1
Exhibit 10.7(A)
===============================================================================
AMENDED AND RESTATED
CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT
Dated as of April 13, 1995
AS AMENDED AND RESTATED
as of October 23, 1996,
among
ALL AMERICAN COMMUNICATIONS, INC.
as a BORROWER and a GUARANTOR,
and
ALL AMERICAN NETHERLANDS B.V.
as a BORROWER,
THE OTHER GUARANTORS NAMED HEREIN
and
THE LENDERS NAMED HEREIN
with
THE CHASE MANHATTAN BANK (formerly known as Chemical Bank),
as Agent
and
THE CHASE MANHATTAN BANK (formerly known as Chemical Bank),
as Fronting Bank
===============================================================================
2
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INTRODUCTORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.1. Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.2. Making of Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.3. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.4. Interest on Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.5. Commitment Fees and Other Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.6. Optional and Mandatory Termination or Reduction of Commitments. . . . . . . . . . . . . . . . . 32
SECTION 2.7. Default Interest; Alternate Rate of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.8. Continuation and Conversion of Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.9. Prepayment of Loans; Reimbursement of Lenders. . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10. Change in Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.11. Change in Legality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.12. Manner of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.13. Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.14. Interest Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.15. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3. REPRESENTATIONS AND WARRANTIES OF DEBTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.1. Corporate Existence and Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.2. Authority and No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.3. Governmental Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.4. Binding Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.5. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.6. No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.7. Subsidiaries; Ownership of Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.8. Copyrights, Patents and Other Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.9. Fictitious Names. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.10. Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.11. Places of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.12. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.13. Federal Reserve Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.14. Investment Company Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.15. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.16. Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(i)
3
SECTION 3.17. Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.18. Security Interest; Other Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.19. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.20. Distribution Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.21. Environmental Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.22. Pledged Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.23. Real Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.1. Conditions Precedent to Initial Loans or Letter of Credit . . . . . . . . . . . . . . . . . . . 56
SECTION 4.2. Conditions Precedent to Each Loan and Letter of Credit. . . . . . . . . . . . . . . . . . . . . 60
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.1. Financial Statements and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.2. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.3. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.4. Notice of Material Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 5.5. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 5.6. Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.7. Music. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.8. Copyright. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.9. Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.10. Observance of Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.11. Film Properties and Rights; Debtors to Act as Pledgeholder. . . . . . . . . . . . . . . . . . . 67
SECTION 5.12. Laboratories; No Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.13. Taxes and Charges; Indebtedness in Ordinary Course of Business. . . . . . . . . . . . . . . . . 68
SECTION 5.14. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.15. Cash Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.16. Further Assurances; Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.17. Recorded Product. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.18. Receivables Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.19. ERISA Compliance and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.20. Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.21. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.22. Record Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 5.23. Completion Bond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 5.24. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 5.25. Convertible Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.1. Limitations on Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.2. Limitations on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.3. Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(ii)
4
SECTION 6.4. Limitations on Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.5. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 6.6. Limitations on Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.7. Limitations on Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.8. Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.9. Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.10. Places of Business; Change of Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.11. Limitations on Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.12. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.13. Prohibition of Amendments or Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.14. Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.15. Refund Percentage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.16. General and Administrative Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.17. Funded Debt Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.18. Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.19. Program Spending Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.20. No Negative Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.21. Acquisitions or Mergers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.22. Limitations on Transactions With Completion Guarantors . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.23. Change in Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.24. ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 6.25. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 6.26. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.27. Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.28. Production/Acquisition Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.29. Advertiser Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 6.30. Unrecouped Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 6.31. NBV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 6.32. Use of Proceeds of Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8. GRANT OF SECURITY INTEREST; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.1. Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.2. Use of Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.3. Collection Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.4. Debtors to Hold in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 8.5. Collections, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 8.6. Possession, Sale of Collateral, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 8.7. Application of Proceeds on Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 8.8. Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 8.9. Financing Statements, Direct Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 8.10. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
(iii)
5
SECTION 8.11. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 8.12. Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 8.13. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 8.14. Continuation and Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.1. Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.2. No Impairment of Guaranty, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.3. Continuation and Reinstatement, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9.4. Limitation on Guaranteed Amount etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10. PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.1. Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.2. Registration in Nominee Name; Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.3. Voting Rights; Dividends; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.4. Remedies Upon Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 10.5. Application of Proceeds of Sale and Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 10.6. Securities Act, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 10.7. Continuation and Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 10.8. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 10.9. Acknowledgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11. CASH COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.1. Cash Collateral Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.2. Investment of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.3. Grant of Security Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 11.4. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
12. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.1. Administration by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.2. Advances and Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.3. Sharing of Setoffs and Cash Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.4. Notice to the Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.5. Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.6. Reimbursement and Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 12.7. Rights of Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.8. Independent Investigation by Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.9. Execution by Agent of Security Documentation on behalf of the
Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.10. Agreement of Majority Lenders or Super Majority Lenders. . . . . . . . . . . . . . . . . . . . 102
SECTION 12.11. Notice of Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.12. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.13. NBV Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
(iv)
6
13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.2. Survival of Agreement, Representations and Warranties, etc. . . . . . . . . . . . . . . . . . . 104
SECTION 13.3. Successors and Assigns; Syndications; Loan Sales; Participations. . . . . . . . . . . . . . . . 104
SECTION 13.4. Expenses; Documentary Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 13.5. Indemnification of Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 13.6. CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 13.7. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 13.8. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 13.9. Extension of Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 13.10. Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 13.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 13.12. SERVICE OF PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 13.13. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 13.14. Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 13.15. Subordination of Intercompany Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 13.16. Orbis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 13.17. Effectiveness with Regard to NBV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Signature and Seals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
(v)
7
Schedules
1 Schedule of Commitments
2 Approved Obligors
3 Employment Agreements
3.7 Subsidiaries/Pledged Securities
3.8(a) Product, Recorded Product and Film Assets
3.9 Fictitious Names
3.11 Principal Executive Office/Location of Collateral
3.12 Litigation
3.17 Existing Indebtedness/Material Agreements
3.21 Environmental Liabilities
3.22 Outstanding Rights, Warrants and Options re Pledged Securities
3.23 Real Properties
5.21 Bank Accounts
6.2 Existing Liens
Exhibits
A Form of Note
B-1 Form of Copyright Security Agreement
B-2 Form of Copyright Security Agreement Supplement
C Form of Laboratory Access Letter
D Matters to be covered in Opinion of Debtors' Counsel
E Form of Borrowing Base Certificate
F-1 Form of Contribution Agreement (Domestic Loans)
F-2 Form of Contribution Agreement (Foreign Loans)
G Form of Pledgeholder Agreement
H Form of Borrowing Certificate
I Form of Assignment and Acceptance
J Form of Trademark Security Agreement
8
AMENDED AND RESTATED CREDIT, SECURITY,
GUARANTY AND PLEDGE AGREEMENT, dated as of
April 13, 1995 as Amended and Restated as of
October 23, 1996, among (i) ALL AMERICAN
COMMUNICATIONS, INC., a Delaware corporation
("Parent"), (ii) ALL AMERICAN NETHERLANDS
B.V., a company organized under the laws of
the Netherlands ("NBV"), (iii) the Guarantors
named herein, (iv) the Lenders referred to
herein, (v) THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank), a New York
banking corporation, as Agent (the "Agent")
for the Lenders and (vi) THE CHASE MANHATTAN
BANK (formerly known as Chemical Bank) as
Fronting Bank (the "Fronting Bank").
INTRODUCTORY STATEMENT
All terms not otherwise defined above or in this Introductory
Statement are as defined in Article 1 hereof, or as defined elsewhere herein.
The Parent, among others, has previously entered into the
Original Credit Agreement (as hereinafter defined) whereby the lenders referred
to therein agreed to make loans to the various borrowers referred to therein
for the specific purposes outlined therein, including the production of certain
television series.
The Parent has now requested that the lenders under the
Original Credit Agreement amend and restate the Original Credit Agreement to
increase and restructure the facility, to extend the maturity date, add new
lenders as parties and to modify certain of the covenants and the Borrowing
Base. The lenders under the Original Credit Agreement have agreed to do so,
subject to the terms and provisions hereof as more particularly set forth
herein. In connection therewith, the Parent has requested that the Lenders
make available a revolving credit facility in the total amount of $155,000,000
to the Borrowers. The Borrowers have represented to the Lenders that the
proceeds of (i) Domestic Loans made, as well as Letters of Credit issued, shall
be used to finance the Parent's and its Subsidiaries' development, production,
acquisition, exploitation and worldwide distribution of made-for-television
Product, Recorded Product and other entertainment Product and to finance
certain working capital needs of the Parent and its Subsidiaries and (ii)
Foreign Loans made shall be used by NBV to fund NBV's share of financing and
refinancing production cost of items of Product for which NBV holds foreign
distribution rights and to finance certain working capital needs of NBV.
To provide assurance for the repayment of the Loans and all
other Obligations of the Borrowers hereunder, the Borrowers and the Guarantors,
as the case may be, will provide to
9
the Agent, for the benefit of the Lenders (as and to the extent more fully
described herein and to the extent not previously provided) (i) a security
interest in the Collateral pursuant to Article 8 hereof, (ii) a Guaranty of the
Obligations pursuant to Article 9 hereof, (iii) subject to the limitations set
forth herein, a pledge of the Pledged Securities pursuant to Article 10 hereof,
(iv) the Foreign Guaranties and (v) the Foreign Security Documents.
Subject to the terms and conditions set forth herein, the
Agent is willing to act as agent for the Lenders and each Lender is willing to
make Loans to the Borrowers in amounts not in excess of the Commitment of that
Lender, all as set forth on the Schedule of Commitments.
This Credit Agreement amends, restates and supersedes in its
entirety the Credit, Security, Guaranty and Pledge Agreement dated as of April
13, 1995, among the parties thereto, as amended by Amendment No. 1 dated as of
April 13, 1995, Amendment No. 2 dated as of November 10, 1995, Amendment No. 3
dated as of July 19, 1996 and Amendment No. 4 dated as of August 20, 1996 (the
"Original Credit Agreement").
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise requires,
the following terms shall have the meanings indicated, all accounting terms not
otherwise defined herein shall have the respective meanings accorded to them
under GAAP and all terms defined in the UCC and not otherwise defined herein
shall have the respective meanings accorded to them therein. Unless the
content otherwise requires, any of the following terms may be used in the
singular or the plural, depending on the reference:
"AAF" shall mean All American Fremantle International, Inc., a
Delaware corporation.
"AAG" shall mean All American Xxxxxxx, Inc., a Delaware
corporation.
"Acceptable L/C" shall mean an irrevocable letter of credit in
form and on terms acceptable to the Agent, payable in Dollars at an office of
the issuing or confirming bank in New York City (or another city acceptable to
the Agent) and issued or confirmed by (a) any commercial bank that has (or
which is the principal operating subsidiary of a holding company which has) as
of the time such letter of credit is issued, public debt outstanding with a
rating of at least "A" (or the equivalent of an "A") from one of the nationally
recognized debt rating agencies, or (b) by any other bank which the Majority
Lenders may in their sole discretion determine to be of acceptable credit
quality, which letter of credit is payable to the Agent or assigned to the
Agent pursuant to documentation in form and substance acceptable to the Agent.
- 2 -
10
"Additional Foreign Subsidiary" shall mean a Foreign
Subsidiary created after the date hereof which is a direct Subsidiary or sister
company of NBV.
"Affiliate" shall mean, with respect to any entity, any Person
which directly or indirectly holds a controlling interest in, or is under
common control with, such entity and any natural Person who is a director or
officer of such entity. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such latter Person possesses,
directly or indirectly, power either to direct or cause the direction of the
management and policies of such controlled Person whether by contract or
otherwise or if such latter Person owns either directly or indirectly at least
20% of the voting securities or general partnership interest of such controlled
Person. For purposes hereof, "Affiliate" shall not include Interpublic.
"Agent" shall mean The Chase Manhattan Bank, in its capacity
as agent for the Lenders hereunder or such successor Agent as may be appointed
pursuant to Section 12.12 of this Credit Agreement.
"Agency Contracts" shall mean those agreements (e.g. "L.A.
Heat") where no ownership interest in Product is transferred to a Debtor, but
rather a Debtor is entitled to solicit contracts on behalf of the producer or
other Person with a proprietary interest in such Product.
"Allowable Amount" shall mean, with respect to (i) any
Approved Obligor identified on Schedule 2, such amount as may be specified as
the maximum aggregate exposure for such Approved Obligor on Schedule 2; (ii)
any Investment Grade Account Debtor, $3,000,000; and (iii) any Non-Investment
Grade Debtor, $200,000; provided however, that from time to time by written
notice to the Parent (which notice shall, with respect to any decrease in such
amount, be effective 15 days subsequent to the Parent's receipt of such notice)
the Agent (x) shall if so instructed by the Majority Lenders, increase such
amount as the Majority Lenders may in their sole discretion deem appropriate;
(y) may decrease such amount as the Agent may in its sole discretion deem
appropriate as a result of a change in circumstances of such Approved Obligor;
or (z) shall if so instructed by the Majority Lenders, decrease such amount as
the Majority Lenders in their sole discretion deem appropriate as a result of a
change in circumstances of such Approved Obligor.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
for such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by the Agent as
its prime rate in effect at its principal office in New York City; each change
in the Prime Rate shall be effective on the date such change is publicly
announced as effective. "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b)
the Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any day,
the secondary market rate for three-month certificates of deposit reported as
being in effect
- 3 -
11
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board of Governors of the Federal Reserve System of the United
States through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under current practices of the Board of
Governors of the Federal Reserve System of the United States, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding Business Day) by
the Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "Statutory Reserves" shall mean a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board of Governors of the
Federal Reserve System of the United States and any other banking authority to
which the Agent is subject for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage. "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate
or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
"Alternate Base Rate Loan" shall mean a Loan based on the
Alternate Base Rate in accordance with the provisions of Article 2 hereof.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of governmental bodies or regulatory agencies applicable
to a Person, and all orders and decrees of all courts and arbitrators in
proceedings or actions in which the Person in question is a party.
- 4 -
12
"Applicable Margin" shall mean in the case of Alternate Base
Rate Loans, 1% per annum and in the case of Eurodollar Loans, 2% per annum,
provided, however, that at such time, if any, and for so long as the Program
Spending Ratio at the end of a Rolling Period is in excess of 1:1, such margins
will be reduced by 1/2 of 1% per annum (i.e., to 1/2 of 1% per annum for
Alternate Base Rate Loans and to 1 1/2 % per annum for Eurodollar Loans). Any
such reduction in the Applicable Margin shall become effective immediately upon
receipt by the Agent of the financial statements (delivered pursuant to Section
5.1(a) or (b) herein) for the quarter at which end the Program Spending Ratio
for the Rolling Period then ended first exceeds 1:1 and any such reduction
shall cease to be effective immediately upon receipt by the Agent of the
financial statements (delivered pursuant to Section 5.1(a) (or (b) herein) for
the quarter at which end the Program Spending Ratio for the Rolling Period then
ended is equal to or less than 1:1. At such time, the margin for Alternate
Base Rate Loans shall be increased to 1% per annum and the margin for
Eurodollar Loans shall be increased to 2% per annum until and unless the
Program Spending Ratio at the end of a Rolling Period is in excess of 1:1, at
which time such margin shall be reduced as provided above. Notwithstanding the
foregoing, on the Closing Date and until the receipt by the Agent of the
financial statements required for the quarter ending September 30, 1996
(delivered pursuant to Section 5.1(b) herein), the Applicable Margin for
Alternate Base Rate Loans shall be 1/2 of 1% per annum and the Applicable
Margin for Eurodollar Loans shall be 1-1/2% per annum. Thereafter, the
Applicable Margin shall be adjusted (or not adjusted) in accordance with the
provisions hereof.
"Approved Obligor" shall mean any Person identified as such on
Schedule 2 subject to the limitations set forth on Schedule 2 or any Investment
Grade Account Debtor or any Non-Investment Grade Account Debtor. The Agent
from time to time by written notice to the Parent (which notice shall, with
respect to any deletion, be effective 15 days subsequent to the Parent's
receipt of such notice) (x) shall if so instructed by the Majority Lenders, add
such Persons as Approved Obligors as the Majority Lenders may in their sole
discretion deem appropriate; (y) may delete such Persons as Approved Obligors
as the Agent may in its sole discretion deem appropriate as a result of a
change in circumstances of such Approved Obligor; or (z) shall if so instructed
by the Majority Lenders, delete such Persons as Approved Obligors as the
Majority Lenders in their sole discretion deem appropriate as a result of a
change in circumstances of such Approved Obligor.
"Assessment Rate" shall mean, for any day, the net annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of 1%)
as most recently estimated by the Agent for determining the then current annual
assessment payable by the Agent to the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such successor) of
time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an agreement in the
form of Exhibit I hereto, executed by the assignor, assignee and other parties
as contemplated thereby.
- 5 -
13
"Authorized Officer" shall mean, with respect to any Person,
its chairman, President, chief financial officer or senior executive vice
president-Finance.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as heretofore and hereafter amended, as codified at 11 U.S.C. Section
101 et seq.
"Barter Receivables" shall mean Type 1 Barter Receivables and
Type 2 Barter Receivables.
"Billed Barter Receivables" shall mean the amount of "net
receipts" (adjusted for actual Make Goods) which is contractually owing to one
of the Debtors in connection with a program which has been aired and which is
payable to one of the Debtors by Approved Obligors as a result of sales to
advertisers of National Spots. Such receivables shall otherwise satisfy all
applicable criteria for inclusion as Eligible Receivables.
"Borrowers" shall mean the Domestic Borrower and the Foreign
Borrower.
"Borrowing" shall mean a borrowing of Loans by a Borrower of
the same interest rate having the same Interest Period made by the Lenders
hereunder on any given day.
"Borrowing Base" shall mean the Domestic Borrowing Base or the
Foreign Borrowing Base, as appropriate.
"Borrowing Base Certificate" shall be as defined in Section
5.1(d).
"Borrowing Certificate" shall mean a borrowing certificate,
substantially in the form of Exhibit H hereto, to be delivered by the Parent to
the Agent in connection with each Borrowing.
"Budgeted Negative Cost" shall mean for any item of Product
the aggregate amount of the preproduction expenses with regard to such item of
Product plus the cost of all production elements usually and customarily
included as part of the negative cost of a television program or other item of
Product of like cost and quality plus the usual and customary post production
costs of such television program or other item of Product, and shall
specifically include charges for (x) any completion guaranty fee which is to be
paid and (y) any interest whether capitalized or not but shall exclude any
producers fees paid to a Debtor and general overhead costs. Preproduction
expenses with respect to a Picture or other item of Product shall mean the
following costs:
(i) the cost of acquisition of the basic literary
property;
(ii) the cost of the screenplays prepared for that
item of Product and any polishing work done thereon; and
- 6 -
14
(iii) the cost of all other production elements
properly includable in the production or preproduction
expenses for that item of Product (subject to the limitations
set forth above), which are payable or incurred before the
commencement of principal photography of that item of Product.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks are required or permitted to close in the
State of New York, State of California or The Netherlands; provided, however,
that when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in Dollar
deposits on the London Interbank Market.
"Capital Expenditures" shall mean, with respect to any Person
for any period, the sum of (i) the aggregate of all expenditures (whether paid
in cash or accrued as a liability) by such Person during that period which, in
accordance with GAAP, are or should be included in "additions to property,
plant or equipment" or similar items (other than "additions to film costs")
reflected in the statement of cash flows of such Person and (ii) to the extent
not covered by clause (i) hereof, the aggregate of all expenditures by such
Person to acquire by purchase or otherwise the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any other
Person (other than the portion of such expenditures allocable in accordance
with GAAP to net current assets), except for such expenditures made in
connection with an item of Product or Recorded Product.
"Capital Lease", as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Cash Collateral Account" shall be as defined in Section 11.1
hereof.
"Cash Equivalents" shall mean (i) marketable securities issued
or directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii) time
deposits and certificates of deposit with maturities of not more than six
months from the date of acquisition, issued by any Lender, or by any other
domestic commercial bank of recognized standing having capital and surplus in
excess of U.S.$250,000,000 and (iii) commercial paper rated at least A-2 or the
equivalent thereof by Standard & Poor's Rating Group or at least P-2 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case maturing
within six months after the date of acquisition.
"Change in Control" shall mean (i) Xxxxxxx Xxxxxx, Xxxxxxxx
Xxxxxx and their Related Parties as a group shall cease to beneficially own,
directly or indirectly, at least 20% (on a fully diluted basis) of the total
Voting Stock then outstanding of the Parent; (ii) any "person" (such term being
used in this clause (ii) as used in Section 13(d) and 14(d) of the Securities
- 7 -
15
Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time; provided, however,
that shares subject to a proxy or voting arrangement in favor of Xxxxxxx Xxxxxx
and Xxxxxxxx Xxxxxx shall not be included in determining "beneficial ownership"
by any other Person), directly or indirectly, of more shares of the total
Voting Stock then outstanding of the Parent than are owned or controlled,
directly or indirectly by Xxxxxxx Xxxxxx and Xxxxxxxx Xxxxxx and Related
Parties collectively (other than an institutional investor eligible to report
its holdings on Schedule 13G which holds no more than 15% of such voting
power); (iii) if at any time, individuals who at the date hereof constituted
the Board of Directors of the Parent (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Parent was approved by a vote of the majority of the
directors then still in office who were either directors at the date hereof or
whose election or a nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the Parent
then in office or (iv) the adoption of a plan relating to the liquidation or
dissolution of the Parent. For purposes of this definition, "Related Party"
shall mean with respect to either Xxxxxxx X. Xxxxxx or Xxxxxxxx X. Xxxxxx
(collectively, the "Scottis") (A) any controlling stockholder, 80% (or more)
owned Subsidiary, or spouse or immediate family member of either Xxxxxx or (B)
a trust, corporation, partnership or any other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of either Xxxxxx and/or such other
Persons referred to in the immediately preceding clause (A), or (C) trust, the
beneficiaries holding more than a 50% beneficial interest of which consist of
either Xxxxxx and/or other such Persons referred to in clause (A), for so long
as such Xxxxxx or any of the other Persons referred to in clause (A) above or
the other Xxxxxx serves as trustee therefor and, in such capacity, possesses
and retains the right to vote, at such trustee's absolute discretion, all
shares of capital stock held in such trust.
"Change in Management" shall mean either (y) Xxxxxxx Xxxxxx or
(z) all three of the following individuals: Xxx Xxxxxxxx, Xxxxx Xxxx and
Xxxxxxxx Xxxxxxxxx shall cease for any reason, including, without limitation,
termination of employment, death or disability (the term "disability" or
"disabled" as used herein meaning an inability continuing for one hundred and
eighty (180) consecutive days (the "Disability Period") to perform the
functions and services currently being performed by such Person, to perform the
functions and services currently being performed by such Person and the Parent
shall fail, for a period of ninety (90) consecutive days following the last day
of the Disability Period in which Xxxxxxx Xxxxxx or the third such individual
referred to in clause (z), may be considered disabled or shall have otherwise
ceased to perform his executive functions with the Parent as aforesaid, to
propose a replacement for Xxxxxxx Xxxxxx or one of such individuals, as the
case may be, acceptable to the Super Majority Lenders in their sole discretion
provided that any such replacement shall be deemed acceptable to the Super
Majority Lenders unless the Agent notifies the Parent in writing that the Super
Majority Lenders object to such replacement within 30 days after receiving a
written notice from the Parent containing the name of the proposed replacement.
- 8 -
16
"Chase Account" shall mean an account of the Parent (under the
dominion and control of the Parent) maintained at the office of the Agent.
"Closing Date" shall mean the date on which all conditions
precedent to the making of the initial Domestic Loans as set forth in Section
4.1 have been satisfied or waived, which shall in no event be later than
October 31, 1996.
"Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations issued thereunder, as now and hereafter in effect, or any
successor provision thereto.
