EXHIBIT 10.31
THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED IN THE
MANNER AND TO THE EXTENT SET FORTH IN ARTICLE 8 HEREOF.
EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE
BOUND BY THE SUBORDINATION PROVISIONS OF THIS AGREEMENT.
AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT
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THIS AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT is made as of the
19th day of May, 1998, by and among NEWS AMERICA INCORPORATED f/k/a News America
Holdings Incorporated, a Delaware corporation ("Lender"), FOX FAMILY WORLDWIDE,
INC. f/k/a FOX KIDS WORLDWIDE, INC., a Delaware corporation (together with any
successors or assigns, the "Borrower"), and CITICORP USA, INC., as the Senior
Representative for the Senior Creditors (each as hereinafter defined).
WHEREAS, the parties hereto are parties to a certain Subordinated Note
Agreement, dated August 29, 1997 as amended by the First Amendment thereto dated
October 28, 1997 (the "Original Note Agreement" or the "Subordinated Note
Agreement"); and
WHEREAS, the parties hereto have agreed to retroactively lower the interest
rate provided under the Original Note Agreement; and
WHEREAS, the parties hereto desire to amend and restate the Original Note
Agreement to evidence such changes;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1. GENERAL DEFINITIONS
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1.1 Defined Terms. All capitalized terms used herein which are defined
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in the Credit Agreement and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement. When used herein, the following
terms shall have the following meanings:
Administrative Agent - means Citicorp USA, Inc., as the administrative
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agent and the collateral agent for the Senior Lenders and the other Secured
Parties, together with any successor thereto appointed pursuant to Article VIII
of the Credit Agreement.
Affiliate - when used in reference to any specified Person, any Person that
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directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person.
Agreement - this Subordinated Note Agreement, as the same may be modified
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or amended from time to time.
Business Day - a day on which the Federal Reserve Bank of New York is open
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for business in New York, New York.
Closing Date - August 31, 1997.
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Code - the Internal Revenue Code of 1986, as amended.
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Credit Agreement - means the Second Amended and Restated Credit Agreement
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dated as of October 28, 1997 among FCN Holding, Inc., International Family
Entertainment, Inc. and Saban Entertainment, Inc., as the Borrowers thereunder,
Fox Kids Holdings, LLC, as a guarantor thereunder, the Senior Lenders, Citicorp
Securities, Inc., Chase Securities, Inc. and BankBoston, N.A., as the Co-
Arrangers for the Facilities referred to therein, and the Administrative Agent,
as such agreement may be amended, supplemented or otherwise modified from time
to time.
Dollars and the symbol $ - lawful money of the United States of America.
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Effective Date - May __, 1998
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Event of Default - as defined in Section 7.1 of this Agreement.
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GAAP - U.S. generally accepted accounting principles, consistently applied.
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Indebtedness - as applied to any Person, means: (a) all indebtedness for
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borrowed money; (b) that portion of obligations with respect to capital leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP; (c) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money; (d) any obligation
owed for all or any part of the deferred purchase price of property or services
if the purchase price is due more than six (6) months from the date the
obligation is incurred or is evidenced by a note or similar written instrument;
and (e) all indebtedness secured by any Lien on any property or asset owned or
held by that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that Person.
Indemnities - as defined in Section 9.1 of this Agreement.
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Indentures - means, collectively, (a) the Indenture dated as of October 28,
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1997 between Fox Kids and The Bank of New York, as Trustee, relating to the 9
1/4% Senior Notes due 2007, and (b) the Indenture dated as of October 28, 1997
between Fox Kids and The Bank of New York, as
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Trustee, relating to the 10 1/4% Senior Discount Notes due 2007, in each case as
such agreement may be amended, supplemented or otherwise modified from time to
time.
Interest - as defined in Section 3.1(A) of this Agreement.
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Insolvency Laws - as defined in Section 8.1 of this Agreement.
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Insolvency Proceedings - as defined in Section 8.1 of this Agreement.
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Interest Payment Date - commencing on September 30, 1997, and each
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successive December 31, March 31, June 30 and September 30 on which the Loan is
outstanding.
Lien - any mortgage, deed of trust, pledge, lien, security interest, charge
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or other encumbrance or security arrangement of any nature whatsoever, including
but not limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security.
Loan - as defined in Section 2.1 of this Agreement.
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Loan Documents - this Agreement, the Note, and any and all agreements,
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instruments and documents executed therewith.
Maturity Date - as defined in Section 2.2 of this Agreement.
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Note - the subordinated promissory note to be made by Borrower on the
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Closing Date in favor of Lender to evidence the Loan, which shall be in the form
of Exhibit A annexed hereto, and any note or notes issued in replacement or
substitution therefor, as any such note or notes may be further amended,
modified, or supplemented from time to time after the execution and delivery
hereof.
Obligations - (i) the obligations of Borrower to pay, as and when due and
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payable (by scheduled maturity or otherwise), all amounts from time to time
owing by it in respect of any Loan Document, whether for principal, Interest
(including, without limitation, all Interest that accrues after the commencement
of any case, proceeding or other action relating to any Insolvency Proceeding of
Borrower), fees, indemnification payments, contract causes of action, costs,
expenses or otherwise and (ii) the obligations of Borrower to perform or observe
all of its other obligations from time to time existing under any Loan Document.
Person - an individual, partnership, association, corporation, limited
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liability company, joint stock or other company, entity, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
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Prepayment Date - any date upon which the Loan is being prepaid, in whole
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or in part, pursuant to Section 3.2 of this Agreement.
Principal Amount - as defined in Section 2.1 of this Agreement.
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Senior Creditors - means, collectively, the Senior Secured Creditors, the
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Senior Notes Creditors and the other holders, if any, of any of the Senior
Indebtedness.
Senior Indebtedness - means, collectively, the Senior Secured Indebtedness
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and the Senior Notes Indebtedness.
Senior Lenders - means the banks, financial institutions and other
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institutional lenders from time to time party to the Credit Agreement.
Senior Loan Documents - the Senior Loan Agreement and any and all
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agreements, instruments and documents executed in connection with the Senior
Loan Agreement, as the same may be further modified, amended or supplemented
after the execution and delivery thereof.
Senior Notes - means, collectively, the 9/1//4% Senior Notes due 2007 and
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the 10/1//4% Senior Discount Notes due 2007 issued under the Indentures, in each
case as amended, supplemented or otherwise modified from time to time.
Senior Notes Creditors - means, collectively, the trustees under each of
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the Indentures and the holders from time to time of Senior Notes Indebtedness.
Senior Notes Indebtedness - means (i) all Obligations of Fox Kids, whether
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now or hereafter existing, under or in respect of the Indentures and the Senior
Notes, whether direct or indirect, absolute or contingent, and whether for
principal, interest (including, without limitation, interest accruing after the
filing of a petition initiating any Insolvency Proceeding (as hereinafter
defined), whether or not such interest accrues after the filing of such petition
for purposes of any applicable Insolvency Laws (as hereinafter defined), or is
an allowed claim in such Insolvency Proceeding), premium, fees, indemnification
payments, contract causes of action, costs, expenses or otherwise and (ii) any
and all extensions, modifications, substitutions, amendments, renewals,
refinancings, replacements and refundings of any or all of the Obligations
referred to in clause (i) of this definition, and any instrument or agreement
evidencing or otherwise setting forth the terms of any Indebtedness or other
Obligations incurred in any such extension, modification, substitution,
amendment, renewal, refinancing, replacement or refunding.
