EXHIBIT 4.8
SENIOR NOTES
DEPOSIT AGREEMENT
This DEPOSIT AGREEMENT (this "Agreement"), dated as of August 25,
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1997, among The Bank of New York, as the securities intermediary (in such
capacity, the "Securities Intermediary"), The Bank of New York, as Trustee (in
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such capacity, the "Trustee") under the Indenture (as defined herein),
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FOX/LIBERTY NETWORKS, LLC, a Delaware limited liability company (the "Company")
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and FLN FINANCE, INC., a Delaware corporation ("FLN Finance").
RECITALS
A. Pursuant to the Indenture, dated as of August 25, 1997 (the
"Indenture"), by and between the Company, FLN Finance and the Trustee, the
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Company and FLN Finance are issuing $500,000,000 aggregate principal amount of
8-7/8% Senior Notes due 2007 (the "Notes").
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B. As security for its obligations under the Notes and the Indenture,
the Company and FLN Finance desire to grant to the Trustee, for the sole and
exclusive benefit of the holders of the Notes, a security interest in and lien
upon the Collateral (as defined herein).
C. The parties have entered into this Agreement in order to set forth
the conditions upon which, and the manner in which, funds will be disbursed from
the Account (as defined herein) and released from the security interest and lien
described above.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. Terms used herein and not otherwise defined have
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the meanings assigned to them in the Indenture. In addition to any other
defined terms used herein, the following terms shall constitute defined terms
for purposes of this Agreement and shall have the meanings set forth below:
"Account" shall mean the account established pursuant to Section 3.
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"Account Statement" shall have the meaning given in Section 3(f).
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"Collateral" shall have the meaning given in Section 2(a) hereof.
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"Current UCC" means the Uniform Commercial Code as in effect on the
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date hereof in the State of New York.
"Deposit Funds" means the sum of (i) the Initial Deposit Amount and
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(ii) interest earned or dividends paid on the funds in the Account (including
holdings of Marketable Securities).
"Initial Deposit Amount" shall mean $489,200,000.
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"Notice of Rainbow Consummation" means a notice sent by the Company to
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the Trustee and Securities Intermediary requesting a release of funds from the
Account to the Company, in substantially the form of Exhibit B hereto. The
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Notice of Rainbow Consummation shall be signed by an officer of the Company.
"Payment Notice and Disbursement Request" means a notice sent by the
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Trustee to the Securities Intermediary requesting a disbursement of funds from
the Account, in substantially the form of Exhibit A hereto. Each Payment Notice
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and Disbursement Request shall be signed by an officer of the Trustee.
"Revised UCC" means the Uniform Commercial Code, Revised Article 8,
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Investment Securities (with Conforming and Miscellaneous Amendments to Articles
1, 3, 4, 5, 9 and 10), 1994 Official Text, as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 15, 1995; provided,
however, that if and when the Revised UCC is enacted in the State of New York,
"Revised UCC" shall mean the Revised UCC as enacted in the State of New York
from time to time.
"UCC" means the Current UCC and the Revised UCC, and the Uniform
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Commercial Code as it may hereafter be in effect from time to time in the State
of New York.
2. GRANT OF SECURITY INTEREST, INSTRUCTIONS TO SECURITIES
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INTERMEDIARY.
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(a) The Company and FLN Finance hereby irrevocably grant a security
interest in and pledge, assign and set over to the Trustee for the ratable
benefit of the holders of the Notes all of the Company's and FLN Finance's
right, title and interest, whether now owned or hereafter acquired or arising,
in the Account, and all property now or hereafter credited to, placed or
deposited in, or delivered to the Securities Intermediary for placement or
deposit in, the Account, including, without limitation, all funds, investment
property, financial assets and security entitlements held therein or credited
thereto, all Marketable Securities held by (or otherwise maintained in the name
of) the Securities Intermediary pursuant to this Section 2, and all
distributions relating thereto and proceeds thereof (collectively, the
"Collateral"), in order to secure all obligations and indebtedness of the
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Company and FLN Finance under the Notes and any other obligation, now or
hereafter arising, of every kind and nature,
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owed by the Company and FLN Finance under the Indenture to the holders of the
Notes or to the Trustee for the benefit of the Holders of the Notes. The
Securities Intermediary hereby acknowledges the Trustee's security interest as
set forth in this Section 2. The Company and FLN Finance shall take all actions
and shall direct the Trustee to take all actions necessary on its part to ensure
(i) the continuance of a security interest in the Collateral in favor of the
Trustee for the benefit of the Holders of the Notes in order to secure all such
obligations and indebtedness and (ii) that such security interest is the first
priority security interest, to the extent that any other security interest shall
at any time attach to the Company's or FLN Finance's right, title or interest in
the Account or any other Collateral. The Company or FLN Finance shall not grant
or cause or permit any other Person to obtain a security interest, encumbrance,
lien or other claim, direct or indirect, in the Company's right, title or
interest in the Account or any other Collateral.
