EXHIBIT 2.7
AMENDED AND RESTATED AGREEMENT
This Agreement (this "Agreement") is made and entered into as of the
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1st day of August, 1997 by and among Fox Kids Worldwide, Inc. ("Fox Kids"),
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Saban Entertainment, Inc. ("Saban"), Fox Broadcasting Sub, Inc. ("Fox
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Broadcasting Sub"), Xxxxx & Company Incorporated ("Xxxxx"), Xxxx Xxxxx and each
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of the entities listed on Schedule "A" hereto (the "SEI Entities" and, with Haim
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Saban, the "SEI Stockholders").
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R E C I T A L S
- - - - - - - -
A. Effective June 1, 1995, the SEI Stockholders and Fox
Broadcasting, the sole stockholder of FCN Holding, Inc. ("FCN Holding"), agreed
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to form a strategic alliance which would provide for the joint control and
management, as well as the sharing of economic risks and rewards, of Saban, FCN
Holding, and of all of their respective Subsidiaries.
B. In connection with the strategic alliance, Xxxx Xxxxx, Saban, the
SEI Entities, Fox Broadcasting, FCN Holding and FCNH Sub, Inc. ("FCNH Sub")
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entered into that certain Strategic Stockholders Agreement dated as of December
22, 1995, as amended by Amendment No. 1 thereto dated as of February 26, 1996,
and as further amended by Amendment No. 2 thereto dated as of September 27,
1996, and as supplemented by that Supplement to Strategic Stockholders Agreement
dated as of September 27, 1996 (together, the "Strategic Stockholders
----------------------
Agreement"), which provided for, among other things, the terms of a
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reorganization of Saban and FCN Holding in contemplation of an initial public
offering of a "Successor Entity" (as that term is defined in the Strategic
Stockholders Agreement).
X. Xxxxx and Xxx Broadcasting have decided not to pursue an initial
public offering at this time. However, Saban and Fox Broadcasting have decided
to complete the reorganization described in the Strategic Stockholders
Agreement, pursuant to which Saban and FCN Holding will be restructured and
reorganized into Fox Kids such that Fox Kids will own the business and
operations of Saban, FCN Holding, and of all of their respective Subsidiaries
(the "Reorganization").
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X. Xxx Broadcasting, FCN Holding and the SEI Stockholders formed Fox
Kids as of August 27, 1996.
E. Pursuant to Section 6 of the Strategic Stockholders Agreement, the
parties hereto have entered into this Agreement to memorialize and confirm the
steps necessary to effect the Reorganization contemplated by the Strategic
Stockholders Agreement.
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F. The Reorganization is to be made concurrently with the
contribution to Fox Kids of shares of non-voting Class C Common Stock, par value
$0.01 per share, of International Family Entertainment, a Delaware corporation
("IFE"), and of $23 million principal amount of 6% Convertible Secured Notes due
---
2004 of IFE (the "Contribution"), contemplated by that certain Contribution and
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Exchange Agreement (the "LIFE Contribution Agreement"), dated as of the date
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hereof, by and among Liberty Media Corporation, a Delaware corporation
("Liberty"), Liberty IFE, Inc., a Colorado corporation and a wholly owned
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subsidiary of Liberty, and Fox Kids.
G. The Contribution and the exchange of shares necessary to effect
the Reorganization are intended to qualify as a tax-free exchange pursuant to
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code"),
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except to the extent that the Exchange Right (as defined in the LIFE
Contribution Agreement) constitutes "taxable boot" under the Code.
H. Any capitalized term used herein but not defined shall have the
meaning assigned to such term in the Strategic Stockholders Agreement.