Senior Representative - means (i) the Administrative Agent or (ii) after
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the payment in full of all of the Senior Secured Indebtedness and the
termination or expiration of all of the commitments
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of the Senior Secured Creditors in respect thereof, either of the trustees for
the Senior Notes or the holders of a majority in aggregate principal amount of
the outstanding Senior Notes of either issue.
Senior Secured Creditors - means, collectively, the Administrative Agent,
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the Senior Lenders and the other Secured Parties and any other holder of any of
the Senior Secured Indebtedness.
Senior Secured Indebtedness - means (i) all Obligations of Fox Kids,
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whether now or hereafter existing, under or in respect of the Credit Agreement,
the Notes (as defined in the Credit Agreement) and the other Loan Documents (as
defined in the Credit Agreement), whether direct or indirect, absolute or
contingent, and whether for principal, interest (including, without limitation,
interest accruing after the filing of a petition initiating any Insolvency
Proceeding, whether or not such interest accrues after the filing of such
petition for purposes of any applicable Insolvency Laws, or is an allowed claim
in such Insolvency Proceeding), premium, fees, indemnification payments,
contract causes of action, costs, expenses or otherwise and (ii) any and all
extensions, modifications, substitutions, amendments, renewals, refinancings,
replacements and refundings of any or all of the Obligations referred to in
clause (i) of this definition, and any instrument or agreement evidencing or
otherwise setting forth the terms of any Indebtedness or other Obligations
incurred in any such extension, modification, substitution, amendment, renewal,
refinancing, replacement or refunding
Subsidiary - with respect to any Person, any other Person of which such
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Person owns or controls the voting of, directly or indirectly through one or
more intermediaries, more than fifty percent (50%) of the voting stock or other
ownership interests representing more than fifty percent (50%) of the ordinary
voting power of such entity at the time of determination.
Tax - any tax, levy, impost, duty, withholding, assessment, fee or other
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charge which is assessed, levied or imposed or calculated for any government,
governmental, semi-governmental administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity (including without
limitation any penalty, addition to tax or interest payable in connection or
with any failure to pay or any delay in paying any of the same).
Voided Payment - as defined in Section 8.5 of this Agreement.
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1.2 Certain Matters of Construction. Terms defined herein in the singular
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shall have the correlative meaning when used in the plural and vice versa. The
terms "herein," "hereof" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to refer to the masculine,
feminine and neuter genders. The Section titles, table of contents and list of
exhibits appear as a matter of convenience only and shall not affect the
interpretation of this Agreement. All references to the knowledge of Borrower
(and phrases of similar import) shall include the knowledge of each of the
Subsidiaries of Borrower.
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1.3 Time References. Unless otherwise indicated herein, all references to
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time of day refer to Pacific standard time or Pacific daylight savings time, as
in effect in Los Angeles, California on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to Lender, such period shall in any event consist of
at least one (1) full day.
ARTICLE 2. THE LOAN
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2.1 The Loan. Lender has made a loan (the "Loan") to Borrower in the
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principal amount of Three Hundred Forty Five Million Five Hundred Thirteen
Thousand Eight Hundred Sixty Four Dollars and Thirty One Cents ($345,513,864.31)
(the "Principal Amount"), which was funded in full on the Closing Date. Lender
shall not have any responsibility as to the use of any of the proceeds of the
Loan. On the Effective Date, the Note delivered by the Borrower pursuant to the
Original Note Agreement shall be returned to the Borrower in exchange for a Note
in favor of Lender substantially in the form of Exhibit A annexed hereto which
Note shall be treated in the same manner as if such Note were executed and
delivered on the Closing Date.
2.2 Repayment of the Loan. The Principal Amount shall be repaid on May 1,
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2008 (the "Maturity Date").
ARTICLE 3. INTEREST, FEES, PREPAYMENTS AND REPAYMENT
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3.1 Interest.
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(A) Interest ("Interest") shall accrue from and after the Closing
Date, on the Principal Amount, at the rate of ten and /427/100/ percent
(10.427%) per annum, compounded quarterly, on the basis of a three hundred
sixty-four (364) day year.
(B) At the option of Borrower, and subject to the subordination
provisions set forth in Article 8 hereof, Borrower may on any Interest Payment
Date elect to (i) pay any portion or all of the accrued and unpaid interest on
the principal amount or (ii) elect to defer such payment until the Maturity Date
as provided in Section 3.1(C).
(C) If, on any Interest Payment Date, Borrower elects to defer the
payment of interest until the Maturity Date as provided in Section 3.1(B) or is
not permitted to pay interest as a result of the subordination provisions set
forth in Article 8 hereof, an amount equal to the Interest which accrued on the
Principal Amount from the immediately preceding Interest Payment Date (or in the
case of the first Interest Payment Date, which accrued from the Closing Date)
through such Interest Payment Date shall be added automatically to the Principal
Amount and become a part thereof (such amount of Interest being referred to as
"Deferred Interest").
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3.2 Optional Prepayment.
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(A) After the Senior Indebtedness have been paid in full, or at any
earlier time to the extent otherwise expressly permitted under the Senior Loan
Agreement, Borrower may prepay the Loan, in whole or in part, at any time, upon
at least five (5) Business Days' prior written notice to Lender. Any partial
prepayment of the Principal Amount shall be in the amount of Five Hundred
Thousand Dollars ($500,000) or in integral multiples of Five Hundred Thousand
Dollars ($500,000). Any prepayment of the Principal Amount on a Prepayment Date
pursuant to this Section 3.2 shall be accompanied by payment of the amount of:
(i) all Obligations (other than principal and Interest) due and
payable on the Prepayment Date; and
(ii) all Interest accrued (and not yet paid and added to the Principal
Amount as Deferred Interest) on the Principal Amount being prepaid from the
Closing Date through the Prepayment Date.
(B) The prepayment of the Loan pursuant to this Section 3.2 shall be
without premium or penalty.
3.3 Payments. The Obligations shall be payable as set forth in this
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Section 3.3.
(A) The Principal Amount shall be due and payable as provided in
Sections 2.2, 3.2 or 7.1 hereof, as applicable.
(B) Interest accrued on the Principal Amount shall be due and payable
in arrears on the earliest of (i) each successive Interest Payment Date, (ii)
the occurrence of an Event of Default in consequence of which Lender elects to
accelerate the maturity and payment of the Obligations, (iii) the Prepayment
Date (but only with respect to the amount of principal being prepaid at such
date) or (iv) the Maturity Date. Notwithstanding the foregoing, Borrower may
elect not to pay Interest on any Interest Payment Date and defer such payment as
provided in Section 3.1(C) above.
(C) Except as may be otherwise provided in Section 3.2 hereof, costs,
fees, expenses and any Obligations payable pursuant to this Agreement other than
Principal Amount and Interest shall be due and payable by Borrower to Lender or
to any other Person designated by Lender in writing (i) on demand, or (ii)
whether or not any demand has been made, upon (a) the occurrence of an Event of
Default in consequence of which Lender elects to accelerate the maturity and
payment of the Obligations or (b) the Maturity Date.