(b) The Company, FLN Finance and the Trustee hereby irrevocably
instruct the Securities Intermediary to, and the Securities Intermediary shall,
(i)(A) maintain sole dominion and control over funds in the Account for the sole
and exclusive benefit of the Trustee on behalf of the holders of the Notes, (B)
maintain, or cause its agent within the State of New York to maintain,
possession of all certificated Marketable Securities purchased hereunder that
are physically possessed by the Securities Intermediary in order for the Trustee
to enjoy a continuous perfected first priority security interest therein under
the law of the State of New York (the Company and FLN Finance hereby agreeing
that in the event any certificated Marketable Securities are in the possession
of the Company and FLN Finance or a third party, the Company and FLN Finance
shall use their best efforts to deliver or cause delivery of all such
certificates to the Securities Intermediary), (C) take all steps specified by
the Company and FLN Finance pursuant to paragraph (a) above to cause the Trustee
to enjoy a continuous perfected first priority security interest under the UCC
(including the Current UCC and the Revised UCC), any other applicable statutory
or case law or regulation of the State of New York and any applicable law or
regulation of the United States in the Collateral and (D) maintain the
Collateral free and clear of all liens, security interests, safekeeping or other
charges, demands and claims against the Securities Intermediary of any nature
now or hereafter existing in favor of anyone other than the Trustee; (ii)
promptly notify the Trustee if the Securities Intermediary receives written
notice that any person other than the Trustee has a lien or security interest
upon any portion of the Collateral; and (iii) in addition to disbursing the
Deposit Funds and all other Collateral held in the Account pursuant to any
Payment Notice and Disbursement Request or Notice of Rainbow Consummation given
to it by the Trustee or the Company and FLN Finance pursuant to Section 4, upon
receipt of written notice from the Trustee of the acceleration of the maturity
of the Notes in accordance with the Indenture, and direction from the Trustee to
disburse all Deposit Funds and all other Collateral to the Trustee,
substantially in the form of Exhibit C hereto, as promptly as practicable,
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disburse all Deposit Funds and other Collateral held in the Account to or as
directed by the Trustee and transfer title to all Marketable Securities held by
the Securities Intermediary hereunder to or as directed by the Trustee. The
Trustee shall apply all such Deposit Funds and other Collateral as required by
the Indenture.
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The security interest provided for by this Section 2 shall
automatically terminate and cease as to, and shall not extend or apply to, and
the Trustee shall have no security interest in, any property constituting
Collateral disbursed by the Securities Intermediary to the Company and FLN
Finance in accordance with this Agreement.
The Securities Intermediary shall act solely as the Trustee's agent in
connection with its duties under this Section 2, notwithstanding any other
provision contained in this Agreement, without any right to receive compensation
from the Trustee and without any authority to obligate the Trustee or to
compromise or pledge its security interest hereunder. Accordingly, the
Securities Intermediary is hereby directed to cooperate with the Trustee in the
exercise of its rights in the Collateral provided for herein.
Without limiting the foregoing, (i) the Securities Intermediary
represents and warrants, for the benefit of the Trustee and the holders of
Notes, that the Securities Intermediary is and will at all times remain the
sole securities intermediary with respect to the Account and all securities or
financial assets held in or credited to the Account within the meaning of the
Current UCC and the Revised UCC and that the Account is and will continue to be
a securities account within the meaning of the Revised UCC; and (ii) the
Company, FLN Finance and the Securities Intermediary agree that the Securities
Intermediary with respect to the Account shall comply with any directions of the
Trustee to the Securities Intermediary to transfer or redeem securities or
financial assets held in or credited to the Account without the consent of the
Company, FLN Finance or any other person. The Trustee hereby agrees to deliver
to the Company a copy of any such directions immediately following the delivery
thereof to the Securities Intermediary.
(c) Any money, Marketable Securities or other Collateral collected by
the Trustee pursuant to Section 2(b)(iii) shall be applied as provided in
Section 10.21 of the Indenture. Any surplus of such cash or cash proceeds held
by the Trustee and remaining after indefeasible payment in full of all the
obligations under the Indenture shall be paid over to the Company and FLN
Finance or to whomsoever may be lawfully entitled to receive such surplus or as
a court of competent jurisdiction may direct.
(d) On the Issue Date the Company and FLN Finance shall execute and
deliver to the Trustee all appropriate financing statements under the provisions
of the UCC (including the Current UCC and the Revised UCC), applicable domestic
or local laws, rules or regulations in each of the offices where such filing is
necessary or appropriate to grant the Trustee a perfected security interest in
the Collateral superior to and prior to the rights of all third persons. Upon
demand, the Company and FLN Finance will execute and deliver to the Trustee such
other instruments and documents as the Trustee may reasonably deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral. The Trustee shall be entitled to
take all necessary action to preserve and protect the security interest created
hereby as a lien and encumbrance upon the Collateral.
