedness or
otherwise to cause, or to permit the holder thereof to cause, such
Indebtedness to mature; or (iii) one or more items of Indebtedness of the
Loan Parties and their Subsidiaries (other than any of the Excluded Fox
Kids Subsidiaries) (excluding Indebtedness outstanding hereunder) that is
outstanding (or under which one or more Persons have a commitment to extend
credit) in an aggregate principal or notional amount of at least
$10,000,000 shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled or required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any of the Loan Parties or any of their respective Subsidiaries
(other than any of the Excluded Fox Kids Subsidiaries) shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any of the Loan Parties or any of their respective Subsidiaries
(other than any of the Excluded Fox Kids Subsidiaries) seeking to
adjudicate it a bankrupt or insolvent, or (other than for the purpose of a
solvent amalgamation or reconstruction) seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, administrator or other
similar official for it
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or for any substantial part of its property and assets and, in the case of
any such proceeding instituted against it (but not instituted by it) that
is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of at least 45
consecutive days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property and assets) shall
occur; or any event or action analogous to or having a substantially
similar effect to any of the events or actions set forth above in this
Section 7.01(f) (other than a solvent reorganization) shall occur under the
Requirements of Law of any jurisdiction applicable to any of the Loan
Parties or any of their respective Subsidiaries (other than any of the
Excluded Fox Kids Subsidiaries); or any of the Loan Parties or any of their
respective Subsidiaries (other than any of the Excluded Fox Kids
Subsidiaries) shall take any corporate, partnership, limited liability
company or other similar action to authorize any of the actions set forth
above in this Section 7.01(f); or
(g) one or more judgments or orders for the payment of money in
excess of $10,000,000 in the aggregate shall be rendered against one or
more of the Loan Parties and their Subsidiaries (other than any of the
Excluded Fox Kids Subsidiaries) and shall remain unsatisfied and either (i)
enforcement proceedings shall have been commenced by any creditor upon any
such judgment or order or (ii) there shall be any period of at least 20
consecutive days during which a stay of enforcement of any such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not give
rise to an Event of Default under this Section 7.01(g) if and for so long
as (A) the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer covering
full payment thereof and (B) such insurer has been notified, and has not
disputed the claim made for payment, of the amount of such judgment or
order; or
(h) one or more nonmonetary judgments or orders (including, without
limitation, writs or warrants of attachment, garnishment, execution,
distraint or similar process) shall be rendered against any of the Loan
Parties or any of their respective Subsidiaries that, either individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, and there shall be any period of at least 20 consecutive
days during which a stay of enforcement of any such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(i) any provision of any of the Loan Documents after delivery thereof
pursuant to Section 3.01 or 5.02(j) shall for any reason (other than
pursuant to the terms thereof) cease to be valid and binding on or
enforceable against any of the Loan Parties intended to be a party to it,
or any such Loan Party shall so state in writing; or
(j) any of the Collateral Documents after delivery thereof pursuant to
Section 3.01 or 5.02(j) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority lien on
and security interest in the Collateral purported to be covered thereby; or
(k) any of the following events or conditions shall have occurred and
such event or condition, when aggregated with any and all other such events
or conditions, has resulted or could reasonably be expected to result in
liabilities of one or more of the Loan Parties and/or the ERISA Affiliates
in an aggregate amount exceeding $10,000,000 at any time:
127
(i) any ERISA Event shall have occurred with respect to a
Plan; or
(ii) any of the Loan Parties or any of the ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer Plan; or
(iii) any of the Loan Parties or any of the ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization, is insolvent or is being
terminated, within the meaning of Title IV of ERISA, and, as a result
of such reorganization, insolvency or termination, the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to
all of the Multiemployer Plans that are in reorganization, are
insolvent or being terminated at such time have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the plan years of such Multiemployer Plans immediately preceding the
plan year in which such reorganization, insolvency or termination
occurs; or
(iv) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived, shall exist with respect to one or more of the
Plans, or any Lien shall exist on the property and assets of any of
the Loan Parties or any of the ERISA Affiliates in favor of the PBGC
or any Plan; or
(l) any of the Governmental Authorizations necessary in order to
permit any of the Loan Parties or any of their respective Subsidiaries to
fully own or lease and operate their respective property and assets or to
properly conduct their respective businesses shall cease to be in effect or
any such Loan Party or any such Subsidiary shall cease to have the full
intended benefit thereof or rights thereunder, unless the revocation,
termination, cancellation, denial, impairment or modification of such
Governmental Authorization, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; or
(m) the Borrowers and their Subsidiaries shall be unable to
transmit programming for more than ten consecutive days as a result of the
loss of all of their transponders and the inability of the applicable
Borrower or Subsidiary of any of the Borrowers to arrange for the use of
suitable substitute transponders; or
(n) (i) NPAL, together with its consolidated subsidiaries, shall
own less than 50% of the Fair Market Value of the total assets of TNCL
(together with any successor by merger thereto), together with its
consolidated subsidiaries, located in the United States of America as of
June 11, 1997 and the proceeds of any disposition of any such assets
subsequent to August 1, 1997 and (ii) the total assets of NPAL, its
consolidated subsidiaries and its investments accounted for by the equity
method, as determined on the basis of the Fair Market Value of such assets,
shall at any time not exceed by at least $2,500,000,000 all of the
Indebtedness of NPAL, its consolidated subsidiaries and its investments
accounted for by the equity method; or
(o) a Change of Control shall occur;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the obligation of each of the Lenders to
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make Advances to be terminated, whereupon the same shall forthwith terminate,
and (ii) shall at the request, or may with the consent, of the Required Lenders,
by notice to the Borrowers, declare the Notes, all interest thereon and all
other amounts payable under or in respect of this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each of the Borrowers; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to any of the Loan Parties under the United States Federal
Bankruptcy Code or a similar order or action under any other Requirements of Law
covering the protection of creditors' rights or the relief of debtors applicable
to such Loan Party, (A) the obligation of each of the Lenders to make Advances
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by each of the Borrowers.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action. (a) Each of the Lenders
------------------------
hereby appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for under the Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all of the Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action (i) that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement or to applicable Requirements of Law or (ii)
as to which the Administrative Agent has not received adequate security or
indemnity (whether pursuant to Section 8.05 or otherwise). If the security or
indemnity furnished to the Administrative Agent for any purpose under or in
respect of the Loan Documents shall, in the good faith opinion of the
Administrative Agent, be insufficient or become impaired, then the
Administrative Agent may require additional security or indemnity and cease, or
not commence, to follow the directions or take the actions indemnified against
until such additional security or indemnity is furnished. The Administrative
Agent agrees to give to each of the Lenders prompt notice of each notice given
to it by Holdings or the Borrowers pursuant to the terms of this Agreement or by
Fox Kids pursuant to the terms of the Fox Kids Guarantee.