"Collateral" shall mean all the Debtors' right, title and
interest in personal property, tangible and intangible, wherever located or
situated and whether now owned or hereafter acquired or created, including but
not limited to all of the Debtors' right, title and interest in and to all
related goods, accounts, intercompany obligations, contract rights, documents,
chattel paper, general intangibles, goodwill, equipment, inventory, copyrights,
trademarks, tradenames, insurance proceeds, securities, securities
entitlements, cash and bank accounts and any proceeds thereon, products thereof
or income therefrom to the extent of the Debtors' interest therein, further
including but not limited to all of the Debtors' right, title and interest in
and to each and every item of Product and Recorded Product to the extent of the
Debtors' interest therein and without limiting the foregoing language, each and
all of the following particular rights and properties to the extent of the
Debtors' interest therein:
(i) all scenarios, screenplays and/or scripts at
every stage thereof;
(ii) all common law and/or statutory copyright and
other rights in all literary and other properties (hereinafter
called "said literary properties") which form the basis of the
item of Product and/or Recorded Product and/or which are or
will be incorporated into the item of Product and/or Recorded
Product, all component parts of the item of Product and/or
Recorded Product consisting of said literary and other
properties, all motion picture rights in and to the story, all
treatments of said story and other literary material, together
with all preliminary and final screenplays used and to be used
in connection with the item of Product and/or Recorded
Product, and all other literary material upon which the item
of Product and/or Recorded Product is based or from which it
is adapted;
(iii) all rights in and to all music and musical
compositions used and to be used in the item of Product and/or
Recorded Product, including, but without being limited to, all
rights to record, rerecord, produce, reproduce or synchronize
all of said music and musical compositions in and in
connection with motion pictures;
- 9 -
17
(iv) all exposed and developed negative film,
tapes, sound tracks, positive prints, cutouts and trims
connected with the item of Product, whether or not in
completed form or in some state of completion;
(v) all collateral, allied, subsidiary and
merchandising rights appurtenant or related to the item of
Product and/or Recorded Product including, without limitation,
the following rights: all rights to produce remakes or
sequels or prequels to the item of Product based upon the item
of Product, said literary properties or the theme of the item
of Product and/or the text or any part of said literary
properties; all rights throughout the world to broadcast,
transmit and/or reproduce by means of television (including
commercially sponsored, sustaining and subscription or "pay"
television) or by any process analogous thereto, now known or
hereafter devised, the item of Product or any remake or sequel
or prequel to the item of Product; all rights to produce
primarily for television or similar use a motion picture or
series of motion pictures, by use of film or any other
mechanical recording device now known or hereafter devised,
based upon the item of Product, said literary properties or
any part thereof, including, without limitation, based upon
any script, scenario or the like used in the item of Product;
all merchandising rights including, without limitation, all
rights to use, exploit and license others to use and exploit
any and all commercial tieups of any kind arising out of or
connected with said literary properties, the item of Product
and/or Recorded Product, the title or titles of the item of
Product and/or Recorded Product, the characters of the item of
Product or said literary properties and/or the names or
characteristics of said characters and including further,
without limitation, any and all commercial exploitation in
connection with or related to the item of Product, any remake
or sequel thereof and/or said literary properties;
(vi) all statutory copyrights, domestic and
foreign, obtained or to be obtained on the item of Product
and/or Recorded Product, together with any and all copyrights
obtained or to be obtained in connection with the item of
Product and/or Recorded Product or any underlying or component
elements of the item of Product and/or Recorded Product,
including, but without being limited to, all copyrights on the
property described in subparagraphs (i) through (v) inclusive,
of this paragraph, together with the right to copyright and
all rights to renew or extend such copyrights and the right to
xxx in the name of any of the Debtors or in the Agent's name
(for the benefit of the Lenders) for past, present and future
infringements of copyright;
(vii) all insurance policies and completion bonds
connected with the item of Product and/or Recorded Product and
all proceeds which may be derived therefrom;
- 10 -
18
(viii) all rights to distribute, sell, rent, license
the exhibition of and otherwise exploit and turn to account
the item of Product and/or Recorded Product, the negatives,
sound tracks, prints and motion picture rights in and to said
story, other literary material upon which the item of Product
is based or from which it is adapted, and said music and
musical compositions used or to be used in the item of Product
and/or Recorded Product;
(ix) any and all sums, proceeds, money, products,
profits or increases, including money profits or increases (as
those terms are used in the UCC or otherwise) or other
property obtained or to be obtained from the distribution,
exhibition, sale or other uses or dispositions of the item of
Product and/or Recorded Product or any part of the item of
Product and/or Recorded Product, including, without
limitation, all proceeds, profits, products and increases,
whether in money or otherwise, from the sale, rental or
licensing of the item of Product and/or Recorded Product
and/or any of the elements of the item of Product and/or
Recorded Product including from collateral, allied, subsidiary
and merchandising rights;
(x) the dramatic, nondramatic, stage, television,
radio and publishing rights, title and interest in and to the
item of Product and/or Recorded Product, and the right to
obtain copyrights and renewals of copyrights therein;
(xi) the title of the item of Product and/or
Recorded Product and all rights of the Debtors to the use
thereof, including, without limitation, rights protected
pursuant to trademark, service xxxx, unfair competition and/or
the rules and principles of law and of any other applicable
statutory, common law, or other applicable statutes, common
law, or other rule or principle of law;
(xii) any and all contract rights and/or chattel
paper which may arise in connection with the item of Product
and/or Recorded Product;
(xiii) all accounts and/or other rights to payment
which any Debtor presently owns or which may arise in favor of
any Debtor in the future, including, without limitation, any
refund under a completion guaranty, all accounts and/or rights
to payment due from exhibitors in connection with the
distribution of the item of Product and/or Recorded Product,
and from exploitation of any and all of the collateral,
allied, subsidiary, merchandising and other rights in
connection with the item of Product and/or Recorded Product;
(xiv) any and all "general intangibles" (as that
term is defined in the UCC) not elsewhere included in this
definition, including, without limitation, any and all general
intangibles consisting of any right to payment which may arise
in the distribution or exploitation of any of the rights set
out herein, and any and all
- 11 -
19
general intangible rights in favor of any Debtor or the
Lenders for services or other performances by any third
parties, including actors, writers, directors, individual
producers and/or any and all other performing or nonperforming
artists in any way connected with the item of Product and/or
Recorded Product, any and all general intangible rights in
favor of any Debtor or the Lenders relating to licenses of
sound or other equipment, licenses for any photograph or
photographic process, and all general intangibles related to
the distribution or exploitation of the item of Product and/or
Recorded Product including general intangibles related to or
which grow out of the exhibition of the item of Product and/or
Recorded Product and the exploitation of any and all other
rights in the item of Product and/or Recorded Product set out
in this definition;
(xv) any and all goods including inventory (as
that term is defined in the UCC) which may arise in connection
with the creation, production or delivery of the item of
Product and/or Recorded Product and which goods pursuant to
any production or distribution agreement or otherwise are
owned by any Debtor;
(xvi) all and each of the rights, regardless of
denomination, which arise in connection with the creation,
production, completion of production, delivery, distribution,
or other exploitation of the item of Product and/or Recorded
Product, including, without limitation, any and all rights in
favor of any Debtor and/or the Agent (for the benefit of the
Lenders), the ownership or control of which are or may become
necessary or desirable, in the opinion of the Agent, in order
to complete production of the item of Product and/or Recorded
Product in the event that the Agent exercises any rights it
may have to take over and complete production of the item of
Product and/or Recorded Product;
(xvii) any and all documents issued by any
pledgeholder or bailee with respect to the item of Product
and/or Recorded Product, the negatives, sound tracks or prints
with respect thereto;
(xviii) any and all rights of any Debtor under
contracts relating to the production of the Product and/or
Recorded Product; and
(xix) any and all rights of any of the Debtors
under Distribution Agreements, Agency Contracts and/or
Licensing Agreements relating to any item of Product and/or
Recorded Product.
provided, however, that Collateral shall not include any real
property.
"Collection Accounts" shall mean the accounts referred to in
Section 8.3.
- 12 -
20
"Commitment" shall mean with respect to each Lender, the
commitment of such Lender to make Loans to the Borrowers in an amount not in
excess of the amount set forth opposite its name in the Schedule of
Commitments, as such amount may be reduced from time to time in accordance with
this Credit Agreement.
"Commitment Fees" shall have the meaning given such term in
Section 2.5 hereof.
"Commitment Termination Date" shall mean the earliest to occur
of (i) October 23, 2000 or (ii) such earlier date on which the Commitments
shall terminate in accordance with Article 7.
"Complete" or "Completed" or "Completion" shall mean with
respect to any item of Product, that (A) either (i) sufficient elements have
been delivered by a Debtor to, and accepted by, a Person (other than any Debtor
or an Affiliate thereof) to permit such Person either to distribute or exhibit
the item of Product on television or, if produced for theatrical exhibition, in
the theatrical market or (ii) the Parent has certified to the Agent that an
independent laboratory has in its possession a complete final one-inch tape,
35mm or 70mm composite positive print of the item of Product as finally cut,
main and end titled, edited, scored and assembled, with sound track printed
thereon in perfect synchronization with the photographic action and fit and
ready for television exhibition and distribution or, if produced for theatrical
exhibition, in the theatrical market, provided that if such certification shall
not have been verified to the Agent by such independent laboratory within 20
Business Days thereafter, such item of Product shall revert to being
un-Completed until the Agent receives such verification and (B) if such item of
Product was acquired by a Debtor from a third party, the entire acquisition
price or minimum advance due and payable at such time shall have been paid in
full and there is no condition or event (including, without limitation, the
payment of money not yet due) the occurrence of which might result in such
Debtor losing any of its rights in such item of Product.
"Completion Bond" shall mean a completion bond, in form and
substance satisfactory to the Agent, issued by a financially sound and
reputable completion guarantor approved by the Majority Lenders which bond is
in favor of the Agent and guarantees Completion and delivery of an item of
Product. The Majority Lenders hereby pre-approve as a completion guarantor (i)
Motion Pictures Guarantors Ltd. (to the extent such completion bond is
accompanied by a Wellington Insurance Company "cut-through"), (ii) Fireman's
Fund Insurance Company, acting through its agent, International Film Guarantors
L.P., (iii) Cinema Completions International, Inc./Continental Casualty Company
and (iv) Film Finances Inc. or an Affiliate thereof located in a country other
than the United States (but only for items of Product with a budget of
$7,500,000 or less and only to the extent the completion bond is accompanied by
a Lloyd's of London "cut-through"); provided that such pre-approval may be
revoked at any time upon 15 days prior written notice to the Parent prior to
the issuance of a Completion Bond by such completion guarantor.
- 13 -
21
"Contribution Agreement" shall mean a Contribution Agreement
substantially in the form of Exhibit F-1 or F-2 hereto.
"Convertible Subordinated Notes" shall mean the Parent's 6
1/2% Convertible Subordinated Notes due 2003.
"Copyright Security Agreement" shall mean the Copyright
Security Agreement, substantially in the form of Exhibit B-1 hereto as the same
may be amended or supplemented from time to time by delivery of a Copyright
Security Agreement Supplement or otherwise.
"Copyright Security Agreement Supplement" shall mean a
Supplement to the Copyright Security Agreement substantially in the form of
Exhibit B-2 hereto.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement, futures contract, option contract or other similar
agreement between a Debtor and any Lender designed to protect a Debtor against
fluctuations in currency values.
"Debtors" shall mean the Borrowers and the Guarantors.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Distribution Agreements" shall mean (i) any and all
agreements entered into by a Debtor pursuant to which such Debtor has acquired
distribution rights to any item of Product and (ii) any agreement hereafter
entered into by a Debtor pursuant to which such Debtor acquires distribution
rights to an item of Product.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Domestic Borrower" shall mean the Parent.
"Domestic Borrowing Base" shall mean, at any date for which
the amount thereof is to be determined, an amount equal to the sum of:
I. Receivables (without duplication):
(a) 90% of the Domestic Debtors' aggregate Eligible
Receivables; plus,
(b) 90% of the Domestic Debtors' aggregate Billed Barter
Receivables; plus,
(c) 85% of the Domestic Debtors' Type 1 Barter
Receivables; plus
(d) 50% of the Domestic Debtors' Type 2 Barter
Receivables; plus
- 14 -
22
(e) the aggregate amount of cash and Cash Equivalents on
deposit in the Cash Collateral Account;
provided, however, that if an Eligible Receivable is supported
by an Acceptable L/C, the advance rate for such Eligible
Receivable shall be increased to 100%, and provided further
that the aggregate amount to be included in the Domestic
Borrowing Base for all Non-Investment Grade Debtors shall not
exceed $7,500,000 minus the amount included in the Foreign
Borrowing Base for all Non-Investment Grade Debtors; plus
II. Fremantle/Xxxxxxx Credit.
"Domestic Debtors" shall mean the Parent and all other Debtors
which are not Foreign Subsidiaries; provided, however, that for the purposes of
calculating the Domestic Borrowing Base, Fremantle UK shall be included as a
Domestic Debtor.
"Domestic Loan" shall be as defined in Section 2.1.
"Domestic Note" shall be as defined in Section 2.3(a).
"Earn Out" shall mean Earn-Out Payments due under Section
3.8(a) of the Asset Purchase Agreement dated as of October 6, 1995 between Xxxx
Xxxxxxx Productions, L.P. and The Child's Play Company on one hand and The
Interpublic Group of Companies, Inc. and Xxxx Xxxxxxx Productions, LLC on the
other.
"EBITDA" shall mean, for any period, for any Person, the sum
for such period of (i) Net Income, (ii) depreciation and amortization expense
(including amortization of film costs), (iii) interest expense and (iv)
provision for income taxes during such period, all as determined for such
period in conformity with GAAP.
"Eligible Assignee" shall mean (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth of at least $100,000,000, calculated in
accordance with generally accepted accounting principles; (iii) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development ("OECD"), or a political
subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch, subsidiary
or agency located in the country in which it is organized or another country
which is also a member of the OECD; or (iv) the central bank of any country
which is a member of the OECD.
"Eligible Receivables" shall mean, at any date at which the
amount thereof is to be determined, an amount equal to (a) the sum of the
minimum specified amounts which relate to
- 15 -
23
Product, or Recorded Product which are contractually obligated to be paid to a
Debtor by an Approved Obligor on payment dates certain or mutually agreed-upon
estimated dates of payment, minus (b) the sum of the following items (based on
the Parent's then best estimates): reserves for bad debts, participations
(other than participations which are not expected to be payable until a date
which is more than 12 months after the date of calculation of Eligible
Receivables), payments due to third parties, taxes (payable, in each case, out
of or reasonably contemporaneously with the payment of such receivable),
residuals, royalties, unpaid collection/distribution expenses, commissions, and
releasing costs, and any other projected expenses of the Parent arising in
connection with such accounts receivable; all such amounts included in clause
(a) or (b) above discounted, in the case of amounts which are not by their
terms due and payable within 12 months following the date of determination, on
a quarterly basis by a rate of interest equal to the greater of (i) interest
rate currently in effect for Alternate Base Rate Loans at the date of such
determination and (ii) 7% per annum. Eligible Receivables shall not include:
(i) accounts receivable which remain unpaid more
than 90 days after the end of the month in which invoiced, in
the case of cash syndication receivables; or more than 120
days after the end of the month in which invoiced, in the case
of barter syndication receivables; or more than 30 days after
they become due and payable, in the case of all other
receivables;
(ii) any receivable amount from any obligor which
has 10% or more of the total receivable amount from such
obligor that is excluded by reason of the preceding paragraph;
(iii) any portion of any receivable which is
payable later than six months after the Commitment Termination
Date;
(iv) accounts receivable for which there is a bona
fide request (which has not been approved by a Debtor within
ten days of receipt) for a material credit, adjustment,
compromise, offset, counterclaim or dispute, provided,
however, that only the amount in question shall be excluded
from such receivable;
(v) accounts receivable for which the Parent or a
Debtor cannot warrant title to sufficient underlying rights to
justify such receivable;
(vi) accounts receivable in which the Agent (for
the benefit of the Lenders) does not have a first perfected
security interest;
(vii) except in the case of Type 1 or Type 2 Barter
Receivables to the extent outlined in the relevant definition,
accounts receivable which are not related to Completed Product
or covered by a Completion Bond;
- 16 -
24
(viii) accounts receivable which have been included
in any Debtors' estimated bad debts; but only to the extent
such amount has not been deducted pursuant to clause (ii) of
this definition of "Eligible Receivables";
(ix) accounts receivable which are subject (in the
discretion of the Agent, acting in good faith) to material
conditions precedent to payment (including a material
performance obligation on the part of a Debtor or any other
party or obligations contingent upon future events) not within
a Debtor's control within the ordinary course of business,
except for Type 1 and Type 2 Barter Receivables to the extent
specified in the relevant definition;
(x) accounts receivable in excess of $5,000,000
in the aggregate which are not payable in Dollars unless the
amount (in excess of $5,000,000) sought to be included in the
Borrowing Base is covered by a Currency Agreement which
provides for Dollar payments to be made directly to the Agent
and which is otherwise acceptable to the Agent. For purposes
of determining the amount to be included in the Borrowing Base
for any accounts receivable payable in a currency other than
Dollars, such amount shall be calculated at a rate equal to
the lowest exchange rate of such currency into Dollars (as
stated in the form of Dollars per foreign currency unit)
available for the preceding twelve months as published in the
Wall Street Journal for current currency transactions or as
quoted by The Chase Manhattan Bank;
(xi) accounts receivable which are in excess in
the aggregate of the Allowable Amount with respect to such
Approved Obligor, or with regard to Agency Contracts, do not
arise from circumstances where the obligor on the underlying
receivable is an Approved Obligor in aggregate amounts not in
excess of the Allowable Amount with respect to such Approved
Obligor and the producer is an Approved Obligor; or
(xii) accounts receivable which are related to an
item of Product which is not covered by a Pledgeholder
Agreement or Laboratory Access Letter to the extent required
by Section 5.12 hereof.
provided, however, that a receivable meeting all of the conditions contained
herein but owing from a Person not an Approved Obligor may be included as an
Eligible Receivable to the extent secured by an Acceptable L/C.
"Employment Agreements" shall mean the agreements with Xxxxxxx
Xxxxxx, Xxx Xxxxxx, Xxx Xxxxxxxx and Xxxxxxxx Xxxxxxxxx listed on Schedule 3
hereto.
"Environmental Laws" shall mean any and all federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any
- 17 -
25
Governmental Authority regulating, relating to or imposing liability or
standards of conduct concerning any Hazardous Material or environmental
protection or health and safety, as now or may at any time hereafter be in
effect, including without limitation, the Clean Water Act also known as the
Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. Section 1251 et seq.,
the Clean Air Act ("CAA"), 42 U.S.C. Section Section 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. Section Section
136 et seq., the Surface Mining Control and Reclamation Act ("SMCRA"), 30
U.S.C. Section Section 1201 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the
Superfund Amendment and Reauthorization Act of 1986 ("XXXX"), Public Law
99-499, 100 Stat. 1613, the Emergency Planning and Community Right to Know Act
("ECPCRKA"), 42 U.S.C. Section 11001 et seq., the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the Occupational Safety
and Health Act as amended ("OSHA"), 29 U.S.C. Section 655 and Section 657,
together, in each case, with any amendment thereto, and the regulations adopted
and the official publications promulgated thereunder and all substitutions
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as heretofore and hereafter amended, as codified at 29 U.S.C. Section
1001 et seq. and the regulations promulgated thereunder.
"Eurodollar Loan" shall mean a Loan based on the LIBO Rate in
accordance with the provisions of Article 2 hereof.
"Event of Default" shall have the meaning given such term in
Article 7 hereof.
"Film Assets" shall mean screenplays, novels, treatments,
outlines and other literary properties upon which an item of Product is to be
based, and copyrights in each case acquired in the ordinary course of business
by any of the Debtors.
"Foreign Borrower" shall mean NBV.
"Foreign Borrowing Base" shall mean, at any date for which the
amount thereof is to be determined, an amount equal to 90% of the sum of
Eligible Receivables of NBV and Additional Foreign Subsidiaries; provided,
however, that if an Eligible Receivable is supported by an Acceptable L/C, the
advance rate for such Eligible Receivable shall be increased to 100% and,
provided further, that the aggregate amount to be included in the Foreign
Borrowing Base for all Non-Investment Grade Debtors shall not exceed $7,500,000
minus the amount included in the Domestic Borrowing Base for all Non-Investment
Grade Debtors. Until such time as the conditions contained in Section 6.4(iii)
relating to a Foreign Entity have been satisfied as to an Additional Foreign
Subsidiary, such Additional Foreign Subsidiary's receivables may not be
included in the Foreign Borrowing Base.
"Foreign Guarantees" shall mean the U.K. Guaranty and any
other Guaranty required from an Additional Foreign Subsidiary.
- 18 -
26
"Foreign Loan" shall be as defined in Section 2.1.
"Foreign Note" shall be as defined in Section 2.3(a).
"Foreign Security Documents" shall mean the U.K. Security
Documents.
"Foreign Subsidiary"shall mean a direct or indirect Subsidiary
of the Parent incorporated or organized under the laws of a jurisdiction
outside the United States of America; provided, however, that for purposes
hereof, Fremantle UK shall not be included as a Foreign Subsidiary.
"Fremantle" shall mean Fremantle International, Inc., a New
York corporation.
"Fremantle/Xxxxxxx Credit" shall mean, as calculated at the
end of the last fiscal quarter an amount equal to the product of (i) the sum of
the amount of EBITDA for each of AAF and AAG for the Rolling Period then ended,
after subtracting therefrom (a) the amount of the Earn-Out accrued during such
Rolling Period and (b) cash flow or operating income attributable to NBV to the
extent included in the calculation of EBITDA for AAF or AAG multiplied by (ii)
two. Until December 31, 1996 for purposes of calculating the EBITDA of AAG,
such calculation shall be made on a pro-forma basis assuming that AAG had been
entitled to 100% of the EBITDA from the assets acquired from Xxxx Xxxxxxx
Productions, L.P. for the entire Rolling Period then ended.
"Fronting Bank" shall mean as defined in the initial paragraph
hereof.
"Fundamental Documents" shall mean this Credit Agreement, the
Notes, the Pledgeholder Agreements, the Laboratory Access Letters, the
Copyright Security Agreement, the Trademark Security Agreement, UCC financing
statements, NBV Security Documents and U.K. Security Documents and any other
ancillary documentation which is required to be or is otherwise executed by any
of the Debtors and delivered to the Agent in connection with this Credit
Agreement.
"Funded Debt" shall mean, at any date, the sum of the
following on a consolidated basis, (i) all Indebtedness of the Parent and its
Subsidiaries (including the outstanding amount of the Senior Subordinated Notes
or Permitted Refinancing and excluding the outstanding amount of any
Convertible Subordinated Note which has been purchased by Parent or called for
redemption on or prior to November 30, 1996) and (ii) all Program Acquisition
Guarantees.
"GAAP" shall mean generally accepted accounting principles in
the United States consistently applied (except for accounting changes in
response to FASB releases, or other authoritative pronouncements).
- 19 -
27
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, or any court, in each case whether of the United States or
foreign.
"Guaranty" shall mean, as to any Person, any direct or
indirect obligation of such Person guarantying or intended to guaranty any
Indebtedness, dividend or other monetary obligation ("primary obligation") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) 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 (c)
to purchase property, securities or services, in each case, primarily for the
purpose of assuring the owner of any such primary obligation. The amount of
any Guaranty shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder).