3.4 Payment Procedures. Each payment payable by Borrower to Lender under
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this Agreement, the Note or any of the other Loan Documents shall be made
directly to Lender, not later
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than 11:00 a.m., on the due date of each such payment, by wire transfer of
immediately available federal funds in United States Dollars. If any sum would,
but for the provisions of this Section 3.4, the Note or any of the other Loan
Documents, become due and payable to Lender on any day which is not a Business
Day, then such sum shall become due and payable on the Business Day next
succeeding the day on which such sum would otherwise have become due and payable
hereunder or thereunder.
3.5 Taxes.
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(A) Gross-up and Other Taxes. All payments made by the Borrower
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hereunder, and under the Note or any other Loan Document shall be made without
setoff, counterclaim, deduction or other defense. All such payments shall be
made free and clear of and without deduction for any present or future income,
franchise, sales, use, excise, stamp or other Taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions or conditions of any
nature now or hereafter imposed, levied, collected, withheld or assessed by any
jurisdiction (whether pursuant to United States Federal, state, local or foreign
law) or by any political subdivision or taxing authority thereof or therein, and
all interest, penalties or similar liabilities, excluding taxes on the net
income of, and branch profit taxes of, any Lender imposed by the jurisdiction in
which such Lender is organized or any political subdivision thereof or taxing
authority thereof or any jurisdiction in which such Person's principal office or
relevant lending office is located or any political subdivision thereof or
taxing authority thereof (other than any such Taxes with respect to additional
net income arising from the receipt of payments under this Section 3.5) (such
non-excluded taxes being hereinafter collectively referred to as "Non-Excluded
Taxes"). If the Borrower shall be required by law to deduct or to withhold any
Non-Excluded Taxes from or in respect of any amount payable hereunder, (i) the
amount so payable shall be increased to the extent necessary so that after
making all required deductions and withholdings (including Taxes on amounts
payable to Lender pursuant to this sentence) Lender receives an amount equal to
the sum it would have received had no such deductions or withholdings been made,
(ii) the Borrower shall make such deductions or withholdings, and (iii) the
Borrower shall pay the full amount deducted or withheld to the relevant taxation
authority in accordance with applicable law. Whenever any Non-Excluded Taxes
are payable by the Borrower, as promptly as possible thereafter, the Borrower
shall send Lender an official receipt (or, if an official receipt is not
available, such other documentation as shall be reasonably satisfactory to
Lender) showing payment. In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar Taxes, charges or levies
that arise from any payment made under the Loan Documents by Borrower or from
the execution, delivery, performance, release, discharge, amendment,
enforcement, attempted enforcement or registration of, or otherwise with respect
to, this Agreement, any other Loan Document or any transaction contemplated by
this Agreement or any other Loan Document as any and all of the foregoing relate
to Borrower (hereinafter referred to as "Other Taxes").
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(B) Tax Indemnity. Borrower shall indemnify Lender for the full
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amount of Non-Excluded Taxes and Other Taxes, including, without limitation, any
Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 3.5 (such Taxes being hereinafter referred to as "Gross-Up
Taxes") with respect to which Borrower has made a deduction from any payment
required to be made to Lender or which are paid by Lender in respect of either
the Loan Documents or payments made by Borrower under the Loan Documents (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date Lender makes
written demand therefor.
(C) Survival of Obligations. Without prejudice to the survival of
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any other agreement of Borrower hereunder, the agreements and obligations of
Borrower contained in this Section 3.5 shall survive the payment in full by
Borrower of all principal and Interest hereunder, until six (6) months after the
expiration of the applicable statute of limitation with respect to any Gross-Up
Taxes, Non-Excluded Taxes and Other Taxes.
(D) Filings by Lender. (i) Borrower shall use reasonable efforts in
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good faith to file (or update the filing of) any certificate or document
provided or requested by Lender or take any reasonable action requested by
Lender if the filing of such certificate or document or the taking of such
action would avoid the need for, reduce the amount of, or assist in the recovery
of any payment of Taxes, or avoid the circumstances giving rise to the need for
such payment, and (ii) in the event Borrower fails to exercise the reasonable
efforts in good faith described in Section 3.5(D)(i) above, the Taxes arising
from such failure shall be considered Non-Excluded Taxes and Borrower shall
indemnify Lender in accordance with Section 3.5(B).
3.6 Application of Payments and Collections. Borrower irrevocably waives
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the right to direct the application of any and all payments and collections at
any time or times hereafter received by Lender from or on behalf of Borrower,
and Borrower does hereby irrevocably agree that Lender shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Lender or any Person designated by
Lender against the Obligations, in such manner as Lender may deem advisable
consistent with the terms of this Agreement, notwithstanding any entry by Lender
upon any of its books and records. Notwithstanding the foregoing provisions of
this Section 3.6, unless otherwise specified by Lender, any payment or
collection in respect of any of the Obligations (other than quarterly payments
of Interest pursuant to Section 3.1 hereof) shall be applied by Lender (a)
first, to the payment of all Obligations (if any) other than the principal and
Interest due and payable at such time, (b) next, to the payment of all Interest
which shall then be due and payable on the Principal Amount and (c) next, to the
payment of the outstanding Principal Amount.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES
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To induce Lender to enter into this Agreement and to make advances
hereunder, Borrower represents and warrants to Lender, on the Closing Date,
that:
4.1 Organization, Good Standing, Etc. Borrower (i) is a corporation, duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, and (ii) has all requisite corporate power and authority to conduct
its business as now conducted and to make the borrowings hereunder and to
consummate the transactions contemplated by the Loan Documents to which it is a
party.
4.2 Authorization, Etc. The execution, delivery and performance by
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Borrower of each of the Loan Documents to which it is a party (i) have been duly
authorized by all necessary corporate action on the part of Borrower, (ii) do
not and will not contravene the charter and by-laws of Borrower, or any
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties, except where such conflict would not have a
material adverse effect on the business, condition (financial or otherwise)
operations or assets of the Borrower and its Subsidiaries taken as a whole (a
"Material Adverse Effect"), (iii) do not and will not result in the violation,
breach of, conflict with, accelerate the due date of any payments under, or
(without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any contract to which the Borrower or any
of its Subsidiaries is a party, or to which any of their respective assets are
subject or otherwise bound which would not have a Material Adverse Effect, and
(iv) do not and will not result in or require the creation of any Lien, upon or
with respect to any of its properties.
4.3 Governmental Approvals. No authorization or approval or other action
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by, and no notice to or filing with, any governmental authority or other
regulatory body is required in connection with the due execution, delivery and
performance by each of Borrower or any Subsidiary of each of the Loan Documents
to which it is a party.
4.4 Enforceability of Loan Documents. This Agreement is, and each other
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Loan Document to which each of Borrower or any Subsidiary is a party, when
delivered hereunder, will be, legal, valid and binding obligations of Borrower
and each Subsidiary, as the case may be, enforceable against Borrower and each
Subsidiary in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
from time to time in effect affecting generally the enforcement of creditors'
rights and remedies and by general principles of equity.