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(e) The Company and FLN Finance hereby appoints the Trustee as its
attorney-in-fact with full power of substitution to do any act which the Company
or FLN Finance is obligated hereunder to do and fails to do, and the Trustee,
upon an Event of Default (as defined in the Indenture) and for so long as such
Event of Default continues, may exercise such rights as the Company or FLN
Finance might exercise with respect to the Collateral and take any action in the
Company's and FLN Finance's name to protect the Trustee's security interest
hereunder. In addition to the rights provided under Section 2(b)(iii) hereof,
upon an Event of Default as defined in the Indenture and for so long as such
Event of Default continues, the Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party under
the UCC or other applicable law, and the Trustee may also upon obtaining
possession of the Collateral as set forth herein, without notice to the Company
or FLN Finance except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Trustee may deem
commercially reasonable. Each of the Company and FLN Finance acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale. Each of the
Company and FLN Finance agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Company and FLN Finance of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(f) The security interest granted hereby shall terminate (i) with
respect to all Collateral upon the release and disbursement of the Deposit Funds
to the Company and FLN Finance pursuant to Section 4(a)(ii) hereof and (ii) with
respect to any Collateral or proceeds thereof held by the Trustee as Paying
Agent pursuant to Section 10.3 of the Indenture in excess of the amount needed
to purchase and pay for all Notes tendered pursuant to the Offer to Purchase
made pursuant to Section 10.21 thereunder upon the purchase and payment for such
Notes.
3. ACCOUNT, SECURITIES INTERMEDIARY.
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(a) Appointment of Securities Intermediary. The Company, FLN Finance
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and the Trustee hereby appoint the Securities Intermediary, and the Securities
Intermediary hereby accepts appointment, as securities intermediary, under the
terms and conditions of this Agreement.
(b) Establishment of Account. On the Issue Date, the Securities
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Intermediary shall establish Account No. 015878 in the name of "The Bank of New
York, as trustee for
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the holders of the 8-7/8% Senior Notes due 2007 issued by Fox/Liberty Networks,
LLC and FLN Finance, Inc." at its office located at ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ (such account and any successor account, the "Account"). The Account is an
account to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Trustee as
entitled to exercise the rights that comprise any financial asset credited to
the account. All securities or other property underlying any financial assets
credited to the Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another securities account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Account be registered in
the name of the Company or FLN Finance, payable to the order of the Company or
FLN Finance or specially indorsed to the Company or FLN Finance except to the
extent the foregoing have been specially indorsed to the Securities Intermediary
or in blank or upon release of the security interest and pledge thereon in favor
of the Trustee created hereby.
All funds accepted by the Securities Intermediary pursuant to this
Agreement shall be held in accordance with this Agreement for the sole and
exclusive benefit of the Trustee as pledgee hereunder on behalf of the holders
of the Notes, until disbursed or paid in accordance with the terms hereof, or
until the security interest and pledge in favor of the Trustee in such property
created hereby is released in accordance with the terms hereof. All such funds
shall be held in the Account until disbursed or paid in accordance with the
terms hereof. Pending disbursement in accordance with Section 4 or Section
2(b)(iii) hereof, the Account, the funds held therein and any Marketable
Securities held by the Securities Intermediary shall be under the sole dominion
and control of the Securities Intermediary for the sole and exclusive benefit of
the Trustee on behalf of the holders of the Notes. On the Issue Date, the
Company shall deliver the Initial Deposit Amount to the Securities Intermediary
for deposit into the Account against the Securities Intermediary's written
acknowledgment and receipt of the Initial Deposit Amount.
(c) Securities Intermediary Compensation. The Company and FLN Finance
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shall pay to the Securities Intermediary such compensation for services to be
performed by it under this Agreement as the Company, FLN Finance and the
Securities Intermediary may agree in writing from time to time. The Securities
Intermediary shall be paid any compensation owed to it directly by the Company
and FLN Finance and shall not disburse from the Account any such amounts. The
provisions of this subparagraph (c) of Section 3 shall survive any termination,
satisfaction or discharge of this Agreement as well as the resignation or
removal of the Securities Intermediary.
The Company and FLN Finance shall reimburse the Securities
Intermediary upon request for all reasonable expenses, disbursements, and
advances incurred or made by the Securities Intermediary in implementing any of
the provisions of this Agreement, including compensation and the reasonable
expenses and disbursements of its counsel. The Securities
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Intermediary shall be paid any such expenses owed to it directly by the Company
and FLN Finance and shall not disburse from the Account any such amounts.