"Guarantors" shall mean (i) with respect to the Foreign Loans,
the Parent, The Baywatch Production Company, a California corporation
("Baywatch"), The Baywatch Nights Production Company, Inc., a California
corporation ("Baywatch Nights"), Fremantle, Malibu, All American Television,
Inc., a Delaware corporation ("AATI"), LBS Communications, Inc., a New York
corporation ("LBS"), All American Entertainment, Inc., a Delaware corporation
(f/k/a Xxxxxx Brothers Entertainment Industries, Inc.) ("AAE"), Santa Xxxxxx
Sound Recorders, Inc., a California corporation ("SMR"), SBSVTV Inc. (f/k/a All
American Television Production, Inc.), a California corporation ("SBS"), All
American Television Production, Inc. (f/k/a All American Productions, Inc.), a
California corporation ("AATP"), All American Music Group, a California
corporation (f/k/a Xxxxxx Brothers Records, Inc.) ("AAMG"), All American FDF
Holdings, Inc., a Delaware corporation ("FDF"), AAG, AAF, Fremantle (UK)
Productions Limited (f/k/a Talbot Television Limited), a corporation organized
under the laws of the United Kingdom ("Fremantle UK"), All American Consumer
Marketing Group, Inc., a Delaware corporation ("AACM"), All American Orbis,
Inc., a Delaware corporation ("AAO"), Xxxx Xxxxxxx Productions, LLC, a New York
limited liability company (the "LLC"), Terrapin Communications, Inc., a
California corporation ("TC"), OTL Productions, Inc., a California corporation
("OTL"), The Spring Collection Production Company, a California corporation
("SCC"), Kickoff Productions, Inc., a California corporation ("KP"), Good
Games Productions, Inc., a California corporation ("GGP") and (ii) with respect
to the Domestic Loans, Baywatch, Baywatch Nights, Fremantle, Malibu, AATI, LBS,
AAE, SMR, SBS, AATP, AAMG, FDF, AAG, AAF, Fremantle UK, AAO, the LLC, TC, OTL,
SCC, KP, GGP and AACM.
"Hazardous Materials" shall mean any flammable materials,
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or similar materials defined in any
Environmental Law.
- 20 -
28
"Indebtedness" shall mean (without double counting), at any
time and with respect to any Person, (i) indebtedness of such Person 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 and Program Acquisition Guarantees to the
extent permitted by Section 6.28 arising in the ordinary course and payable in
accordance with customary trading terms in the ordinary course of business);
(ii) indebtedness of others which such Person has directly or indirectly
assumed or guaranteed or for which such Person has otherwise provided credit
support; (iii) indebtedness of others secured by a Lien on assets of such
Person, whether or not such Person shall have assumed such indebtedness; (iv)
obligations of such Person 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 such Person (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 such Person under Capital Leases.
"Interest Coverage Ratio" for any Rolling Period shall mean
the ratio of (x) Operating Income for such period minus, the amount, if any, of
the Earn Out accrued during such Rolling Period to (y) Net Interest Expense for
such Rolling Period.
"Interest Payment Date" shall mean (i) as to any Eurodollar
Loan having an Interest Period of one, two or three months, the last day of
such Interest Period, (ii) as to any Eurodollar Loan having an Interest Period
of six months, the last day of such Interest Period and, in addition, the date
during such Interest Period that would be the last day of an Interest Period
commencing on the same day as the first day of such Interest Period but having
a duration of three months and (iii) with respect to Alternate Base Rate Loans,
the last Business Day of each March, June, September and December (commencing
the last Business Day of December 1996).
"Interest Period" shall mean as to any Eurodollar Loan, the
period commencing on the date of such Loan or the last day of the preceding
Interest Period and ending on the numerically corresponding day (or if there is
no corresponding day, the last day) in the calendar month that is one, two,
three or six months thereafter as the Parent may elect; provided, however, that
(i) if any Interest Period would end on a day which shall not be a Business
Day, such Interest Period shall be extended to the next succeeding Business
Day, unless such next succeeding Business Day would fall in the next calendar
month, in which case, such Interest Period shall end on the next preceding
Business Day and (ii) no Interest Period may be selected which would end later
than October 24, 2000.
"Interest Rate Protection Agreements" shall mean any interest
rate swap agreement, interest rate cap agreement, synthetic cap or other
financial agreement or arrangement designed to protect the Parent against
fluctuations in interest rates.
"Investment" shall mean any stock, evidence of indebtedness or
other securities of any Person, any loan, advance, contribution of capital,
extension of credit or commitment
- 21 -
29
therefor, including without limitation the guarantee of loans made to others
(except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trading terms in the ordinary course of business), and any purchase
of (i) any securities of another Person or (ii) any business or undertaking of
any Person or any commitment or option to make any such purchase, or any other
investment exclusive of Program Acquisition Guarantees and commitments to the
extent permitted by Section 6.28.
"Investment Grade Account Debtor" shall mean any Person not
specifically identified by name on Schedule 2 hereto (as amended from time to
time) which has a credit rating of at least BBB or the equivalent thereof by
Standard & Poor's Rating Group or Xxxxx'x Investors Services, Inc.
"Keyman Life Insurance" shall mean the life insurance policy
on the life of Xxxxxxx Xxxxxx issued by Transamerica Occidental Life Insurance
Company or such other insurance company acceptable to the Agent in a face
amount of not less than $10,000,000, and any supplemental or replacement
policies relating thereto.
"Keyman Life Insurance Assignment" shall mean the Assignment
to the Agent of the Keyman Life Insurance as Collateral, in form and substance
satisfactory to the Agent.
"L/C Exposure" shall mean, at any time, the amount expressed
in Dollars of the aggregate face amount of all drafts which may then or
thereafter be presented by beneficiaries under all Letters of Credit then
outstanding plus the face amount of all drafts which have been presented under
all Letters of Credit but have not yet been paid or have been paid but not
reimbursed.
"Laboratory Access Letter" shall mean a letter agreement among
(i) a laboratory holding any elements of any Product or Recorded Product to
which a Debtor has the right of access, (ii) such Debtor and (iii) the Agent,
substantially in the form of Exhibit C hereto or a form otherwise acceptable to
the Agent.
"Lender" and "Lenders" shall mean the financial institutions
whose names appear at the foot hereof and any assignee of a Lender pursuant to
Section 13.3(b).
"Lending Office" shall mean, with respect to any of the
Lenders, the branch or branches (or affiliate or affiliates) from which any
such Lender's Eurodollar Loans or Alternate Base Rate Loans, as the case may
be, are made or maintained and for the account of which all payments of
principal of, and interest on, such Lender's Eurodollar Loans or Alternate Base
Rate Loans are made, as notified to the Agent from time to time.
"Letter of Credit" shall mean a letter of credit issued by the
Fronting Bank pursuant to Section 2.15.
- 22 -
30
"LIBO Rate" shall mean, with respect to the Interest Period
for a Eurodollar Loan, an interest rate per annum equal to the quotient
(rounded upwards to the next 1/100 of 1%) of (A) the average of the rates at
which Dollar deposits approximately equal in principal amount to the Agent's
portion of such Eurodollar Loan and for a maturity equal to the applicable
Interest Period are offered to the Lending Office of the Agent in immediately
available funds in the London Interbank Market for Eurodollars at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period divided by (B) one minus the applicable statutory reserve
requirements of the Agent, expressed as a decimal (including without
duplication or limitation, basic, supplemental, marginal and emergency
reserves), from time to time in effect under Regulation D or similar
regulations of the Board of Governors of the Federal Reserve System. It is
agreed that for purposes of this definition, Eurodollar Loans made hereunder
shall be deemed to constitute Eurocurrency Liabilities as defined in Regulation
D and to be subject to the reserve requirements of Regulation D.
"Licensing Agreements" shall mean agreements between a Debtor
and other Persons (who are not Affiliates of a Debtor) pursuant to which such
Debtor grants licenses to such other Persons to distribute, broadcast or
exhibit an item of Product.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, hypothecation, lien 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 Uniform Commercial Code of any jurisdiction or the agreement to grant
a security interest at a future date).
"Loan" shall mean a Domestic Loan or a Foreign Loan.
"Majority Lenders" shall mean (i) the Lenders holding at least
51% of the aggregate unpaid principal amount of the Loans then outstanding plus
any L/C Exposure or (ii) if no Loans are then outstanding, the Lenders holding
at least 51% of the Commitments.
"Make Goods" shall mean an obligation to offer an advertiser
additional advertising time on a particular television program or on other
programs as compensation for any shortfall in the actual rating or demographic
make-up of the viewing audience (as determined by X.X. Xxxxxxx or similar
rating services) of a particular program on which such advertiser has purchased
advertising time.
"Malibu" shall mean The Malibu Branch Production Company, a
California corporation.
"Margin Stock" shall be as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
- 23 -
31
"Maturity Date" shall mean October 24, 2000 or such earlier
date, if any, on which the Loans shall become due and payable in accordance
with Article 7.
"Multiemployer Plan" shall mean a plan described in Section
3(37) of ERISA.
"National Spots" shall mean units of a specified duration of
national commercial advertisements to be integrated into an item of Product for
its telecast in a specified territory, in accordance with customary industry
practice of barter.
"NBV" shall be as defined in the initial paragraph of this
Credit Agreement.
"NBV Account" shall mean an account of NBV maintained with a
Lender.
"NBV Security Documents" shall mean a Security Agreement and a
Pledge Agreement under Netherlands law, satisfactory to the Agent and its
counsel, covering Collateral owned by NBV and the pledge of the shares of NBV.
"Net Cash Proceeds" shall mean cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received) from any issuance of any securities of a Debtor or any sale, lease,
transfer or other disposition of property or other assets of a Debtor, in each
case net of all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and any taxes payable and reasonably estimated
income taxes, as a consequence of such sale, lease, transfer or other
disposition, but only to the extent reserved for, whether or not such reserve
is required by GAAP.
"Net Income" shall mean for any period for which such amount
is being determined the net income (loss) of such Person for such period in
accordance with GAAP.
"Net Interest Expense" shall mean for any period for which
such amount is being determined, total interest expense (including amounts
properly attributable to Capital Leases in accordance with GAAP, amortization
of debt discount and debt issuance costs, but net of interest income (to the
extent received in cash) and capitalized interest) of the Parent and its
Subsidiaries on a consolidated basis.
"Net Worth" shall mean, at any date, the amount of
stockholders' equity as would be reported on the consolidated balance sheet of
the Parent and its Subsidiaries prepared in accordance with GAAP as of the date
of determination.
"Non-Investment Grade Account Debtor" shall mean any Person
which is neither specifically identified by name on Schedule 2 hereto (as
amended from time to time) nor an Investment Grade Account Debtor.
- 24 -
32
"Notes" shall mean the Domestic Notes and the Foreign Notes.
"Obligations" shall mean, with respect to either Borrower, the
obligation of the relevant Borrower to make due and punctual payment of
principal of and interest on the Loans, the Commitment Fees and all other
monetary obligations of the Borrowers to the Agent or any Lender under this
Credit Agreement, the Notes or any other Fundamental Documents and all amounts
payable by the Parent to any Lender under any Interest Rate Protection
Agreement or Currency Agreement.
"Operating Income" shall mean for any period for which such
amount is being determined, total revenues less total expenses of the Parent
and its Subsidiaries as determined on a consolidated basis in accordance with
GAAP.
"Orbis Agreement" shall mean the Stock Purchase Agreement
dated as of July 19, 1996 among the Parent, ORBIS Entertainment Company Inc.
and the Selling Shareholders (as defined therein).
"Original Credit Agreement" shall be as defined in the
Introductory Statement.
"Parent" shall be as defined in the initial paragraph of this
Credit Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Percentage" shall mean each Lender's percentage share of the
Commitments.
"Permitted Encumbrances" shall mean Liens permitted under
Section 6.2 hereof.
"Permitted Refinancing" shall mean any Indebtedness which (i)
is incurred by the Parent solely to refinance the Senior Subordinated Notes and
related costs and expenses, (ii) has terms, conditions and covenants not
materially more restrictive than those contained in the Indebtedness being
refinanced, (iii) does not have any scheduled principal payment, sinking fund
or mandatory redemption requirement prior to October 15, 2001, (iv) is
subordinated to the Obligations on terms at least as favorable to the Lenders
(in the reasonable view of the Agent) as the Indebtedness being refinanced, and
(v) is issued no less than five (5) Business Days after receipt by the Agent of
a certificate of an Authorized Officer of the Borrower confirming that such
refinancing Indebtedness satisfies the criteria set forth in the preceding
clauses (i) through (iv) and does not violate any provision of this Credit
Agreement.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association, company,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
- 25 -
33
"Plan" shall mean an employee benefit plan within the meaning
of Section 3(3) of ERISA.
"Pledged Securities" shall mean all of the issued and
outstanding capital stock of each of the Subsidiaries of the Parent other than
as noted on Schedule 3.7 hereto.
"Pledgeholder Agreement" shall mean a Laboratory Pledgeholder
Agreement among a Debtor, the Agent, a third party completion guarantor (if
there is one), and one or more laboratories located within the continental
United States, substantially in the form of Exhibit G hereto, or in such other
form as shall be acceptable to the Agent.
"Pledgors" shall mean those Debtors identified as such on
Schedule 3.7.
"Prepayment Date" shall be as defined in Section 2.9(g).
"Product" shall mean any movie-of-the-week, television series,
motion picture, film, videotape or other program produced for television
release or for release in any other medium, or exhibited in any theater, or
shown on network, free and cable, pay and/or other television medium (including
without limitation first run syndication) in each case whether recorded on
film, videotape, cassette, cartridge, disc or on or by any other means, method,
process or device whether now known or hereafter developed, with respect to
which a Debtor (i) is the initial copyright owner or (ii) acquires an equity
interest or distribution rights. The term "item of Product" shall include,
without limitation, the scenario, screenplay or script upon which such item of
Product is based, all of the properties thereof, tangible and intangible, and
whether now in existence or hereafter to be made or produced, whether or not in
possession of a Debtor, and all rights therein and thereto, of every kind and
character to the extent of the Debtor's interest therein.
"Program Acquisition Guarantees" shall mean any commitment of
a Debtor to a producer or owner of Product in conjunction with the acquisition
of Product or distribution rights in Product by such Debtor to the effect that
the gross revenues to be generated in the future from the exploitation of such
Product or the net revenues to be received by such producer or owner from the
exploitation of such Product will equal or exceed an amount specified in the
acquisition agreement related to such Product or otherwise requiring payment by
the Debtor of a minimum amount specified in the acquisition agreement related
to such Product regardless of actual performance of such Product.
"Program Spending Ratio" shall mean the ratio of (x) EBITDA of
the Parent and its Subsidiaries plus the amount of Net Cash Proceeds received
by the Parent during the Rolling Period most recently ended as a result of any
new issuance (after the Closing Date) of equity securities during such Rolling
Period plus the redemption price of any Convertible Subordinated Note converted
(rather than redeemed) during such Rolling Period minus Net Interest Expense
for such Rolling Period to (y) Program Spending during such Rolling Period.
For purposes
- 26 -
34
hereof, "Program Spending" shall mean the cash component of "additions to
television programming costs" as such term is used on the Parent's consolidated
statement of cash flow.
"Quiet Enjoyment" shall be as defined in Section 8.13.
"Recorded Product" shall mean any audio embodiment of musical,
spoken or other sounds regardless of the nature of the material object, such as
discs, tapes or other phonorecords, in which such sounds are embodied.
"Refund Percentage" shall mean at the date of determination
the actual amount of cash refunds made by all Debtors during the period most
recently ended in connection with all Barter Receivables divided by the total
amount of actual barter revenue received by the Debtors during such period.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA, other than a reportable event as to which
provision for 30-day notice to the PBGC would be waived under applicable
regulations had the regulations in effect on the Closing Date been in effect on
the date of occurrence of such reportable event.
"Restricted Payment" shall mean (i) any distribution, dividend
or other direct or indirect payment on account of shares of any class of stock
of the Parent or any of its Subsidiaries now or hereafter outstanding; (ii) any
redemption or other acquisition or re-acquisition by the Parent or any of its
Subsidiaries of any class of its own stock or other equity interest of the
Parent, any of its Subsidiaries or any Affiliate 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 Subordinated Debt 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 the Parent or any
of its Subsidiaries now or hereafter outstanding.
"Rolling Period" shall mean, with respect to the fiscal
quarter then ended, such fiscal quarter and the three immediately preceding
fiscal quarters considered as a single accounting period.
"Schedule of Commitments" shall mean the schedule of the
Commitments of the Lenders set forth in Schedule 1 hereto.
"Self-Produced Product" shall mean an item of Product in
respect of which a Debtor has direct production funding responsibility.
"Senior Subordinated Notes" shall mean the Parent's 10 7/8%
Senior Subordinated Notes due 2001 or substantially similar notes which may be
exchanged therefor.
- 27 -
35
"Subordinated Debt" shall mean all other Indebtedness of any
of the Debtors subordinated to the Obligations pursuant to written agreements,
containing interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to the Super Majority Lenders.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the Voting Stock or other ownership interests having ordinary voting power for
the election of directors (or the equivalent) is, at the time as of which any
determination is being made, owned or controlled by such Person or one or more
subsidiaries of such Person or by such Person and one or more subsidiaries of
such Person.
"Super Majority Lenders" shall mean (i) the Lenders holding at
least 60% of the aggregate unpaid principal amount of the Loans then
outstanding plus any L/C Exposure or (ii) if no Loans are then outstanding, the
Lenders holding at least 60% of the Commitments.
"Trademark Security Agreement" shall mean a Trademark Security
Agreement executed by the Debtors substantially in the form of Exhibit J.
"Type 1 Barter Receivables" shall mean with respect to any
Debtor, the amount of all receivables (adjusted for actual Make Goods) which
are contractually owing to such Person from Approved Obligors in connection
with any episodic television Product which is in its second or subsequent
season and which receivables are due within twelve (12) months from the date of
inclusion in the Borrowing Base even though the corresponding program to which
such receivables relate has not yet aired, provided that such Debtor has a
broadcast order or firm contracts to clear markets in 70% of the country for
such program and, if required pursuant to Section 5.23, a Completion Bond is in
place naming the Agent as beneficiary on the Completion Bond (the maximum
amount included shall then be the lesser of such Debtor's investment and amount
covered by the Completion Bond). The receivables to be included as Type 1
Barter Receivables are to be calculated (before the underlying television
product giving rise to such receivable airs in the current season) using a
rating which is equal to 80% of the previous season's cumulative rating until a
rating is received for the current season; thereafter such receivables are to
be calculated, after four weeks, using the lowest rating received during the
previous four weeks. The underlying contract for a Type 1 Barter Receivable
may include a provision for a cash reduction as opposed, or in addition, to a
Make Good provision. Such receivables shall otherwise satisfy all applicable
criteria for inclusion as Eligible Receivables.
"Type 2 Barter Receivables" shall mean with respect to any
Debtor, the amount of all receivables (adjusted for actual Make Goods) which
are contractually owing to such Debtor from Approved Obligors in connection
with any episodic television Product in its first season and for which all
other conditions for Type 1 Barter Receivables have been met. The receivables
to be included as Type 2 Barter Receivables are to be calculated, until the
underlying television
- 28 -
36
product giving rise to such receivable has aired for four weeks and a rating
has been received for such weeks, at 50% of the guaranty given by the
appropriate Debtor to the advertiser in connection with such television product
and thereafter using the average rating received during the previous four weeks
for such television product. The underlying contract for a Type 2 Barter
Receivable may include a provision for a cash reduction as opposed, or in
addition, to a Make Good provision. Such receivables shall otherwise satisfy
all applicable criteria for inclusion as Eligible Receivables.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York on the date of execution of this Credit Agreement.
"Voting Stock" shall mean the capital stock of an entity
having ordinary voting power under ordinary circumstances to vote in the
election of directors of such entity.
2. THE LOANS
SECTION 2.1. Loans. Each Lender, severally and not jointly,
agrees upon the terms and subject to the conditions hereof, to make loans to
the Parent (each such loan, a "Domestic Loan") and to NBV (each such loan, a
"Foreign Loan") from time to time on or after the Closing Date and prior to the
Commitment Termination Date, in an aggregate amount at any one time outstanding
for such Lender which shall not exceed the amount of such Lender's Commitment.
No Loan shall be made which would result in the aggregate amount of all
outstanding Loans plus L/C Exposure exceeding the aggregate of the Commitments
of all Lenders then in effect. No Domestic Loan shall be made which would
result in the aggregate of all outstanding Domestic Loans plus L/C Exposure
exceeding the then current amount of the Domestic Borrowing Base. No Foreign
Loan shall be made which would result in the aggregate of all outstanding
Foreign Loans exceeding the then current Foreign Borrowing Base. Subject to
the terms hereof, a Borrower may borrow, repay and reborrow amounts
constituting the Commitments. Subject to Section 2.2 hereof, the Loans shall
be made at such times as a Borrower shall request, but the Lenders shall not be
required to make Loans hereunder more often than once each calendar week. The
Foreign Borrower hereby designates the Parent to provide any and all notices,
requests and certificates to be delivered by the Foreign Borrower pursuant to
the terms of this Credit Agreement. The Agent shall apply a sufficient amount
of the proceeds of the initial Domestic Loans hereunder to the payment in full
of the term loans under the Original Credit Agreement and all other
outstanding loans under the Original Credit Agreement shall become Domestic
Loans hereunder.
SECTION 2.2. Making of Loans. (a) Each Loan shall be an
Alternate Base Rate Loan or a Eurodollar Loan as the Parent may request subject
to and in accordance with this Section. The Parent shall give the Agent at
least three Business Days' prior written, telegraphic or telephonic
- 29 -
37
(promptly confirmed in writing) notice of each Borrowing which is to consist of
Eurodollar Loans, and at least one Business Day's prior written, telegraphic or
telephonic (promptly confirmed in writing) notice of each Borrowing which is to
consist of Alternate Base Rate Loans. Each such notice in order to be
effective must be received by the Agent not later than 3:00 p.m., New York City
time on the day required and shall specify the date (which shall be a Business
Day) on which such Loan is to be made and the aggregate principal amount of the
requested Loan. Each such notice shall be irrevocable and shall specify
whether the Borrowing then being requested is to be a Domestic Loan or a
Foreign Loan and is to consist of Alternate Base Rate Loans or Eurodollar Loans
and in the case of Eurodollar Loans, the Interest Period or Interest Periods
with respect thereto. If no election of an Interest Period is specified in
such notice in the case of a Borrowing consisting of Eurodollar Loans, such
notice shall be deemed to be a request for an Interest Period of one month. If
no election is made as to the type of Loan, such notice shall be deemed a
request for a Borrowing consisting of Alternate Base Rate Loans. No Borrowing
shall consist of Eurodollar Loans if after giving effect thereto an aggregate
of more than ten (10) separate Eurodollar Loans would be outstanding hereunder
with respect to each Lender (determined in accordance with Section 2.8(c)
hereof).
(b) The Agent shall promptly notify each Lender of its
Percentage of each Borrowing under this Section, the date of such Borrowing,
whether such Loan is a Domestic Loan or a Foreign Loan, the type of Loans being
requested and the Interest Period or Interest Periods applicable thereto. On
the borrowing date specified in such notice, each Lender shall make its
Percentage of the Borrowing available at the offices of the Agent's Agent Bank
Services Department, 000 Xxxx 00xx Xx., 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxx Xxxxxxxxxx for credit to All American Communications Clearing
Acct., Account No. 000-0-00000 (Reference: "All American Communications, Inc. -
Credit Agreement dated as of October 23, 1996") no later than 1:00 P.M. New
York City time in Federal or other immediately available funds. Upon receipt
of the funds to be made available by the Lenders to fund any Borrowing
hereunder, the Agent shall disburse such funds by depositing the requested
amounts into the Chase Account if a Domestic Loan or into the NBV Account if a
Foreign Loan.
(c) Each Lender may at its option fulfill its obligation to
make Eurodollar Loans by causing a foreign branch or affiliate to fund such
Eurodollar Loans, provided that any exercise of such option shall not affect
the obligation of the Borrowers to repay Loans in accordance with the terms
hereof. Subject to the other provisions of this Section, Loans of more than
one interest rate type may be outstanding at the same time.
(d) The amount of any Borrowing of new funds shall be in an
aggregate principal amount of $500,000 (or such lesser amount as shall equal
the available but unused portion of the Commitments) or such greater amount
which is an integral multiple of $100,000; provided, however that the amount of
any Borrowing of new funds which shall be a Eurodollar Loan shall be in an
aggregate principal amount of $1,500,000 or such greater amount which is an
integral multiple of $100,000.