NOW, THEREFORE, pursuant to the Strategic Stockholders Agreement and
to the other agreements referred to above, and in consideration of the premises
and the mutual promises herein made, and in consideration of the
representations, warranties and covenants herein contained, the parties agree
that the Reorganization shall be effected as follows:
1. Issuances of Capital Stock of Fox Kids. At the "Closing" (as defined
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in Section 4 hereof):
a. Exchange by Fox Broadcasting Sub and Xxxxx. Xxx Broadcasting Sub
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will contribute to Fox Kids 800 shares of the common stock of FCN Holding ("FCNH
----
Common Stock") in exchange for 7,920,000 shares of Class B Common Stock, $0.001
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par value per share, of Fox Kids (the "Class B Common Stock"). Xxxxx will
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contribute to Fox Kids 16 16/99 shares of FCNH Common Stock in exchange for
160,000 shares of Class A Common Stock, $0.001 par value per share, of Fox Kids
(the "Class A Common Stock").
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b. Exchange by SEI Stockholders. The SEI Stockholders will
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contribute to Fox Kids their Saban Common Stock (as set forth on Schedule "A"
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hereto) in exchange for an aggregate of 7,920,000 shares of the Class B Common
Stock. The shares of Class B Common Stock to be held by each SEI Stockholder
are set forth on Schedule "A" hereto with respect to each SEI Stockholder.
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2. Representations and Warranties.
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a. By Fox Kids. Fox Kids represents and warrants to Saban, Fox
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Broadcasting Sub, Xxxxx and the SEI Stockholders that the following statements
are true and correct as of the date hereof, and will be true and correct at the
Closing Date:
(1) Organization and Standing; Articles and By-Laws. Fox Kids is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Fox Kids is qualified, licensed or domesticated as a
foreign corporation and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified, licensed or domesticated would not have a material adverse effect on
Fox Kids. Fox Kids has all requisite power and authority and all requisite
licenses, permits and franchises necessary to own, lease and operate its
properties and assets and to carry on its business in the manner and in the
locations as presently conducted, except where the failure to do so would not
have a material adverse effect on Fox Kids. Copies of the Restated Certificate
of Incorporation (as certified by the Delaware Secretary of State) and By-Laws
of Fox Kids have been delivered to the other parties to this Agreement and are
accurate and complete as of the date hereof.
(2) Authorization. Fox Kids has the requisite corporate power and
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authority to enter into and carry out the terms and conditions of this Agreement
and all the transactions contemplated hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by Fox Kids' Board of Directors, and all corporate
proceedings have been taken and no other corporate proceedings on the part of
Fox Kids or its Affiliates is necessary to authorize the execution, delivery and
performance by Fox Kids of this Agreement. This Agreement has been duly
executed and delivered by Fox Kids and constitutes the valid and binding
obligations of Fox Kids, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally from time to time in effect and except that equitable remedies
may not in all cases be available (regardless of whether enforceability is
considered in a proceeding at law or in equity) (collectively, the "Remedies
--------
Exception"). The execution, delivery and performance of this Agreement by Fox
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Kids will not conflict with or constitute a breach, violation or default under
Fox Kids' Restated Certificate of Incorporation or By-Laws, any statute, law or
administrative regulation, or under any judgment, decree, order, writ,
governmental permit or license, any material contract, agreement, lease,
indenture or instrument to which Fox Kids or any of its Affiliates is a party or
by which Fox Kids or any of its Affiliates is bound.
(3) No Consents. No consent, authorization, order or approval of, or
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filing with or registration with, any governmental authority, commission, board
or other regulatory body of the United States or any State or political
subdivision thereof, or any other Person, is required to be made or obtained by
Fox Kids or any of its Affiliates, for or in
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connection with the execution and delivery by Fox Kids of this Agreement and the
consummation by Fox Kids of the transactions contemplated hereby.
(4) Capital Stock. The authorized capital stock of Fox Kids consists
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of 10,000,000 shares of Class A Common Stock, 10,000,000 shares of Class B
Common Stock 20,000,000 shares of "blank check" Preferred Stock (together, the
"Fox Kids Stock"). As of the date hereof, there are 0.02 shares of Class A
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Common Stock, two (2) shares of Class B Common Stock, no shares of Preferred
Stock issued and outstanding. All of the issued and outstanding shares of Class
A and Class B Common Stock are duly authorized, validly issued, fully paid and
non-assessable and were not issued in violation of any preemptive rights or any
Federal or State securities laws, and the issued and outstanding shares of Class
A Common Stock are held by Xxxxx and the issued and outstanding shares of Class
B Common Stock are held by Fox Broadcasting Sub and the SEI Stockholders. As of
the date hereof, there are no options, warrants, calls, subscriptions,
convertible securities or other rights (including preemptive rights),
agreements, understandings, arrangements or commitments of any character
obligating Fox Kids now or at any time in the future to issue or sell any of the
capital stock of Fox Kids.