(b) The Administrative Agent shall also act as the "collateral agent"
under the Loan Documents, and each of the Lenders (in its capacity as a Lender
and a Secured Party) hereby appoints and authorizes the Administrative Agent to
act as the agent of such Lender for purposes of acquiring, holding and enforcing
any and all Liens on Collateral granted by any of the Loan Parties to secure any
of the Secured Obligations, together with such powers and discretion as are
reasonably incidental thereto. The Administrative Agent may from time to time
in its discretion appoint any of the other Lenders or any of the Affiliates of a
Lender to act as its co-agent or sub-agent for purposes of holding or enforcing
any Lien on the Collateral (or any portion thereof) granted under the Collateral
Documents or of exercising
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any rights and remedies thereunder at the direction of the Administrative Agent.
In this connection, the Administrative Agent, as "collateral agent", and such
co-agents and sub-agents shall be entitled to the benefits of all provisions of
this Article VIII (including, without limitation, Section 8.05, as though such
co-agents or sub-agents were the "collateral agent" under the Loan Documents) as
if set forth in full herein with respect thereto.
(c) Each of the Co-Arrangers shall have no powers or discretion under
this Agreement or any of the other Loan Documents other than those bestowed upon
it as a co-agent or sub-agent from time to time by the Administrative Agent
pursuant to subsection (b) of this Section 8.01, and each of the Lenders hereby
acknowledges that none of the Co-Arrangers have any liability under this
Agreement or any of the other Loan Documents.
SECTION 8.02. Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. Without limitation of the
generality of the immediately preceding sentence, the Administrative Agent:
(a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and
an Eligible Assignee, as assignee, as provided in Section 9.08;
(b) may consult with legal counsel (including counsel for any of the
Loan Parties), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants
or experts;
(c) makes no representation or warranty to any of the Secured Parties
and shall not be responsible to any of the Secured Parties for any
statements, representations or warranties (whether written or oral) made in
or in connection with the Loan Documents;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
any of the Loan Documents on the part of any of the Loan Parties or to
inspect the property and assets (including the books and records) of any of
the Loan Parties;
(e) shall not be responsible to any of the Secured Parties for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any of the
Loan Documents or any other instrument or document furnished pursuant
thereto; and
(f) shall incur no liability under or in respect of any of the Loan
Documents by acting upon any notice, consent, order, certificate or other
instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or
parties.
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SECTION 8.03. The Administrative Agent, the Co-Arrangers and
----------------------------------------------
Affiliates. With respect to its Commitment or Commitments, the Advances made by
----------
it and the Note or Notes issued to it, Citicorp USA shall have the same rights
and powers under the Loan Documents as any of the other Lenders and may exercise
the same as though it were not the Administrative Agent; and the term "Lender",
"Lenders", "Secured Party" or "Secured Parties" shall, unless otherwise
expressly indicated, include Citicorp USA, Citicorp Securities, Chase Securities
and BankBoston in their respective individual capacities. Citicorp USA, Citicorp
Securities, Chase Securities and BankBoston and their respective Affiliates
(whether or not parties hereto) may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any of the Loan Parties, any of
their respective Subsidiaries and any Person who may do business with or own
securities of any of the Loan Parties or any such Subsidiary, all as if Citicorp
USA, Citicorp Securities, Chase Securities and BankBoston were not the Agents
and without any duty to account therefor to the other Lenders.
SECTION 8.04. Lender Credit Decision. Each of the Lenders hereby
----------------------
acknowledges that it has, independently and without reliance upon any of the
Agents or any of the other Lenders and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each of the Lenders also hereby acknowledges that it will,
independently and without reliance upon any of the Agents or any of the other
Lenders and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
SECTION 8.05. Indemnification. Each of the Lenders hereby severally
---------------
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrowers) from and against such Lender's ratable share
(determined as provided below in this Section 8.05) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Administrative Agent under the Loan Documents (collectively, the "LENDER
INDEMNIFIED COSTS"); provided, however, that none of the Lenders shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct as determined in a
final, nonappealable judgment by a court of competent jurisdiction. In the case
of any claim, investigation, litigation or proceeding giving rise to any Lender
Indemnified Costs, the indemnification provided by the Lenders under this
Section 8.05 shall apply whether or not any such claim, investigation,
litigation or proceeding is brought by the Administrative Agent, any of the
other Agents, any of the Lenders or a third party. Without limiting any of the
provisions of the immediately preceding sentence, each of the Lenders hereby
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Administrative Agent is not promptly reimbursed for such
costs and expenses by the Borrowers. For purposes of this Section 8.05, the
Lenders' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of all Advances
owing to the respective Lenders and outstanding at such time, (b) the aggregate
unused
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portion of the Term Commitments of the respective Term Lenders at such time and
(c) the Unused Revolving Credit Commitments of the respective Revolving Credit
Lenders at such time. If one or more Defaulted Advances shall be owing by any
Defaulting Lender at any time, such Defaulting Lender's Commitment under each of
the Facilities under which any such Defaulted Advance was required to have been
made shall be considered unused for purposes of this Section 8.05 to the extent
of such Defaulted Advance. The failure of any of the Lenders to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to the Administrative Agent as provided in
this Section 8.05 shall not relieve any of the other Lenders of its obligation
hereunder to reimburse the Administrative Agent for its ratable share of such
amount, but none of the Lenders shall be responsible for the failure of any of
the other Lenders to reimburse the Administrative Agent for such other Lender's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any of the Lenders hereunder, the agreement and obligations of each
of the Lenders contained in this Section 8.05 shall survive the payment in full
of all principal, interest and other amounts payable under this Agreement and
the other Loan Documents.