- 30 -
38
(e) Notwithstanding the provisions of clause (a) above and/or
the absence of a request from the Parent that the Lenders make a Loan, the
Lenders may make Loans and apply the proceeds thereof as follows:
(x) if the completion guarantor for any Product being
produced by a Debtor shall take over production of
such Product pursuant to the Completion Bond with
respect to such Product, the Lenders may make Loans
with respect to the production of such Product (not
to exceed the amount of the "strike price" contained
in such Completion Bond) and pay the proceeds thereof
directly to the completion guarantor to be used to
finance the production and delivery of such Product
pursuant to the terms of the Completion Bond; and
(y) if an Event of Default shall have occurred and be
continuing, the Lenders may make Loans with respect
to any Product being produced by a Debtor and pay the
proceeds thereof directly to Persons providing
services in connection with the production, delivery
and distribution of such Product so as to ensure
Completion of such Product and/or the collection of
Eligible Receivables.
SECTION 2.3. Notes. (a) The Domestic Loans made by each
Lender hereunder shall be evidenced by a promissory note substantially in the
form of Exhibit A (each a "Domestic Note" and collectively the "Domestic
Notes") in the face amount of each such Lender's Commitment, payable to the
order of each such Lender, duly executed by the Domestic Borrower and dated the
Closing Date. The Foreign Loans made by each Lender hereunder shall be
evidenced by a promissory note substantially in the form of Exhibit A (each a
"Foreign Note" and collectively the "Foreign Notes") in the face amount of each
such Lender's Commitment, payable to the order of each such Lender, duly
executed by the Foreign Borrower and dated the Closing Date.
(b) Each of the Notes shall bear interest on the outstanding
principal balance thereof as set forth in Section 2.4 hereof. Each Lender and
the Agent on its behalf is hereby authorized by the Borrowers, but not
obligated, to enter the amount of each Loan and the amount of each payment or
prepayment of principal or interest thereon in the appropriate spaces on the
reverse of or on an attachment to the Notes; provided, however, that the
failure of any Lender or the Agent to set forth such Loans, principal payments
or other information shall not in any manner affect the obligations of the
relevant Borrower to repay such Loans.
(c) The Notes shall be payable in full on the Commitment
Termination Date, subject to mandatory prepayment as provided in Section 2.6
hereof.
SECTION 2.4. Interest on Notes. (a) In the case of a
Eurodollar Loan, interest shall be payable at a rate per annum (computed on the
basis of the actual number of days elapsed
- 31 -
39
over a year of 360 days) equal to the LIBO Rate plus the Applicable Margin.
Interest shall be payable on each Eurodollar Loan on each applicable Interest
Payment Date, at maturity and on the date of a conversion of such Eurodollar
Loan to an Alternate Base Rate Loan. The Agent shall determine the applicable
LIBO Rate for each Interest Period as soon as practicable on the date when such
determination is to be made in respect of such Interest Period and shall notify
the Parent and the Lenders of the applicable interest rate so determined. Such
determination shall be conclusive absent manifest error.
(b) In the case of an Alternate Base Rate Loan, interest
shall be payable at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365/366 days, as the case may be, during
such times as the Alternate Base Rate is based upon the Prime Rate, and over a
year of 360 days at all other times) equal to the Alternate Base Rate plus the
Applicable Margin. Interest shall be payable on each Alternate Base Rate Loan
on each applicable Interest Payment Date, at maturity and on the date of a
conversion of such Alternate Base Rate Loan to a Eurodollar Loan.
(c) Anything in this Credit Agreement or the Notes to the
contrary notwithstanding, the interest rate on the Loans shall in no event be
in excess of the maximum permitted by Applicable Law.
SECTION 2.5. Commitment Fees and Other Fees. (a) The Parent
agrees to pay to the Agent for the account of each Lender on the last Business
Day of each March, June, September and December in each year (commencing on the
last Business Day of December 1996) prior to the Commitment Termination Date
and on the Commitment Termination Date, an aggregate fee (the "Commitment
Fees") of 3/8 of 1% per annum, computed on the basis of the actual number of
days elapsed over a year of 360 days, on the average daily amount by which such
Lender's Commitment, as such Commitment may be reduced in accordance with the
provisions of this Credit Agreement, exceeds the sum of such Lender's
Percentage of outstanding Loans plus its Percentage of L/C Exposure during the
preceding period or quarter.
(b) Such Commitment Fees shall commence to accrue from the
Closing Date.
(c) In addition, the Parent agrees to pay to the Agent on the
Closing Date any and all fees that are then due and payable pursuant to the Fee
Letter dated September 24, 1996 between the Parent and the Agent.
SECTION 2.6. Optional and Mandatory Termination or Reduction
of Commitments. (a) Upon written or telephonic (promptly confirmed in
writing) notice to the Agent, which notice must be received by the Agent not
later than 11:00 a.m. New York City time on the same Business Day, the Parent
may at any time permanently terminate the Commitment in its entirety, or from
time to time permanently reduce the Commitment in part. Each such reduction
shall be in a minimum aggregate principal amount of $500,000 or an integral
multiple thereof.
- 32 -
40
(b) The Commitments shall be permanently reduced by an amount
equal to 100% of the Net Cash Proceeds of (i) all issuances by any Debtor of
any debt securities issued after the Closing Date (other than to another Debtor
and other than the Senior Subordinated Notes or any Permitted Refinancing) and
(ii) any asset sale made by any Debtor which sale is not in the ordinary course
of business and the Net Cash Proceeds of which sale exceed $5,000,000, in the
event that the net proceeds of any such asset sale (other than the sale of the
record company operations) are not utilized within 365 days of such sale to
invest in assets related to the principal business of the Parent (to the extent
not otherwise prohibited by the terms of the Credit Agreement). Such reduction
in the Commitments shall occur as to debt securities, simultaneously with the
receipt by any Debtor of such Net Cash Proceeds and, if required in connection
with an asset sale, not later than the 366th day after such sale. The
foregoing provisions regarding the application of Net Cash Proceeds of certain
transactions should not be read to imply that the Lenders have consented to any
such transaction which would violate any other provision of this Credit
Agreement, and any such transaction shall remain subject in all respects to the
limitations imposed by Sections 6.1 and 6.7 and all other applicable provisions
hereof.
(c) Any reduction of the Commitments pursuant to this Section
shall be pro rata in accordance with each Lender's Percentage and applied to
reduce the Commitment of each Lender.
SECTION 2.7. Default Interest; Alternate Rate of Interest.
(a) If the Parent shall default in the payment of the principal of or interest
on any Loan becoming due hereunder, whether at stated maturity, by acceleration
or otherwise, or the payment of any other amount becoming due hereunder after
notification from the Agent to the Parent of such amount, the Parent shall on
demand from time to time pay interest, to the extent permitted by law, on all
Loans and overdue amounts outstanding up to the date of actual payment of such
defaulted amount or until such Default has been cured, if earlier (after as
well as before judgment), (i) for the remainder of the then current Interest
Period for each Eurodollar Loan, at 2% in excess of the rate then in effect for
Eurodollar Loans and (ii) for all periods subsequent to the then current
Interest Period for each Eurodollar Loan, for all Alternate Base Rate Loans and
for all other overdue amounts hereunder, at 2% in excess of the rate then in
effect for Alternate Base Rate Loans.
(b) In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a Eurodollar
Loan, (i) the Agent shall have received notice from any Lender of such Lender's
determination (which determination, absent manifest error, shall be conclusive)
that Dollar deposits in the amount of the principal amount of such Eurodollar
Loan are not generally available in the London Interbank Market or that the
rate at which such Dollar deposits are being offered will not adequately and
fairly reflect the cost to such Lender of making or maintaining the principal
amount of such Eurodollar Loan during such Interest Period or (ii) the Agent
shall have determined that reasonable means do not exist for ascertaining the
applicable LIBO Rate, the Agent shall, as soon as practicable thereafter, give
- 33 -
41
written or telegraphic notice of such determination to the Parent and the
Lenders, and any request by the Parent for a Eurodollar Loan (or conversion to
or continuation as a Eurodollar Loan pursuant to Section 2.8), made after
receipt of such notice, shall be deemed a request for an Alternate Base Rate
Loan; provided, however, that in the circumstances described in clause (i)
above such deemed request shall only apply to the affected Lender's portion
thereof. After such notice shall have been given and until the circumstances
giving rise to such notice no longer exist, each request (or portion thereof,
as the case may be) for a Eurodollar Loan shall be deemed to be a request for
an Alternate Base Rate Loan.
SECTION 2.8. Continuation and Conversion of Loans. Each
Borrower shall have the right, at any time, (i) to convert any Eurodollar Loan
or portion thereof to an Alternate Base Rate Loan or to continue such
Eurodollar Loan or a portion thereof for a successive Interest Period, or (ii)
to convert any Alternate Base Rate Loan or a portion thereof to a Eurodollar
Loan, subject to the following:
(a) the Parent shall give the Agent prior notice of each
continuation or conversion hereunder of at least three Business Days for
continuation as or conversion to a Eurodollar Loan and one Business Days for
continuation as or conversion to an Alternate Base Rate Loan; such notice shall
be irrevocable and to be effective, must be received by the Agent on the day
required not later than 11:00 a.m., New York City time;
(b) no Event of Default or Default shall have occurred and be
continuing at the time of any conversion to a Eurodollar Loan or continuation
of any such Eurodollar Loan into a subsequent Interest Period;
(c) no Alternate Base Rate Loan may be converted to a
Eurodollar Loan and no Eurodollar Loan may be continued as a Eurodollar Loan
if, after such conversion, and after giving effect to any concurrent prepayment
of Loans, an aggregate of more than ten (10) separate Eurodollar Loans would be
outstanding hereunder with respect to each Lender (for purposes of determining
the number of such Loans outstanding, Loans with different Interest Periods
shall be counted as different Loans even if made on the same date);
(d) if fewer than all Eurodollar Loans and Alternate Base
Rate Loans at the time outstanding shall be continued or converted, such
continuation or conversion shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans held by the
Lenders immediately prior to such continuation or conversion;
(e) the aggregate principal amount of Loans continued as or
converted to Eurodollar Loans as part of the same borrowing, shall be
$1,500,000 or such greater amount which is an integral multiple of $100,000.
(f) accrued interest on the Eurodollar Loans (or portion
thereof) being continued or converted shall be paid by the appropriate Borrower
at the time of continuation or conversion;
- 34 -
42
(g) the Interest Period with respect to a new Eurodollar Loan
effected by a continuation or conversion shall commence on the date of a
continuation or conversion;
(h) if a Eurodollar Loan is converted to another type of Loan
other than on the last day of the Interest Period with respect thereto, the
amounts required by Section 2.9(b) shall be paid upon such conversion; and
(i) each request for a continuation as or conversion to a
Eurodollar Loan which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month.
In the event that the Parent shall not give notice to continue or convert any
Eurodollar Loan as provided above, such Loan (unless repaid) shall
automatically be converted to an Alternate Base Rate Loan at the expiration of
the then current Interest Period. The Agent shall, after it receives notice
from the Parent, promptly give the Lenders notice of any continuation or
conversion.
SECTION 2.9. Prepayment of Loans; Reimbursement of Lenders.
(a) Subject to the terms of paragraph (b) of this Section 2.9, the Borrowers
shall have the right at their option at any time and from time to time to
prepay (i) any Alternate Base Rate Loan, in whole or in part, upon at least one
Business Day's written, telephonic (promptly confirmed in writing) or
telegraphic notice, in the principal amount of $500,000 or such greater amount
which is an integral multiple of $100,000 or the remaining balance of such Loan
if less than $500,000 and (ii) any Eurodollar Loan, in whole or in part, upon
at least three Business Days' written, telephonic (promptly confirmed in
writing) or telegraphic notice, in the principal amount of $1,500,000 or such
greater amount which is an integral multiple of $100,000. Each notice of
prepayment shall specify the prepayment date, each Loan to be prepaid and the
principal amount thereof, shall be irrevocable and shall commit such Borrower
to prepay such Loan in the amount and on the date stated therein. Such notice
shall also specify the expected principal amount of Loans to be outstanding
after giving effect to such prepayment.
(b) The Borrowers shall reimburse each Lender on demand for
any loss incurred or to be incurred by any such Lender in the reemployment of
the funds released (i) by any prepayment (for any reason) of any Eurodollar
Loan if such Loan is repaid other than on its last day of the Interest Period
for such Loan or (ii) in the event that after the Parent delivers a notice of
borrowing under Section 2.2(a) or Section 2.8(a) in respect of Eurodollar
Loans, such Loan is not made on the first day of the Interest Period specified
in such notice of borrowing for any reason other than (I) a suspension or
limitation under Section 2.7(b) of the right of the Borrowers to select a
Eurodollar Loan or (II) a breach by the Lenders of their obligation hereunder.
Such loss shall be the amount as reasonably determined by such Lender as the
excess, if any of (A) the amount of interest which would have accrued to such
Lender on the amount so paid or not borrowed, continued or converted at a rate
of interest equal to the interest rate applicable to such Loan pursuant to
Section 2.4 hereof, for the period from the date of such payment or failure to
borrow, continue or convert to the last day (x) in the case of a payment other
than on the last day
- 35 -
43
of the Interest Period for such Loan, of the then current Interest Period for
such Loan or (y) in the case of such failure to borrow, continue or convert, of
the Interest Period for such Loan which would have commenced on the date of
such failure to borrow, continue or convert, over (B) the amount realized by
such Lender in reemploying the funds not advanced or the funds received in
prepayment or realized from the Loan not so continued or converted during the
period referred to above. Each Lender shall deliver to the Parent from time to
time one or more certificates setting forth the amount of such loss (and in
reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amounts shown on such certificate within
ten days of the Parent's receipt of such certificate.
(c) In the event any Borrower fails to prepay any Eurodollar
Loan on the date specified in any prepayment notice delivered pursuant to
Section 2.9(a), such Borrower shall pay to the Agent for the account of the
applicable Lender any amounts required to compensate such Lender for any actual
loss incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Each Lender shall
deliver to the Parent and the Agent from time to time one or more certificates
setting forth the amount of such loss (and in reasonable detail the manner of
computation thereof) as determined by such Lender, which certificates shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the
amounts shown on such certificate within ten days of the Parent's receipt of
such certificate.
(d) Within five (5) days following the delivery to the Agent
of each Borrowing Base Certificate, the Parent will prepay the Domestic Loans
to the extent, if any, that the total of all Domestic Loans outstanding plus
the L/C Exposure exceeds the Domestic Borrowing Base as set forth on such
Borrowing Base Certificate and NBV will repay the Foreign Loans to the extent,
if any, that the total of all Foreign Loans outstanding exceeds the Foreign
Borrowing Base as set forth on such Borrowing Base Certificate.
(e) The outstanding principal amount of the Loans shall be
repaid immediately to the extent that the aggregate amount thereof exceeds the
Commitments then in effect.
(f) Simultaneously with each termination and/or mandatory or
optional reduction of the Commitments pursuant to Section 2.6, the Borrowers
shall pay to the Agent for the benefit of the Lenders the excess of the
aggregate outstanding principal amount of the Loans over the applicable reduced
Commitments, all accrued and unpaid interest thereon and the Commitment Fees on
the amount of the Commitments so terminated or reduced through the date
thereof. The Parent may determine whether the Foreign Loans or the Domestic
Loans are to be so repaid; provided, however, that in the event the Parent does
not notify the Agent of such determination, the Agent shall first apply such
prepayment to the outstanding Domestic Loans.
- 36 -
44
(g) If on any day on which the Loans would otherwise be
required to be prepaid but for the operation of this Section 2.9(g) (each a
"Prepayment Date"), the amount of such required prepayment exceeds the then
outstanding aggregate principal amount of the Loans which consist of Alternate
Base Rate Loans, and no Default or Event of Default is then continuing, then on
such Prepayment Date the Agent at the request of the relevant Borrower shall
transfer funds, if any, from a Collection Account into the Cash Collateral
Account in an amount equal to such excess. If any of the Borrowers makes such
deposit (i) only the outstanding Alternate Base Rate Loans shall be required to
be prepaid on such Prepayment Date, and (ii) on the last day of each Interest
Period in effect after such Prepayment Date, the Agent is irrevocably
authorized and directed to apply funds from the Cash Collateral Account (and
liquidate investments held in such Cash Collateral Account as necessary) to
prepay Eurodollar Loans for which the Interest Period is then ending until the
aggregate of such prepayments equals the prepayment which would have been
required on such Prepayment Date but for the operation of this Section 2.9(g).
(h) Unless otherwise designated in writing by the Parent, all
prepayments shall be applied first to that amount of Domestic Loans maintained
as Alternate Base Rate Loans, then to that amount of Foreign Loans maintained
as Alternate Base Rate Loans and then, subject to the provisions of Section
2.9(g) to that amount of such applicable principal payment of Domestic Loans
maintained as Eurodollar Loans and then to that amount of Foreign Loans
maintained as Eurodollar Loans, in each case in order of the scheduled expiry
of Interest Periods with respect thereto.
(i) All prepayments (other than those made pursuant to clause
(e) above, whether as a result of the application of Section 2.6(b) or
otherwise) shall be accompanied by accrued but unpaid interest on the principal
amount being prepaid to the date of prepayment.
SECTION 2.10. Change in Circumstances. (a) In the event
that after the date hereof any change in Applicable Law or in the official
interpretation or administration thereof (including, without limitation, any
request, guideline or policy not having the force of law) by any authority
charged with the administration or interpretation thereof or, with respect to
clause (ii), (iii) or (iv) below any change in conditions, shall occur which
shall:
(i) subject any Lender to, or increase the net
amount of, any tax, levy, impost, duty, charge, fee, deduction
or withholding with respect to any Eurodollar Loan (other than
withholding tax imposed by the United States of America or any
political subdivision or taxing authority thereof or any other
tax, levy, impost, duty, charge, fee, deduction or withholding
(x) that is measured with respect to the overall net income of
such Lender or of a Lending Office of such Lender, and that is
imposed by the United States of America, or by the
jurisdiction in which such Lender or Lending Office is
incorporated, in which such Lending Office is located, managed
or controlled or in which such Lender has its principal office
(or any political subdivision or taxing authority thereof or
therein), or (y) that is
- 37 -
45
imposed solely by reason of any Lender failing to make a
declaration of, or otherwise to establish, non-residence, or
to make any other claim for exemption, or otherwise to comply
with any certification, identification, information,
documentation or reporting requirements prescribed under the
laws of the relevant jurisdiction, in those cases where a
Lender may properly make such declaration or claim or so
establish non-residence or otherwise comply); or
(ii) change the basis of taxation of any payment to
any Lender of principal or any interest on any Eurodollar Loan
(except as limited in clause (i) above); or
(iii) impose, modify or deem applicable any reserve,
deposit or similar requirement against any assets held by,
deposits with or for the account of or loans or commitments by
an office of such Lender with respect to any Eurodollar Loan;
or
(iv) impose upon such Lender or the London
Interbank Market any other condition with respect to the
Eurodollar Loans or this Credit Agreement;
and the result of any of the foregoing shall be to increase the actual cost to
such Lender of making or maintaining any Eurodollar Loan hereunder or to reduce
the amount of any payment (whether of principal, interest or otherwise)
received or receivable by such Lender in connection with any Eurodollar Loan
hereunder, or to require such Lender to make any payment in connection with any
Eurodollar Loan hereunder, in each case by or in an amount which such Lender in
its sole judgment shall deem material, then and in each case the appropriate
Borrower shall pay to the Agent for the account of such Lender, as provided in
paragraph (c) below, such amounts as shall be necessary to compensate such
Lender for such cost, reduction or payment.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation or guideline regarding
capital adequacy, or any change after the date hereof in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
Lending Office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this
Credit Agreement or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies on capital adequacy) by an amount deemed by such Lender
to be material, then from time to time the appropriate Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such
- 38 -
46
Lender's holding company for any such reduction suffered with respect to Loans
made by such Lender hereunder.
(c) Each Lender shall deliver to the Parent and the Agent
from time to time, one or more certificates setting forth the amounts due to
such Lender under paragraphs (a) and (b) above, the changes as a result of
which such amounts are due, the manner of computing such amounts and the manner
of computing the amounts allocable to Loans hereunder pursuant to paragraphs
(a) and (b) above. Each such certificate shall be conclusive in the absence of
manifest error. The appropriate Borrower shall pay to the Agent for the
account of each such Lender the amounts shown as due on any such certificate
within ten Business Days after its receipt of the same. No failure on the part
of any Lender to demand compensation under paragraph (a) or (b) above on any
one occasion shall constitute a waiver of its rights to demand compensation on
any other occasion. The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by such Lender for compensation thereunder.
(d) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event or the existence of a condition
that (i) would cause it to incur any increased cost under Section 2.9(b) or
this Section 2.10 or (ii) would require the Parent to pay an increased amount
under Section 2.9(b) or this Section 2.10, it will use reasonable efforts to
notify the Parent of such event or condition and, to the extent not
inconsistent with such Lender's internal policies, will use its reasonable
efforts to make, fund or maintain the affected Loans of such Lender through
another Lending Office of such Lender if as a result thereof the additional
monies which would otherwise be required to be paid or the reduction of amounts
receivable by such Lender thereunder in respect of such Loans would be
materially reduced, or such inability to perform would cease to exist, or the
increased costs which would otherwise be required to be paid in respect of such
Loans pursuant to Section 2.9(b) or this Section 2.10 would be materially
reduced or the taxes or other amounts otherwise payable under Section 2.9(b) or
this Section 2.10 would be materially reduced, and if, as determined by such
Lender, in its sole discretion, the making, funding or maintaining of such
Loans through such other Lending Office would not otherwise materially
adversely affect such Loans or such Lender.
(e) In the event any Lender shall have delivered to the
Parent a notice that amounts are due to such Lender pursuant to this Section
2.10 or Section 2.13 or that any of the events designated in paragraph (d)
hereof have occurred, the Parent may (but subject in any such case to the
payments required by Section 2.9(b) and (c) and Section 2.13(e)), provided that
there shall exist no Default or Event of Default, upon at least five Business
Days' prior written or telecopier notice to such Lender and the Agent, but not
more than 30 days after receipt of notice from such Lender, identify to the
Agent an Eligible Assignee reasonably acceptable to the Agent which will
purchase the Commitments of such Lender, the amount of outstanding Loans and
any participations in
- 39 -
47
Letters of Credit from such Lender providing such notice and such Lender shall
thereupon assign its Commitments, any Loans owing to such Lender and any
participations in Letters of Credit and the Notes held by such Lender to such
replacement Eligible Assignee pursuant to Section 13.3. Such notice shall
specify an effective date for such assignment and at the time thereof, the
appropriate Borrower(s) shall pay all accrued interest, Commitment Fees and all
other amounts (including without limitation all amounts payable under this
Section 2.10) owing hereunder to such Lender as at such effective date for such
assignment.
SECTION 2.11. Change in Legality. (a) Notwithstanding
anything to the contrary contained elsewhere in this Credit Agreement, if any
change after the date hereof in Applicable Law, guideline or order, or in the
interpretation thereof by any Governmental Authority charged with the
administration thereof, shall make it unlawful for any Lender to make or
maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan, then, by written notice
to the Parent and the Agent, such Lender may (i) declare that Eurodollar Loans
will not thereafter be made by such Lender hereunder and/or (ii) require that,
subject to Section 2.9(b), all outstanding Eurodollar Loans made by it be
converted to Alternate Base Rate Loans, whereupon all of such Eurodollar Loans
shall automatically be converted to Alternate Base Rate Loans, as of the
effective date of such notice as provided in paragraph (b) below. Such
Lender's pro rata portion of any subsequent Eurodollar Loan shall, instead, be
an Alternate Base Rate Loan unless such declaration is subsequently withdrawn.
(b) A notice to the Parent by any Lender pursuant to
paragraph (a) above shall be effective for purposes of clause (ii) thereof, if
lawful, on the last day of the current Interest Period for each outstanding
Eurodollar Loan; and in all other cases, on the date of receipt of such notice
by the Parent.
SECTION 2.12. Manner of Payments. All payments of principal
and interest by a Borrower in respect of any Loans to it shall be pro rata
among the Lenders hereunder shall be made pro rata among the Lenders in
accordance with their Commitments. All payments by the Borrowers hereunder and
under the Notes shall be made in Dollars in Federal or other immediately
available funds at the office of the Agent's Agent Bank Services Department,
000 Xxxx 00xx Xx., 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxxxxxx
for credit to All American Communication Clearing Acct., Account No.