(5) No Disposition. Fox Kids has no plan or intention to dispose of
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any of the property received by it pursuant to this Agreement.
b. By the SEI Stockholders. Each of the SEI Stockholders represents
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and warrants to Fox Kids, Saban, Fox Broadcasting Sub and Xxxxx that the
following statements are true and correct as of the date hereof, and will be
true and correct at the Closing Date:
(1) Organization and Standing; Articles and By-Laws. To the extent an
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SEI Stockholder is not a natural person, such SEI Stockholder is a corporation,
partnership, limited liability partnership or similar entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. Each such SEI Stockholder is qualified, licensed or domesticated
as a foreign entity and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified, licensed or domesticated would not have a material adverse effect on
such SEI Stockholder. Each SEI Stockholder has all requisite power and
authority and all requisite licenses, permits and franchises necessary to own,
lease and operate its properties and assets and to carry on its business in the
manner and in the locations as presently conducted, except where the failure to
do so would not have a material adverse effect on such SEI Stockholder. Copies
of the organizational documents of each SEI Stockholder have been delivered to
the other parties to this Agreement and are accurate and complete as of the date
hereof.
(2) Authorization. Each SEI Stockholder has the requisite power and
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authority to enter into and carry out the terms and conditions of this Agreement
and all the transactions contemplated hereunder. The execution and delivery of
this Agreement and the
4
consummation of the transactions contemplated hereby have been duly authorized
by each SEI Stockholder's Board of Directors or similar entity, and all
proceedings have been taken and no other proceedings on the part of any SEI
Stockholder or its Affiliates is necessary to authorize the execution, delivery
and performance by such SEI Stockholder of this Agreement. This Agreement has
been duly executed and delivered by each SEI Stockholder and constitutes the
valid and binding obligations of such SEI Stockholder, enforceable in accordance
with its terms, except as enforceability may be limited by the Remedies
Exception. The execution, delivery and performance of this Agreement by each SEI
Stockholder will not conflict with or constitute a breach, violation or default
under its organizational documents, any statute, law or administrative
regulation, or under any judgment, decree, order, writ, governmental permit or
license, any material contract, agreement, lease, indenture or instrument to
which such SEI Stockholder or any of its Affiliates is a party or by which such
SEI Stockholder or any of its Affiliates is bound.
(3) No Consents. No consent, authorization, order or approval of, or
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filing with or registration with, any governmental authority, commission, board
or other regulatory body of the United States or any State or political
subdivision thereof, or any other Person, is required to be made or obtained by
any SEI Stockholder or any of their Affiliates, for or in connection with the
execution and delivery by such SEI Stockholder of this Agreement and the
consummation by such SEI Stockholder of the transactions contemplated hereby.
(4) Title to Saban Stock. Each SEI Stockholder has, and at the
--------------------
Closing will have, good and valid title to the shares of Saban Stock listed on
Schedule "A" hereto, owned by it, free and clear of any liens, encumbrances,
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equities, security interests, claims and other restrictions of any nature
whatsoever, and each SEI Stockholder has the full legal right, power and
authority, and any approval required by law, to sell, assign, transfer and
deliver the Saban Stock and to make the representations, warranties, covenants
and agreements made by it. Upon the effectiveness of the Reorganization, Fox
Kids will acquire good and valid title to the Saban Stock, free and clear of all
liens, encumbrances, equities, security interests, claims and other restrictions
of any nature whatsoever. None of the SEI Stockholders has entered into any
agreements, understandings or undertakings with respect to the Saban Stock under
which such SEI Stockholder is or may become obligated, directly or indirectly,
to transfer, dispose of, or assign the Saban Stock, or which would result in any
Person placing a Lien upon the Saban Stock.