(d) Investment of Funds in the Account. Funds deposited in the
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Account shall be invested and reinvested only upon the following terms and
conditions:
(i) Acceptable Investments. All funds deposited or held in the
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Account at any time shall be invested by the Securities Intermediary in
Marketable Securities in accordance with the Company's written instructions
from time to time to the Securi ties Intermediary. Any such written
instruction shall specify the particular investment to be made, shall state
that such investment is authorized to be made hereby, shall contain the
certification referred to in Section 3(d)(ii), if required, and shall be
executed by any officer of the Company. All Marketable Securities shall be
assigned to and held in the possession of, or, in the case of Marketable
Securities maintained in book-entry form with the Federal Reserve Bank,
transferred to a book-entry account in the name of the Securities
Intermediary, for the sole and exclusive benefit of the Trustee on behalf
of the holders of the Notes, as provided herein, with such guarantees as
are customary, except that Marketable Securities maintained in book-entry
form with the Federal Reserve Bank shall be transferred to a book-entry
account in the name of the Securities Intermediary at the Federal Reserve
Bank that includes only Marketable Securities held by the Securities
Intermediary for its customers and segregated by separate recordation in
the books and records of the Securities Intermediary.
(ii) Security Interest in Investments. No investment of funds in
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the Account shall be made unless the Company has certified to the
Securities Intermediary and the Trustee that, upon such investment, the
Trustee will have a first priority perfected security interest in the
applicable investment. A certificate as to a class of investments need not
be issued with respect to individual investments in securities in that
class if the certificate applicable to the class remains accurate with
respect to such individual investments, which continued accuracy the
Securities Intermediary may conclusively assume. On the Issue Date, each
of the Trustee and the Securities Intermediary shall receive an Opinion of
Counsel (as such term is defined in the Indenture) to the Company, which
opinion shall meet the requirements of Section 314(b) of the Trust
Indenture Act of 1939, as amended (the "TIA"), and shall comply with
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Section 1.2 of the Indenture.
(iii) Interest and Dividends. All interest earned and dividends paid
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on funds invested in Marketable Securities shall be deposited in the
Account as Deposit Funds and additional Collateral in accordance with this
Agreement and shall be reinvested in accordance with the terms hereof at
the Company's written instruction.
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(iv) "Financial Assets" Election. The Securities Intermediary hereby
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agrees that each item of property credited to the Account shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the
UCC.
(v) Limitation on Securities Intermediary's Responsibilities. The
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Securities Intermediary's sole responsibilities under this Section 3 shall
be (A) to retain posses sion of certificated Marketable Securities (except,
however, that the Securities Intermediary may surrender possession to the
issuer of any such Marketable Security for the purposes of effecting
assignment, crediting interest, or reinvesting such security or reducing
such security to cash) and to be the registered or designated owner of
Marketable Securities which are not certificated; (B) to follow the
Company's written instructions given in accordance with Section 3(d)(i);
(C) to invest and reinvest funds pursuant to this Section 3(d); and (D) to
use reasonable efforts to reduce to cash such Marketable Securities as may
be required to fund any disburse ment or payment in accordance with Section
4. In connection with clause (A) above, the Securities Intermediary will
maintain continuous possession in the State of New York of certificated
Marketable Securities and cash included in the Collateral and will cause
uncertificated Marketable Securities to be registered in the book-entry
system of and transferred to an account of the Securities Intermediary at
the Federal Reserve Bank of New York. Except as provided in Section 7, the
Securities Intermediary shall have no other responsibilities with respect
to perfecting or maintaining the perfection of the Trustee's security
interest in the Collateral. In connection with clause (D) above and
subject to the following sentence, the Securities Intermediary shall not be
required to reduce to cash any Marketable Securities to fund any
disbursement or payment in accordance with Section 4 in the absence of
written instructions signed by an officer of the Company specifying the
particular investment to liquidate. If no such written instructions are
received, the Securities Intermediary shall liquidate those Marketable
Securities having the lowest interest rate per annum or if none such exist,
those having the nearest maturity.
(e) Substitution of Securities Intermediary. The Securities
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Intermediary may resign by giving no less than 30 days prior written notice to
the Company, FLN Finance and the Trustee. Such resignation shall take effect
upon the later to occur of (i) delivery of all funds and Marketable Securities
maintained by the Securities Intermediary hereunder and copies of all books,
records, plans and other documents in the Securities Intermediary's possession
relating to such funds or Marketable Securities or this Agreement to a successor
security intermediary mutually approved by the Company, FLN Finance and the
Trustee (which approvals shall not be unreasonably withheld or delayed) and (ii)
the Company, FLN Finance, the Trustee and such successor security intermediary
entering into this Agreement or any written successor agreement no less
favorable to the interests of the holders of the Notes and the Trustee than this
Agreement; and the Securities Intermediary shall thereupon be discharged of all
obligations under this Agreement and shall have no other duties, obligations or
responsibilities in connection herewith, except as set forth in Section 5. If a
successor security intermediary has not been appointed or has not accepted such
appointment within 30
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days after notice of resignation is given to the Company and FLN Finance, the
Securities Intermediary may, at the expense of the Company and FLN Finance,
apply to a court of competent jurisdiction for the appointment of a successor
security intermediary.