000-0-00000 (Reference: All American Communications, Inc. - Restated Credit
Agreement) no later than 1:00 P.M., New York City time, on the date on which
such payment shall be due. Interest in respect of any Loan hereunder shall
accrue from and including the date of such Loan to but excluding the date on
which such Loan is paid or converted to a Loan of a different type.
SECTION 2.13. Withholding. (a) Prior to the date of the
initial Loans hereunder, and from time to time thereafter if requested by the
Parent or the Agent or required because, as a result of a change in law or a
change in circumstances or otherwise, a previously delivered form or statement
becomes incomplete or incorrect in any material respect, each Lender organized
under the laws of a jurisdiction outside the United States shall provide, if
applicable, the Agent and the Parent with complete, accurate and duly executed
forms or other
- 40 -
48
statements prescribed by the Internal Revenue Service of the United States
certifying such Lender's exemption from, or entitlement to a reduced rate of,
United States withholding taxes (including backup withholding taxes) with
respect to all payments to be made to such Lender hereunder and under the
Notes.
(b) The appropriate Borrower and the Agent shall be entitled
to deduct and withhold any and all present or future taxes or withholdings, and
all liabilities with respect thereto, from payments hereunder or under the
Notes, if and to the extent that such Borrower or the Agent in good faith
determines that such deduction or withholding is required by the law of the
Netherlands or the United States, including, without limitation, any applicable
treaty of the United States. In the event that any of the appropriate Borrower
or the Agent shall so determine that deduction or withholding of taxes is
required, it shall advise the affected Lender as to the basis of such
determination prior to actually deducting and withholding such taxes. In the
event such Borrower or the Agent shall so deduct or withhold taxes from amounts
payable hereunder, it (i) shall pay to or deposit with the appropriate taxing
authority in a timely manner the full amount of taxes it has deducted or
withheld; (ii) shall provide evidence of payment of such taxes to, or the
deposit thereof with, the appropriate taxing authority and a statement setting
forth the amount of taxes deducted or withheld, the applicable rate, and any
other information or documentation reasonably requested by the Lenders from
whom the taxes were deducted or withheld; and (iii) shall forward to such
Lenders any refund of the deducted or withheld taxes as may be issued from time
to time by the appropriate taxing authority. Unless the Parent and the Agent
have received forms or other documents satisfactory to them indicating that
payments hereunder or under the Notes are not subject to any withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
appropriate Borrower or the Agent may withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for any Lender
organized under the laws of a jurisdiction outside the United States.
(c) Each Lender agrees (i) that as between it and the
Borrowers or the Agent, such Lender shall be the Person to deduct and withhold
taxes, and to the extent required by law it shall deduct and withhold taxes, on
amounts that such Lender may remit to any other Person(s) by reason of any
undisclosed transfer or assignment of an interest in this Credit Agreement to
such other Person(s) pursuant to paragraph (g) of Section 13.3 and (ii) to
indemnify the Borrowers and the Agent and any officers, directors, agents, or
employees of the Borrowers or the Agent against and to hold them harmless from
any tax, interest, additions to tax, penalties, reasonable counsel and
accountants' fees, disbursements or payments arising from the assertion by any
appropriate taxing authority of any claim against them relating to a failure to
withhold taxes as required by law with respect to amounts described in clause
(i) of this paragraph (c) or arising from the reliance by a Borrower or the
Agent on any form or other document furnished by such Lender and purporting to
establish a basis for not withholding, or for withholding at a reduced rate,
taxes with respect to payments hereunder.
(d) Each assignee of a Lender's interest in this Credit
Agreement in conformity with Section 13.3 shall be bound by this Section 2.13,
so that such assignee will have all of the
- 41 -
49
obligations and provide all of the forms and statements and all indemnities,
representations and warranties required to be given under this Section 2.13.
(e) Notwithstanding the foregoing, in the event that any
additional withholding taxes shall become payable solely as a result of any
change in any statute, treaty, ruling, determination or regulation occurring
after the Initial Date in respect of any sum payable hereunder or under any
other Fundamental Document to any Lender or the Agent (i) the sum payable by
the appropriate Borrower shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.13) such Lender or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
withholding deductions been made, (ii) the appropriate Borrower shall make such
deductions and (iii) the appropriate Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with Applicable Law. For purposes of this Section 2.13, the term "Initial
Date" shall mean (i) in the case of the Agent, the date hereof, (ii) in the
case of each Lender as of the date hereof, the date hereof and (iii) in the
case of any other Lender, the date of the Assignment and Acceptance or the date
of the Assumption Agreement, as the case may be, pursuant to which it became a
Lender.
(f) In the event that a Lender receives a refund of or credit
for taxes withheld pursuant to clause (e) of this Section 2.13, which credit or
refund is identifiable by such Lender as being a result of taxes withheld in
connection with sums payable hereunder or under any other Fundamental Document,
such Lender shall promptly notify the Agent and the Parent and shall remit to
the appropriate Borrower the amount of such refund or credit allocable to
payments made hereunder or under the other Fundamental Documents.
(g) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event that would cause any Borrower to
pay any amount pursuant to clause (e) of this Section 2.13, it will use
reasonable efforts to notify the Parent of such event and, to the extent not
inconsistent with such Lender's internal policies, will use its reasonable
efforts to make, fund or maintain the affected Loans of such Lender through
another Lending Office of such Lender if as a result thereof the additional
monies which would otherwise be required to be paid by reason of Section
2.13(e) in respect of such Loans would be materially reduced, and if, as
determined by such Lender, in its sole discretion, the making, funding or
maintaining of such Loans through such other Lending Office would not otherwise
materially adversely affect such Loans or such Lender.
SECTION 2.14. Interest Adjustments. If the provisions of
this Credit Agreement or any Note would at any time require payment by any of
the Borrowers to a Lender of any amount of interest in excess of the maximum
amount then permitted by the law applicable to any Loan, the interest payments
to that Lender shall be reduced to the extent necessary so that such Lender
shall not receive interest in excess of such maximum amount. If, as a result
of the foregoing, a Lender shall receive interest payments hereunder or under a
Note in an amount less than the amount otherwise provided hereunder, such
deficit (hereinafter called the "Interest
- 42 -
50
Deficit") will, to the fullest extent permitted by Applicable Law, cumulate and
will be carried forward (without interest) until the termination of this Credit
Agreement. Interest otherwise payable to a Lender hereunder and under a Note
for any subsequent period shall be increased by the maximum amount of the
Interest Deficit that may be so added without causing such Lender to receive
interest in excess of the maximum amount then permitted by the law applicable
to the Loans.
The amount of any Interest Deficit relating to a particular
Loan and Note shall be treated as a prepayment penalty and shall, to the
fullest extent permitted by Applicable Law, be paid in full at the time of any
optional prepayment by the Borrowers to the Lenders of all the Loans at that
time outstanding pursuant to Section 2.6(a) hereof. The amount of any Interest
Deficit relating to a particular Loan and Note at the time of any complete
payment of the Loans at that time outstanding (other than an optional
prepayment thereof pursuant to Section 2.9(a) hereof) shall be canceled and not
paid.
SECTION 2.15. Letters of Credit. (a) (i) Subject to the
terms and conditions hereof and of Applicable Law, the Fronting Bank agrees to
issue Letters of Credit payable in Dollars from time to time after the Closing
Date and prior to the Commitment Termination Date upon the request of the
Parent, provided, however, that (A) the Parent shall not request that any
Letter of Credit be issued if, after giving effect thereto, (1) the sum of the
then current L/C Exposure plus the aggregate Loans then outstanding would
exceed the Commitments then in effect or (2) all outstanding Domestic Loans
plus L/C Exposure would exceed the then current amount of the Domestic
Borrowing Base and (B) in no event shall the Fronting Bank issue any Letter of
Credit having an expiration or earliest revocation date after the Commitment
Termination Date.
(ii) Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the Fronting Bank a participation in such Letter of Credit in
accordance with such Lender's Percentage.
(iii) Each Letter of Credit may, at the option of the
Fronting Bank, provide that the Fronting Bank may (but shall not be required
to) pay all or any part of the maximum amount which may at any time be
available for drawing thereunder to the beneficiary thereof upon the occurrence
and continuation of an Event of Default and the acceleration of the maturity of
the Loans, provided that, if payment is not then due to the beneficiary, the
Fronting Bank shall deposit the funds in question in a segregated account with
the Fronting Bank to secure payment to the beneficiary and any funds so
deposited shall be paid to the beneficiary of the Letter of Credit if
conditions to such payment are satisfied or returned to the Fronting Bank for
distribution to the Lenders (or, if all Obligations shall have been paid in
full in cash, to the Parent) if no payment to the beneficiary has been made and
the final date available for drawings under the Letter of Credit has passed.
Each payment or deposit of funds by the Fronting Bank as provided in this
paragraph shall be treated for all purposes of this Credit Agreement as a
drawing duly honored by the Fronting Bank under the related Letter of Credit.
- 43 -
51
(b) Whenever the Parent desires the issuance of a Letter of
Credit, it shall deliver to the Fronting Bank a written notice no later than
1:00 p.m. (New York time) at least five Business Days prior to the proposed
date of issuance. Such notice shall specify (i) the proposed date of issuance
(which shall be a Business Day), (ii) the face amount of the Letter of Credit,
(iii) the expiration date of the Letter of Credit and (iv) the name and address
of the beneficiary. Such notice shall be accompanied by a brief description of
the underlying transaction and upon request of the Fronting Bank, the Parent
shall provide additional details regarding the underlying transaction.
Concurrently with the giving of written notice of a request for the issuance of
a Letter of Credit, the Parent shall specify a precise description of the
documents and the verbatim text of any certificate to be presented by the
beneficiary of such Letter of Credit which, if presented by such beneficiary
prior to the expiration date of the Letter of Credit, would require the
Fronting Bank to make payment under the Letter of Credit; provided, however,
that the Fronting Bank, in its reasonable discretion, may require customary
changes in any such documents and certificates. Promptly after receipt of such
notice, the Agent shall notify each Lender of the issuance and the amount of
each such Lender's respective participation therein.
(c) The payment of drafts under any Letter of Credit shall be
made in accordance with the terms of such Letter of Credit and the Uniform
Customs and Practice for documentary Credits of the International Chamber of
Commerce. The Fronting Bank shall be entitled to honor any drafts and accept
any documents presented to it by the beneficiary of such Letter of Credit in
accordance with the terms of such Letter of Credit and believed by the Fronting
Bank in good faith to be genuine. The Fronting Bank shall not have any duty to
inquire as to the accuracy or authenticity of any draft or other drawing
documents which may be presented to it, but shall be responsible only to
determine in accordance with customary commercial practices that the documents
which are required to be presented before payment or acceptance of a draft
under any Letter of Credit have been delivered and that they comply on their
face with the requirements to that Letter of Credit.
(d) If the Fronting Bank shall make payment on any draft
presented under a Letter of Credit (regardless of whether a Default or Event of
Default or acceleration has occurred), the Fronting Bank shall give notice of
such payment to the Lenders and each Lender hereby authorizes and requests the
Fronting Bank to advance for its account pursuant to the terms thereof its
share of such payment based upon its participation in the Letter of Credit and
agrees promptly to reimburse the Fronting Bank in immediately available funds
for the Dollar equivalent of the amount so advanced on its behalf. If such
reimbursement is not made by any Lender in immediately available funds on the
same day on which the Fronting Bank shall have made payment on any such draft,
such Lender shall pay interest thereof to the Fronting Bank at a rate per annum
equal to the Fronting Bank's cost of obtaining overnight funds in the New York
Federal Funds Market. In the case of any draft presented under a Letter of
Credit which is required to be paid at any time on or before the Commitment
Termination Date, such payment of the unreimbursed draft shall constitute an
Alternate Base Rate Loan (under the Commitment, if available) hereunder to the
Parent and interest shall accrue from the date the Fronting Bank makes payment
of a draft under the Letter of Credit.
- 44 -
52
(e) If any draft is presented under a Letter of Credit,
payment of which is required to be made after the termination of the
Commitments (it being understood that no Letter of Credit shall be issued which
would expire after October 23, 2000), then the Parent will, upon demand by the
Fronting Bank, pay to the Fronting Agent, in immediately available funds, the
full amount of such draft. If such payment is not made by the Parent and the
Fronting Bank shall make payment on any draft presented under a Letter of
Credit, the Fronting Bank shall give notice of such payment to the Lenders and
each Lender hereby authorizes and requests the Fronting Bank to advance for its
account pursuant to the terms thereof its share of such payment based upon its
participation in the Letter of Credit and agrees promptly to reimburse the
Fronting Bank in immediately available funds for the Dollar equivalent of the
amount so advanced on its behalf. If such reimbursement is not made by any
Lender in immediately available funds on the same day on which the Fronting
Bank shall have made payment on any such draft, such Lender shall pay interest
thereon to the Fronting Bank at a rate per annum equal to the Fronting Bank's
cost of obtaining overnight funds in the New York Federal Funds Market. Such
payment by the Fronting Bank shall constitute an Alternate Base Rate Loan
hereunder to the Parent and interest shall accrue from the date the Fronting
Bank makes payment of a draft under the Letter of Credit at the rate specified
in Section 2.7.
(f) (i) The Parent agrees to pay the following amount to the
Fronting Bank with respect to Letters of Credit issued by it hereunder:
(A) with respect to drawings made under any Letter
of Credit, interest, payable on demand, on the amount paid by
the Fronting Bank in respect of each such drawing from the
date of the drawing to but excluding the date such amount is
reimbursed by the Parent at a rate which is at all times equal
to 2% per annum in excess of the rate in effect for Alternate
Base Rate Loans; provided, however, that no such default
interest shall be payable if such reimbursement is made from
the proceeds of Loans pursuant to Section 2.15(d);
(B) with respect to the issuance, amendment,
transfer or any other transaction related to each Letter of
Credit and each drawing made thereunder, documentary and
processing charges in accordance with the Fronting Bank's
standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or drawing, as the case may
be; and
(C) a fronting fee for the period from and including
the Closing Date to but excluding the Commitment Termination
Date, computed at a rate equal to 1/4 of 1% per annum
(computed on the basis of the actual number of days elapsed
over a year of 360 days) of the daily average L/C Exposure,
such fee to be due and payable in arrears on and through the
last day of each fiscal quarter of the Parent, on the
Commitment Termination Date and on the expiration of the last
outstanding Letter of Credit.
- 45 -
53
(ii) The Parent agrees to pay to the Agent for distribution
to each Lender in respect of all L/C Exposure, such Lender's pro rata share of
a commission on the amount thereof calculated at a rate per annum of 2%
(computed on the basis of the actual number of days elapsed over a year of 360
days) of the daily average L/C Exposure; provided, however, that at such time,
if any, and for so long as the Program Spending Ratio at the end of a Rolling
Period is in excess of 1:1, such rate will be reduced to 1 1/2% per annum.
Any such reduction in the rate shall become effective immediately upon receipt
by the Agent of the financial statements (delivered pursuant to Section 5.1(a)
or (b) herein) for the quarter at which end the Program Spending Ratio for the
Rolling Period then ended first exceeds 1:1 and any such reduction shall cease
to be effective immediately upon receipt by the Agent of the financial
statements (delivered pursuant to Section 5.1(a) (or (b) herein) for the
quarter at which end the Program Spending Ratio for the Rolling Period then
ended is equal to or less than 1:1. At such time, the rate shall be increased
to 2% per annum until and unless the Program Spending Ratio at the end of a
Rolling Period is in excess of 1:1, at which time such rate shall be reduced to
1-1/2%. Notwithstanding the foregoing, on the Closing Date and until the
receipt by the Agent of the financial statements required for the quarter
ending September 30, 1996 (delivered pursuant to Section 5.1(b) herein), the
rate shall be 1-1/2% per annum. Thereafter the rate shall be adjusted (or not
adjusted) in accordance with the provisions hereof. Such commission shall be
payable in arrears on and through the last day of each fiscal quarter and on
the later of the Commitment Termination Date and the expiration of the last
outstanding Letter of Credit.
(iii) Promptly upon receipt by the Fronting Bank of any
amount described in clause (i)(A) or (ii) of this Section 2.15(f), or any
amount described in Section 2.15(e) previously reimbursed to the Fronting Bank
by the Lenders, the Fronting Bank shall distribute to each Lender its pro rata
share of such amount. Amounts payable under clauses (i)(B) and (i)(C) of this
Section 2.15(f) shall be paid directly to the Fronting Bank and shall be for
its exclusive use.
(g) If by reason of (i) any change after the date hereof in
Applicable Law, or in the interpretation or administration thereof (including,
without limitation, any request, guideline or policy not having the force of
law) by any Governmental Authority charged with the administration or
interpretation thereof, or (ii) compliance by the Fronting Bank or any Lender
with any direction, request or requirement (whether or not having the force of
law) issued after the date hereof by any Governmental Authority or monetary
authority (including any change whether or not proposed or published prior to
the date hereof), including, without limitation, Regulation D:
(A) the Fronting Bank or any Lender shall be subject
to any tax, levy, duty, fee, charge, deduction or withholding
with respect to any Letter of Credit (other than withholding
tax imposed by the United States of America or any other tax,
levy, impost, duty, charge, fee, deduction or withholding (i)
that is measured with respect to the overall net income of the
Fronting Bank or such Lender or of a Lending Office of the
Fronting Bank or such Lender, and that is imposed by the
United States of America, or by the jurisdiction in which the
Fronting Bank or
- 46 -
54
such Lender is incorporated, or in which such Lending Office
is located, managed or controlled or in which the Fronting
Bank or such Lender has its principal office (or any political
subdivision or taxing authority thereof or therein) or (ii)
that is imposed solely by reason of any Lender failing to make
a declaration of, or otherwise to establish, non-residence or
to make any other claim for exemption, or otherwise to comply
with any certification, identification, information,
documentation or reporting requirements prescribed under the
laws of the relevant jurisdiction, in those cases where a
Lender may properly make such declaration or claim or so
establish non-residence or otherwise comply);
(B) the basis of taxation of any fee or amount
payable hereunder with respect to any Letter of Credit shall
be changed (except as limited in clause (A) above);
(C) any reserve, deposit or similar requirement is
or shall be applicable, imposed or modified in respect of any
Letter of Credit issued by the Fronting Bank or participations
therein purchased by any Lender; or
(D) there shall be imposed on the Fronting Bank or
any Lender any other condition regarding this Section 2.15,
any Letter of Credit or any participation therein;
and the result of the foregoing is to increase the actual cost to the Fronting
Bank or any Lender of issuing, making or maintaining any Letter of Credit or of
purchasing or maintaining any participation therein, or to reduce the amount
receivable in respect thereof by the Fronting Bank or any Lender, in each case
by or in an amount which the Fronting Bank or any Lender shall reasonably deem
material, then and in any such case the Fronting Bank or such Lender may, at
any time, notify the Parent, and the Parent shall pay on demand such amounts as
the Fronting Bank or such Lender may specify to be necessary to compensate the
Fronting Bank or such Lender for such additional cost or reduced receipt.
Section 2.10(c), (d), (e) and Section 2.11 shall in all instances apply to the
Fronting Bank and any Lender with respect to Letters of Credit issued
hereunder.
(h) If at any time when an Event of Default shall have
occurred and be continuing, any Letters of Credit shall remain outstanding,
then the Majority Lenders or the Fronting Bank may, at their option, require
the Parent to deliver to the Fronting Bank Cash Equivalents in an amount equal
to the full amount of the L/C Exposure or to furnish other security acceptable
to the Fronting Bank. Any amounts so delivered pursuant to the preceding
sentence shall be applied to reimburse the Fronting Bank for the amount of any
drawings honored under Letters of Credit; provided, however, that if prior to
the Commitment Termination Date, no Event of Default is then continuing, the
Fronting Bank shall return all of such collateral relating to such deposit to
the Parent if requested by it.
- 47 -
55
(i) If at any time, the L/C Exposure plus Domestic Loans
outstanding exceeds the Domestic Borrowing Base, then the Majority Lenders or
the Fronting Bank may, at their option, require the Parent to deliver Cash
Equivalents to the Fronting Bank in an amount sufficient to eliminate such
excess or to furnish other security for such excess acceptable to the Fronting
Bank. Any amounts so delivered pursuant to the preceding sentence shall be
applied to reimburse the Fronting Bank for the amount of any drawings honored
under Letters of Credit; provided, however, that if subsequent to any such
deposit such excess is reduced to an amount less than the amount of such
deposited amounts and no Default or Event of Default is then continuing, the
Parent shall be entitled to receive such excess collateral if requested by it.
(j) If at any time, a prepayment would be required under
Section 2.9 in an amount in excess of Loans then outstanding, such excess (but
not more than an amount equal to the L/C Exposure) shall be deposited in the
Cash Collateral Account as security for outstanding Letters of Credit.
(k) Notwithstanding the termination of the Commitments and
the payment of the Loans, the obligations of the Parent under this Section 2.15
shall remain in full force and effect until the Fronting Bank and the Lenders
shall have been irrevocably released from their obligations with regard to any
and all Letters of Credit.
3. REPRESENTATIONS AND WARRANTIES OF DEBTORS
In order to induce the Lenders to enter into this Credit
Agreement and to make the Loans and issue the Letters of Credit provided for
herein, each Debtor, jointly and severally, makes the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Credit Agreement, the issuance of the Notes,
the making of the Loans and the issuance of the Letters of Credit:
SECTION 3.1. Corporate Existence and Power. Each of the
Debtors is a corporation or, in the case of the LLC, a limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or formation as applicable, and is in good
standing as a foreign corporation in all jurisdictions where the nature of its
properties or business so requires and where the failure to be in good standing
as a foreign corporation would render an Eligible Receivable unenforceable or
would give rise to a material liability of the Parent or the Parent and its
Subsidiaries taken as a whole. Each of the Debtors has the corporate or other
organizational power and authority to own its respective properties and carry
on its respective businesses as now being conducted, to execute, deliver and
perform, as applicable, its obligations under this Credit Agreement, the Notes
and the other Fundamental Documents and other documents contemplated hereby to
which it is or will be a party as provided herein and to grant to the Agent,
for the benefit of the Lenders, a security interest in the Collateral as
contemplated by Article 8 hereof and in the Pledged Securities as contemplated
by Article 10 hereof.
- 48 -
56
SECTION 3.2. Authority and No Violation. Except as relates
to NBV until its execution of this Credit Agreement, the execution, delivery
and performance of this Credit Agreement and the other Fundamental Documents to
which it is a party, by each Debtor and, in the case of the Parent, the
borrowings hereunder and the execution and delivery of the relevant Notes and,
in the case of each Debtor, the grant to the Agent for the benefit of the
Lenders of the security interest in the Collateral and the Pledged Securities
as contemplated herein and in the other Fundamental Documents (a) have been
duly authorized by all necessary corporate or other appropriate action on the
part of each such Debtor, (b) will not constitute a violation by any Debtor of
any provision of Applicable Law, any order of any court or other agency of the
United States or any state thereof applicable to any of the Debtors or any of
their respective properties or assets, (c) will not violate any provision of
the Certificate of Incorporation or other organizational documents or By-Laws
of any of the Debtors, or any material provision of any Distribution Agreement,
Licensing Agreement, indenture, agreement, bond, note or other similar
instrument to which any of the Debtors is a party or by which any of the
Debtors or their respective properties or assets are bound, (d) will not be in
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under or create any right to terminate any such
Distribution Agreement, indenture, agreement, bond, note or other instrument,
and (e) will not result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
any of the Debtors other than pursuant to this Credit Agreement or the other
Fundamental Documents to which it is a party.
SECTION 3.3. Governmental Approval. All authorizations,
approvals, registrations or filings from or with any governmental or public
regulatory body or authority of the United States or any state thereof or any
foreign jurisdiction required on the part of any Debtor for the execution,
delivery and performance by any Debtor of this Credit Agreement and the other
Fundamental Documents to which it is a party, and the execution and delivery by
the Parent of the relevant Notes, have been duly obtained or made, and are in
full force and effect.
SECTION 3.4. Binding Agreements. This Credit Agreement and
the other Fundamental Documents when executed will constitute the legal, valid
and binding obligations of the respective Debtors, enforceable in accordance
with their respective terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity.