SECTION 8.06. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign as to either or both of the Facilities at any time by giving
written notice thereof to the Lenders and the Borrowers and may be removed as to
both of the Facilities at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent as to such of the
Facilities as to which the Administrative Agent has resigned or been removed.
If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders and the other
Secured Parties, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any state thereof and having a combined capital and surplus of at least
$5,000,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent as to both of the Facilities and
upon the execution and filing or recording of such Uniform Commercial Code
financing statements (or the equivalent thereof), or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may reasonably request, in order to continue the perfection of
the Liens granted or purported to be granted under the Collateral Documents,
such successor Administrative Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to only one of the Facilities and upon the execution and
filing or recording of such Uniform Commercial Code financing statements (or the
equivalent thereof), or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
reasonably request, in order to continue the perfection of the Liens granted or
purported to be granted under the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent
as to such Facility, other than with respect to funds transfers and other
similar aspects of the administration of Borrowings under such Facility and
payments by the Appropriate Borrowers in respect of such Facility, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents as to such Facility, other than as
aforesaid. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent as to both of the Facilities, the provisions
of this Article VIII shall inure to its benefit as to any actions taken or
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omitted to be taken by it while it was Administrative Agent as to either of the
Facilities under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement or the Notes or, to the extent not otherwise
provided for therein, any of the other Loan Documents, nor consent to any
departure by any of the Loan Parties therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that:
(a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any of the Lenders that is, at
such time, a Defaulting Lender), do any of the following at any time:
(i) waive any of the conditions specified in Section 3.01 or,
in the case of the initial Borrowing under either of the Facilities,
Section 3.02;
(ii) change the number of Lenders or the percentage of the
Commitments or the aggregate outstanding principal amount of Advances
that, in any case, shall be required for the Lenders or any of them to
take any action hereunder;
(iii) reduce or limit the obligations of Holdings or any of the
Borrowers under Article VI, Fox Kids under Section 1 of the Fox Kids
Guarantee or any of the Subsidiaries of the Borrowers party to the
Subsidiaries Guarantee under Section 1 of the Subsidiaries Guarantee,
or otherwise limit any of the Loan Parties' liability with respect to
the Obligations owing to the Administrative Agent and the other
Secured Parties under or in respect of the Loan Documents;
(iv) release all or substantially all of the Collateral in any
transaction or any series of related transactions;
(v) permit the creation, incurrence, assumption or existence
of any Lien on any material portion of the Collateral in any
transaction or series of related transactions to secure any
Obligations other than Obligations owing to the Administrative Agent
and the other Secured Parties under or in respect of the Loan
Documents and other than Indebtedness owing to any other Person,
provided that, in the case of any Lien on a material portion of the
Collateral to secure Indebtedness owing to any other Person, (A) the
Borrowers shall, on the date such Indebtedness shall be incurred or
issued, reduce the Commitments pursuant to, and to the extent required
under, Section 2.04(b)(iv), and prepay the Advances pursuant to, and
to the extent required under, Section 2.05(b), in an aggregate
principal amount equal to the amount of the Net Cash Proceeds received
from the incurrence or issuance of such Indebtedness to the extent
required to do so under Section 2.04(b)(iv), (B) such Lien shall be
subordinate to the Liens created under
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the Loan Documents on terms reasonably acceptable to the Required
Lenders and (C) the Required Lenders shall otherwise permit the
creation, incurrence, assumption or existence of such Lien and, to
the extent not otherwise permitted under Section 5.02(b), such
Indebtness; or
(vi) amend this Section 9.01; and
(b) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each of the Lenders that has a
Commitment under the Term Facility or the Revolving Credit Facility if
affected by such amendment, waiver or consent:
(i) increase the Commitments of such Lender or subject such
Lender to any additional Obligations;
(ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such
Lender;
(iii) postpone any date fixed for the reduction of the
Commitment or Commitments of such Lender, or for any payment of
principal of, or interest on, the Notes held by such Lender or any
fees or other amounts payable hereunder to such Lender; or
(iv) change the order of application of any commitment reduction
set forth in Section 2.04 or any prepayment set forth in Section 2.05,
in either case in any manner that materially and adversely affects
such Lender; and
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement or any of the other Loan Documents. Notwithstanding any of
the foregoing provisions of this Section 9.01, none of the defined terms set
forth in Section 1.01 shall be amended, supplemented or otherwise modified in
any manner that would change the meaning, purpose or effect of this Section 9.01
or any section referred to herein unless such amendment, supplement or
modification is agreed to in writing by the number and percentage of Lenders
(and the Administrative Agent, if applicable) otherwise required to amend such
section under the terms of this Section 9.01.