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ARTICLE 5. COVENANTS AND CONTINUING AGREEMENTS
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So long as any amount owing in respect of the Obligations (whether or not
due) shall remain unpaid, Borrower covenants that, unless otherwise consented to
by Lender in writing, it shall:
5.1 Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
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to comply, with all applicable laws, rules, regulations and orders, except where
such failure to comply would not, either in any case or in the aggregate,
reasonably be likely to result in a Material Adverse Effect.
5.2 Preservation of Existence, Etc. Maintain and preserve, and cause each
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of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by them or
in which the transaction of their business makes such qualification necessary,
except (i) where the failure to maintain and preserve the existence, rights and
privileges of Borrower or its Subsidiaries would not, either in any single case
or in the aggregate, reasonably be likely to result in a Material Adverse
Effect, or (ii) where such failure to qualify would not, either in any case or
in the aggregate, reasonably be likely to result in a Material Adverse Effect.
5.3 Keeping of Records and Books of Account. Keep, and cause each of its
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Subsidiaries to keep, adequate records and books of account, with complete
entries made in accordance with GAAP.
5.4 Further Assurances. Shall, and shall cause each Subsidiary to, do,
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execute, acknowledge and deliver, at the sole cost and expense of Borrower or
any such Subsidiary, all such further acts and assurances as Lender may
reasonably require from time to time in order to better assure and confirm unto
Lender the rights now or hereafter intended to be granted to it under this
Agreement, any Loan Document or any other instrument under which Borrower or any
of its Subsidiaries may be or may hereafter become bound for carrying out the
intention or facilitating the performance of the terms of the Agreement.
5.5 Characterization of Note. Lender and Borrower shall at all times
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characterize the Note as "indebtedness" rather than "stock" for all purposes
whatsoever and will not take any position or action to the contrary thereto
unless required by law. Neither Lender nor Borrower will disclose treatment of
the Note in a manner inconsistent with the characterization of the Note as
"indebtedness" within the meaning of the Code Section 385(c) in any return,
information statement or other filing with the Internal Revenue Service.
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ARTICLE 6. CONDITIONS PRECEDENT
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As a condition precedent to the amendment and restatement hereunder, the
following conditions, as the case may be, shall be fulfilled in a manner
reasonably satisfactory to Lender:
6.1 Delivery of Documents. Lender shall have received the following
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documents on or prior to the Effective Date:
(A) the Note, duly executed and delivered by Borrower, and any other
instruments, documents or certificates executed by Borrower or any of its
Subsidiaries in respect of the transactions contemplated by this Agreement or
which are reasonably requested by Lender;
(B) evidence that Borrower and its Subsidiaries are in full
compliance with all of their respective representations, warranties, covenants
and agreements set forth in the Senior Loan Documents, that neither Borrower nor
its Subsidiaries are in breach of, or default under, any of the Senior Loan
Documents and that the Senior Loan Documents are in full force and effect in
accordance with their respective terms; and
(C) such other documents, instruments and agreements as Lender shall
reasonably request in connection with the foregoing matters.
6.2 Additional Conditions Precedent. The following conditions shall be
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satisfied on the Closing Date, in the sole discretion, reasonably exercised, of
Lender:
(A) no action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this
Agreement, the other Loan Documents, any Senior Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in
Lender's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents;
and
(B) all legal matters in connection with the transactions
contemplated by the Loan Documents shall be reasonably satisfactory to Lender
and its counsel in their sole discretion.
ARTICLE 7. EVENTS OF DEFAULT: RIGHTS AND REMEDIES ON DEFAULT
-------------------------------------------------
7.1 Events of Default. The existence of any one or more of the following
-----------------
events shall constitute an Event of Default:
12
(A) Borrower shall fail to pay any (i) principal when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise)
under the Loan Documents and such failure shall continue unremedied for fifteen
(15) days or (ii) any Interest, any fee, indemnity or other amounts due or other
Obligations under any Loan Document when due (unless deferred pursuant to
Section 3.1(C) hereof) and such failure shall continue unremedied for thirty
(30) days;
(B) any representation or warranty made by Borrower or any officer of
Borrower under or in connection with any Loan Document shall have been or shall
be incorrect in any material respect when made;
(C) Borrower shall fail to perform or observe any of its Obligations
under any Loan Document, including but not limited to any covenant contained in
Article 5 hereof (other than occurrences referred to or embodied in other
provisions of this Section 7.1), and such failure shall continue unremedied for
a period of thirty (30) days after the earlier of (i) Borrower's receipt of
notice from Lender or (ii) actual knowledge of such breach by Borrower;
(D) Borrower or any Subsidiary (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for such party or for any substantial part
of its property, (ii) shall be generally not paying its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
(iii) shall make a general assignment for the benefit of creditors or (iv) shall
take any action to authorize or effect any of the actions set forth above in
this subsection (D);
(E) any proceeding shall be instituted against Borrower or any
Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other similar official for
Borrower or any Subsidiary or for any substantial part of its property, and
either such proceeding shall remain undismissed or unstayed for a period of
seventy (70) days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property) shall occur; and
(F) any material provision of any Loan Document shall at any time for
any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by Borrower, or a proceeding shall be commenced by
Borrower or any governmental authority or other regulatory body having
jurisdiction over Borrower, seeking to establish the invalidity or
13
unenforceability thereof, or Borrower shall deny in writing that Borrower has
any material liability or obligation purported to be created under any Loan
Document;
then, and in any such event, and except as otherwise provided in the
subordination provisions set forth in Article 8 hereof, Lender may by written
notice to Borrower, (i) declare the Loan, all Interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Loan, all such Interest and all such 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 Borrower; provided, however,
that upon the occurrence and during the continuance of any Event of Default
described in Section 7.1 (C) or (D), the Loan, all such Interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrower, and (ii) exercise any and all of its other rights under applicable
law, hereunder and under the other Loan Documents.
7.2 Remedies Cumulative; No Waiver. All covenants, conditions,
------------------------------
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrower contained in this Agreement and the other Loan Documents, or in any
document referred to herein or contained in any agreement supplementary hereto
or thereto or contained in any other agreement between Lender and Borrower,
heretofore, concurrently, or hereafter entered into, shall be deemed cumulative
to, and not in derogation or substitution of, any of the terms, covenants,
conditions, or agreements of Borrower herein contained. The failure or delay of
Lender to exercise or enforce any rights, powers, or remedies hereunder or under
any of the aforesaid agreements or other documents shall not operate as a waiver
of such rights, powers and remedies, but all such rights, powers, and remedies
shall continue in full force and effect until the outstanding Principal Amount,
all Interest and all other Obligations owing or to become owing from Borrower to
Lender shall have been fully satisfied, and all rights, powers, and remedies
herein provided for are cumulative and none are exclusive.
ARTICLE 8. SUBORDINATION
-------------
8.1 The aggregate principal amount owing to the Lender from time to time
under this Subordinated Note Agreement, the Note and the other Loan Documents
all accrued and unpaid interest thereon, and any other indebtedness evidenced by
or otherwise owing in respect of this Subordinated Note Agreement, the Note and
the other Loan Documents (collectively, the "Subordinated Indebtedness") is and
shall be subordinate and junior in right of payment and otherwise, to the extent
and in the manner hereinafter set forth, to the prior payment in full of all of
the Senior Indebtedness (an hereinafter defined), whether now or hereafter
existing. For all purposes of this Subordinated Note Agreement, the Senior
Indebtedness shall not be deemed to have been paid in full until the latest of
(A) the payment in full in cash of all of the Senior Indebtedness and the
expiration or termination of all of the commitments of the Secured Parties and
the other holders of
14
any of the Senior Indebtedness thereunder, (B) the expiration or termination of
all of the Bank Hedge Agreements and (C) the Termination Date.