(f) Account Statement. Beginning on August 31, 1997, and on the last
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Business Day of each month thereafter, the Securities Intermediary shall deliver
to the Company, FLN Finance and the Trustee a statement setting forth with
reasonable particularity the balance of funds then in the Account and the
manner in which such funds are invested (the "Account Statement"). The parties
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hereto irrevocably instruct the Securities Intermediary that on the first date
upon which the balance in the Account (including the holdings of all Marketable
Securities) is reduced to zero, the Securities Intermediary shall deliver to the
Company, FLN Finance and to the Trustee a notice that the balance in the Account
has been reduced to zero.
4. DISBURSEMENTS.
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(a) Payment Notice and Disbursement Request; Disbursements.
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(i) The Company and FLN Finance shall notify the Trustee in writing
prior to 10:00 a.m. (New York time) on (A) December 30, 1997, if the
Rainbow Consummation has not occurred or (B) at the election of the
Company, any date prior to December 30, 1997, if the Company determines to
make an Offer to Purchase pursuant to Section 10.21 of the Indenture as
permitted thereby prior to December 30, 1997. The Trustee shall upon the
date of receiving any such notice, submit not later than 1:00 p.m. (New
York time) to the Securities Intermediary a completed Payment Notice and
Disbursement Request substantially in the form of Exhibit A hereto.
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(ii) The Company shall promptly submit to the Securities Intermediary
and the Trustee a completed Notice of Rainbow Consummation substantially in
the form of Exhibit B hereto certifying the occurrence of Rainbow
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Consummation. Upon receipt by the Securities Intermediary of such Notice
of Rainbow Consummation, subject to the provisions of paragraphs (b) and
(c) below, the Securities Intermediary shall promptly release all Deposit
Funds and other Collateral in the Account to the Company and FLN Finance
by wire or book-entry transfer of immediately available funds as set forth
in the Notice of Rainbow Consummation.
(b) The Securities Intermediary's disbursement pursuant to any Payment
Notice and Disbursement Request or release pursuant to any Notice of Rainbow
Consummation shall be subject to the satisfaction of the applicable conditions
set forth in Section 4(c). Provided such Payment Notice and Disbursement
Request or Notice of Rainbow Consummation, as the case may be, is not rejected
by it, the Securities Intermediary, not later than 3:00 P.M. (New York time) on
the date of receipt of the Payment Notice and Disbursement Request or Notice of
Rainbow Consummation, as the case may be, shall disburse all Deposit
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Funds and all other Collateral by wire or book-entry transfer of immediately
available funds as set forth in the Payment Notice and Disbursement Request or
Notice of Rainbow Consummation, as the case may be. The Securities Intermediary
shall notify the Trustee, the Company and FLN Finance promptly if any Payment
Notice and Disbursement Request or Notice of Rainbow Consummation is rejected
and of the reason(s) therefor. In the event such rejection is based upon
nonsatisfaction of the condition in Section 4(c)(i) below, the Trustee or the
Company shall thereupon resubmit the Payment Notice and Disbursement Request or
Notice of Rainbow Consummation, as the case may be, with appropriate changes.
Any Payment Notice and Disbursement Request or Notice of Rainbow Consummation
received by the Securities Intermediary on a day that is not a Business Day or
after 1:00 p.m., New York time, on a Business Day will be deemed to have been
received on the following Business Day.
(c) Conditions Precedent to Disbursement. The Securities
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Intermediary's payment of any disbursement shall be made only if: (i) the
Trustee shall have submitted, in accordance with the provisions of Section
4(a)(i) herein, a completed Payment Notice and Disbursement Request to the
Securities Intermediary substantially in the form of Exhibit A hereto with
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blanks appropriately filled in, or the Company shall have submitted, in accor-
dance with the provisions of Section 4(a)(ii) herein, a Notice of Rainbow
Consummation submitted in the form of Exhibit B hereto with blanks appropriately
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filled in and (ii) the Securities Intermediary shall not have received any
notice from the Trustee that as a result of an Event of Default the indebtedness
represented by the Notes has been accelerated and has become due and payable, in
which event the Securities Intermediary shall apply all Deposit Funds and other
Collateral as required by Section 2(b)(iii).