SECTION 9.02. Notices, Etc. (a) All notices and other
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communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed by certified mail
return receipt requested, telegraphed, telecopied, telexed or delivered:
(i) if to Holdings or any of the Borrowers, at its address at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopier No.: (310)
235-5552, Attention: ▇▇. ▇▇▇ ▇▇▇▇▇;
(ii) if to any of the Initial Lenders, at its Base Rate Lending Office
specified opposite its name on Part B of Schedule I hereto;
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(iii) if to any of the other Lenders, at its Base Rate Lending Office
specified on Schedule I to the Assignment and Acceptance pursuant to which
it became a Lender; and
(iv) if to the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; or
(v) as to Holdings, each of the Borrowers and the Administrative
Agent, at such other address as shall be designated by such party in a
written notice to each of the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice
to Holdings, each of the Borrowers and the Administrative Agent.
Notwithstanding any of the other provisions of the Loan Documents, any notice to
Holdings or the Borrowers required to be made under this Agreement or any of the
other Loan Documents that is delivered to Holdings or one of the Borrowers in
accordance with this Section 9.02 shall constitute effective notice to Holdings
and each of the Borrowers. All such notices and communications shall, when
mailed, telegraphed, telecopied or telexed, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively, addressed as aforesaid, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VIII shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
(b) If any notice required under this Agreement or any of the other
Loan Documents is permitted to be made, and is made, by telephone, actions taken
or omitted to be taken in reliance thereon by the Administrative Agent or any of
the Lenders shall be binding upon the Borrowers notwithstanding any
inconsistency between the notice provided by telephone and any subsequent
writing in confirmation thereof provided to the Administrative Agent or such
Lender; provided that any such action taken or omitted to be taken by the
Administrative Agent or such Lender shall have been in good faith and in
accordance with the terms of this Agreement.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any of
-------------------
the Lenders or the Administrative Agent to exercise, and no delay in exercising,
any right, power or privilege hereunder or under any Note shall operate as a
waiver thereof or consent thereto; nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
applicable law.
SECTION 9.04. Indemnification. (a) Each of the Borrowers hereby
---------------
jointly and severally agrees to indemnify and hold harmless each of the Agents,
each of the Lenders and each of their respective affiliates and their respective
officers, directors, employees, agents, representatives and advisors (each, an
"INDEMNIFIED PARTY") from, and hold each of them harmless against, any and all
claims, damages, losses, liabilities and reasonable expenses (including, without
limitation, reasonable fees and expenses of counsel), joint or several, that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
the preparation of a defense in connection therewith) (i) the Transaction (or
any aspect thereof) or any similar transaction of Fox Kids or any of its
Subsidiaries, (ii) the Facilities, the actual or proposed use of the proceeds of
any Advances,
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the Loan Documents or any of the other transactions contemplated thereby, (iii)
any acquisition or proposed acquisition by Fox Kids or any of its Subsidiaries
or Affiliates of all or any portion of the Equity Interests in, or substantially
all of the property and assets of, any other Person or (iv) the actual or
alleged presence of Hazardous Materials on any property of any of the Loan
Parties or any of their respective Subsidiaries or any Environmental Action
relating in any way to any of the Loan Parties or any of their respective
Subsidiaries (collectively, the "INDEMNIFIABLE MATTERS"), except to the extent,
in the case of any such Indemnified Party, that such claim, damage, loss,
liability or expense is found in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of any investigation, litigation
or proceeding for which the indemnity under this Section 9.04(a) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any of the Loan Parties, any of their respective
directors, stockholders, partners, members or creditors or an Indemnified Party
or any Indemnified Party is otherwise a party thereto and whether or not the
Transaction (or any part thereof) or any of the other transactions contemplated
hereby is consummated. Notwithstanding any of the foregoing provisions of this
Section 9.04(a), in the case of any Indemnifiable Matter of any of the Lenders
solely against one or more other Lenders (and not any Indemnifiable Matter by
one or more Lenders against the Administrative Agent or one or more of the other
Agents), none of the Borrowers shall be obligated to indemnify such Lender or
any of its affiliates or any of its officers, directors, employees, agents,
representatives or advisors for any claim, damage, loss, liability or expense
resulting from such Indemnifiable Matter, except to the extent such claim,
damage, loss, liability or expense is found in the final, nonappealable judgment
of a court of competent jurisdiction to have resulted from the action, inaction,
participation or contribution of any of the Loan Parties or any of their
respective Affiliates or any of their respective officers, directors,
stockholders, partners, members, employees, agents, representatives or advisors,
and then only to the extent of their collective action, inaction, participation
or contribution.
(b) Promptly after receipt by any of the Indemnified Parties of notice
of the commencement of any Indemnifiable Matter, such Indemnified Party shall,
if indemnification therefor is to be sought from any or all of the Borrowers
pursuant to subsection (a) of this Section 9.04, give notice to any of the
Borrowers of the commencement of such Indemnifiable Matter; provided, however,
that the failure of such Indemnified Party to give such notice to any of the
Borrowers shall not relieve any of the Borrowers of any of their Obligations
under this Section 9.04, unless, and then only to the extent that, such failure
results in the forfeiture of rights or defenses and the Borrowers incur an
increased indemnification obligation to such Indemnified Party under the terms
of subsection (a) of this Section 9.04 on account of such failure.