8.2 In the event of any dissolution, winding up, liquidation, arrangement,
reorganization, adjustment, protection, relief or composition of Borrower or its
debts, whether voluntary or involuntary, in any bankruptcy, insolvency,
arrangement, reorganization, receivership, relief or other similar action or
proceeding under the United States Federal Bankruptcy Code or any other federal
or state bankruptcy or insolvency laws or any similar Requirements of Law of any
other jurisdiction covering the protection of creditors' rights or the relief of
debtors (collectively, the "Insolvency Laws"), or upon an assignment for the
benefit of creditors or any other marshaling of the property, assets and
liabilities of Borrower or otherwise (each, an "Insolvency Proceeding"), the
Senior Creditors shall be entitled to receive payment in full of all of the
Senior Indebtedness before the Lender is entitled to receive any payment or
distribution of any kind or character on account of all or any of the
Subordinated Indebtedness, and, to that end, any payment or distribution of any
kind or character (whether in cash, property or securities) that otherwise would
be payable or deliverable upon or with respect to the Subordinated Indebtedness
in any such Insolvency Proceeding (including, without limitation, any payment
that may be payable by reason of any other Indebtedness of Borrower being
subordinated to payment of the Subordinated Indebtedness) shall be paid or
delivered forthwith directly to the Senior Representative, for the ratable
account of the Senior Secured Creditors and the Senior Notes Creditors, in the
same form as so received (with any necessary endorsement or assignment), for
application (in the case of cash) to, or to be held as collateral (in the case
of noncash property or securities) for, the payment or prepayment of the Senior
Indebtedness until all of the Senior Indebtedness shall have been paid in full.
8.3 No payment or distribution of any property or assets of Borrower of
any kind or character (including, without limitation, any payment that may be
payable by reason of any other Indebtedness of Borrower being subordinated to
payment of the Subordinated Indebtedness) shall be made by or on behalf of
Borrower for or on account of any Subordinated Indebtedness, unless and until
all of the Senior Indebtedness shall have been paid in full or unless such
payment is expressly permitted to be made under Section 8(d)(i)(D) of the Fox
Kids Guarantee and Sections 10.8 and 10.9 of the Indentures. Furthermore, so
long as the Senior Indebtedness shall not have been paid in full, the Lender
shall not (a) ask, demand, xxx for, take or receive from Borrower, directly or
indirectly, in cash or other property or by setoff or in any manner (including,
without limitation, from or by way of collateral), payment of all or any of the
Subordinated Indebtedness, except to the extent that such payment is expressly
permitted to be made under Section 8(d)(i)(D) of the Fox Kids Guarantee and
Sections 10.8 and 10.9 of the Indentures, (b) commence, or join with any
creditor other than the Senior Representative in commencing, or directly or
indirectly cause Borrower to commence, or assist Borrower in commencing, any
Insolvency Proceeding, or (c) request or accept any collateral or other security
for the Subordinated Indebtedness. If the Subordinated Lender, in contravention
hereof, shall commence, prosecute or participate in any Insolvency Proceeding,
then
15
the Senior Representative may intervene and interpose as a defense or plea
the terms of this Subordinated Note Agreement in its own name or in the name of
the Subordinated Lender.
8.4 Until such time as all of the Senior Indebtedness has been paid in
full, if any Insolvency Proceeding is commenced by or against Borrower:
(A) the Senior Representative is hereby irrevocably authorized and
empowered (in its own name or in the name of the Lender or otherwise), but
shall have no obligation, to demand, xxx for, collect and receive every
payment or distribution otherwise payable to the Lender in respect of this
Subordinated Note Agreement and give acquittance therefor, and to file
claims and proofs of claim and take such other actions (including, without
limitation, voting the Subordinated Indebtedness or enforcing any security
interest or other lien securing payment of the Subordinated Indebtedness)
as it may deem necessary or advisable for the exercise or enforcement of
any of the rights or interests of the Senior Representative or any of the
other Senior Creditors under this Subordinated Note Agreement; and
(B) the Lender shall duly and promptly take such action as the Senior
Representative may reasonably request (i) to collect the Subordinated
Indebtedness for the account of the Senior Representative, for the ratable
benefit of the Senior Secured Creditors and the Senior Notes Creditors, and
to file appropriate claims or proofs of claim in respect of the
Subordinated Indebtedness, (ii) to execute and deliver to the Senior
Representative such powers of attorney, assignments or other instruments as
the Senior Representative may reasonably request in order to enable the
Senior Representative to enforce any and all claims with respect to, and
any security interests and other liens securing payment of, the
Subordinated Indebtedness and (iii) to collect and receive any and all
payments or distributions that may be payable or deliverable upon or with
respect to the Subordinated Indebtedness.
8.5 All payments or distributions upon or with respect to the Subordinated
Indebtedness that are received by the Lender contrary to the provisions of this
Subordinated Note Agreement shall be received in trust for the benefit of the
Senior Representative and the other Senior Creditors, shall be segregated from
other property or funds of the Lender and shall be paid or delivered forthwith
directly to the Senior Representative, for the account of the Senior Secured
Creditors and the Senior Notes Creditors, in the same form as so received (with
any necessary endorsement or assignment), to be applied (in the case of cash)
to, or held as collateral (in the case of noncash property or securities) for,
the payment or prepayment of the Senior Indebtedness until all of the Senior
Indebtedness shall have been paid in full.
8.6 To the extent that Borrower, the Lender or any of their respective
Subsidiaries or any other guarantor of or provider of collateral for the Senior
Indebtedness shall make any payment on the Senior Indebtedness that is
subsequently invalidated, declared to be fraudulent or preferential or
16
set aside or is required to be repaid to a trustee, receiver or any other party
under any applicable Insolvency Law or equitable cause (any such payment being a
"Voided Payment"), then to the extent of such Voided Payment, that portion of
the Senior Indebtedness that had been previously satisfied by such Voided
Payment shall be reinstated and continue in full force and effect as if such
Voided Payment had never been made. To the extent that the Lender shall have
received any payments subsequent to the date of the initial receipt of such
Voided Payment by the Senior Representative or any of the other Senior Creditors
and such payments have not been invalidated, declared to be fraudulent or
preferential or set aside or required to be repaid to a trustee, receiver or any
other party under any applicable Insolvency Law or equitable cause, the Lender
shall be obligated and hereby agrees that any such payment so made or received
shall be deemed to have been received in trust for the benefit of the Senior
Representative and the other Senior Creditors, and the Lender hereby agrees to
pay to the Senior Representative, upon demand, the full amount so received by
the Lender during such period of time to the extent necessary to fully restore
to the Senior Representative and the other Senior Creditors the amount of such
Voided Payment, which amount shall be applied as set forth in Section 8.5.