(d) The Company and FLN Finance hereby irrevocably appoint the Trustee
as Paying Agent for purposes of any Offer to Purchase made pursuant to Section
10.21 of the Indenture. The Trustee shall establish an irrevocable trust to
hold such funds for the sole and exclusive benefit of the holders. The Trustee
shall, as Paying Agent, apply such funds to repurchase, upon consummation of
such Offer to Purchase and acceptance by the Company and FLN Finance, all Notes
tendered pursuant to the Offer to Purchase made pursuant to Section 10.21 of the
Indenture. Any funds remaining with the Paying Agent after repurchasing all
Notes tendered pursuant to such Offer to Purchase shall be released to the
Company and FLN Finance.
5. SECURITIES INTERMEDIARY.
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(a) Limitation of the Securities Intermediary's Liability,
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Responsibilities of the Securities Intermediary. The Securities Intermediary's
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responsibility and liability under this Agreement shall be limited as follows:
(i) the Securities Intermediary does not represent, warrant or guaranty to the
holders of the Notes from time to time the performance of the Company and FLN
Finance; (ii) the Securities Intermediary shall have no responsibility to the
Company, FLN Finance or the holders of the Notes or the Trustee from time to
time as a consequence of performance or non-performance by the Securities
Intermediary hereunder,
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except for any negligence, bad faith or willful misconduct of the Securities
Intermediary; (iii) the Company shall remain solely responsible for all aspects
of the Company's business and conduct; and (iv) the Securities Intermediary is
not obligated to supervise, inspect or inform the Company, FLN Finance or any
third party of any matter referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Securities Intermediary, nor shall the Securities
Intermediary be bound by the provisions of any agreement beyond the specific
terms hereof. Specifically and without limiting the foregoing, the Securities
Intermediary shall in no event have any liability for any loss, fee, tax or
other charge in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds or Marketable
Securities held by it hereunder, including, without limitation, any liability
for any delay not resulting from negligence, bad faith or willful misconduct in
such investment, reinvestment or liquidation, or for any loss of principal or
income incident to any such delay.
The Securities Intermediary shall be entitled to rely upon any
judicial order or judgment, upon any opinion of counsel or upon any
certification, instruction, notice, or other writing delivered to it by the
Company, FLN Finance or the Trustee in compliance with the provisions of this
Agreement without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of service
thereof. The Securities Intermediary may act in reliance upon any instrument
comporting with the provisions of this Agreement or signature reasonably
believed by it to be genuine and may assume that any person purporting to give
notice or receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
At any time the Securities Intermediary may request in writing an
instruction in writing from the Company or FLN Finance and may at its own option
include in such request the course of action it proposes to take and the date on
which it proposes to act, regarding any matter arising in connection with its
duties and obligations hereunder; provided, however, that the Securities
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Intermediary shall state in such request that it believes in good faith that
such proposed course of action is consistent with another identified provision
of this Agreement. The Securities Intermediary shall not be liable to the
Company or FLN Finance for acting without the Company's or FLN Finance's consent
in accordance with such a proposal on or after the date specified therein if (i)
the specified date is at least two Business Days after the Company or FLN
Finance receives the Securities Intermediary's request for instructions and its
proposed course of action, and (ii) prior to so acting, the Securities
Intermediary has not received the written instructions requested from the
Company or FLN Finance.
The Securities Intermediary shall not be called upon to advise any
party as to selling or retaining, or taking or refraining from taking any action
with respect to, any securities or other property deposited hereunder.
11
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds or property deposited hereunder, the Securities
Intermediary shall be entitled to refuse to comply with any and all claims,
demands or instructions with respect to such funds or property, and the
Securities Intermediary shall not be or become liable for its failure or refusal
to comply with conflicting claims, demands or instructions. The Securities
Intermediary shall be entitled to refuse to act until either any conflicting or
adverse claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting
claimants as evidenced in a writing, satisfactory to the Securities
Intermediary, or the Securities Intermediary shall have received security or an
indemnity satisfactory to the Securities Intermediary sufficient to save the
Securities Intermediary harmless from and against any and all loss, liability
or expense which the Securities Intermediary may incur by reason of its acting.
The Securities Intermediary may in addition elect in its sole option to commence
an interpleader action or seek other judicial relief or orders as the Securities
Intermediary may deem necessary.
No provision of this Agreement shall require the Securities
Intermediary to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder.
6. INDEMNITY. Each of the Company and FLN Finance shall indemnify,
---------
hold harmless and defend the Securities Intermediary and its directors,
officers, agents, employees and controlling persons, from and against any and
all claims, actions, obligations, liabilities and expenses, including defense
costs, investigative fees and costs, legal fees, and claims for damages, arising
from the Securities Intermediary's performance under this Agreement, except to
the extent that such liability, expense or claim is directly attributable to the
negligence, bad faith or willful misconduct of any of the foregoing persons.
The provisions of this Section shall survive any termination, satisfaction or
discharge of this Agreement as well as the resignation or removal of the
Securities Intermediary.