Notwithstanding the delivery of such notice to one or more of the Borrowers,
such Indemnified Party may defend against such Indemnifiable Matter in any
manner such Indemnified Party shall reasonably deem appropriate; provided that,
in the event that any of the Borrowers shall notify such Indemnified Party,
promptly following the delivery of such notice to such Borrower, that such
Borrower is assuming the defense of such Indemnifiable Matter, then (i) so long
as the Indemnifiable Matter referred to in such notice has not been commenced by
any of the Loan Parties or any of their respective Affiliates or any of their
officers, directors, stockholders, partners, members, employees, agents,
representatives or advisors and (ii) unless in the reasonable opinion of counsel
for such Indemnified Party (A) a conflict of interest between such Indemnified
Party and any of the Loan Parties or any of their respective Affiliates may
exist in respect of such Indemnifiable Matter and representation of both such
Indemnified Party and any such Loan Party or any such Affiliate would be
inappropriate or (B) there may be one or more legal defenses available to such
Indemnified Party that are different from or in addition to, but in any such
case are adverse to, any of the Loan Parties or any of their respective
Affiliates, such Borrower (either individually or together with the other
Borrowers) shall be entitled to
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participate in and to assume the defense of such Indemnifiable Matter solely on
the following terms and conditions:
(1) any and all counsel selected by such Borrower or Borrowers to
participate in the defense of any such Indemnifiable Matter shall be
reasonably satisfactory to such Indemnified Party, and such Borrower or
Borrowers shall be responsible for all of the fees and expenses of each
such counsel;
(2) such Indemnified Party shall have the right (but not any
obligation) to retain separate co-counsel and shall have the right, but not
the obligation, to assert any and all defenses, cross-claims and
counterclaims that it may have, and the fees and expenses of any such co-
counsel shall be at the expense of such Indemnified Party (except that such
Borrower or Borrowers shall be responsible for the fees and expenses of the
separate co-counsel (x) to the extent such Indemnified Party reasonably
concludes that any of the counsel chosen by such Borrower or Borrowers to
participate in the defense of any such Indemnifiable Matter has a conflict
of interest, (y) if such Borrower or Borrowers do not employ counsel
reasonably satisfactory to such Indemnified Party or (z) if such Borrower
or Borrowers or its counsel does not at all times defend such Indemnifiable
Matter vigorously and in good faith; and
(3) such Borrower or Borrowers shall confirm (in a writing reasonably
satisfactory to such Indemnified Party) that all of the liabilities and
obligations with respect to such Indemnifiable Matter will, upon the
election by such Borrower or Borrowers to participate in or assume the
defense of such Indemnifiable Matter, be solely the joint and several
liabilities and Obligations of the Borrowers, and such Borrower or
Borrowers will not consent to the entry of any judgment or enter into any
settlement with respect to such Indemnifiable Matter without providing
reasonable prior notice to such Indemnified Party and, if such Indemnified
Party does not exercise the rights afforded to it under the next succeeding
proviso, without obtaining (in a writing reasonably acceptable to such
Indemnified Party) a full and unconditional release and discharge of the
applicable Indemnified Party from all liability and potential liability on
claims that are the subject matter of such Indemnifiable Matter; provided,
however, that, notwithstanding any of the foregoing provisions of this
subclause (3), if the applicable Indemnified Party objects to the entry of
any such judgment or any such settlement, such Indemnified Party may
thereafter assume the defense of the Indemnifiable Matter and the Borrowers
shall be released from their respective Obligations under subsection (a) of
this Section 9.04 for all fees and expenses relating to such Indemnifiable
Matter arising after such objection, and their respective liabilities and
Obligations hereunder for other claims, damages, losses, liabilities and
expenses relating to such Indemnifiable Matter shall be limited in dollar
amount to the amount of the proposed judgment or settlement, as the case
may be.
In connection with the election by any of the Borrowers to participate in or
assume the defense of any Indemnifiable Matter in accordance with the terms
provided in this subsection (b), each of the Indemnified Parties subject thereto
shall supply such Borrower with all such information reasonably requested
thereby (and that is reasonably necessary or appropriate and would not, in the
judgment of such Indemnified Party, be materially disadvantageous to such
Indemnified Party) in order to cooperate in such Borrowers' participation in and
assumption of the defense of such Indemnifiable Matter.
(c) None of the Borrowers shall be liable to any of the Indemnified
Parties for the settlement by such Indemnified Party of any pending or
threatened litigation or proceeding for which such
137
Indemnified Party may seek indemnity under Section 9.04(a) without the prior
written consent of such Borrower (which consent shall not be unreasonably
withheld or delayed and shall be deemed to have been given if the Borrower to
which such notice was provided has not objected to such settlement within 20
days after the date of notice thereto of such proposed settlement). In turn,
none of the Borrowers or any of their respective Affiliates or their respective
officers, directors, stockholders, partners, members, employees, agents,
representatives or advisors shall effect the settlement of any such pending or
threatened litigation or proceeding unless either (i) such settlement includes a
full and unconditional release and discharge of each of the Indemnified Parties
subject to such action or proceeding from all liability and potential liability
on claims that are the subject matter of such action or proceeding or (ii) each
of the Indemnified Parties subject to such action or proceeding shall give their
prior written consent to the settlement thereof (which consent shall not be
unreasonably withheld or delayed).
(d) Upon payment in full in cash of any Indemnifiable Matter by or on
behalf of any of the Borrowers to or on behalf of any of the Indemnified
Parties, the applicable Borrower (or the Person making payment on its behalf)
shall be subrogated to any claims that such Indemnified Party may have to seek
reimbursement from any other Person relating to such Indemnifiable Matter;
provided, however, that the applicable Borrower (or the Person making payment on
its behalf) shall not exercise any rights of subrogation, reimbursement,
contribution or indemnification that it may now or hereafter acquire against any
of the Loan Parties or any of their respective Subsidiaries or against any of
the Indemnified Parties until such time as all of the Advances and all of the
other amounts owing by any of the Loan Parties under or in respect of the Loan
Documents shall have been paid in full in cash, all of the Bank Hedge Agreements
shall have expired or been terminated and all of the Commitments shall have
expired or terminated. Each of the Indemnified Parties, if reasonably requested
by and at the expense of any of the Borrowers, will execute and deliver to such
Borrower appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer of subrogation to such Borrower of
an interest in such claims resulting from the payment made by such Borrower
under the indemnity set forth in subsection (a) of this Section 9.04.