8.7 The Senior Representative is hereby authorized to demand specific
performance of the subordination provisions of this Subordinated Note Agreement,
whether or not Borrower shall have complied with any of the provisions hereof
applicable to it, at any time when the Lender shall have failed to comply with
any of the subordination provisions of this Subordinated Note Agreement. The
Lender hereby irrevocably waives any defense based on the adequacy of a remedy
at law which might be asserted as a bar to such remedy of specific performance.
8.8 The Lender will not:
(A) (i) Cancel or otherwise discharge any of the Subordinated
Indebted ness (except upon payment in full of all of the Senior
Indebtedness or, at any time and from time to time prior thereto, to the
extent that such payment is expressly permitted to be made under Section
8(d)(i)(D) of the Fox Kids Guarantee and under Sections 10.8 and 10.9 of
the Indentures), (ii) convert or exchange any of the Subordinated
Indebtedness into or for any other Indebtedness (except to the extent
expressly permitted by the Indentures), (iii) convert or exchange any of
the Subordinated Indebtedness into or for any Equity Interest in Borrower
or otherwise (except to the extent expressly permitted by the Indentures)
or (iv) subordinate any of the Subordinated Indebtedness to any
Indebtedness of Borrower other than the Senior Indebtedness (except that no
consent of the holders of the Senior Notes or either of the trustees for
the Senior Notes shall be required to subordinate any of the Subordinated
Indebtedness to any other Indebtedness of Borrower (although nothing herein
shall limit the obligation of any holder of Indebtedness of Borrower to
turn over or otherwise subordinate itself to any or all of the Senior
Creditors in accordance with any subordination provisions applicable to
such Indebtedness);
17
(B) Sell, assign, pledge, encumber or otherwise dispose of any of the
Subordinated Indebtedness; or
(C) Permit the terms of any of the Subordinated Indebtedness to be
amended, waived, supplemented or otherwise modified in such a manner as
could have an adverse effect upon the rights or interests of the Senior
Representative or any of the other Senior Creditors under this Subordinated
Note Agreement, any of the Loan Documents (as defined in the Credit
Agreement), either of the Indentures or any of the other agreements,
instruments or other documents evidencing or otherwise setting forth the
terms of any of the Senior Indebtedness.
8.9 No payment or distribution to the Senior Representative or any of the
other Senior Creditors pursuant to the provisions of this Subordinated Note
Agreement shall entitle the Lender to exercise any rights of subrogation in
respect thereof, nor shall the Lender have any right of reimbursement,
restitution, exoneration, contribution or indemnification whatsoever from any
property or assets of Borrower or any of the other guarantors, sureties or
providers of collateral security for the Senior Indebtedness, or any right to
participate in any claim or remedy of the Senior Representative or any of the
other Senior Creditors against Borrower or any of the Collateral, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law (including, without limitation, the right to take or receive from
Borrower, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim, remedy or
right), until (i) all of the Senior Indebtedness shall have been paid in full
and all of the commitments of the Secured Parties and the other holders thereof
shall have expired or been terminated, (ii) all of the Bank Hedge Agreements
shall have expired or been terminated and (iii) the Termination Date shall have
occurred.
8.10 The holders of the Senior Indebtedness may, at any time and from time
to time, without any consent of or notice to the Lender or any other holder of
the Subordinated Indebtedness and without impairing or releasing the obligations
of the Lender hereunder:
(A) change the manner, place or terms of payment of, or change or
extend the time of payment of, or renew payment or change or extend the
time or payment of, or renew or alter, the Senior Indebtedness (including
any change in the rate of interest thereon), or amend, supplement or
otherwise modify in any manner any instrument, agreement or other document
under which any of the Senior Indebtedness is outstanding;
(B) sell, exchange, release, not perfect and otherwise deal with any
of the property or assets of any Person at any time pledged, assigned or
mortgaged to secure the Senior Indebtedness;
18
(C) release any Person liable in any manner under or in respect of the
Senior Indebtedness;
(D) exercise or refrain from exercising any rights against Borrower,
any of the other Loan Parties or any of their respective Subsidiaries or
any other Person;
(E) apply to the Senior Indebtedness any sums from time to time
received by or on behalf of the Senior Representative or any of the other
Senior Creditors; and
(F) sell, assign, transfer or exchange any of the Senior Indebtedness.
8.11 Each of Borrower and the Lender will, if reasonably requested by the
Senior Representative or either of the trustees for the Senior Notes, further
xxxx their respective books of account in such a manner as shall be effective to
give proper notice of the effect of the subordination provisions of this
Subordinated Note Agreement. Each of Borrower and the Lender will, at its sole
expense and at any time and from time to time, promptly execute and deliver all
further instruments and documents, and take all further actions, that may be
necessary or that the Senior Representative or either of the trustees for the
Senior Notes may reasonably deem desirable and may request in order to protect
any right or interest granted or purported to be granted under the subordination
provisions of this Subordinated Note Agreement or to enable the Senior
Representative or any of the other Senior Creditors to exercise and enforce its
rights and remedies hereunder.
8.12 The foregoing provisions regarding subordination are and are intended
solely for the purpose of defining the relative rights of the holders of the
Senior Indebtedness, on the one hand, and the holders of the Subordinated
Indebtedness, on the other hand. Such provisions are for the benefit of the
holders of the Senior Indebtedness and shall inure to the benefit of, and shall
be enforceable by, the Senior Representative, on behalf of itself and the other
Senior Creditors, directly against the holders of the Subordinated Indebtedness,
and no holder of the Senior Indebtedness shall be prejudiced in its right to
enforce the subordination of any of the Subordinated Indebtedness by any act or
failure to act by Borrower or any Person in custody of its property or assets.
The subordination provisions herein shall constitute a continuing offer to each
and every holder of Senior Indebtedness from time to time and such holders are
intended third party beneficiaries hereof. Nothing contained in the foregoing
provisions is intended to or shall impair, as between Borrower and the holders
of the Subordinated Indebtedness, the obligations of Borrower to such holders.
8.13 (A) Borrower agrees to pay, upon demand therefor, all of the
reasonable and properly documented out-of-pocket costs and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by the
Senior Representative or any of the other Senior Creditors in enforcing the
provisions of this Subordinated Note Agreement.
19
(B) Borrower hereby waives promptness, diligence, presentment for
payment, demand, notice of dishonor and protest and any other notice with
respect to this Subordinated Note Agreement .
(C) None of the rights or interests of the Lender in this Subordinated
Note Agreement may be assigned or otherwise transferred thereby to any Person
other than a member of the TNCL Group or the Saban Group without the prior
written consent of Borrower and the Senior Representative.
(D) No amendment, waiver or modification of this Subordinated Note
Agreement (including, without limitation, the subordination provisions hereof),
and no consent to any departure herefrom, shall be effective unless the same
shall be in writing and signed by the Lender and, if any such amendment, waiver
or modification of this Subordinated Note Agreement (including, without
limitation, the subordination provisions hereof) could adversely affect the
rights or interests of the Senior Representative or any of the other Senior
Creditors under or in respect of this Subordinated Note Agreement, any of the
Loan Documents (as defined in the Credit Agreement), either of these Indentures
or any of the other agreements, instruments or other documents evidencing or
otherwise setting forth the terms of any of the Senior Indebtedness in any
manner, signed by the Senior Representative and/or each of the trustees for the
Senior Notes, and then, in each case, such waiver, modification or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that neither of the trustees for the Senior Notes shall be
required to consent to any such amendment, waiver or modification that would not
adversely affect the rights or interests of any of the Senior Notes Creditors.