(5) Investment. Each SEI Stockholder acknowledges that the shares of
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Class B Common Stock have not been registered under the Securities Act nor
qualified under any state securities or "Blue Sky" law, on the basis that no
distribution or public offering of the Class B Common Stock is to be effected,
and in this connection Fox Kids is relying in part on the representations of
such SEI Stockholder. Each SEI Stockholder further represents and warrants to
Fox Kids that:
(a) Investment Intent. The Class B Common Stock is being acquired by
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such SEI Stockholder solely for its own account, for investment purposes only,
and
5
with no present intention of distributing, selling or otherwise transferring
or disposing of the Class B Common Stock.
(b) Access. Each SEI Stockholder has had, during the course of this
------
transaction and prior to its execution of this Agreement, the opportunity to ask
questions of, and receive answers from Fox Kids and its management concerning
their respective businesses, operations and financial condition, and the terms
and conditions of this Agreement. Each SEI Stockholder acknowledges that its
representatives have received all such information as it considers necessary for
evaluating the risks and merits of acquiring the Class B Common Stock and for
verifying the accuracy of any information furnished to it or to which it has had
access, and that each SEI Stockholder has entered into this Agreement on the
basis of its own judgment and analysis of the Company and the transaction.
(c) Illiquidity. Each SEI Stockholder understands that there is no
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public market for the Class B Common Stock or for any securities, and that there
may never be such a public market, and that even if a market develops such SEI
Stockholder may never be able to sell or dispose of the Class B Common Stock and
may thus have to bear the risk of its investment for a substantial period of
time, or forever.
(d) Accredited Investor. Each SEI Stockholder is an "accredited
-------------------
investor" for purposes of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act.
(6) Brokers, etc. None of the SEI Stockholders has incurred, directly
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or indirectly, any obligation or liability for brokers' or finders' fees,
agents' commissions or other similar charges in connection with this Agreement
or any other similar charges in connection with this Agreement; and, without
limiting the generality of the foregoing, to the extent such SEI stockholder is
not a natural person, none of the officers, directors or employees of such SEI
Stockholder have any right to receive a beneficial interest in any of the Class
B Common Stock, or otherwise to participate in such SEI Stockholder's investment
in Fox Kids.
c. By Fox Broadcasting Sub. Fox Broadcasting Sub represents and
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warrants to Fox Kids, Xxxxx, Xxxxx and each of the SEI Stockholders that the
following statements are true and correct as of the date hereof, and will be
true and correct at the Closing Date:
(1) Organization and Standing; Articles and By-Laws. Fox Broadcasting
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Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. Fox Broadcasting Sub is qualified, licensed
or domesticated as a foreign corporation and is in good standing in all
jurisdictions where the character of its properties owned or held under lease or
the nature of its activities make such qualification necessary, except where the
failure to be so qualified, licensed or domesticated would not have a material
adverse effect on Fox Broadcasting Sub. Fox Broadcasting Sub has all requisite
power and authority and all
6
requisite licenses, permits and franchises necessary to own, lease and operate
its properties and assets and to carry on its business in the manner and in the
locations as presently conducted, except where the failure to do so would not
have a material adverse effect on Fox Broadcasting Sub. Copies of the
Certificate of Incorporation (as certified by the Delaware Secretary of State)
and By-Laws of Fox Broadcasting Sub have been delivered to the other parties to
this Agreement and are accurate and complete as of the date hereof.