(e) Each of the Borrowers hereby also severally agrees that none of
the Indemnified Parties shall have any liability (whether direct or in direct,
in contract, tort or otherwise) to any of the Loan Parties or any of their
respective Affiliates or their respective officers, directors, stockholders,
partners, members, employees, agents, representatives or advisors, and each of
the Borrowers hereby severally agrees not to assert any claim against any of the
Indemnified Parties on any theory of liability, for special, indirect,
consequential or punitive damages, arising out of or otherwise relating to the
Transaction (or any aspect thereof), the Facilities, the actual or proposed use
of the proceeds of any Advances, the Loan Documents or any of the other
transactions contemplated thereby, except to the extent, in the case of any such
Indemnified Party, that such claim, damage, loss, liability or expense is found
in a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
SECTION 9.05. Costs and Expenses. (a) Each of the Borrowers hereby
------------------
agrees to pay, upon demand, (i) all reasonable and properly documented out-of-
pocket costs and expenses of each of the Agents in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all reasonable due
diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for the Agents (which shall include only one counsel in each applicable
jurisdiction) with respect thereto, with respect to advising each of the Agents
as to their respective rights and responsibilities, or
138
the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any of the Loan Parties or
with other creditors of any of the Loan Parties or any of their respective
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all reasonable and properly documented out-of-pocket costs and
expenses of the Agents and the Lenders in connection with the enforcement of the
Loan Documents, whether through negotiations, in any action, suit or litigation,
or in any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without limitation, the
reasonable fees and expenses of counsel for the Agents and the Lenders,
collectively, with respect thereto (which shall include only one counsel in each
applicable jurisdiction, each of which counsel shall be counsel selected by, and
counsel for, the Administrative Agent, unless (i) any of the Lenders shall
reasonably determine that a conflict of interest exists such that counsel for
the Administrative Agent is precluded by applicable Requirements of Law or by
standards of conduct from representing the Administrative Agent and the Lenders
as a group, in which case each of the Borrowers hereby agrees to pay, upon
demand, all reasonable and properly documented out-of-pocket fees and expenses
of the minimum number of counsel necessary in the reasonable judgment of the
Lenders to provide the Administrative Agent and each Lender with appropriate
legal representation in connection with the enforcement of their respective
rights under this Agreement and the other Loan Documents and (ii) any of the
Lenders elects to pursue its rights and remedies under this Agreement and the
other Loan Documents for nonpayment of any amounts due and payable hereunder or
thereunder in a proceeding separate from that of the Administrative Agent and/or
the other Lenders, in which case each of the Borrowers hereby agrees to pay,
upon demand, all reasonable and properly documented out-of-pocket fees and
expenses of one additional counsel for each such Lender in each of the
applicable jurisdictions)).
(b) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by any of the Borrowers to or for the account of any of the
Lenders other than on the last day of the Interest Period for such Advance, as a
result of a payment, repayment or Conversion pursuant to Section 2.08(b)(i) or
2.09(d), a prepayment pursuant to Section 2.05, acceleration of the maturity of
the Notes pursuant to Section 7.01 or for any other reason, or by an Eligible
Assignee to a Lender other than on the last day of the Interest Period for such
Advance upon an assignment of rights and obligations under this Agreement
pursuant to Section 9.08 as a result of a demand by Holdings pursuant to Section
9.08(a), such Borrower shall, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses (including losses of anticipated profits other than any amount
attributable solely to the Applicable Margin), costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any of the Lenders to fund or maintain such
Advance.
(c) If any of the Loan Parties fails to pay when due any costs,
expenses or other amounts payable by it under or in respect of any of the Loan
Documents (including, without limitation, any reasonable fees and expenses of
counsel or any indemnities), such amount may be paid on behalf of such Loan
Party by the Administrative Agent or any of the Lenders, in its sole discretion.
(d) Without prejudice to the survival of any other agreement of any of
the Loan Parties under this Agreement or any of the other Loan Documents, the
agreements and obligations of each of the Borrowers contained in Sections 2.09,
2.11 and 9.04 and this Section 9.05 shall survive the
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payment in full of all principal, interest and all other amounts payable under
this Agreement and any of the other Loan Documents.
SECTION 9.06. Right of Setoff. Upon (a) the occurrence and during
---------------
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each of the Lenders and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of Holdings or any of the
Borrowers against any and all of the Obligations of Holdings or any of the
Borrowers now or hereafter existing under this Agreement and the Note or Notes,
if any, held by such Lender, irrespective of whether such Lender shall have made
any demand under this Agreement or such Note or Notes and although such
obligations may be unmatured. Each of the Lenders hereby agrees to notify
Holdings or the applicable Borrower promptly after any such setoff and
application shall be made by such Lender or any of its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each of the Lenders and each of
their respective Affiliates under this Section 9.06 are in addition to other
rights and remedies (including, without limitation, any other rights of setoff)
that such Lender or any of its Affiliates may have.
SECTION 9.07. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by Holdings, each of the Borrowers and the
Administrative Agent and when the Administrative Agent shall have been notified
by each of the Initial Lenders that such Initial Lender has executed it and,
thereafter, shall be binding upon and inure to the benefit of, and be
enforceable by, Holdings, each of the Borrowers, each of the Agents and each of
the Lenders and their respective successors and assigns, except that neither
Holdings nor any of the Borrowers shall have the right to assign their
respective rights hereunder or any interest herein without the prior written
consent of all of the Lenders.