(E) No failure on the part of the Lender or the Senior Representative
or any of the other Senior Creditors to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof or a
consent thereto; nor shall a 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 provided herein are
cumulative and are not exclusive of any remedies provided by applicable law."
ARTICLE 9. MISCELLANEOUS
-------------
9.1 Indemnification. In addition to all of Borrower's other Obligations
---------------
under this Agreement, Borrower agrees to defend, protect, indemnify and hold
harmless Lender and all of its officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indemnities") from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnities, whether prior
to or from and after the Closing Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this
20
Agreement or of any document executed in connection with the transactions
contemplated by this Agreement; (ii) the furnishing of funds to Borrower under
this Agreement; (iii) any document executed in connection with the transactions
contemplated by this Agreement or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (collectively, the "Indemnified Matters"); provided, however, that
Borrower shall not have any obligation to any Indemnitee hereunder for any
Indemnified Matter caused by or resulting from the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section 9.1 may be unenforceable because it is
violative of any law or public policy, Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnities.
The foregoing indemnity shall survive the repayment of the Obligations.
9.2 Amendments, Etc. No amendment or waiver of any provision of this
----------------
Agreement or the other Loan Documents, and no consent to any departure therefrom
by Borrower, shall in any event be effective unless the same shall be in writing
and signed by Borrower and Lender, 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 no amendment, waiver or consent shall, unless in
writing and signed by Lender, (i) reduce the principal of, or interest on, the
Loan or Obligations, (ii) postpone any date fixed for any payment of principal
of, or interest or fees on, the Loan or the amount of any other Obligations,
(iii) change the percentage of the aggregate unpaid principal amount of the
Note, which shall be required for Lender to take any action hereunder or (iv)
amend, modify or waive this Section 9.2; and provided further that no such
amendment or waiver or consent to any departure therefrom of Article 8 or any
other provision that could adversely affect the rights and interests of the
Senior Agent or any of the Senior Lenders (under or in respect of the Loan
Documents or any of the Senior Loan Documents) in any manner shall be effective
without the written consent of the Senior Agent.
9.3 Expenses; Attorneys' Fees. Borrower agrees to pay or cause to be
-------------------------
paid, on demand, and to save Lender harmless against liability for the payment
of, all reasonable out-of-pocket expenses, including but not limited to
reasonable fees and expenses of counsel for Lender, periodic field audits, from
time to time arising from or relating to (other than when arising from the gross
negligence or willful misconduct of Lender, as the case may be): (i) any
amendments, waivers or consents to this Agreement or the other Loan Documents
requested by Borrower whether or not such documents become effective or are
given; (ii) upon the occurrence and during the continuance of any Event of
Default, the preservation and protection of any of Lender's rights under this
Agreement or the other Loan Documents; (iii) the defense of any claim or action
asserted or brought against Lender by any Person that arises from this
Agreement, any other Loan Document, Lender's claims against Borrower, or any and
all matters in connection therewith; (iv) the commencement (other than by
Lender, except upon the occurrence and during the continuance of any Event of
Default) or defense
21
of, or intervention in, any court proceeding arising from or related to this
Agreement or any other Loan Document; (v) upon the occurrence and during the
continuance of any Event of Default, the filing of a petition, complaint,
answer, motion or other pleading by Lender, or the taking of any action in
connection with this Agreement or any other Loan Document; (vi) upon the
occurrence and during the continuance of any Event of Default, any attempt to
collect from Borrower; and (vii) the receipt of any advice with respect to any
of the foregoing.
9.4 Indulgences Not Waivers. The failure, at any time or times hereafter,
-----------------------
to require strict performance by Borrower of any provision of this Agreement
shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver of an
Event of Default under this Agreement or any of the other Loan Documents shall
not suspend, waive or affect any other Event of Default under this Agreement or
any of the other Loan Documents, whether the same is prior or subsequent thereto
and whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Borrower contained in
this Agreement or any of the other Loan Documents and no Event of Default under
this Agreement or any of the other Loan Documents shall be deemed to have been
suspended or waived by Lender, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is signed by a
duly authorized representative of Lender and directed to Borrower.
9.5 Severability. Wherever possible, each provision of this Agreement or
------------
any other Loan Document shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement or any
other Loan Document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of such agreement.
9.6 Cumulative Effect; Conflict of Terms. The provisions of the other
------------------------------------
Loan Documents are hereby made cumulative with the provisions of this Agreement.
Except as specifically otherwise provided in this Agreement or in any of the
other Loan Documents by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in direct conflict
with, or inconsistent with, any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
9.7 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 and delivered shall be deemed to be an original
and all of which counterparts taken together shall constitute but one and the
same instrument.
9.8 Notices. Except as otherwise provided herein, all notices, requests
-------
and demands to or upon a party hereto to be effective shall be in writing, shall
be sent by certified or registered mail,
22
return receipt requested), or by telecopier or delivered by hand or by a
recognized overnight courier service and, unless otherwise expressly provided
herein, shall be deemed to have been validly served, given or delivered when
delivered against receipt or, in the case of telecopy notice, when sent, or, in
the case of telex, when the appropriate answerback received, addressed as
follows:
(A) If to Lender:
News America Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
With a copy to:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
(B) If to Borrower, at:
Fox Family Worldwide, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxx
With a copy to:
Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: C.N. Xxxxxxxx Xxxxxxx, III, Esq.
(C) If to Senior Representative, at:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Vice President
With a copy to:
23
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 9.8.
9.9 Demand. Nothing in this Agreement shall affect or abrogate the demand
------
nature of any portion of the Obligations expressly made payable on demand by
this Agreement or by any instrument evidencing same, and the occurrence of an
Event of Default shall not be a prerequisite for requiring payment of such
Obligations, except as provided for in this Agreement.
9.10 Entire Agreement; Headings. This Agreement, and the other Loan
--------------------------
Documents, together with all other instruments, agreements and certificates
executed by the parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings and inducements, whether express or implied,
oral or written. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
9.11 Governing Law; Consent To Forum. This Agreement, the Note and the
-------------------------------
other Loan Documents shall be governed by, and construed in accordance with, the
law of the State of New York applicable to contracts made and to be performed in
the State of New York without regard to conflicts of law principles. Any legal
action or proceeding with respect to this Agreement or any other Loan Document
may be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Agreement, Borrower hereby irrevocably accepts in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
Borrower further irrevocably consents to the service of process out of any of
the aforementioned courts and in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, at its address
for notices contained in Section 9.8, such service to become effective ten (10)
days after such mailing. Nothing herein shall affect the right of Lender to
service of process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Borrower in any other jurisdiction.