SECTION 3.5. Financial Statements. The audited consolidated
balance sheet of the Parent and its Subsidiaries at December 31, 1995 and the
unaudited consolidated balance sheet of the Parent and its Subsidiaries at June
30, 1996, together with the related consolidated or consolidating statements of
income and cash flow and the related notes and supplemental information, has
been prepared in accordance with GAAP, except as otherwise indicated in the
notes to such financial statements. All of such financial statements fairly
present the consolidated financial condition or the results of operations of
the Parent and its Subsidiaries, at the dates or for the periods indicated,
subject in the case of unaudited statements to changes
- 49 -
57
resulting from normal year-end and audit adjustments, and (in the case of
balance sheets) reflect (including the notes thereto) all known liabilities,
contingent or otherwise, as of such dates required in accordance with GAAP to
be shown or reserved against, or disclosed in the notes to the financial
statements. The combined balance sheet of Xxxx Xxxxxxx Productions L.P. and
The Child's Play Company at December 31, 1995 together with the related
combined statement of operating income and changes in partnership interest and
statement of cash flows for the period from October 6, 1995 (inception) to
December 31, 1995 and the related notes and supplemental information have been
prepared in accordance with GAAP, except as otherwise indicated in the notes to
such financial statements.
SECTION 3.6. No Material Adverse Change. (a) At (and for
the period ending on) the Closing Date, there has been no material adverse
change from the business plan previously provided by the Parent to the Agent
and included in the September 1996 Confidential Information Memorandum.
(b) No Debtor has entered or is entering into the
arrangements contemplated hereby and by the other Fundamental Documents, or
intends to make any transfer or incur any obligations hereunder or thereunder,
with actual intent to hinder, delay or defraud either present or future
creditors. On and as of the date hereof, on a pro forma basis after giving
effect to all Indebtedness (including the Loans) (w) each Debtor expects the
cash available to such Debtor, after taking into account all other anticipated
uses of the cash of such Debtor (including the payments on or in respect of
debt referred to in clause (y) of this Section 3.6(b)), will be sufficient to
satisfy all final judgments for money damages which have been docketed against
such Debtor or which may be rendered against such Debtor in any action in which
such Debtor is a defendant (taking into account the reasonably anticipated
maximum amount of any such judgment and the earliest time at which such
judgment might be entered); (x) the sum of the present fair saleable value of
the assets of each Debtor (including any rights of such Debtor under any
Contribution Agreement to which such Debtor is a party) will exceed the
probable liability of such Debtor on its debts (including its Guaranties); (y)
no Debtor will have incurred or intends to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature (taking into
account the timing and amounts of cash to be received by such Debtor from any
source, and of amounts to be payable on or in respect of debts of such Debtor
and the amounts referred to in clause (w)); and (z) each Debtor believes it
will have sufficient capital with which to conduct its present and proposed
business and the property of such Debtor does not constitute unreasonably small
capital with which to conduct its present or proposed business. For purposes
of this Section 3.6, "debt" means any liability on a claim, and "claim" means
(i) right to payment whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed
(other than those being disputed in good faith), undisputed, legal, equitable,
secured or unsecured, or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured.
- 50 -
58
SECTION 3.7. Subsidiaries; Ownership of Stock. (a) Annexed
hereto as Schedule 3.7 is a correct and complete list as of the date hereof, of
all the Subsidiaries of the Parent showing, as to each, its name, the
jurisdiction of incorporation, its authorized capitalization and the ownership
of the capital stock or other equity interest of such Subsidiary;
(b) Except as noted on Schedule 3.7, neither the Parent nor
any Subsidiary owns any Voting Stock or beneficial interest, directly or
indirectly, in any entity other than in the Subsidiaries of the Parent; and
(c) All of the outstanding shares of capital stock of each
Subsidiary of the Parent have been validly issued and are fully paid and
non-assessable; such shares are owned by the Person set forth in Schedule 3.7
free and clear of all liens, charges or encumbrances except as contemplated
herein.
SECTION 3.8. Copyrights, Patents and Other Rights. (a) On
the date hereof, the Product, Recorded Product and Film Assets listed on
Schedule 3.8(a) hereof comprise all of the Product, Recorded Product and Film
Assets in which any Debtor has any right, title or interest (either directly or
through a joint venture or partnership) and the value to the Debtor of which in
the Debtors' reasonably commercial judgment is in excess of $250,000 and the
description of the interests held by each Debtor are set forth on such
Schedule. Each Debtor has duly recorded its interest in each such Product,
Recorded Product or Film Asset in the United States Copyright Office and
delivered copies of all such recordations to the Agent (other than such
Product, Recorded Product or Film Assets which in the aggregate do not
represent more than 1% of the overall value of the Collateral). No Product,
Recorded Product or Film Asset or any component part thereof violates or
infringes upon any copyright, right of privacy, trademark, patent, trade name,
performing right or any literary, dramatic, musical, artistic, personal,
private, contract or copyright right or any other right of any Person if such
infringement would materially adversely affect the business or financial
condition of the Parent and its Subsidiaries taken as a whole or expose any
Debtor to material damages or costs or contains any libelous or slanderous
material. There is no claim, suit, action or proceeding pending or threatened
against any Debtor that involves a claim of infringement of any copyright and
no Debtor has knowledge of any existing infringement by any other Person of any
copyright held by any Debtor.
(b) Schedule A to the Trademark Security Agreement (i) lists
all the trademarks registered by any Debtor on the date hereof and identifies
the Debtor which registered each such trademark and (ii) specifies as to each,
the jurisdictions in which such trademark has been issued or registered (or, if
applicable, in which an application for such issuance or registration has been
filed), including the respective registration or application numbers and
applicable dates of registration or application and (iii) specifies as to each,
as applicable, material licenses, sublicenses and other material agreements as
of the date hereof (other than any agreements which relate to the exploitation
of a item of Product), to which any Debtor is a party and pursuant to which
any Person is authorized to use such trademark.
- 51 -
59
SECTION 3.9. Fictitious Names. Except as disclosed on
Schedule 3.9, none of the Debtors are doing business or intend to do business
other than under its full corporate name, including, without limitation, under
any trade name or other doing business name.
SECTION 3.10. Title to Properties. The Debtors have good
title to each of the properties and assets reflected on the latest balance
sheets referred to in Section 3.5 (other than such properties or assets
disposed of in the ordinary course of business since the date of such balance
sheets) and all such properties and assets are free and clear of Liens, except
Permitted Encumbrances.
SECTION 3.11. Places of Business. The chief executive office
of each Debtor is, on the date hereof, as set forth on Schedule 3.11 hereto,
which offices in the United States are the places where each Debtor is
"located" for the purpose of the UCC and the Uniform Commercial Code in effect
in any State in which any Debtor is so located. All of the places where each
Debtor keeps the records concerning the Collateral on the date hereof or
regularly keeps any goods included in the Collateral on the date hereof are
also listed on Schedule 3.11 hereto.
SECTION 3.12. Litigation. Except as set forth on Schedule
3.12 hereto, there are no actions, suits or other proceedings at law or in
equity by or before any arbitrator or arbitration panel, or any Governmental
Authority (including, but not limited to, matters relating to environmental
liability) or any investigation by any Governmental Authority of the affairs of
or threatened litigation action or other proceedings against or affecting any
Debtor or of any of their respective properties or rights which could
reasonably be expected to materially and adversely affect (i) the ability of
any Debtor to perform its obligations under the Fundamental Documents to which
it is a party, (ii) the ability of any Debtor to carry on its business, (iii)
the security interests granted to the Agent for the benefit of the Lenders
under the Fundamental Documents, (iv) the financial condition or business of
the Parent and its Subsidiaries taken as a whole or, (v) the Collateral. No
Debtor is in default with respect to any order, writ, injunction, decree, rule
or regulation of any Governmental Authority binding upon such Person, which
default would have a material adverse effect upon the financial condition or
the business of the Parent and its Subsidiaries taken as a whole.
SECTION 3.13. Federal Reserve Regulations. No Debtor is
engaged principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
No part of the proceeds of the Loans will be used, directly or indirectly,
whether immediately, incidentally or ultimately (i) to purchase or carry any
Margin Stock (other than the Convertible Subordinated Notes) or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock, or
(ii) for any other purpose violative of or inconsistent with any of the
provisions of any regulation of the Board of Governors of the Federal Reserve
System, including, without limitation, Regulations G, T, U and X thereto.
SECTION 3.14. Investment Company Act. No Debtor is, or will
during the term of this Credit Agreement be, (x) an "investment company",
within the meaning of the Investment
- 52 -
60
Company Act of 1940, as amended or (y) subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or any foreign,
federal or local statute or any other Applicable Law of the United States of
America, any other jurisdiction, in each case limiting its ability to incur
indebtedness for money borrowed as contemplated hereby or by any other
Fundamental Document.
SECTION 3.15. Taxes. Each Debtor has filed or caused to be
filed all federal, state, local and foreign tax returns which are required to
be filed with any Governmental Authority after giving effect to applicable
extensions (except for the failure to file certain franchise tax returns, the
failure to file which does not result in any Debtor not being in good standing)
and has paid or have caused to be paid all taxes as shown on said returns or on
any assessment received by them in writing, to the extent that such taxes have
become due, except as permitted by Section 5.13 hereof and except for certain
past due franchise tax payments not exceeding $100,000. No Debtor knows of any
material additional assessments or any basis therefor. The Debtors reasonably
believe that the charges, accrual and reserves on the books of the Parent and
its Subsidiaries in respect of taxes or other governmental charges are
adequate.
SECTION 3.16. Compliance with ERISA. Each Debtor is in
compliance in all material respects with the provisions of ERISA and the Code
applicable to Plans, and the regulations and published interpretations
thereunder, if any, which are applicable to it. As of the date hereof, no
Debtor has, with respect to any Plan established or maintained by it, engaged
in a prohibited transaction which would subject it to a material tax or penalty
on prohibited transactions imposed by ERISA or Section 4975 of the Code. No
liability to the PBGC has been or is expected to be incurred with respect to
the Plans and there has been no Reportable Event and no other event or
condition that presents a material risk of termination of a Plan by the PBGC.
No Debtor has engaged in a transaction which would result in the incurrence by
such Debtor of any liability under Section 4069 of ERISA. No Debtor has taken
any action and no event has occurred with respect to any Multiemployer Plan
which would subject any Debtor to liability under either Section 4201 or 4204
of ERISA.
SECTION 3.17. Agreements. (a) No Debtor is in default in
the performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any agreement or instrument (including the
Distribution Agreements or any Licensing Agreements) to which it is a party
which would reasonably be expected to result in any material adverse change in
the business, properties, assets, operations, condition (financial or
otherwise) or prospects of the Parent or the Parent and its Subsidiaries taken
as a whole.
(b) Schedule 3.17 is a true and complete listing (in form
satisfactory to the Agent) as of the date hereof of (i) all credit agreements,
indentures, and other agreements related to any Indebtedness for borrowed money
of the Debtors, (ii) all joint venture agreements to which the Debtors are a
party (iii) all material Distribution Agreements and/or Licensing Agreements to
which the Debtors are party and (iv) all other contracts and agreements which
are material to any Debtor. The Debtors have delivered or made available to
the Agent a true and
- 53 -
61
complete copy of each agreement listed on Schedule 3.17, including all exhibits
and schedules. For purposes of this Section 3.17, a Distribution Agreement or
other contract or agreement shall be deemed "material" if the Debtors
reasonably expect that prior to the Commitment Termination Date any Debtor
would, pursuant to the terms thereof, (x) recognize net revenues after the
payment of third party shares in excess of $250,000 or (y) incur liabilities or
obligations (not covered by corresponding revenues) in excess of $100,000.
SECTION 3.18. Security Interest; Other Security. (a) This
Credit Agreement and the other Fundamental Documents, when executed and
delivered and, upon the making of the initial Loan hereunder, will create and
grant to the Agent for the benefit of the Lenders (upon (i) the filing of the
appropriate UCC-1 financing statements, (ii) the filing of the Copyright
Security Agreements with the U.S. Copyright Office, (iii) the filing of the
Trademark Security Agreement with the U.S. Patent and Trademark Office and (iv)
delivery of the Pledged Securities to the Agent) valid and first priority
perfected security interests in the Collateral and the Pledged Securities
subject only to Permitted Encumbrances (other than any Collateral consisting of
a Debtor's interest in a copyright as to which a security interest may only be
perfected by a filing in the U.S. Copyright Office and as to which no filing
has been made in the U.S. Copyright Office to perfect the transfer of such
interest to such Debtor and which in the aggregate do not represent more than
1% of the overall value of the Collateral).
(b) The Keyman Life Insurance is in full force and effect and
the Debtors know of no defense or offset to the full and timely payment thereon
which could be asserted by the insurer issuing such policy if a bona fide claim
were to be made.
(c) The Keyman Life Insurance Assignment constitutes a valid
and effective transfer to the Agent for the benefit of the Lenders for security
purposes of all right, title and interest of the Debtors in and to the Keyman
Life Insurance.
SECTION 3.19. Disclosure. Neither this Credit Agreement nor
any other Fundamental Document nor any agreement, document, certificate or
statement furnished to the Agent for the benefit of the Lenders by any Debtor
in connection with the transactions contemplated hereby, at the time it was
furnished or delivered contained any untrue statement of a material fact
regarding any Debtor or, when taken together with such other agreements,
documents, certificates and statements omitted to state a material fact
necessary under the circumstances under which it was made in order to make the
statements contained herein or therein not misleading. There is no fact known
to any Debtor as of the Closing Date not constituting general industry
conditions or not disclosed in such agreements, documents, certificates and
statements which materially and adversely affects, or could reasonably be
expected in the future to materially and adversely affect, the business,
assets, condition, operations or prospects, financial or otherwise of the
Parent and its Subsidiaries taken as a whole. All financial projections
concerning the Parent and its Subsidiaries and the business plan of the Parent
made available to the Lenders by the Parent or on its behalf were prepared in
good faith based upon assumptions which the Parent believes to be reasonable.
- 54 -
62
SECTION 3.20. Distribution Rights. Each Debtor has
sufficient right, title and interest in Product and/or Recorded Product to
enable it (i) to enter into and perform all of the Distribution Agreements
and/or Licensing Agreements to which it is a party and other agreements
generating Eligible Receivables and accounts receivable reflected on the most
recent balance sheet delivered to the Lenders pursuant hereto, and (ii) to
charge, earn, realize and retain all fees and profits to which such Debtor is
entitled thereunder, and is not in breach of any of its obligations under such
agreements, nor does any Debtor have any knowledge of any breach or anticipated
breach by any other parties thereto, which breach in either case either
individually or when aggregated with all other such breaches would have a
material adverse effect on the Parent taken as a whole or on the Parent and its
Subsidiaries taken as a whole.
SECTION 3.21. Environmental Liabilities. (a) Except as set
forth on Schedule 3.21 hereto, no Debtor has used, stored, treated,
transported, manufactured, refined, handled, produced or disposed of any
Hazardous Materials on, under, at, from, or in any way affecting, any of their
properties or assets, or otherwise, in any manner which at the time of the
action in question violated any Environmental Law governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials and to the best of the Debtors' knowledge, no
prior owner of such property or asset or any tenant, subtenant, prior tenant or
prior subtenant thereof has used Hazardous Materials on or affecting such
property or asset, or otherwise, in any manner which at the time of the action
in question violated any Environmental Law governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials.
(b) To the best of each Debtor's knowledge (i) no Debtor has
any obligations or liabilities, known or unknown, matured or not matured,
absolute or contingent, assessed or unassessed, where such would reasonably be
expected to have a materially adverse effect on the business or condition
(financial or otherwise) of any of the Debtors and (ii) no claims have been
made against any of the Debtors during the past five years and no presently
outstanding citations or notices have been issued against any of the Debtors,
where such could reasonably be expected to have a materially adverse effect on
the business or condition (financial or otherwise) of any of the Debtors, which
in either case have been or are imposed by reason of or based upon any
provision of any Environmental Law, including, without limitation, any such
obligations or liabilities relating to or arising out of or attributable, in
whole or in part, to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation or handling of any Hazardous Materials by any
Debtor, or any of their employees, agents, representatives or predecessors in
interest in connection with or in any way arising from or relating to any of
the Debtors or any of their respective properties, or relating to or arising
from or attributable, in whole or in part, to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation or handling of
any such substance, by any other Person at or on or under any of the real
properties owned or used by any of the Debtors or any other location where such
could have a materially adverse effect on the business or condition (financial
or otherwise) of the Parent taken as a whole or the Parent and its Subsidiaries
taken as a whole.
- 55 -
63
SECTION 3.22. Pledged Securities. All of the Pledged
Securities are duly authorized, validly issued and fully paid, and are owned
and held by the Pledgors, free and clear of any liens, encumbrances, or
security interests whatsoever other than those created pursuant to this Credit
Agreement or Permitted Encumbrances and there are no restrictions on the
transfer of the Pledged Securities other than as a result of this Credit
Agreement, applicable securities laws or, as to shares of NBV, any mandatory
share transfer restriction which requires compliance with certain formalities
to effectuate a transfer in the event of foreclosure. Except as set forth on
Schedule 3.22, there are no outstanding rights, warrants, options, or
agreements to purchase or otherwise acquire any shares of the stock or
securities or obligations of any kind convertible into any shares of capital
stock, of any shares, of the issuers of the Pledged Securities. The Pledged
Securities are owned by the Persons specified on Schedule 3.7.
SECTION 3.23. Real Properties. Listed on Schedule 3.23 are
all material real properties currently owned or occupied by a Debtor and a
designation of each such property as being owned or leased by such Person and
relevant terms of material leases.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Initial Loans or Letter
of Credit. The obligation of each Lender to make its initial Loan or issue and
participate in the initial Letter of Credit is subject to the following
conditions precedent:
(a) Corporate Documents. The Agent shall have received, with
copies for each of the Lenders:
(i) a copy of each Debtor's certificate of
incorporation, partnership agreement or other organizational
document, certified as of a recent date by the Secretary of
State of such Debtor's jurisdiction of incorporation or other
appropriate governmental official of such Foreign Subsidiary's
jurisdiction of incorporation or formation;
(ii) with respect to all Debtors other than NBV a
certificate of such Secretary of State, or other appropriate
governmental official of such Foreign Subsidiary's
jurisdiction of incorporation or formation dated as of a
recent date as to the good standing (or equivalent thereof) of
and payment of taxes by each Debtor which lists the charter
documents on file in the office of such Secretary of State or
other governmental official and, with respect to NBV, an
extract of the relevant Trade Register in the Netherlands;
(iii) a certificate dated as of a recent date as to
the good standing of each Debtor issued by the appropriate
governmental official of each jurisdiction in
- 56 -
64
which each Debtor is qualified as a foreign corporation (other
than the Netherlands); and
(iv) a certificate of the Secretary of each Debtor
or, in the case of NBV, a managing director, dated the date of
the initial Loans and certifying (A) that attached thereto is
a true and complete copy of the by-laws of such Debtor as in
effect on the date of such certification, (B) that attached
thereto is a true and complete copy of resolutions adopted by
the Board of Directors of such Debtor authorizing (to the
extent applicable) the Borrowings hereunder, the execution,
delivery and performance in accordance with their respective
terms of this Credit Agreement, the Notes to be executed by
it, and any other documents required or contemplated hereunder
or thereunder, (C) that the certificate of incorporation of
such Debtor has not been amended since the date of the last
amendment thereto indicated on the certificate of the
Secretary of State or other governmental official furnished
pursuant to clause (i) above except to the extent specified in
such Secretary's or Managing Director's certificate and (D) as
to the incumbency and specimen signature of each officer of
such Debtor executing (as applicable) this Credit Agreement,
the Notes or any other document delivered by it in connection
herewith or therewith (such certificate to contain a
certification by another officer of such Debtor as to the
incumbency and signature of the officer signing the
certificate referred to in this clause (iv)).
(b) Notes. The Agent shall have received the Notes executed
by the appropriate Borrower.
(c) Opinions of Counsel. The Agent shall have received the
favorable written opinions, dated the Closing Date and addressed to the Agent
and the Lenders, of (i) Xxxx, Scholer, Fierman, Xxxx & Handler LLP, counsel to
the Parent and the other Domestic Debtors, covering the matters set forth in
Exhibit D-1 hereto, (ii) the general counsel to the Parent and the other
Debtors, covering the matters set forth in Exhibit D-2 hereto, (iii) Xxxx,
Scholer, Fierman, Xxxx & Handler, LLP as special copyright counsel to the
Parent and the other Debtors, covering the matters set forth on Exhibit D-3
hereto, (iv) X.X. Xxxxxx & Co., U.K. counsel to Fremantle UK, and (v) such
other local counsel as the Agent may reasonably request regarding perfection of
security interests and such other matters as the Agent shall reasonably
request; in addition, prior to the date of the initial Foreign Loan, the Agent
shall have received the favorable written opinion of Xxxxx Dutilh, Netherlands
counsel to NBV, regarding the matters set forth in Exhibit D-1 hereto as
relates to NBV and such other matters as the Majority Lenders shall reasonably
request.
(d) Projected Financial Information. The Debtors shall have
delivered to the Agent a business plan, which shall include forecasted
financial statements consisting of balance sheets, cash flow statements and
income statements together with appropriate supporting details and a statement
of the underlying assumptions. Such projected statements shall cover a period
- 57 -
65
commencing on the Closing Date and ending at year end 1998, and shall have been
prepared on a basis consistent with the Parent's past practices. All of the
foregoing shall have been prepared in good faith and shall represent the
reasonable, good faith opinion of the senior management of the Parent of the
most probable course of its business as of the date of delivery of such
projections to the Agent.
(e) No Material Adverse Change. No material adverse change
shall have occurred with respect to the business, operations, performance,
assets, properties, condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries taken as a whole from the business plan previously
provided by the Parent to the Agent and included in the September 1996
Confidential Memorandum.
(f) Insurance. The Debtors shall have furnished the Agent
with a summary of all existing insurance coverage and evidence acceptable to
the Agent that the insurance policies required by Section 5.5 hereof have been
obtained and are in full force and effect.
(g) Borrowing Base Certificate. The Agent shall have
received an initial Borrowing Base Certificate.
(h) Security and Other Documentation. On or prior to the
Closing Date, the Agent shall have received fully executed copies of (i) a
Pledgeholder Agreement for each item of Product, Recorded Product or Film Asset
for which a Debtor has control over any physical elements thereof as listed on
Schedule 3.8(a) hereto; (ii) a Copyright Security Agreement for each item of
Product, Recorded Product or Film Asset in which a Debtor has a copyrightable
interest (as listed on Schedule 3.8(a) hereto) executed by such Debtor; (iii) a
Trademark Security Agreement for each trademark in which a Debtor has any
interest (as listed on Schedule 3.8(b) hereto) executed by such Debtor; (iv) a
Laboratory Access Letter addressed to each laboratory where a Debtor has access
rights to any physical elements of Product or Recorded Product; (v) appropriate
UCC-1 financing statements relating to the Collateral; (vi) the Pledged
Securities with appropriate undated stock powers executed in blank and (vii)
the U.K. Security Documents; in addition, prior to the date of the initial
Foreign Loan, the Agent shall have received the fully executed NBV Security
Documents.
(i) Security Interests in Copyrights and other Collateral.
On or prior to the Closing Date, the Agent shall have received evidence
satisfactory to it that each Debtor has sufficient right, title and interest in
and to the Collateral and other assets which it purports to own (including
appropriate licenses under copyright), as set forth in its financial statements
and in the other documents presented to the Lenders to enable each such Debtor
to perform the Distribution Agreements and Licensing Agreements to which each
such Debtor is a party and to grant to the Agent for the benefit of the Lenders
the security interests contemplated by the Fundamental Documents, and that all
financing statements, copyright filings and other filings under Applicable Law
necessary to provide the Agent for the benefit of the Lenders with a first
priority perfected security interest in the Pledged Securities, Keyman Life
Insurance and Collateral
- 58 -
66
(subject, as to the Collateral, to Permitted Encumbrances and other than any
Collateral consisting of a Debtor's interest in a copyright as to which a
security interest may only be perfected by filing in the U.S. Copyright Office
and as to which no filing has been made in the U.S. Copyright Office to
perfect the transfer of such interest to such Debtor and which in the aggregate
do not represent more than 1% of the overall value of the Collateral) have been
filed or delivered to the Agent in satisfactory form for filing.