SECTION 9.08. Assignments and Participations. (a) Each of the
------------------------------
Lenders may, and, if demand is made by Holdings (following (i) a demand by such
Lender for the payment of additional compensation pursuant to Section 2.09(a),
2.09(b) or 2.11, (ii) an assertion by such Lender pursuant to Section 2.09(c) or
2.09(d) that it is impractical or unlawful for such Lender to make Eurodollar
Rate Advances or (iii) a refusal by such Lender to approve any amendment or
waiver of, or consent to departure from, any of the terms or conditions of this
Agreement or any of the other Loan Documents; provided that Holdings may not
demand the replacement of one or more Lenders pursuant to this subclause (iii)
holding, in the aggregate, more than 5% of the aggregate Commitments under both
of the Facilities as of the date of any such proposed amendment, waiver or
consent or the date of any such proposed demand), upon at least 30 days' notice
(or, solely in the case of clause (iii) of this Section 9.08(a), upon at least
five Business Days' prior notice) to such Lender and the Administrative Agent,
each of the Lenders will, assign to one or more Persons all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that:
(A) each such assignment with respect to either of the Facilities
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of such Facility;
140
(B) except in the case of an assignment to a Person that immediately
prior to such assignment was a Lender or an assignment of all of a Lender's
rights and obligations under either or both of the Facilities, the
aggregate amount of the Commitments of the assigning Lender under both of
the Facilities being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000;
(C) each such assignment shall be to an Eligible Assignee;
(D) each such assignment made as a result of a demand by Holdings
pursuant to this Section 9.08(a) shall be arranged by Holdings with the
approval of the Administrative Agent, which approval shall not be
unreasonably withheld or delayed, and shall be either an assignment of all
of the rights and obligations of the assigning Lender under this Agreement
or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that,
in the aggregate, cover all of the rights and obligations of the assigning
Lender under this Agreement;
(E) no Lender shall be obligated to make any such assignment as a
result of a demand by Holdings pursuant to this Section 9.08(a) unless and
until such Lender shall have received one or more payments from one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of all Advances owing to such Lender, together
with accrued and unpaid interest thereon to the date of payment of such
principal amount, and from the Borrowers and/or one or more Eligible
Assignees in an aggregate amount equal to all other amounts payable to such
Lender under this Agreement and the Notes (including, without limitation,
any amounts owing to such Lenders under Sections 2.09, 2.11, 9.04 and
9.05);
(F) except in the case of any assignment made as a result of a demand
by Holdings pursuant to Section 9.08(a), the Lender assignor or the
Administrative Agent shall have given Holdings at least two Business Days'
prior notice of the intended assignment and the Person to which such
assignment is proposed to be made;
(G) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to
such assignment; and
(H) the Lender assignor (or, if such assignment is being made pursuant
to a demand by Holdings therefor under this Section 9.08(a), the Borrowers
or the Lender assignee) shall pay to the Administrative Agent a processing
and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.09, 2.11, 9.04 and
9.05 (and other similar provisions of the other Loan Documents that are
specified under the terms of such other Loan Documents to survive the payment in
full of the Obligations of the
141
Loan Parties under or in respect of the Loan Documents) to the extent any claim
thereunder relates to an event arising prior to such assignment) and be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the
other Loan Documents, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any
lien or security interest created or purported to be created under or in
connection with, this Agreement or any of the other Loan Documents, or any
other instrument or document furnished pursuant hereto or thereto;
(ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any of
the Borrowers or any of the other Loan Parties or the performance or
observance by any of the Borrowers or any of the other Loan Parties of any
of their respective Obligations under or in respect of any of the Loan
Documents, or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon any
of the Agents, such assigning Lender or any of the other Lenders and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Administrative Agent
to take such action as an agent on its behalf and to exercise such powers
and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose (but only for
this purpose) as the agent of each of the Borrowers, shall maintain at its
address set forth in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment under each of the Facilities of,
and principal amount of the Advances owing under each of the Facilities to, each
of the Lenders from time to time (the
142
"REGISTER"). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and Holdings, the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Holdings, any of
the Borrowers, any of the Agents or any of the Lenders at any reasonable time
and from time to time during normal business hours upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Appropriate Borrowers. In the case of any assignment by a Lender, within five
Business Days after its receipt of such notice, each of the Appropriate
Borrowers, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note or new Notes from
such Borrower payable to or to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under each of the Facilities pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment under such Facility, a new Note or Notes from each such Appropriate
Borrower payable to or to the order of the assigning Lender in an amount equal
to the Commitment retained by it under such Facility. Each of the new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or Exhibit A-2 hereto, as appropriate.
(f) Each of the Lenders may sell participations to one or more Persons
(other than any of the Loan Parties or any of their respective Affiliates) in or
to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes, if any, held by
it); provided, however, that:
(i) such Lender's obligations under this Agreement (including,
without limitation, its Commitment or Commitments) shall remain unchanged;
(ii) the aggregate amount of the Commitments of the participating
Lender under both of the Facilities being sold in each such participation
(determined as of the date such participation is effected) shall in no
event be less than $5,000,000;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of any such Note for all
purposes of this Agreement;
(v) the Loan Parties, the Administrative Agent, the other Agents and
the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents; and
143
(vi) no participant under any such participation shall have any right
to approve any amendment or waiver of any provision of any of the Loan
Documents, or any consent to any departure by any of the Loan Parties
therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any of the Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.08, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Fox Kids or any of its Subsidiaries, or
to any aspect of the Transaction, furnished to such Lender by or on behalf of
Fox Kids, Holdings or any of the Borrowers; provided, however, that, prior to
any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Confidential
Information received by it from such Lender on substantially the same terms as
those set forth in Section 9.09.