(2) Authorization. Fox Broadcasting Sub has the requisite corporate
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power and authority to enter into and carry out the terms and conditions of this
Agreement and all the transactions contemplated hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by Fox Broadcasting Sub's Board of Directors,
and all corporate proceedings have been taken and no other corporate proceedings
on the part of Fox Broadcasting Sub or its Affiliates is necessary to authorize
the execution, delivery and performance by Fox Broadcasting Sub of this
Agreement. This Agreement has been duly executed and delivered by Fox
Broadcasting Sub and constitutes the valid and binding obligations of Fox
Broadcasting Sub, enforceable in accordance with its terms, except as
enforceability may be limited by the Remedies Exception. The execution,
delivery and performance of this Agreement by Fox Broadcasting Sub will not
conflict with or constitute a breach, violation or default under Fox
Broadcasting Sub's Certificate of Incorporation or By-Laws, any statute, law or
administrative regulation, or under any judgment, decree, order, writ,
governmental permit or license, any material contract, agreement, lease,
indenture or instrument to which Fox Broadcasting Sub or any of its Affiliates
is a party or by which Fox Broadcasting Sub or any of its Affiliates is bound.
(3) No Consents. No consent, authorization, order or approval of, or
-----------
filing with or registration with, any governmental authority, commission, board
or other regulatory body of the United States or any State or political
subdivision thereof, or any other Person, is required to be made or obtained by
Fox Broadcasting Sub or any of its Affiliates, for or in connection with the
execution and delivery by Fox Broadcasting Sub of this Agreement and the
consummation by Fox Broadcasting Sub of the transactions contemplated hereby.
(4) Title to FCNH Common Stock. Fox Broadcasting Sub has, and at the
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Closing will have, good and valid title to the 800 shares of FCNH Common Stock,
owned by it, free and clear of any liens, encumbrances, equities, security
interests, claims and other restrictions of any nature whatsoever, and it has
the full legal right, power and authority, and any approval required by law, to
sell, assign, transfer and deliver the FCNH Common Stock and to make the
representations, warranties, covenants and agreements made by it. Upon the
effectiveness of the Reorganization as contemplated hereby, Fox Kids will
acquire good and valid title to the FCNH Common Stock, free and clear of all
liens, encumbrances, equities, security interests, claims and other restrictions
of any nature whatsoever. Fox Broadcasting Sub has not entered into any
agreements, understandings or undertakings with respect to the FCNH Common Stock
under which Fox Broadcasting Sub is or may become obligated, directly or
indirectly, to
7
transfer, dispose of, or assign the FCNH Common Stock, or which would result in
any Person placing a Lien upon the FCNH Common Stock.
(5) Investment. Fox Broadcasting Sub acknowledges that the shares of
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Class B Common Stock have not been registered under the Securities Act nor
qualified under any state securities or "Blue Sky" law, on the basis that no
distribution or public offering of the Class B Common Stock is to be effected,
and in this connection Fox Kids is relying in part on the representations of Fox
Broadcasting Sub. Fox Broadcasting Sub further represents and warrants to Fox
Kids that:
(a) Investment Intent. The Class B Common Stock is being acquired by
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Fox Broadcasting Sub solely for its own account, for investment purposes only,
and with no present intention of distributing, selling or otherwise transferring
or disposing of the Class B Common Stock.
(b) Access. Fox Broadcasting Sub has had, during the course of this
------
transaction and prior to its execution of this Agreement, the opportunity to ask
questions of, and receive answers from Fox Kids and its management concerning
their respective businesses, operations and financial condition, and the terms
and conditions of this Agreement. Fox Broadcasting Sub acknowledges that its
representatives have received all such information as it considers necessary for
evaluating the risks and merits of acquiring the Class B Common Stock, and for
verifying the accuracy of any information furnished to it or to which it has had
access, and that Fox Broadcasting Sub has entered into this Agreement on the
basis of its own judgment and analysis of Fox Kids and the transaction.
(c) Illiquidity. Fox Broadcasting Sub understands that there is no
-----------
public market for the Class B Common Stock, or for any securities, and that
there may never be such a public market, and that even if a market develops Fox
Broadcasting Sub may never be able to sell or dispose of the Class B Common
Stock, and may thus have to bear the risk of its investment for a substantial
period of time, or forever.
(d) Accredited Investor. Fox Broadcasting Sub is an "accredited
-------------------
investor" for purposes of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act.