7. TERMINATION. This Agreement shall terminate automatically ten
-----------
days following disbursement of all funds remaining in the Account (including
Marketable Securities), unless sooner terminated by agreement of the parties
hereto (in accordance with the terms hereof and not in violation of the
Indenture); provided, however, that the obligations of the Company and FLN
-------- -------
Finance under Section 3(c) and Section 6 (and any existing claims thereunder)
shall survive termination of this Agreement or the resignation of the Securities
Intermediary; provided, further, however, that until such tenth day or earlier
-------- ------- -------
date of termination as provided herein, the Company and FLN Finance will cause
this Agreement (or any permitted successor agreement) to remain in effect and
will cause there to be a securities intermediary (including any permitted
successor thereto) acting hereunder (or under any such permitted successor
agreement).
8. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the
----------------------------------------
Securities Intermediary has or subsequently obtains by agreement, operation of
law or
12
otherwise a security interest in the Account or any financial asset or security
entitlement credited thereto, the Securities Intermediary hereby agrees that
such security interest shall be subordinate to the security interest of the
Trustee. The Deposit Funds will not be subject to deduction, set-off, banker's
lien or any other right in favor of any person other than the Trustee.
9. MISCELLANEOUS.
-------------
(a) Waiver. Any party hereto may specifically waive any breach of
------
this Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of the
----------
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties hereto, and
----------
the rights and duties of any party hereunder shall not be assignable except with
the prior written consent of the other parties. Notwithstanding the foregoing,
this Agreement shall inure to and be binding upon the parties and their
permitted successors and assigns.
(d) Benefit. The parties hereto and their successors and permitted
-------
assigns, but no others, shall be bound hereby and entitled to the benefits
hereof; provided, however, that the holders of the Notes and their permitted
-------- -------
assigns shall be entitled to the benefits hereof and to enforce this Agreement
(upon the written consent of the holders of not less than a majority in
aggregate principal amount at Maturity of the Notes then outstanding (other than
any Notes held by the Company and its Affiliates)) if and to the extent that the
Trustee refuses or fails to act hereunder as directed by the holders of the
Notes in accordance with the Indenture.
(e) Time. Time is of the essence with respect to each provision of
----
this Agreement.
(f) Entire Agreement; Amendments. This Agreement (including those
----------------------------
portions of the Indenture incorporated by reference herein) contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and commitments, whether
oral or written. This Agreement may be amended only in accordance with Article
IX of the Indenture and further by a writing signed by a duly authorized
representative of each party hereto.
13
(g) Conflict With Other Agreements. There are no other agreements
------------------------------
entered into between the Securities Intermediary and the Company or FLN Finance
with respect to the Account. In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall prevail.
(h) Notices. All notices and other communications required or
-------
permitted to be given or made under this Agreement shall be in writing and shall
be deemed conclusively to have been duly given: (a) on the day of hand delivery;
(b) three business days following the day sent, when sent by United States
certified mail, postage and certification fee prepaid, return receipt requested,
addressed as set forth below; (c) when transmitted by telecopy with verbal
confirmation of receipt by the telecopy operator to the telecopy number set
forth below; and (d) one business day following the day timely delivered to a
next-day air courier addressed as set forth below:
To the Securities Intermediary:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Securities Intermediary Accounts
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
Fox/Liberty Networks, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
14
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The News Corporation Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To FLN Finance:
FLN Finance, Inc.
c/o Fox/Liberty Networks, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(i) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(j) Captions. Captions in this Agreement are for convenience only and
--------
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
(k) Choice of Law. The existence, validity, construction, operation
-------------
and effect of any and all terms and provisions of this Agreement shall be
determined in accordance with and governed by the laws of the State of New
York, without regard to principles of conflicts of laws. The Account
established hereunder (as well as the security entitlements related thereto)
shall be governed by the laws of the State of New York. For purpose of this
Agreement and the UCC, the State of New York shall be the Securities
Intermediary's location. The parties to this Agreement hereby agree that
jurisdiction over such parties and over the subject matter of any action or
proceeding arising under this Agreement may be exercised by a competent Court of
the State of New York, or by a United States Court, sitting in New York City.
Each of the Company and FLN Finance hereby submits to the personal
15
jurisdiction of such courts, hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return-receipt requested, directed to the Company or FLN
Finance, as the case may be, at its address last specified for notices
hereunder, and service so made shall be deemed completed five (5) days after the
same shall have been so mailed, and hereby waives the right to a trial by jury
in any action or proceeding with the Securities Intermediary. All actions and
proceedings brought by the Company or FLN Finance against the Securities
Intermediary relating to or arising from, directly or indirectly, this Agreement
shall be litigated only in courts within the State of New York.