9.12 Right of Set-Off. Upon the occurrence and during the continuance of
----------------
any Event of Default, Lender may, and is hereby authorized to, at any time and
from time to time, without notice to Borrower (any such notice being expressly
waived by Borrower) and to the fullest extent permitted by law, and subject to
the rights of the Senior Agent and the Senior Lenders hereunder, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at
24
any time held and other indebtedness at any time owing by Lender to or for the
credit or the account of Borrower against any and all obligations of Borrower
now or hereafter existing under any Loan Document to the extent such obligations
have become due. Lender agrees to notify Borrower promptly after any such set-
off and application made by such Bank; provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of Lender under this Section 9.12 are in addition to the other rights and
remedies (including, without limitation, other rights of set-off) which Lender
may have.
9.13 No Party Deemed Drafter. Borrower and Lender agree that no party
-----------------------
hereto shall be deemed to be the drafter of this Agreement, and Borrower and
Lender, further agree that, in the event this Agreement is ever construed by a
court of law, such court shall not construe this Agreement or any provision of
this Agreement against any party hereto as the drafter of this Agreement.
9.14 Reinstatement; Certain Payments. If claim is ever made upon Lender
-------------------------------
for repayment or recovery of any amount or amounts received by Lender in payment
or on account of any of the Obligations under this Agreement, Lender shall give
prompt notice of such claim to Borrower, and if Lender repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over Lender or any of its property or
(ii) any good faith settlement or compromise of any such claim effected by
Lender with any such claimant, then and in such event, Borrower agrees that (a)
any such judgment, decree, order, settlement or compromise shall be binding upon
Borrower notwithstanding the cancellation of the Note or other instrument
evidencing the Obligations under this Agreement or the other Loan Documents or
the termination of this Agreement or the other Loan Documents and (b) it shall
be and remain liable to Lender hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by
Lender.
9.15 Assignment. Lender may assign to one or more Persons all or a portion
----------
of its rights and obligations under this Agreement; provided, however, that,
without the prior written consent of Borrower, Lender may not assign its rights
and obligations under this Agreement to any Person who is not (a) an individual
who is a citizen or resident of the United States, (b) a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any State or any political subdivision thereof, (c) an estate the
income of which is subject to United States Federal income taxation regardless
of its source or (d) a trust whose administration is subject to the primary
supervision of a United States court and which has one or more United States
fiduciaries who have the authority to control all substantial decisions of such
trust.
9.16 Confidentiality. Lender agrees to exercise all reasonable efforts to
---------------
keep any information delivered or made available by Borrower to it which has not
been publicly disclosed confidential from anyone other than persons employed or
retained by Lender who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loan; provided, however, that
nothing herein shall prevent Lender from disclosing such information (i) to its
officers,
25
directors, employees, agents, attorneys and accountants who have a need to know
such information in accordance with customary practices and who receive such
information having been made aware of the restrictions set forth in this
Section, (ii) upon the order of any court or administrative agency, (iii) upon
the request or demand of any regulatory agency or authority having jurisdiction
over Lender, (v) to the extent reasonably required in connection with any
litigation to which Lender, Borrower, or any Subsidiary or their respective
affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to Lender's legal counsel and
independent auditors, and (viii) to any actual or proposed participant or
assignee of all or part of its rights hereunder which has agreed in writing to
be bound by the provisions of this Section 9.15.
IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year specified at the beginning hereof.
Borrower: FOX FAMILY WORLDWIDE, INC.
By: /s/ Xxx Xxxxx
------------------------------
Name: Xxx Xxxxx
----------------------
Title: President
----------------------
Lender: NEWS AMERICA INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxx
----------------------
Title: Senior Vice President
----------------------
Senior Representative: CITICORP USA, INC.
By: /s/ Xxxxxx Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxx
------------------------
Title: Attorney-in-Fact
------------------------
26
Exhibit A - Form of Note
---------
THIS NOTE AND THE OBLIGATIONS EVIDENCED HEREBY ARE
SUBORDINATED IN THE MANNER AND TO THE EXTENT SET FORTH IN
THE AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT (THE
"NOTE AGREEMENT"), DATED AS OF MAY __, 1998. EACH HOLDER OF
THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE NOTE AGREEMENT.
SUBORDINATED PROMISSORY NOTE
----------------------------
No. A-1
$345,513,864.31 as of August 29, 1997
FOR VALUE RECEIVED, the undersigned, Fox Family Worldwide, Inc. f/k/a Fox
Kids Worldwide, Inc., a Delaware corporation, having an office at 00000 Xxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, XX 00000 ("Borrower"), hereby promises to pay to the
order of News America Incorporated, f/k/a News America Holdings, Incorporated, a
Delaware corporation (the "Lender"), having an office at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, or registered assigns, in lawful money of the
United States, by wire transfer in immediately available federal funds, the
principal amount of Three Hundred Forty Five Million Five Hundred Thirteen
Thousand Eight Hundred Sixty Four Dollars and Thirty One Cents
($345,513,864.31), loaned by Lender to Borrower pursuant to the Amendment and
Restated Subordinated Note Agreement dated as of May __, 1998 among Borrower,
Lender and Citicorp USA, Inc. (as amended and modified from time to time, the
"Note Agreement"), together with additions to such principal amount and interest
thereon as set forth in the Note Agreement, which interest shall accrue from and
after the date hereof on the outstanding principal amount of this Note, and such
principal amount and interest thereon shall be payable at such times as set
forth in the Note Agreement.
Lender is hereby authorized by Borrower to record on Schedule A to this
Note (or on a supplemental Schedule thereto) the amount of the Loan and the
amount of each payment or prepayment of principal thereof received by Lender, it
being understood, however, that failure to
27
make any such notation shall not affect the rights of Lender or the obligations
of Borrower hereunder in respect of this Note. At Lender's option, Lender may
record such matters in their internal records rather than recording such matters
on such Schedule.
This Note is referred to in, and is issued pursuant to, the Note Agreement
and is entitled to all of the benefits of the Note Agreement and the Loan
Documents. All of the terms, covenants and conditions of the Note Agreement and
all other instruments evidencing the indebtedness hereunder (including, without
limitation, the Loan Documents), are hereby made a part of this Note and are
deemed incorporated herein in full. The Note Agreement, among other things,
provides for the acceleration of the then outstanding indebtedness hereunder
during the existence of an Event of Default, upon the terms and conditions
specified therein. All capitalized terms used herein, unless otherwise
specifically defined in this Note, shall have the meanings ascribed to them in
the Note Agreement. The Loan and all of the Obligations shall be subordinate to
the Senior Indebtedness, in the manner and to the extent set forth in the Note
Agreement. Each transferee of this Note (or any Note or Notes issued in
exchange or substitution therefor), by acceptance of this Note (or any Note or
Notes issued in exchange or substitution therefor), agrees to such
subordination.
To the fullest extent permitted by applicable law, Borrower, for itself and
its legal representatives, successors and assigns, expressly waives presentment,
demand, protest, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, presentment for the purpose of accelerating maturity and
diligence in collection, and consents that Lender may (with the consent of
Borrower) extend the time for payment or otherwise modify the terms of payment
of any part or the whole of the debt evidenced hereby.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York, without regard to conflicts of laws
principles.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of
the date first above written.
FOX FAMILY WORLDWIDE, INC.
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: President
28
Schedule A
----------
Payments
-------------------- Unpaid Name of
Principal Person
Current Balance of Making
Date Amount Principal Interest Note Notation
---- ------ --------- -------- ----------- --------