(h) Any of the Lenders may at any time create a security interest in
all or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 9.09. Confidentiality. Neither any of the Agents nor any of
---------------
the Lenders shall disclose any Confidential Information to any Person without
the consent of Holdings, other than (a) to such Agent's or such Lender's
respective Affiliates and their respective officers, directors, employees,
agents, representatives, attorneys, auditors and other advisors on a
confidential basis, (b) to actual or prospective Eligible Assignees and
participants in each case on a confidential basis and otherwise in accordance
with Section 9.08(g), (c) as required by any applicable Requirements of Law or
by subpoena or any other judicial or other legal process, provided that solely
with respect to this clause (c), such Agent or such Lender shall notify Holdings
of the requirement or request that it disclose any such Confidential Information
prior to doing so unless such notification is prohibited by any applicable
Requirements of Law or judicial or legal process (although neither Holdings nor
any other Person having any right or interest in such Confidential Information
shall have any recourse against any such Agent or any such Lender for the
failure to deliver such notice to Holdings), (d) to other Agents and Lenders and
(e) as requested or required by any Governmental Authority or any state, federal
or foreign authority or examiner regulating banks or banking.
SECTION 9.10. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.11. Governing Law; Jurisdiction, Etc. (a) This Agreement
--------------------------------
shall be governed by, and construed in accordance with, the laws of the State of
New York, excluding (to the fullest extent a New York court would permit) any
rule of law that would cause application of the laws of any jurisdiction other
than the State of New York.
144
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property and assets, to the nonexclusive
jurisdiction of any New York state court or any federal court of the United
States of America sitting in New York City, New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment in respect thereof, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York state court or, to the fullest extent permitted by applicable law, in
any such federal court. Each of the parties hereto hereby irrevocably consents
to the service of copies of any summons and complaint and any other process
which may be served in any such action or proceeding by certified mail, return
receipt requested, or by delivering a copy of such process to such party, at its
address specified in Section 9.02, or by any other method permitted by
applicable law. Each of the parties hereto hereby agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable law. Nothing in this Agreement shall affect any right that any of
the parties hereto may otherwise have to bring any action or proceeding relating
to this Agreement or any of the other Loan Documents in the courts of any
jurisdiction.
(c) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party in any New York state court or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
SECTION 9.12. WAIVER OF JURY TRIAL. HOLDINGS, EACH OF THE BORROWERS,
--------------------
EACH OF THE AGENTS AND EACH OF THE LENDERS IRREVOCABLY WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE
OTHER LOAN DOCUMENTS, ANY OF THE DOCUMENTS DELIVERED PURSUANT TO THE TERMS OF
THE LOAN DOCUMENTS, THE ADVANCES, THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY OR THE ACTIONS OF ANY OF THE AGENTS OR ANY OF THE LENDERS IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
GUARANTOR
FOX KIDS HOLDINGS, LLC
By: Fox Kids Worldwide, Inc.,
as its Managing Member
/s/ ▇▇▇ ▇▇▇▇▇
By _____________________________
Name: ▇▇▇ ▇▇▇▇▇
Title:
145
THE BORROWERS
FCN HOLDING, INC.
/s/ ▇▇▇ ▇▇▇▇▇
By _____________________________
Name: ▇▇▇ ▇▇▇▇▇
Title:
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
By /s/ ▇▇▇ ▇▇▇▇▇
_____________________________
Name: ▇▇▇ ▇▇▇▇▇
Title:
SABAN ENTERTAINMENT, INC.
/s/ ▇▇▇ ▇▇▇▇▇
By _____________________________
Name: ▇▇▇ ▇▇▇▇▇
Title:
THE ADMINISTRATIVE AGENT
CITICORP USA, INC., as the
Administrative Agent
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By _____________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
THE CO-ARRANGERS
CITICORP SECURITIES, INC., as Co-Arranger
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By _____________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
146
CHASE SECURITIES, INC.,
as Syndication Agent and Co-Arranger
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
BANKBOSTON, N.A.,
as Documentation Agent and Co-Arranger
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
THE INITIAL LENDERS
CITICORP USA, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By _________________________________
Name:
Title:
BANKBOSTON, N.A.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
THE CHASE MANHATTAN BANK
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ & ▇▇,
as Managing Agent
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
THE BANK OF NOVA SCOTIA, as Managing Agent
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
FLEET BANK, N.A., as Managing Agent
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY, as
Managing Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: SVP & SR. MGR
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A., as Managing
Agent
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VICE PRESIDENT
TORONTO-DOMINION (TEXAS), INC., as Managing
Agent
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VICE PRESIDENT
SOCIETE GENERALE, NEW YORK BRANCH,
as Co-Agent
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VICE PRESIDENT
THE BANK OF NEW YORK
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: ASSISTANT VICE PRESIDENT
BANQUE NATIONALE DE PARIS
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: VICE PRESIDENT
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
149
THE MITSUBISHI TRUST & BANKING
CORPORATION, LOS ANGELES AGENCY
/s/ YASUSHI SATOMI
By _________________________________
Name: YASUSHI SATOMI
Title: SENIOR VICE PRESIDENT
THE SUMITOMO BANK, LIMITED
/s/ ▇▇▇▇ ▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: JOINT GENERAL MANAGER
CRESTAR BANK
/s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
By _________________________________
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: VICE PRESIDENT
THE DAI-ICHI KANGYO BANK, LIMITED
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By _________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: ASST. VICE PRESIDENT
THE FUJI BANK, LIMITED, LOS ANGELES AGENCY
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: JOINT GENERAL MANAGER