(j) Employment Agreements. Each of the Lenders shall have
received true, correct and complete copies of the Employment Agreements and any
amendments thereto in effect on the Closing Date, which shall be in form and
substance satisfactory to the Agent.
(k) Payment of Fees. All fees and expenses then due and
payable by any Debtor in connection with the transactions contemplated hereby
shall have been paid including, but not limited to, fees and expenses due and
payable by the Borrowers to the Agent and the Lenders.
(l) Certificate from the Parent. The Agent shall have
received a certificate, signed by an Authorized Officer on behalf of the
Parent, confirming that the Parent has determined that the projected
availability of the Loans as determined by the Borrowing Base, together with
funds from internally generated sources, is sufficient to finance the Debtors
in a manner compatible with the forecasted financial statements previously
delivered to the Lenders.
(m) Litigation. No litigation shall be pending or threatened
which involves this Credit Agreement or which in the Agent's good faith
judgment would be likely to materially and adversely affect the assets,
operations, business, condition (financial or otherwise), or prospects of the
Borrowers or the Parent and its Subsidiaries taken as a whole, or could
reasonably be expected to materially adversely affect (i) the ability of the
Borrowers or the Parent and its Subsidiaries (taken as a whole) to fulfill
their respective Obligations hereunder or (ii) the rights and remedies of the
Lenders.
(n) Existing Debt. The Debtors shall have no Indebtedness
other than as specified on Schedule 3.17.
(o) UCC Searches. The Agent shall have received UCC searches
satisfactory to it indicating that no other filings (other than in connection
with Permitted Encumbrances) with regard to the Collateral are of record in any
jurisdiction in which it shall be necessary or desirable for the Agent to make
a UCC filing in order to provide the Agent with a perfected security interest
in the Collateral.
(p) ERISA. The Agent shall have received copies of all Plans
of the Debtors that are in existence on the Closing Date, and descriptions of
those that are committed to on the Closing Date.
- 59 -
67
(q) Contribution Agreements. The Agent shall have received
the applicable fully executed Contribution Agreements executed by the Domestic
Guarantors as to Domestic Loans and the Foreign Borrower and all Guarantors
(other than the Parent) as to the Foreign Loans.
(r) Keyman Life Insurance Assignment. The Keyman Life
Insurance and the Keyman Life Insurance Assignment shall have been delivered to
the Agent.
(s) Federal Reserve Regulations. The Agent shall be
satisfied that the provisions of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System will not be violated by the
transactions contemplated hereby.
(t) Structure. The Agent shall be satisfied with the
corporate and capital structure of the Parent.
(u) Other Matters. All legal matters incident to this Credit
Agreement and the transactions contemplated hereby shall be satisfactory to
Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to the Agent.
SECTION 4.2. Conditions Precedent to Each Loan and Letter of
Credit. The obligation of the Lenders to make each Loan and to issue and
participate in each Letter of Credit (including the initial Loans and Letter of
Credit) is subject to the following conditions precedent:
(a) Notice. The Agent shall have received a notice with
respect to such Borrowing as required by Article 2 hereof.
(b) Borrowing Certificate. The Agent shall have received a
Borrowing Certificate with respect to such Borrowing, duly executed by an
Authorized Officer of the Parent.
(c) Representations and Warranties. The representations and
warranties set forth in Article 3 hereof and in the other Fundamental Documents
shall be true and correct in all material respects on and as of the date of
each Borrowing and issuance of a Letter of Credit hereunder (except to the
extent that such representations and warranties expressly relate to an earlier
date and except to the extent that such changes have occurred without breach or
default under any of the terms or conditions hereof including without
limitation Articles 5 and 6 hereof) with the same effect as if made on and as
of such date.
(d) No Event of Default. On the date of each Borrowing
hereunder, each Debtor shall be in compliance with all of the terms and
provisions set forth herein to be observed or performed and no Event of Default
or Default shall have occurred and be continuing.
(e) No Material Adverse Change. No material adverse change
shall have occurred with respect to the business, operations, performance,
assets, properties, condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries taken as a whole from June
- 60 -
68
30, 1996, except for changes due to seasonality that are consistent with the
corresponding periods in prior years.
(f) Additional Documents. The Lenders shall have received
from the Parent on the date of each Borrowing and issuance of a Letter of
Credit such documents and information as they may reasonably request relating
to the satisfaction of the conditions in this Section 4.2. Each request for a
Borrowing or for issuance of a Letter of Credit shall be deemed to be a
representation and warranty by the Debtors on the date of such Borrowing or the
issuance of such Letter of Credit as to the matters specified in paragraphs
(c), (d) and (e) of this Section.
5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as the Commitments shall
be in effect or any amount remains outstanding under the Notes or any Letter of
Credit shall remain outstanding or any Obligations remain unpaid or
unsatisfied, each Debtor agrees that, unless the Majority Lenders shall
otherwise consent in writing, it will and will cause each of the Subsidiaries
to:
SECTION 5.1. Financial Statements and Reports. Furnish or
cause to be furnished to the Agent in sufficient numbers for distribution to
the Lenders:
(a) Within 95 days after the end of each fiscal year (or 110
days in the event the Parent has applied for an extension for such filing
pursuant to Rule 12b-25 of the Securities Exchange Act of 1934, as amended) (i)
the audited consolidated balance sheet of the Parent and its Subsidiaries as at
the end of, and the related statements of income, shareholders' equity and cash
flow for, such year, and the corresponding figures as at the end of, and for,
the preceding fiscal year, accompanied by an opinion of Price Waterhouse LLP or
such other independent public accountants of recognized standing as shall be
retained by the Parent and be satisfactory to the Agent, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards relating to reporting and which report and opinion shall contain no
material exceptions or qualifications except for qualifications relating to
accounting changes (with which such independent public accountants concur) in
response to FASB releases or other authoritative pronouncements and (ii) the
unaudited consolidating balance sheet of the Parent and its Subsidiaries and
the balance sheet of NBV (at the end of its first fiscal year), in each case as
at the end of, and the related unaudited consolidating statements of income and
cash flow for, such fiscal year certified by the chief financial officer of the
Parent, on behalf of the Parent;
(b) Within 50 days after the end of each of the first three
fiscal quarters of each of its fiscal years (or 65 days in the event the Parent
has applied for an extension for such filing pursuant to Rule 12b-25 of the
Securities Exchange Act of 1934, as amended), the unaudited (y) consolidated
and consolidating balance sheets of the Parent and its Subsidiaries and (z)
balance sheet of NBV, in each case as at the end of, and the
- 61 -
69
related unaudited consolidated and consolidating statements of income and cash
flow as to the Parent and its Subsidiaries and the related statements of income
and cash flow as to NBV, in each case for, such quarter, and the corresponding
figures as at the end of, and for, the corresponding period in the preceding
fiscal year, together with a certificate signed by an Authorized Officer of the
Parent, on behalf of the Parent, to the effect that such financial statements,
while not examined by independent public accountants, reflect, in the opinion
of the Parent, all adjustments necessary to present fairly the financial
position of the Parent and its Subsidiaries or NBV, as the case may be, as at
the end of the fiscal quarter and the results of its operations for the quarter
then ended in conformity with GAAP;
(c) Simultaneously with the delivery of the statements
referred to in paragraphs (a) and (b) of this Section 5.1, a certificate of an
Authorized Officer of the Parent, on behalf of the Parent, in form and
substance satisfactory to the Agent (i) stating whether or not such Authorized
Officer has knowledge of any condition or event which would constitute an Event
of Default or Default has occurred and, if so, specifying each such condition
or event and the nature thereof, (ii) demonstrating in reasonable detail
compliance with the provisions of Sections 6.14, 6.16, 6.17, 6.18, 6.19, 6.21,
6.28 and 6.30 hereof, (iii) stating the actual amount of cash refunds made
during such past quarter by the Parent or the Subsidiaries in connection with
Barter Receivables and indicating the Refund Percentage as of such date and
(iv) certifying that all filings required under Section 5.8 hereof have been
made and listing each such filing that has been made since the date of the last
certificate delivered in accordance with this Section 5.1(c);
(d) On or prior to the twentieth day of each month, a
certificate ("Borrowing Base Certificate") in the form of Exhibit E hereto,
setting forth the amount of each component included in each of the Domestic
Borrowing Base and the Foreign Borrowing Base as of the last Business Day of
the preceding month, attached to which shall be detailed information including
the calculation of each such component (the Parent, at its option, may furnish
additional Borrowing Base Certificates setting forth such information as of
such other dates as it may deem appropriate);
(e) Promptly upon their becoming available, copies of (i) all
management projections, studies or evaluations prepared by consultants for or
presented to any Debtor's Board of Directors and (ii) all audits, studies,
reports or evaluations prepared for or submitted to any of the Debtors by any
outside professional firm or service, including, without limitation, the
comment letter submitted by the Debtors' accountants to management in
connection with their annual audit;
(f) Within 30 days after filing with the Internal Revenue
Service, copies of the actual corporate income tax return(s) of the Parent and
its consolidated Subsidiaries;
(g) Promptly upon their becoming available, copies of (i) all
registration statements, proxy statements, and all reports which the Parent or
any other Debtor shall file with any securities exchange or with the Securities
and Exchange Commission or any successor agency and (ii) all reports, financial
statements, press releases and other information which the
- 62 -
70
Parent or any other Debtor shall release, send or make available to its common
stockholders generally;
(h) Notice of (i) any proposed issuance by any Debtor of any
additional debt or equity securities and (ii) the date on which such Debtor
expects to receive the net cash proceeds from the issuance of such additional
debt or equity securities;
(i) By June 30th of each year (commencing June 30, 1997),
forecasted financial statements consisting of balance sheets of the Parent and
its Subsidiaries, cash flow statements and income statements together with
appropriate supporting details and a statement of underlying assumptions
comparable to the projections delivered to the Lenders pursuant to Section
4.1(d) hereof which cover the succeeding two fiscal years, and which shall have
been prepared in accordance with GAAP;
(j) Within 30 days after the end of each fiscal quarter, a
certificate of an Authorized Officer of the Parent, on behalf of NBV, in form
and substance satisfactory to the Agent (i) stating the actual amount of all
liabilities incurred by NBV during the quarter then ended and (ii) containing
such other information as the Agent may request;
(k) If requested by the Agent, then within 90 days after the
end of each fiscal year commencing with the fiscal year ended December 31,
1996, Price Waterhouse LLP or other independent public accountants of
recognized standing retained by the Parent and reasonably satisfactory to the
Majority Lenders, shall be engaged by the Parent to perform certain procedures
(as agreed to by the Majority Lenders), relating to the Borrowing Base
Certificate submitted to the Lenders by the Parent for the month ended December
31 and to issue a procedures report (in accordance with the Statement of
Standards for Attestation Engagements No. 4) (such report shall be in a form
acceptable to the Agent) addressed to the Lenders to assist the Majority
Lenders in assessing whether the Parent has determined the elements of each
Borrowing Base in accordance with the definitions contained in this Credit
Agreement; and
(l) From time to time such additional information regarding
the financial condition or business of the Debtors or otherwise regarding the
Collateral, as any Lender may reasonably request for the purpose of assuring
itself as to compliance by the Debtors with the terms hereof.
SECTION 5.2. Corporate Existence. Do or cause to be done all
things reasonably necessary to preserve, renew and keep in full force and
effect its corporate existence, rights, licenses, permits and franchises, and
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, any Governmental Authority.
SECTION 5.3. Maintenance of Properties. Keep its tangible
properties which are material to its business in good repair, working order and
condition and, from time to time (i) make all necessary and proper repairs,
renewals, replacements, additions and improvements
- 63 -
71
thereto and (ii) comply at all times with the provisions of all material leases
and other material agreements to which it is a party so as to prevent any loss
or forfeiture thereof or thereunder unless compliance therewith is being
currently contested in good faith by appropriate proceedings.
SECTION 5.4. Notice of Material Events. (a) Promptly upon
any executive officer of any Debtor obtaining knowledge of (i) any Default or
Event of Default, or becoming aware that any Lender has given notice or taken
any other action with respect to a claimed Event of Default, (ii) any material
adverse change in the condition or operations of the Parent or the Parent and
its Subsidiaries taken as a whole, financial or otherwise, (other than changes
due to seasonality that are consistent with the corresponding periods in prior
years), (iii) any action or event which might materially and adversely affect
the performance of the Debtors' obligations under this Credit Agreement, the
repayment of the Notes, or the security interests granted to the Agent for the
benefit of the Lenders under this Credit Agreement or any other Fundamental
Document, (iv) the opening of any office of any Debtor or the change of the
executive office or the principal place of business of any Debtor or of the
location of any Debtor's books and records, (v) any change in the name of any
Debtor, (vi) any other event which may materially and adversely impact upon the
amount or collectibility of accounts receivable of the Debtors or otherwise
materially decrease the value of the Collateral or (vii) any Person giving any
notice to any Debtor or taking any other action to enforce remedies with
respect to a claimed default or event or condition of the type referred to in
paragraph (d) of Article 7, such Debtor shall promptly give written notice
thereof to the Agent specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken and the
nature of such claimed Event of Default or condition and what action such
Debtor has taken, is taking and proposes to take with respect thereto.
(b) Promptly upon any executive officer of any Debtor
obtaining knowledge of (i) the institution of, or threat of, any action, suit,
proceeding, investigation or arbitration by any Governmental Authority or other
Person against or affecting any Debtor or any of its assets, or (ii) any
material development in any such action, suit, proceeding, investigation or
arbitration (whether or not previously disclosed to the Lenders), which, in the
case of (i) or (ii) might, if adversely determined, reasonably be expected to
have a materially adverse effect on the Parent and its Subsidiaries taken as a
whole, such Debtor shall promptly give notice thereof to the Agent and provide
such other information as may be available to it to enable the Lenders to
evaluate such matters; and, in addition to the requirements set forth in
clauses (i) and (ii) of this subsection (b), such Debtor upon request shall
promptly give notice of the status of any action, suit, proceeding,
investigation or arbitration covered by a report delivered to the Lenders
pursuant to clause (i) and (ii) above to the Lenders and provide such other
information as may be reasonably available to it to enable the Lenders to
evaluate such matters. For the purposes of this Section 5.4, the submittal or
filing by a Debtor of a notice or report or an application for the issuance,
modification or renewal of any permit or the acknowledgment by a Governmental
Authority of receipt of such notice, report or application shall not constitute
an "action", "suit", "proceeding", "investigation" or "arbitration".
- 64 -
72
(c) Provide 10 days' prior written notice to the Agent in the
event any asset of the Parent or a Domestic Subsidiary is to be transferred or
otherwise assigned to NBV.
SECTION 5.5. Insurance. (a) Keep its assets which are of an
insurable character insured (to the extent and for the time periods consistent
with normal industry practices) by financially sound and reputable insurers
against loss or damage by fire, explosion, theft or other hazards which are
included under extended coverage in amounts not less than the insurable value
of the property insured or such lesser amounts, and with such self-insured
retention or deductible levels, as are consistent with normal industry
practices.
(b) Maintain with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses.
(c) Maintain, or cause to be maintained, in effect during the
period from the commencement of principal photography of each item of Product
produced by any Debtor, through the third anniversary of the date on which such
item of Product is Completed and/or as otherwise required by applicable
contracts, a so-called "Errors and Omissions" policy with respect to all items
of Product for which principal photography has commenced, and cause such Errors
and Omissions policy to provide coverage to the extent and in such manner as is
customary for items of like Product but, at minimum, to the extent and in such
manner as is required under all applicable contracts relating thereto.
(d) Maintain, or cause to be maintained, in effect during the
period from the commencement of principal photography of each item of Product
produced by any Debtor, or from the date of acquisition of each item of Product
acquired by any Debtor (1) until such time as the Agent shall have been
provided with satisfactory evidence of the existence of one negative or master
tape in one location and an interpositive or internegative or duplicate master
tape in another location of the final version of the Completed Product,
insurance on the negatives and sound tracks or master tapes of such item of
Product in an amount not less than the cost of re-shooting the principal
photography of the item of Product, and (2) until principal photography of such
item of Product has been concluded, a cast insurance policy with respect to
such item of Product, which provides coverage to the extent and in such manner
as is customary for a like type of Product, but at minimum, to the extent
required under all applicable contracts relating thereto.
(e) Maintain, or cause to be maintained, in effect
distributor's "Errors and Omissions" insurance to the extent and in amounts
customary for companies in similar businesses.
(f) Cause all such above-described insurance (excluding
worker's compensation insurance) to (1) provide for the benefit of the Lenders
that 30 days' prior written notice of suspension, cancellation, termination,
modification, non-renewal or lapse or material change of
- 65 -
73
coverage shall be given to the Agent; (2) name the Agent for the benefit of the
Lenders as the loss payee (except for errors and omissions insurance and other
third party liability insurance), provided, however, that production insurance
recoveries received prior to Completion or abandonment of an item of Product
may be utilized to finance the production of such item of Product and property
insurance proceeds may be used to repair damage in respect of which such
proceeds were received; and (3) to the extent that neither the Agent nor the
Lenders shall be liable for premiums or calls, name the Agent for the benefit
of the Lenders as an additional assured.
(g) Upon the request of the Agent, the Parent will render to
the Agent a statement in such detail as the Agent may request as to all such
insurance coverage.
(h) So long as Xxxxxxx Xxxxxx is employed by the Parent,
maintain or cause to be maintained the Keyman Life Insurance.
SECTION 5.6. Production. Use its best efforts to cause any
item of Product being produced by any Debtor to be produced in accordance with
the standards set forth in, and within the time period established in, all
agreements with respect to such item of Product to which such Debtor is a
party, subject to the terms and conditions of such agreements.
SECTION 5.7. Music. When an item of Product has been scored,
if requested by the Agent, deliver to the Agent, (a) written evidence of the
music synchronization rights obtained from the composer or the licensor of the
music and (b) copies of all music cue sheets with respect to such item of
Product.
SECTION 5.8. Copyright. (a) As soon as practicable after an
item of Product, Film Asset or Recorded Product can be copyrighted and, with
respect to episodic television Product, in no event later than within ten
Business Days after the end of the relevant broadcast season, and to the extent
any Debtor is or becomes the copyright proprietor thereof or to the extent such
interest is obtained by any Debtor, or any Debtor otherwise acquires a
copyrightable interest, take any and all actions necessary to register the
copyright for such item in the name of such Debtor (subject to a lien in favor
of the Agent for the benefit of the Lenders pursuant to the Copyright Security
Agreement) in conformity with the laws of the United States and such other
jurisdictions as the Majority Lenders may reasonably specify, and immediately
deliver to the Agent (i) written evidence of the registration of any and all
such copyrights for inclusion in the Collateral under this Credit Agreement and
(ii) a Copyright Security Agreement Supplement relating to such item executed
by such Debtor.
(b) Use its reasonable best efforts to obtain instruments of
transfer or other documents evidencing the interest of any Debtor with respect
to the copyright relating to items of Product, Recorded Product or Film Assets
in which such Debtor is not entitled to be the initial copyright proprietor,
and promptly record such instruments of transfer on the United States Copyright
Register and such other jurisdictions as the Agent may specify.
- 66 -
74
SECTION 5.9. Books and Records. Maintain or cause to be
maintained at all times true and complete books and records of its financial
operations and provide the Agent and its representatives access to such books
and records upon reasonable notice and during regular business hours in order
that the Agent may make such audits and examinations and make abstracts from
such books, accounts, records and other papers pertaining to the Collateral
(including, but not limited to, Eligible Receivables included in the Borrowing
Base) and may discuss the affairs, finances and accounts with, and be advised
as to the same by, officers and independent accountants, all as the Agent may
deem appropriate for the purpose of verifying the accuracy of the Borrowing
Base Certificate and the various other reports delivered by the Parent to the
Agent and/or the Lenders pursuant to this Credit Agreement or for otherwise
ascertaining compliance with this Credit Agreement.
SECTION 5.10. Observance of Agreements. Duly observe and
perform all material terms and conditions of all material agreements with
respect to the exploitation of items of Product and/or Recorded Product and
diligently protect and enforce the rights of the Debtors under all such
agreements in a manner consistent with prudent business judgment and subject to
the terms and conditions of such agreements.
SECTION 5.11. Film Properties and Rights; Debtors to Act as
Pledgeholder. Act as pledgeholder for the Agent for the benefit of the Lenders
with the same effect as if the Agent for the benefit of the Lenders were a
pledgee in possession of all Film Assets relating to items of Product which are
now or hereafter in the (actual or constructive) possession of any Debtor,
subject to such access as shall be necessary to distribute such items of
Product.
SECTION 5.12. Laboratories; No Removal. (a) To the extent
any Debtor has control over or rights to receive any of the physical elements
of any item of Product, deliver or cause to be delivered to a laboratory or
laboratories located within the United States all negative and preprint
material, master tapes and all sound track materials with respect to each such
item of Product and deliver to the Agent a fully executed Pledgeholder
Agreement with respect to such materials. To the extent that any Debtor has
only rights of access to preprint material or master tapes then the Debtors
will deliver to the Agent a fully executed Laboratory Access Letter covering
such materials. Prior to requesting any such laboratory to deliver such
negative or other preprint or sound track material or master tapes to another
laboratory, any such Debtor shall provide the Agent with a Pledgeholder
Agreement or Laboratory Access Letter, as appropriate, executed by such other
laboratory.
(b) During production of any item of Product produced by any
Debtor, such Debtor shall promptly deliver the daily rushes for such item of
Product to the appropriate laboratory.
(c) With respect to all items of Product completed after the
date hereof, as soon as practicable after completion, deliver to the Agent and
the laboratories which are signatories to Pledgeholder Agreements a revised
schedule of Product on deposit with such laboratories.
- 67 -
75
SECTION 5.13. Taxes and Charges; Indebtedness in Ordinary
Course of Business. Duly pay and discharge, or cause to be paid and
discharged, before the same shall become in arrears (after giving effect to
applicable extensions), all taxes, assessments, levies and other governmental
charges, imposed upon any Debtor or its properties, sales and activities, or
any part thereof, or upon the income or profits therefrom, as well as all
claims for labor, materials, or supplies which if unpaid might by law become a
Lien upon any property of any Debtor; provided, however, that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Debtor shall have set aside on 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; and provided, further, that such
Debtor will pay all such taxes, assessments, levies or other governmental
charges forthwith upon the commencement of proceedings to foreclose any Lien
which may have attached as security therefor. The Debtors will pay when due,
or in conformance with customary trade terms, all other Indebtedness or trade
liabilities incurred in the ordinary course of business in a manner consistent
with the Parent's past business practices.
SECTION 5.14. Liens. Defend the Collateral against any and
all Liens howsoever arising, other than Permitted Encumbrances.
SECTION 5.15. Cash Receipts. In the event any Debtor
receives (i) payment from any account debtor or obligor, which payment should
have been remitted to the Agent or (ii) the proceeds of any sale of Product or
Recorded Product, whether in the form of cash or otherwise, such Debtor shall
immediately remit such payment or proceeds to the Agent for deposit in the
appropriate Collection Account.
SECTION 5.16. Further Assurances; Security Interests. (a)
Upon the request of the Agent, duly execute and deliver, or cause to be duly
executed and delivered, at the cost and expense of the Debtors, such further
instruments as may be appropriate in the reasonable judgment of the Agent, to
provide the Agent (for the benefit of the Lenders) a perfected Lien in the
Collateral and to carry out the provisions and purposes of this Credit
Agreement and the other Fundamental Documents.