(6) Brokers, etc. Fox Broadcasting Sub has not incurred, directly or
-------------
indirectly, any obligation or liability for brokers' or finders' fees, agents'
commissions or other similar charges in connection with this Agreement or any
other similar charges in connection with this Agreement; and, without limiting
the generality of the foregoing, none of the officers, directors or employees of
Fox Broadcasting Sub have any right to receive a beneficial interest in any of
the Class B Common Stock or otherwise to participate in Fox Broadcasting Sub's
investment in Fox Kids.
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d. By Xxxxx. Xxxxx represents and warrants to Fox Kids, Saban, Fox
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Broadcasting Sub and each of the SEI Stockholders that the following statements
are true and correct as of the date hereof, and will be true and correct at the
Closing Date:
(1) Organization and Standing; Articles and By-Laws. Xxxxx is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of New York. Xxxxx is qualified, licensed or domesticated as a
foreign corporation and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified, licensed or domesticated would not have a material adverse effect on
Xxxxx. Xxxxx has all requisite power and authority and all requisite licenses,
permits and franchises necessary to own, lease and operate its properties and
assets and to carry on its business in the manner and in the locations as
presently conducted, except where the failure to do so would not have a material
adverse effect on Xxxxx. Copies of the Articles of Incorporation (as certified
by the New York Secretary of State) and By-Laws of Xxxxx have been delivered to
the other parties to this Agreement and are accurate and complete as of the date
hereof.
(2) Authorization. Xxxxx has the requisite corporate power and
-------------
authority to enter into and carry out the terms and conditions of this Agreement
and all the transactions contemplated hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by Xxxxx'x Board of Directors, and all corporate
proceedings have been taken and no other corporate proceedings on the part of
Xxxxx or its Affiliates is necessary to authorize the execution, delivery and
performance by Xxxxx of this Agreement. This Agreement has been duly executed
and delivered by Xxxxx and constitutes the valid and binding obligations of
Xxxxx, enforceable in accordance with its terms, except as enforceability may be
limited by applicable the Remedies Exception. The execution, delivery and
performance of this Agreement by Xxxxx will not conflict with or constitute a
breach, violation or default under Xxxxx'x Articles of Incorporation or By-Laws,
any statute, law or administrative regulation, or under any judgment, decree,
order, writ, governmental permit or license, any material contract, agreement,
lease, indenture or instrument to which Xxxxx or any of its Affiliates is a
party or by which Xxxxx or any of its Affiliates is bound.
(3) No Consents. No consent, authorization, order or approval of, or
-----------
filing with or registration with, any governmental authority, commission, board
or other regulatory body of the United States or any State or political
subdivision thereof, or any other Person, is required to be made or obtained by
Xxxxx or any of its Affiliates, for or in connection with the execution and
delivery by Xxxxx of this Agreement and the consummation by Xxxxx of the
transactions contemplated hereby.
(4) Title to FCNH Common Stock. Xxxxx has, and at the Closing will
--------------------------
have, good and valid title to the 16 16/99 shares of FCNH Common Stock, owned by
it, free and clear of any liens, encumbrances, equities, security interests,
claims and other restrictions of any
9
nature whatsoever, and it has the full legal right, power and authority, and any
approval required by law, to sell, assign, transfer and deliver the FCNH Common
Stock and to make the representations, warranties, covenants and agreements made
by it. Upon the effectiveness of the Reorganization as contemplated hereby, Fox
Kids will acquire good and valid title to the FCNH Common Stock, free and clear
of all liens, encumbrances, equities, security interests, claims and other
restrictions of any nature whatsoever. Xxxxx has not entered into any
agreements, understandings or undertakings with respect to the FCNH Common Stock
under which Xxxxx is or may become obligated, directly or indirectly, to
transfer, dispose of, or assign the FCNH Common Stock, or which would result in
any Person placing a Lien upon the FCNH Common Stock.