(l) Representations and Warranties of the Company. Each of the
---------------------------------------------
Company and FLN Finance hereby represents and warrants that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes the
legal, valid and binding obligation of the Company and FLN Finance. The
execution, delivery and performance of this Agreement by the Company and FLN
Finance do not violate any applicable law or regulation to which the Company or
FLN Finance is subject and do not require the consent of any governmental or
other regulatory body to which the Company or FLN Finance is subject, except for
such consents and approvals as have been obtained and are in full force and
effect.
(m) Representations and Warranties of Securities Intermediary and
-------------------------------------------------------------
Trustee. Each of the Securities Intermediary and the Trustee hereby represents
-------
and warrants that this Agreement has been duly authorized, executed and
delivered on its behalf and constitutes its legal, valid and binding obligation.
[Signature Page Follows]
16
IN WITNESS WHEREOF, the parties have executed and delivered this
Deposit Agreement as of the day first above written.
SECURITIES INTERMEDIARY: THE BANK OF NEW YORK, as Securities Intermediary
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Treasurer
TRUSTEE: THE BANK OF NEW YORK, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Treasurer
COMPANY: FOX/LIBERTY NETWORKS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President, Finance
FLN FINANCE: FLN FINANCE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President, Finance
17
EXHIBIT A
---------
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
(Name of Securities Intermediary)
---------------------------------
(Address of Securities Intermediary)
------------------------------------
Attention: [Corporate Trust Administration]
Re: Disbursement Request No.
---------------------------------
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Deposit Agreement, dated as of August 25, 1997 (the
"Deposit Agreement") among you (the "Securities Intermediary"), the undersigned
as Trustee, FOX/LIBERTY NETWORKS, LLC, a Delaware limited liability company
(the "Company") and FLN Finance, Inc., a Delaware corporation ("FLN Finance").
Capitalized terms used herein shall have the meaning given in the Deposit
Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Deposit Agreement.
The undersigned hereby notifies you of [the non-occurrence of the
Rainbow Transaction] [the receipt by the undersigned of written notice from the
Company and FLN Finance that it has elected to make an Offer to Purchase
pursuant to Section 10.21 of the Indenture as permitted thereby]. Accordingly,
you are hereby directed to transfer all Deposit Funds and other Collateral in
the Account to [specify account information] by 3:00 p.m. (New York time) on the
date of receipt of this letter.
In connection with the requested disbursement, the undersigned hereby
notifies you that the Notes have not, as a result of an Event of Default, been
accelerated and become due and payable.
The Securities Intermediary is entitled to rely on the foregoing in
disbursing funds relating to this Payment Notice and Disbursement Request.
The Bank of New York, as Trustee
By:______________________________
Name:
Title:
EXHIBIT B
---------
Form of Notice of Rainbow Consummation
[Letterhead of the Company]
[Date]
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [Securities Intermediary Accounts]
Attention: [Corporate Trust Administration]
Re: Rainbow Consummation
--------------------
Ladies and Gentlemen:
We refer to the Deposit Agreement, dated as of August 25, 1997 (the
"Deposit Agreement"), among The Bank of New York, as securities intermediary
(the "Securities Intermediary"), The Bank of New York as Trustee, FOX/LIBERTY
NETWORKS, LLC, a Delaware limited liability company (the "Company") and FLN
Finance, Inc., a Delaware corporation ("FLN Finance"). Capitalized terms used
herein shall have the meaning given in the Deposit Agreement.
This letter constitutes a notice by the undersigned certifying the
Rainbow Consummation. The undersigned directs you to release all Deposit Funds
and other Collateral in the Account to the Company and FLN Finance by wire
transfer to [specify account information].
Fox/Liberty Networks, LLC
By:______________________________
Name:
Title:
EXHIBIT C
---------
Form of Notification of Acceleration of
Maturity of the Notes
[Letterhead of the Trustee]
[Date]
(Name)
-----
(Address)
---------
(Address)
---------
Attention:
Re: Acceleration of Maturity of the Notes
-------------------------------------
Ladies and Gentlemen:
We refer to the Deposit Agreement, dated as of August 25, 1997 (the
"Deposit Agreement") among you (the "Securities Intermediary"), the undersigned
as Trustee, FOX/LIBERTY NETWORKS, LLC, a Delaware limited liability company (the
"Company") and FLN Finance, Inc., a Delaware corporation ("FLN Finance").
Capitalized terms used herein shall have the meaning given in the Deposit
Agreement.
This letter constitutes a notice of an acceleration of maturity of the
Notes under Section 2(b) of the Deposit Agreement. Accordingly, you are hereby
directed to disburse all Deposit Funds and other Collateral in the Account to
the Trustee to [specify account information].
The Securities Intermediary is entitled to rely on the foregoing in
disbursing funds relating to this notice.
The Bank of New York, as Trustee
By:______________________________
Name:
Title: