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EXHIBIT 10.34
ALL AMERICAN TELEVISION II, INC. GUARANTY
Reference is made to the following Agreements: the Asset Purchase
Agreement, dated as of October 6, 1995 (the "Asset Purchase Agreement"), by and
among ▇▇▇▇ ▇▇▇▇▇▇▇ Productions, L.P and The Child's Play Company, as Sellers,
and ▇▇▇▇ ▇▇▇▇▇▇▇ Productions, LLC (the "Company") and The Interpublic Group of
Companies, Inc. ("Interpublic"), as Buyers, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, as Executors of The Estate of ▇▇▇▇ ▇▇▇▇▇▇▇ and
All American Communications, Inc. ("AACI"); the Main License Agreement, dated
as of October 6, 1995 (the "Main License"), by and between the Company and All
American ▇▇▇▇▇▇▇, Inc. ("AAG"); the Amended and Restated Operating Agreement,
dated as of October 6, 1995 (the "Operating Agreement"), by and among AACI,
AAG, Interpublic and Infoplan International, Inc. ("Infoplan"); the Letter
Agreement dated as of October 6, 1995 (the "Letter Agreement"), by and among
Interpublic, Infoplan, Interpublic Game Shows, Inc., the Company, AACI, AAG,
All American Fremantle II, Inc. ("AAFII") and All American Television II, Inc.
("AATII" or "Guarantor"); the Intercreditor Agreement, dated as of October 6
(the "Intercreditor Agreement"), by and among Chemical Bank (acting for itself
and as Agent), Interpublic, AACI, AAG, AAFII, AATII and the Company; the
Affiliate Guaranties, dated as of the date hereof (the "Affiliate Guaranties"),
entered into by each of AAG and AAFII; the Security Agreements, dated as of the
date hereof (the "Security Agreements"), entered into by each of AAG, AATII and
AAFII; and the Pledge Agreements, dated as of the date hereof (the "Pledge
Agreements") entered into by each of AACI, AAG, All American Television, Inc.
and All American Fremantle International, Inc. The Asset Purchase Agreement,
Main License, Operating Agreement, Letter Agreement, Intercreditor Agreement,
Affiliate Guaranties, Security Agreements and Pledge Agreements are
collectively referred to as the "Related Agreements." This Guaranty is being
delivered in order to induce Interpublic to consummate the transactions
contemplated by the Intercreditor Agreement. This Guaranty and Guarantor
Obligations (as defined below) guaranteed hereunder are subordinated to the
Senior Obligations (as such term is defined in the Intercreditor Agreement) to
the extent and on the terms and conditions set forth in the Intercreditor
Agreement.
1. For good and valuable consideration the adequacy of which is
hereby acknowledged Guarantor hereby unconditionally and irrevocably guarantees
to Interpublic, Infoplan International, Inc., and Interpublic Game Shows, Inc.
(A) the due and punctual payment of any and all amounts required to be paid by,
and performance of each and every one of the obligations of AACI to Interpublic
in connection with certain "put" and, upon the occurrence and continuation of a
Make Whole Default (as such term is defined in the Operating Agreement), the
"make whole" obligations of AACI pursuant to the Operating Agreement (as
amended, modified or supplemented from time to time), (B) the due and punctual
payment of any and all amounts to be paid by, and performance of certain
indemnification obligations of AACI to Interpublic pursuant to Section 4(a) of
the Letter Agreement (as amended, modified or
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supplemented from time to time) and (C) the due and punctual payment of any and
all amounts to be paid by, and performance of each and every one of the
obligations of AACI, AAG and AAFII to Interpublic pursuant to the first
sentence of Section 19 of the Intercreditor Agreement (as amended, modified or
supplemented from time to time) AACI, AAG and AAFII are collectively referred
to as the "All American Entities" and the payment and performance obligations
set forth in paragraphs (A), (B) and (C) above are collectively referred to as
the "Guarantor Obligations". Guarantor further agrees that the Guarantor
Obligations may be amended, modified, supplemented, accelerated, extended or
renewed, in whole or in part, without notice or further assent from it (except
as may be otherwise expressly required herein), and it will remain bound upon
this Guaranty notwithstanding any amendment, modification, supplement,
acceleration, extension or renewal of any Guarantor Obligation. The term
"Interpublic" as used herein shall refer to Interpublic, Infoplan
International, Inc. and Interpublic Game Shows, Inc. except that when a
provision requires notice to or consent from Interpublic, the term Interpublic
shall refer to only The Interpublic Group of Companies, Inc.
2. Guarantor waives presentation to, or demand for payment from
and protest to, as the case may be, any of the All American Entities or any
other Person (as such term is defined in the Security Agreements) by
Interpublic, and also waives notice of protest for nonpayment. The obligations
of Guarantor hereunder shall not be affected by (i) the failure of Interpublic,
to assert any claim or demand or to enforce any right or remedy against any or
all of the All American Entities or any other Person under the provisions of
any Related Agreement, as the case may be, or any other agreement or otherwise;
(ii) any amendment, modification, supplement, acceleration, extension or
renewal of any provision hereof or thereof; or (iii) the failure of Interpublic
to obtain the consent of Guarantor (which consent shall not be necessary) with
respect to any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any Related Agreement or of
any other agreement.
3. Guarantor hereby expressly assumes all responsibility to remain
informed of the financial condition of each of the All American Entities and
any circumstances affecting the ability of each of the All American Entities to
fulfill their respective Guarantor Obligations under any Related Agreement or
any other agreement.
4. Guarantor's guaranty hereunder shall not be (a) affected by
the genuineness, validity, regularity or enforceability of the Guarantor
Obligations or any other instrument evidencing any of the Guarantor
Obligations, (b) affected by the existence, validity, enforceability or
perfection of any collateral, (c) limited to the extent or by any release of
any such collateral or (d) affected or limited by any other circumstance
relating to the Guarantor Obligations which might otherwise constitute a
defense to Guarantor's guaranty hereunder other than the full, timely and
nonrescinded payment and performance of the Guarantor Obligations by the All
American Entities in accordance with the terms of the applicable Relevant
Documents. Interpublic makes no representation or warranty with respect to any
such circumstances and has no duty or responsibility whatsoever to Guarantor in
respect to the
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management and maintenance of the Guarantor Obligations or any collateral
security for the Guarantor Obligations.
5. The obligations of Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guarantor Obligations. Without limiting the generality
of the foregoing, the obligations of Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of Interpublic to
assert any claim or demand or to enforce any remedy under the Related
Agreements or any other agreement by any waiver or modification of any
provision thereof, by any default, failure or delay, willful or otherwise, in
the performance of the Guarantor Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of Guarantor or would otherwise operate as a
discharge of Guarantor as a matter of law, unless and until the Guarantor
Obligations are paid and performed in full.
6. Guarantor's obligations hereunder shall not be affected by the
fact that any of the Guarantor Obligations are unenforceable or not allowable
due to the existence of a bankruptcy, insolvency, reorganization or other
similar procedure involving any All American Entity. Guarantor further agrees
that its guaranty hereunder shall continue to be effective or be reinstated, as
the case may be, if at any time payment or performance, or any part thereof, of
any Guarantor Obligation is rescinded or must otherwise be restored by
Interpublic upon the bankruptcy, insolvency or reorganization of any of
Guarantor or any All American Entity, or otherwise. In furtherance of the
provisions of this Guaranty, and not in limitation of any other right which
Interpublic may have at law or in equity against any of the All American Entity
or Guarantor by virtue hereof, upon failure of any All American Entity to pay
or perform any such Guarantor Obligation to Interpublic when and as the same
shall become due, Guarantor hereby promises to and will, upon receipt of
written demand by or on behalf of Interpublic, on behalf of such All American
Entity, forthwith pay or cause to be paid to Interpublic, on behalf of such all
American Entity, in cash an amount equal to the unpaid amount of all the
Guarantor Obligations then due.
7. All rights of Guarantor against any of the All American
Entities arising as a result of the payment by Guarantor of any sums to
Interpublic hereunder by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior final and
indefeasible payment in full of all then outstanding Guarantor Obligations. If
any amount shall be paid to Guarantor for the account of any All American
Entity, such amount shall be held in trust for the benefit of Interpublic and
shall forthwith be paid to Interpublic and be credited and applied to the
Guarantor Obligations.
8. Notwithstanding any other provision of the Agreement, the
amount guaranteed by Guarantor hereunder shall be limited to the extent, if
any, required so that its obligations under this guaranty shall not be subject
to avoidance under Section 548 of the
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Bankruptcy Code or to being set aside or annulled under any applicable state
law relating to fraud on creditors. In determining the limitations, if any, on
the amount of the Guarantor's Obligations hereunder pursuant to the preceding
sentence, it is the intention of the parties hereto that any rights of
subrogation or contribution which Guarantor may have under this guaranty or the
Agreement shall be taken into account.
9. The rights and/or obligations of Guarantor hereunder shall not
be assigned by Guarantor without the prior written consent of Interpublic. The
rights and/or obligations of Interpublic hereunder shall be assignable without
the approval of Guarantor to any person to whom Interpublic's rights under any
of the Intercreditor Agreement, Operating Agreement and Letter Agreement are
validly assigned. The Guarantor Obligation set forth in paragraph 1 clause (A)
of this Guaranty shall terminate automatically and shall be of no further force
or effect, in the event Guarantor or its Affiliates (as defined below) acquire
all of Interpublic's membership interests in the Company pursuant to that
certain Option Agreement, dated as of October 6, 1995, by and among AACI,
Interpublic and Infoplan. As used herein, the term "Affiliate" means, with
respect to any Person, any other Person that directly or indirectly controls,
is controlled by or is under common control with such Person and, for purposes
of this definition, "control" shall mean the direct or indirect possession of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
10. From the date hereof and for so long as any Guarantor
Obligations remain unpaid or unsatisfied, Guarantor agrees that it will not:
(a) Incur, create, assume or suffer to exist any (i) indebtedness
for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of property or services
purchased (other than amounts constituting trade payables arising in the
ordinary course and payable in accordance with customary trading terms in the
ordinary course of business); (ii) indebtedness of others which Guarantor has
directly or indirectly assumed or guaranteed or for which Guarantor has
otherwise provided credit support; (iii) indebtedness of others secured by a
Lien (as hereinafter defined) on assets of Guarantor whether or not Guarantor
shall have assumed such indebtedness; (iv) obligations of Guarantor in respect
of letters of credit, acceptance facilities, or drafts or similar instruments
issued or accepted by banks and other financial institutions for the account of
Guarantor (other than trade payables arising in the ordinary course and payable
in accordance with customary trading terms in the ordinary course of business);
and (v) obligations of Guarantor under any lease of property (whether real,
personal or mixed) by Guarantor as lessee which, in accordance with GAAP (as
defined in the Security Agreements) is or should be accounted for as a capital
lease on Guarantor's balance sheet (a "Capital Lease" and the items set forth
in (i) - (v) collectively, "Indebtedness") other than:
(A) normal business liabilities which are not the
result of a transaction which is the equivalent of a borrowing
of money;
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(B) liabilities relating to net or gross profit
participations, deferments, guild residuals and other costs
payable to parties that are not Affiliates of Guarantor with
respect to the exploitation of any of the Library Rights,
Library Physical Properties, Programs (as each term is defined
in the Main License) or portions thereof or rights therein as
contemplated by and subject to the terms and conditions of the
Related Documents or any documents contemplated thereby;
(C) Indebtedness pursuant to or contemplated by
any of the Related Agreements;
(D) Indebtedness permitted by (i) that certain
Credit Security, Guaranty and Pledge Agreement, dated as of
April 13, 1995, with Chemical Bank, as Agent (the "Chemical
Agreement") as currently in effect (other than Indebtedness
set forth in clauses (vi) and (vii) of Section 6.1 of the
Chemical Agreement) or as hereafter amended (so long as such
amendment has been approved by Interpublic or by the
Arbitration Committee of AACI's board of directors whose
members at the time of such approval shall include three
members, one of who is an Interpublic designee, one of who is
an AACI designee and one of who is an independent designee
(as such committee is constituted, the "Arbitration
Committee")), or (ii) any refinancing of the Chemical
Agreement by a party agreeing to be bound by the terms and
conditions of the Intercreditor Agreement, which refinancing
does not increase the Tranche E Indebtedness then outstanding
under the Chemical Agreement at the time of such refinancing
(any such refinancing, a "Permitted Refinancing").