(5) Investment. Xxxxx acknowledges that the shares of Class A Common
----------
Stock, respectively, have not been registered under the Securities Act nor
qualified under any state securities or "Blue Sky" law, on the basis that no
distribution or public offering of the Class A Common Stock is to be effected,
and in this connection Fox Kids is relying in part on the representations of
Xxxxx. Xxxxx further represents and warrants to Fox Kids that:
(a) Investment Intent. The Class A Common Stock is being acquired by
-----------------
Xxxxx solely for its own account, for investment purposes only, and with no
present intention of distributing, selling or otherwise transferring or
disposing of the Class A Common Stock.
(b) Access. Xxxxx has had, during the course of this transaction and
------
prior to its execution of this Agreement, the opportunity to ask questions of,
and receive answers from Fox Kids and its management concerning their respective
businesses, operations and financial condition, and the terms and conditions of
this Agreement. Xxxxx acknowledges that its representatives have received all
such information as it considers necessary for evaluating the risks and merits
of acquiring the Class A Common Stock and for verifying the accuracy of any
information furnished to it or to which it has had access, and that Xxxxx has
entered into this Agreement on the basis of its own judgment and analysis of Fox
Kids and the transaction.
(c) Illiquidity. Xxxxx understands that there is no public market for
-----------
the Class A Common Stock, or for any securities, and that there may never be
such a public market, and that even if a market develops Xxxxx may never be able
to sell or dispose of the Class A Common Stock, and may thus have to bear the
risk of its investment for a substantial period of time, or forever.
(d) Accredited Investor. Xxxxx is an "accredited investor" for
-------------------
purposes of Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act.
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(6) Brokers, etc. Xxxxx has not incurred, directly or indirectly,
-------------
any obligation or liability for brokers' or finders' fees, agents' commissions
or other similar charges in connection with this Agreement or any other similar
charges in connection with this Agreement; and, without limiting the generality
of the foregoing, none of the officers, directors or employees of Xxxxx have any
right to receive a beneficial interest in any of the Class A Common Stock or
otherwise to participate in Xxxxx'x investment in Fox Kids.
3. Amendments to Strategic Stockholders Agreement.
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a. Reorganization as a "Reorganization" under the Strategic
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Stockholders Agreement. While this Agreement is being entered into other than
----------------------
in contemplation of an Initial Public Offering, this Agreement shall, for all
purposes of the Strategic Stockholders Agreement, constitute and be included
within the definition of a "Reorganization" thereunder, and, without limiting
the generality of the foregoing:
i) Fox Kids is the "Successor Entity" under the Strategic
Stockholders Agreement;
ii) All shares of capital stock of Fox Kids issued to the
SEI Stockholders in the Reorganization shall be shares of "SEI Common
Stock" under the provisions of the Strategic Stockholders Agreement, and,
without limiting the generality of the foregoing, shall be subject to all
of the provisions of Sections 2, 3, 4, 6 and 7 relating to the SEI Common
Stock, and shall constitute "SEI Option Shares" under Section 7 of the
Strategic Stockholders Agreement;
iii) All shares of capital stock of Fox Kids issued to Fox
Broadcasting Sub in the Reorganization shall be shares of "FCNH Common
Stock" under the provisions of the Strategic Stockholders Agreement, and,
without limiting the generality of the foregoing, shall be subject to all
of the provisions of Sections 2, 3, 4, 6 and 7 relating to the FCNH Common
Stock.
iv) All shares of capital stock of Fox Kids issued to Xxxxx
in the Reorganization shall be "Xxxxx Shares" under the provisions of the
Strategic Stockholders Agreement, and, without limiting the generality of
the foregoing, shall be subject to all of the provisions of Sections 2, 3,
4, 5, 6 and 7 relating to the Xxxxx Shares.
b. Consent to Reorganization. Each of the parties to the Strategic
-------------------------
Stockholders Agreement hereby consents to the transfer of the Shares pursuant to
the Reorganization.
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c. Agreement of Fox Kids. By entering into this Agreement, Fox
---------------------
Kids, as the "Successor Entity," agrees to be bound by each and all of the
covenants and obligations of the Successor Entity under and pursuant to the
Strategic Stockholders Agreement.