(b) Incur, create, assume or suffer to exist any pledge, mortgage,
security, interest, encumbrance, lien, copyright mortgage, or charge of any
kind whatsoever (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the UCC (as such term is defined in the
Security Agreements) (each of the foregoing a "Lien" and collectively "Liens")
on its income, property or assets, whether now owned or hereafter acquired,
except the Liens set forth in clauses (i) - (viii) below (collectively
"Permitted Liens"):
(i) Liens pursuant to written security agreements (in
form and substance reasonably acceptable to the Interpublic) in favor
of guilds required pursuant to terms of collective bargaining
agreements, which Liens are subordinated or junior to the claims of
Interpublic hereunder pursuant to documentation that is satisfactory
in form and substance to Interpublic;
(ii) Liens for taxes, assessments or other governmental
charges or levies due and payable, the validity or amount of which is
currently being contested in good faith by appropriate proceedings,
provided that, Guarantor shall have set aside on
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its books reserves (the presentation of which is segregated to the
extent required by GAAP) adequate with respect thereto if reserves
shall be deemed necessary;
(iii) Liens on receivables in situations where Guarantor is
acting solely as a collection agent for such receivables in return for
a fee;
(iv) Liens customarily granted or incurred in the ordinary
course of business with regard to services rendered by laboratories
and production houses, record warehouses and suppliers of materials
and equipment but in any instance not securing obligations in excess
of $500,000 in the aggregate;
(v) possessory Liens (other than of laboratories and
production houses) which (A) occur in the ordinary course of business,
(B) secure normal trade debt which is not yet due and payable, (C) do
not secure Indebtedness for borrowed money and (D) do not defer
payment terms beyond 180 days;
(vi) Liens arising out of attachments, judgments or awards
as to which an appeal or other appropriate proceedings for contest or
review are promptly commenced (and as to which foreclosure and other
enforcement proceedings shall not have been commenced (unless fully
bonded or otherwise effectively stayed));
(vii) Liens in favor of Interpublic or the Lenders (as such
term is defined in the Chemical Agreement) pursuant to or contemplated
by the Chemical Agreement, this Guaranty, the Intercreditor Agreement
or any of the other Related Agreements.
(viii) Liens permitted by (A) the Chemical Agreement as
currently in effect (other than Liens set forth in clauses (x), (xii),
and (xvi) of Section 6.2 of the Chemical Agreement) or as hereafter
amended (so long as such amendment has been approved by Interpublic
or by the Arbitration Committee), or (B) any Permitted Refinancing.
(c) Incur, create, assume or suffer to exist any Guaranty (as
hereinafter defined) either directly or indirectly, or otherwise in any way
become responsible for any Indebtedness (including working capital maintenance,
pay-or-play contracts or other similar obligations) of any other Person,
contingently or otherwise, except (A) for the endorsement of negotiable
instruments by AATII in the ordinary course of business, (B) for Guaranties
pursuant to or contemplated by the Intercreditor Agreement or any of the other
Related Agreements, (C) Guaranties permitted by (i) the Chemical Agreement as
currently in effect (other than Guaranties set forth in clause (iii) of Section
6.3 of the Chemical Agreement) or as hereafter amended (so long as such
amendment has been approved by Interpublic or by the Arbitration Committee), or
(ii) any Permitted Refinancing and (D) this Guaranty. The term "Guaranty"
shall mean direct or indirect obligation guarantying or intended to guaranty
any Indebtedness, Capital Lease, dividend or other monetary obligation
("primary obligation") of any other Person (the "primary
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obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, or (iii) to purchase property,
securities or services, in each case, primarily for the purpose of assuring the
owner of any such primary obligation.
(d) Make or permit to exist any loan, advance, contribution of
capital or similar extension of credit to any Affiliate of Guarantor, other
than to AAG or AAFII, or purchase any stock of any Affiliate of Guarantor,
other than of AAG or AAFII, or make or permit to exist any commitment for any
of the foregoing (except for current trade and customer accounts receivable for
services rendered by an Affiliate in the ordinary course of business and
payable in accordance with customary trading terms in the ordinary course of
business).
(e) Declare, make or incur (i) any liability to make any
distribution, dividend or other direct or indirect payment on account of shares
of any class of stock of Guarantor or any of its subsidiaries now or hereafter
outstanding; (ii) any redemption or other acquisition or re-acquisition by
Guarantor or any of its subsidiaries of any class of its own stock or other
equity interest of Guarantor, any of its subsidiaries or Affiliates now or
hereafter outstanding; (iii) any payment of principal of, premium, if any, or
interest on, or any redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Indebtedness subordinated to the
Guarantor Obligations and (iv) any payment made to retire, or obtain the
surrender of any outstanding warrants, puts or options or other rights to
purchase or acquire shares of any class of stock of Guarantor or any of its
subsidiaries now or hereafter outstanding.
(f) Sell, lease, liquidate or otherwise dispose of any asset,
including, without limitation, the Main License, any sublicenses thereunder and
any other licenses for the exploitation of the Library Rights, Library Physical
Properties, Programs or portions thereof or rights therein, except in the
ordinary course of business or as otherwise permitted in the Main License.
(g) Change the location of its chief executive office or principal
place of business or any of the locations where it keeps any material portion
of the Collateral (as defined in the Security Agreement to which it is a party)
or its books and records with respect to the Collateral or change its name
without (i) giving Interpublic 30 days prior written notice of such change and
(ii) filing any additional UCC financing statements, and such other documents
requested by Interpublic or which are otherwise necessary or desirable to
maintain perfection of the security interest of Interpublic.
(h) Effect any transaction with any Affiliate of Guarantor other
than transactions contemplated or permitted by the Related Documents.
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(i) Amend, alter, modify, or waive, or consent to any amendment,
alteration, modification or waiver of the articles of incorporation or bylaws
of Guarantor except (i) such amendments or modifications as are deemed
ministerial and not materially adverse to Interpublic's interests by Guarantor
in its reasonable judgment or (ii) with Interpublic's prior consent, which
consent shall not be unreasonably withheld or delayed.
(j) Merge into or consolidate with a Person.
(k) Engage in any business substantially different from, or not
related to, the business that Guarantor is presently engaged in or presently
contemplated to be engaged in.
(l) Acquire or create any new direct or indirect subsidiary;
provided, however, that Guarantor may incorporate additional subsidiaries if
(i) each such subsidiary executes an instrument of joinder satisfactory to
Interpublic whereby such subsidiary becomes a Guarantor hereunder and the
capital stock of such subsidiary becomes part of the Pledged Stock (as such
term is defined in the Intercreditor Agreement) or (ii) Guarantor takes such
other action in connection with the stock of such subsidiary as is reasonably
deemed appropriate by Interpublic to protect its security interest therein.
(m) After the date hereof, open or maintain any bank account other
than those accounts referred to in the Intercreditor Agreement or listed on
Schedule I hereto without the prior written consent of Interpublic, provided
that, Interpublic shall be deemed to have consented to the opening or
maintenance of any such bank account if, within ten (10) days after its receipt
of written notice of such opening of such account, Interpublic has not notified
Guarantor of its objection thereto.
11. This Agreement and the obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, applicable to contracts made and to be fully performed
within such State, without giving effect to the principles of conflict of laws
thereof. Guarantor hereby irrevocably submits to the jurisdiction of any New
York State court or United States federal court, in either case sitting in The
City of New York, Borough of Manhattan over any suit, action or other
proceeding brought by any party arising out of or relating to this Agreement,
and Guarantor hereby waives any objection that it may have based upon lack of
personal jurisdiction, improper venue or forum non conveniens. Guarantor
hereby irrevocably appoints ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇), as its agent
to receive service of summons and complaints and any other process which may be
served in any such suit, action or proceeding.
12. The parties hereto waive all right to trial by jury in any
action, suit, or proceeding brought to resolve any dispute, whether in
contract, tort, or otherwise arising out of, connected with, related to, or
incidental to, this agreement or the transactions contemplated hereby.
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IN WITNESS WHEREOF, AATII has caused this Guaranty to be executed and
delivered by its duly authorized officer on November 20, 1995.
ALL AMERICAN TELEVISION II, INC.
By:
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Name:
Title
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SCHEDULE I: BANK ACCOUNTS
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