4. Closing. The closing of the Reorganization (the "Closing") shall
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occur concurrently with the contribution contemplated by the LIFE Contribution
Agreement.
5. Prior Issuances. Concurrently with the Closing, the prior issuance of
---------------
two shares of Class B Common Stock to Fox Broadcasting Sub and the SEI
Stockholders shall be cancelled and the shares of Class B Common Stock shall
cease to be outstanding and the prior issuance of .02 shares of Class A Common
Stock to Xxxxx shall be cancelled and the shares of Class A Common Stock shall
cease to be outstanding.
6. Miscellaneous. All of the provisions of Section 11 of the Strategic
-------------
Stockholders Agreement (other than Sections 11(b), (k) and (p)) shall apply with
respect to this Agreement.
7. Definitions. As used in this Agreement, the following terms shall
-----------
have the meanings set forth below:
"AFFILIATE" means, when used with reference to a specified Person, any
Person that directly or indirectly through one or more intermediaries controls
or is controlled by, or is under common control with, the specified Person. For
the purposes of this definition, "control" (including the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies to such Person, whether through the
ownership of voting securities, by contract or otherwise, and any Person owning
10% or more of the equity or voting power of any other Person shall be deemed to
control such other Person.
"PERSON" includes an individual, corporation, partnership, limited
liability company, limited liability partnership, trust, estate, joint venture,
incorporated or unincorporated association, government (or a bureau, agency or
political subdivision thereof) or other entity of whatsoever kind or nature.
"SUBSIDIARY" of a corporation means (i) any corporation of which
equity securities possessing a majority of the ordinary voting power in electing
the board of directors are, at the time as of which such determination is being
made, owned by such corporation either directly or indirectly through one or
more Subsidiaries, and (ii) any Person (other than a corporation) in which such
corporation or any Subsidiary, directly or indirectly, has more than a 10%
ownership interest or over which it exercises control.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
FOX KIDS WORLDWIDE, INC.
By /s/ Xxx Xxxxx
----------------------------------------
Xxx Xxxxx
President
SABAN ENTERTAINMENT, INC.
By /s/ Xxxx Xxxxx
-----------------------------------------
Xxxx Xxxxx
Chief Executive Officer
/s/ Xxxx Xxxxx
--------------------------------------------
XXXX XXXXX
QUARTZ ENTERPRISES, L.P.
By /s/ Xxxx Xxxxx
-------------------------------------------
Name: Xxxx Xxxxx
Title: General Partner, Indigo
Enterprises, L.P.
General Partner
MERLOT INVESTMENTS
By /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: General Partner, Indigo
Enterprises, L.P.
General Partner
SILVERLIGHT ENTERPRISES, L.P.
By /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: General Partner, Glass Xxxx
Enterprises, L.P.
General Partner
XXXXX ENTERPRISES, L.P.
By /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: General Partner
FOX BROADCASTING SUB, INC.
By /s/ Xxx Xxxxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxxxx
Title: Senior Vice President
FCN HOLDING, INC.
By /s/ Xxx Xxxxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxxxx
Title: Senior Vice President
XXXXX & COMPANY INCORPORATED
By /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxxxx X.Xxxxxxxxxx
Title: Vice President & General Counsel
SCHEDULE "A"
------------
=========================================================================================
Number of Shares of Class
Number of Shares of Saban B Common Stock of Fox
Name Common Stock Kids
-----------------------------------------------------------------------------------------
Xxxx Xxxxx 377.56 3,737,844
-----------------------------------------------------------------------------------------
Quartz Enterprises, L.P. 76.80 760,320
-----------------------------------------------------------------------------------------
Merlot Enterprises 65.19 645,381
-----------------------------------------------------------------------------------------
Silverlight Enterprises, L.P. 278.76 2,759,724
-----------------------------------------------------------------------------------------
Xxxxx Enterprises, L.P. 1.69 16,731
-----------------------------------------------------------------------------------------
Total 800.00 7,920,000
========================================================================================