(b) Upon the request of the Agent, promptly execute or cause
to be executed any and all documents (including, without limitation, the
execution, amendment or supplementation of any financing statement and
continuation statement or other statement) for filing under the provisions of
the UCC and the rules and regulations thereunder, or any other statute, rule or
regulation of any applicable foreign, federal, state or local jurisdiction, and
perform or cause to be performed such other ministerial acts which are
necessary or advisable, from time to time, in order to grant and maintain in
favor of the Agent for the ratable benefit of the Lenders as beneficiaries
thereof the security interest in the Collateral contemplated hereunder and
under the other Fundamental Documents, subject only to Permitted Encumbrances.
- 68 -
76
(c) Promptly undertake to deliver or cause to be delivered to
the Lenders from time to time such other documentation, consents,
authorizations and approvals in form and substance satisfactory to the Agent,
as the Agent shall deem reasonably necessary or advisable to perfect or
maintain the Liens of the Agent for the benefit of the Lenders.
SECTION 5.17. Recorded Product. Provide the Agent with:
(a) copies of requests for audit by performers promptly after
receipt by any Debtor; and
(b) if requested by the Agent, copies of reports on the
Debtors' recorded music business, including reports from
Warner/Elektra/Atlantic, a division of Time Warner Inc.
SECTION 5.18. Receivables Audit. In connection with the
annual audit by Price Waterhouse LLP (or any successor auditor) if so requested
by the Agent arrange for account debtors to confirm accounts receivables (both
on and off balance sheet) directly to the Agent.
SECTION 5.19. ERISA Compliance and Reports. Furnish to the
Agent (a) as soon as possible, and in any event within 30 days after any Debtor
knows that (A) any Reportable Event with respect to any Plan has occurred, a
statement of an Authorized Officer of the Parent, setting forth on behalf of
such Debtor details as to such Reportable Event and the action which it
proposes to take with respect thereto, together with a copy of the notice, if
any, required to be filed by the applicable Debtor of such Reportable Event
given to the PBGC or (B) an accumulated funding deficiency has been incurred or
an application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard or an extension of any
amortization period under Section 412 of the Code with respect to a Plan, a
Plan has been or is proposed to be terminated, unorganized, partitioned or
declared insolvent under Title IV of ERISA, proceedings have been instituted to
terminate a Plan, a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan, or the Parent or such
Debtor will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Sections 4062, 4063, 4201 or 4204 of ERISA, if the occurrence of any of
the foregoing events would result in a liability which is materially adverse to
the financial condition of the Parent and its Subsidiaries taken as a whole or
would materially and adversely affect the ability of the Parent to perform its
obligations under this Credit Agreement or the Notes, a statement of an
Authorized Officer of the Parent, setting forth details as to such event and
the action the applicable Debtor proposes to take with respect thereto, (b)
promptly upon reasonable request of the Agent, copies of each annual and other
report with respect to each Plan and (c) promptly after receipt thereof, a copy
of any notice any Debtor may receive from the PBGC relating to the PBGC's
intention to terminate any Plan or to appoint a trustee to administer any Plan.
SECTION 5.20. Environmental Laws. (a) Promptly notify the
Agent upon any Debtor becoming aware of any violation or potential violation or
non-compliance with, or
- 69 -
77
liability or potential liability under any Environmental Laws which, when taken
together with all other pending violations would reasonably be expected to be
materially adverse to the Parent and its Subsidiaries or any Debtor, and
promptly furnish to the Agent all notices of any nature which any Debtor may
receive from any Governmental Authority or other Person with respect to any
violation, or potential violation or non- compliance with, or liability or
potential liability under any Environmental Laws which, in any case or when
taken together with all such other notices, could reasonably be expected to
have a material adverse effect on the Parent and its Subsidiaries or any
Debtor.
(b) Comply with and use reasonable efforts to ensure
compliance by all tenants and subtenants with all Environmental Laws, and
obtain and comply in all material respects with and maintain and use best
efforts to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain any and all licenses, approvals,
registrations or permits required by Environmental Laws.
(c) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under all Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities. Any order or
directive whose lawfulness is being contested in good faith by appropriate
proceedings shall be considered a lawful order or directive when such
proceedings, including any judicial review of such proceedings, have been
finally concluded by the issuance of a final non-appealable order; provided,
however, that the appropriate Debtor shall have set aside on 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.
(d) Defend, indemnify and hold harmless the Agent and the
Lenders, and their respective employees, agents, officers and directors, from
and against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way related to the violation
of or non-compliance by any Debtor with any Environmental Laws, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses, but excluding therefrom
all claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses arising out of or resulting from (i) the gross negligence or
willful misconduct of any indemnified party or (ii) any acts or omissions of
any indemnified party occurring after any indemnified party is in possession
of, or controls the operation of, any property or asset.
SECTION 5.21. Bank Accounts. Provide the Agent with notice
of the opening of any bank accounts by any Debtor other than those listed on
Schedule 5.21 hereof and execute such forms of notice to the banks holding such
accounts as reasonably requested by the Agent.
- 70 -
78
SECTION 5.22. Record Company. Conduct the operations of the
record company business consistent in all material respects with past business
practices of the Parent and its Subsidiaries other than as permitted under
Section 6.7 hereof.
SECTION 5.23. Completion Bond. Obtain a Completion Bond for
(a) any non-episodic television item of Product produced by a Debtor (or
Subsidiary of a Debtor) for which the Budgeted Negative Cost exceeds $7 Million
and (b) any episodic television item of Self- Produced Product (other than game
shows, reality-based shows or talk shows) which is being produced outside of
the United States or Canada, or which is in its first year of production
(regardless of where it is being produced); and provided, further, that at no
time shall any Debtor commence production for any non-episodic television item
of Product not covered by a Completion Bond if, after giving effect thereto,
the aggregate of amount of Budgeted Negative Costs for all non-episodic
television items of Product in production not covered by a Completion Bond
would exceed $12 Million.
SECTION 5.24. Use of Proceeds. The proceeds of Domestic
Loans may be used to (i) finance the Parent's and its Subsidiaries'
development, production, acquisition, exploitation and worldwide distribution
of made-for-television Product, Recorded Product and other entertainment
Product, (ii) to redeem and/or repurchase outstanding Convertible Subordinated
Notes and (iii) for general working capital purposes. The proceeds of Foreign
Loans may be used solely to (i) fund NBV's share of financing and refinancing
production cost of projects for which NBV holds foreign distribution rights and
(ii) finance certain working capital needs.
SECTION 5.25. Convertible Subordinated Notes. Not later than
November 29, 1996, the Parent shall give the fiscal agent under the Indenture
relating to the Convertible Subordinated Notes the appropriate instructions to
implement a notice of redemption in connection with all outstanding Convertible
Subordinated Notes.
6. NEGATIVE COVENANTS
From the date hereof and for so long as the Commitments shall
be in effect or any amount remains outstanding under the Notes or any Letter of
Credit shall remain outstanding or any Obligations remain unpaid or
unsatisfied, each Debtor agrees that, unless as to Sections 6.1, 6.5, 6.7,
6.14, 6.17, 6.18, 6.19 and 6.28, the Super Majority Lenders shall otherwise
consent in writing or as to any other Section in this Article 6, the Majority
Lenders shall otherwise consent in writing, it will not and will not allow any
of its Subsidiaries to:
SECTION 6.1. Limitations on Indebtedness. Incur, create,
assume or suffer to exist any Indebtedness other than:
(i) the Indebtedness represented by the Notes and
the other Obligations;
- 71 -
79
(ii) Indebtedness in respect of secured purchase
money financing to the extent permitted by Section 6.2(ii);
(iii) Indebtedness in respect of Capital Leases to
the extent permitted under Section 6.11 hereof;
(iv) normal business liabilities which are not yet
due and payable and are not the result of a transaction which
is the equivalent of borrowing of money;
(v) liabilities relating to net or gross profit
participations, deferments and guild residuals with respect to
items of Product and/or Film Assets;
(vi) the Senior Subordinated Notes in a maximum
principal amount of $100,000,000 or any Permitted Refinancing
thereof;
(vii) the Convertible Subordinated Notes; and
(viii) existing Indebtedness listed on Schedule 3.17
hereto but no increases, extensions or renewals thereof unless
otherwise noted on Schedule 3.17.
SECTION 6.2. Limitations on Liens. Incur, create, assume or
suffer to exist any Lien on its income, property or assets, whether now owned
or hereafter acquired, except:
(i) Liens pursuant to written security agreements
(in form and substance acceptable to the Agent) in favor of
guilds required pursuant to terms of collective bargaining
agreements, which Liens are (A) subordinated or junior to the
claims of the Lenders hereunder pursuant to documentation that
is satisfactory in form and substance to the Agent or (B)
otherwise acceptable to the Agent;
(ii) Liens (including in the form of Capital
Leases) granted to the Person financing the acquisition of
property, plant or equipment if (A) limited to the particular
assets acquired; (B) the debt secured by the Lien does not
exceed the amount financed for the acquisition cost of a
particular asset for which the Lien is granted; (C) such
transaction does not otherwise violate this Credit Agreement
and (D) the aggregate amount of all indebtedness secured by
Liens permitted under this paragraph does not exceed
$2,000,000 at any one time outstanding;
(iii) deposits under worker's compensation,
unemployment insurance and Social Security laws or to secure
statutory obligations or surety or appeal bonds or performance
or other similar bonds in the ordinary course of business
(other than completion bonds);
- 72 -
80
(iv) 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 pursuant to the terms of Section
5.13 hereof;
(v) Liens on receivables in situations where a
Debtor is acting solely as a collection agent for such
receivables in return for a fee;
(vi) 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 $1,000,000 in the aggregate;
(vii) 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;
(viii) 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));
(ix) Liens in connection with the lease of computer
equipment and office furniture;
(x) Liens of completion guarantors in connection
with Completion Bonds which comply with Section 6.22 hereof;
(xi) existing Liens set forth on Schedule 6.2
hereto;
(xii) Liens upon tangible personal property, which
property was acquired after the Closing Date (by purchase or
otherwise) by a Debtor, each of which Liens existed on such
property before the time of its acquisition and was not
created in anticipation thereof; provided, however, that no
such Lien shall extend to or cover any property of any Debtor
other than the respective property so acquired; and
(xiii) the Liens of the Agent and the Lenders under
this Credit Agreement, the other Fundamental Documents and
other documents contemplated hereby.
SECTION 6.3. Guaranties. Incur, create, assume or suffer to
exist any Guaranty, either directly or indirectly, or otherwise in any way
become responsible for any Indebtedness
- 73 -
81
(including working capital maintenance, pay-or-play contracts or other similar
obligations) of any other Person, contingently or otherwise, except for (i) the
endorsement of negotiable instruments by any Debtor in the ordinary course of
business, (ii) Program Acquisition Guaranties and other commitments to the
extent permitted by Section 6.28, (iii) Guaranties by the Parent of a Debtor's
obligations to a guild required pursuant to the terms of collective bargaining
agreements, (iv) existing Guaranties listed on Schedule 3.17 hereto and (v)
Guaranties to the Agent and the Lenders in accordance with the terms of this
Credit Agreement.
SECTION 6.4. Limitations on Investments. Make or permit to
exist any Investment (including any loans to any officer, shareholder or other
Affiliate of any Debtor) other than (i) the existing loan to Xxxxxx Xxxxxxxx in
the aggregate principal amount of not more than $250,000 plus accrued interest,
(ii) in Cash Equivalents, (iii) intercompany advances from the Parent and/or
any Guarantor to the Parent or a Guarantor (other than to any Subsidiary
(including any Guarantor) incorporated in a jurisdiction outside the United
States (a "Foreign Entity") to which all Debtors may not make total advances to
all such Foreign Entities in excess of $1,500,000 at any one time outstanding
in the aggregate (not including Investments pursuant to clause (ix) below)
unless the Agent (for the benefit of the Lenders) shall have a perfected
security interest in the assets of such Foreign Entities on terms and
conditions satisfactory to the Agent which shall include, but not be limited
to, (x) a valid and enforceable first position lien (subject to Permitted
Encumbrances) in such Foreign Entity's assets and (y) a favorable written
opinion of such local counsel as is acceptable to the Agent with respect
thereto and to the guaranty of such Foreign Entity of the Obligations of NBV
hereunder, (iv) intercompany advances from a Foreign Entity to the Parent or
Guarantor, (v) intercompany advances from the Foreign Borrower/or any
Additional Foreign Subsidiary to the Foreign Borrower or any Additional Foreign
Subsidiary provided that the conditions outlined in clause (iii) (x) and (y)
above shall have been satisfied with respect to such Additional Foreign
Subsidiary, (vi) by any consolidated Subsidiary to the Parent in connection
with a tax-sharing agreement between the Parent and such consolidated
Subsidiary, (vii) Investments by the Parent in the stock or other securities of
any Person which constitute the acquisition of such Person; provided, however,
that the actual aggregate cost of all such Investments plus acquisitions
permitted pursuant to Section 6.21 in any calendar year may not exceed 10% of
the Net Worth of the Parent as at December 31 of the previous year and that the
Person so acquired becomes a wholly owned direct or indirect Subsidiary of the
Parent as provided for in Section 6.25, (viii) existing Investments in
Subsidiaries, (ix) Investments in NBV and Additional Foreign Subsidiaries
and/or intercompany advances from the Parent or a Domestic Subsidiary to NBV or
an Additional Foreign Subsidiary in an aggregate amount not to exceed $500,000,
and (x) in addition to the amount permitted in clause (ix), additional
intercompany advances from the Parent or a Domestic Debtor to NBV or an
Additional Foreign Subsidiary provided that NBV or such Additional Foreign
Subsidiary (as appropriate) has granted to the Parent or such Domestic Debtor
(as appropriate) a perfected security interest in its assets to secure such
advance; provided, however, that all intercompany loans and advances
contemplated by clauses (iii), (iv), (v) and (x) of this Section 6.4 shall be
on open account and not evidenced by any note or other instrument and shall be
subordinated to the Loans hereunder on terms specified in Section 13.15.
- 74 -
82
SECTION 6.5. Restricted Payments. Declare, make or incur any
liability to make any Restricted Payments other than:
(a) Restricted Payments constituting dividends from any
Debtor to the Parent or to a Domestic Debtor (other than to Malibu) or from any
Additional Foreign Subsidiary to NBV);
(b) Restricted Payments to pay the Parent's reasonable legal,
accounting, operational and other similar expenses;
(c) Restricted Payments to allow the Parent to pay income
taxes actually paid by the Parent or intercompany advances otherwise permitted
by Section 6.4;
(d) Restricted Payments by the Parent constituting fees and
expenses (incurred in the ordinary course) relating to the Senior Subordinated
Notes, interest payments due and payable to the holders of the Convertible
Subordinated Notes and the Senior Subordinated Notes and redemption or
repurchase by the Parent of outstanding Convertible Subordinated Notes, but
only if at the time of each payment contemplated by this Section 6.5(d) (and
after giving effect thereto), no Event of Default has occurred and is
continuing;
(e) Restricted Payments by the Parent constituting (i)
optional redemption of the Senior Subordinated Notes with the Net Cash Proceeds
of any Permitted Refinancing; (ii) from the Closing Date until April 4, 1998,
optional redemption of the Senior Subordinated Notes in an amount up to
$35,000,000 in principal with the Net Cash Proceeds of a public offering of the
common stock of the Parent, provided, however, that (A) the redemption price
shall be not greater than 110.875% of the principal amount of the Senior
Subordinated Notes and (B) after giving effect to such redemption, (1) at least
$65,000,000 in aggregate principal amount of Senior Subordinated Notes remains
outstanding, (2) after giving effect to such payment the ratio of Funded Debt
to Net Worth is not greater than 2.25:1 and (3) after giving effect to such
payment the Interest Coverage Ratio on a pro-forma basis as of the anticipated
date of such payment is not less than 3:1; and (iii) other optional redemptions
or repurchases of the Senior Subordinated Notes (with the consent of the Super
Majority Banks); provided that, in each case, at the time of each payment
contemplated by this Section 6.5(e) (and after giving effect thereto), no Event
of Default has occurred and is continuing;
(f) Restricted Payments not exceeding $5,000,000 in the
aggregate constituting repurchase by the Parent of outstanding shares of its
Class B Common Stock; provided, however, that prior to making any such
repurchase, no Default or Event of Default is then existing or would occur as a
result of such redemption or repurchase; and
(g) Restricted Payments constituting a conversion or exchange
of the Parent's Class A Common Stock to Class B Common Stock or Class B Common
Stock to Class A Common Stock.
- 75 -
83
SECTION 6.6. Limitations on Leases. Incur, create or assume
any commitment to make any direct or indirect payment, whether as rent or
otherwise, under any lease, rental or other arrangement hereafter entered into
(other than Capital Leases and Program Acquisition Guarantees to the extent
permitted by Section 6.28) for the use of real or personal property or both but
excluding Product and/or Recorded Product, if immediately thereafter the
aggregate of all such payments that shall be payable by all of the Debtors (a)
during 1996 shall exceed $4,100,000 and (b) during any period of twelve
consecutive months thereafter shall exceed $600,000 in excess of the amount
permitted hereunder for the prior twelve month period measured on a pro-forma
basis.
SECTION 6.7. Limitations on Sale of Assets. Sell, lease,
license, transfer, liquidate or otherwise dispose of any item of Product,
Recorded Product or any other asset except:
(a) licenses for exploitation of Product on television or in
other media and of Recorded Product pursuant to Licensing Agreements in the
ordinary course of business consistent with past practices;
(b) outright sales of Product and Recorded Product not in
excess of $2,000,000 in the aggregate prior to the Commitment Termination Date;
(c) sales or dispositions of assets (other than items of
Product or Recorded Product) in the ordinary course of business and consistent
with past practices of the Parent which assets are obsolete or no longer useful
in the operation of the Debtors' businesses;
(d) sale by the Parent of its former Santa Xxxxxx corporate
headquarters facility;
(e) sale of the record company operations of the Debtors; and
(f) dispositions permitted by Section 6.8.
SECTION 6.8. Receivables. Sell, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to any Debtor
except for the purpose of collection in the ordinary course of business.
SECTION 6.9. Sale and Leaseback. Enter into any arrangement
with any Person or Persons, whereby in contemporaneous transactions any Debtor
sells essentially all of its right, title and interest in an item of Product or
Recorded Product and acquires or licenses the right to distribute or exploit
such item of Product or Recorded Product in media and markets accounting for
substantially all the value of such item of Product or Recorded Product.
SECTION 6.10. Places of Business; Change of Name. Change the
location of its chief executive office or principal place of business or any of
the locations where it keeps any
- 76 -
84
material portion of the Collateral or its books and records with respect to the
Collateral or change its name without (i) giving the Agent 30 days prior
written notice of such change and (ii) filing any additional Uniform Commercial
Code financing statements, and such other documents requested by the Agent or
which are otherwise necessary or desirable to maintain perfection of the
security interest of the Agent for the benefit of the Lenders in the
Collateral.
SECTION 6.11. Limitations on Capital Expenditures. Make or
incur any obligation to make Capital Expenditures (other than in connection
with items of Product or Recorded Product), in the aggregate in excess of
$1,500,000 in calendar year 1997 or in any calendar year thereafter.
SECTION 6.12. Transactions with Affiliates. Effect any
transaction with an Affiliate of any Debtor on a basis less favorable to any
Debtor than would have been the case if such transaction had been effected at
arms-length with a Person other than such Affiliate, other than: (i) any
payment of money or issuance of securities (or issuance of benefits, including
indemnification) by the Parent or any wholly- owned Subsidiary pursuant to
employment agreements and arrangements and employee benefit plans in the
ordinary course of business, consistent with past practices and approved by a
majority of the members of the Board of Directors of the Parent or such
wholly-owned Subsidiary, or a committee of such Board of Directors that is
composed solely of two or more non-employee directors (as such terms are
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended),
(ii) reasonable payments and other benefits (including indemnification)
provided to directors for service on the Board of Directors of the Parent or
any wholly-owned Subsidiary, including the reimbursement or advancement of
out-of-pocket expenses and directors' and officers' liability insurance, each
as paid or incurred in the ordinary course of business and consistent with past
practice and (iii) transactions between the Parent and any wholly-owned
Subsidiary, or between any wholly-owned Subsidiary and another wholly-owned
Subsidiary, each in the ordinary course of business and consistent with past
practice. For purposes of this Section 6.12, "wholly-owned Subsidiary" shall
include Fremantle.
SECTION 6.13. Prohibition of Amendments or Waivers. Amend,
alter, modify, or waive, or consent to any amendment, alteration, modification
or waiver of:
(a) any material agreement to which any Debtor is a party, or
the terms thereof in any manner which would change, alter or waive any material
term thereof and which might (i) materially and adversely affect the
collectibility of accounts receivable that form part of either Borrowing Base,
(ii) materially and adversely affect the financial condition of either Borrower
or the Parent and its Subsidiaries taken as a whole, (iii) materially and
adversely affect the rights of the Lenders under this Credit Agreement, the
other Fundamental Documents and any other agreements contemplated hereby, (iv)
materially decrease the value of the Collateral, (v) decrease the amount of the
Domestic Borrowing Base to less than the then outstanding principal amount of
the Domestic Loans; or (vi) decrease the amount of the Foreign Borrowing Base
to be less than the outstanding principal amount of the Foreign Loans;
- 77 -
85
(b) the articles of incorporation or bylaws of any Debtor
except (i) such amendments or modifications as are deemed ministerial by the
Agent in its sole discretion or (ii) with the Agent's prior consent, which
consent shall not be unreasonably withheld or delayed;
(c) the Employment Agreements (except extensions of a given
Employment Agreement that would otherwise expire prior to the Commitment
Termination Date); or
(d) the provisions of any Subordinated Debt, including, but
not limited to, the Senior Subordinated Notes or any Permitted Refinancing
thereof.
SECTION 6.14. Net Worth. Permit consolidated Net Worth at
any time after September 30, 1996 to be less than $65,000,000 plus 50% of the
cumulative consolidated Net Income of the Parent and its Subsidiaries for the
period from September 30, 1996 through the last day of the fiscal quarter
immediately preceding the date of determination plus 100% of the net proceeds
of any equity issued by the Parent or Indebtedness converted into equity after
the Closing Date.
SECTION 6.15. Refund Percentage. Permit the Refund
Percentage at the end of any Rolling Period to exceed 5%.
SECTION 6.16. General and Administrative Expense. Incur
selling, general and administrative expenses (excluding direct syndication,
promotion and advertising and distribution costs and other items included in
Budgeted Negative Cost) in excess of $32,000,000 in the fiscal year ending
December 31, 1996 and in any subsequent fiscal year, in excess of the amount
permitted hereunder for the prior fiscal year plus 10%.
SECTION 6.17. Funded Debt Ratio. Permit the ratio of Funded
Debt to Net Worth to exceed the ratio listed in Column B below at any time
during the period listed opposite thereto in Column A below:
Column A Column B
-------- --------
From the Closing Date through 12/30/97 3.75:1.0
From 12/31/97 through 12/30/98 3.5:1.0
From 12/31/98 through 12/30/99 3.2:1.0
From 12/31/99 through 12/30/00 2.5:1.0
from 12/31/00 and thereafter 2.0:1.0
- 78 -
86
SECTION 6.18. Interest Coverage Ratio. Permit the Interest
Coverage Ratio at the end of any Rolling Period ending on or before September
30, 1997 to be less than 1.75:1.00 and thereafter, to be less than 2.0:1.0.
SECTION 6.19. Program Spending Ratio. Permit the Program
Spending Ratio at the end of any Rolling Period to be less than .75:1.
SECTION 6.20. No Negative Pledge. Enter into any agreement
after the date hereof (other than the Fundamental Documents and any Permitted
Refinancing but only to the same extent as provided for in the Senior
Subordinated Notes) which prohibits the creation or assumption of any Lien upon
the properties or assets of any Debtor, whether now owned or hereafter acquired
or requiring an obligation to be secured if some other obligation is secured.
SECTION 6.21. Acquisitions or Mergers. (a) Merge into or
consolidate with a Person or (b) acquire substantially all the assets of
another Person; provided, however that the Parent may acquire substantially all
of the assets of another Person provided that the actual aggregate acquisition
cost of all such transactions plus Investments permitted pursuant to Section
6.4(vi) in any calendar year may not exceed 10% of the Net Worth of the Parent
as at December 31 of the previous year.
SECTION 6.22. Limitations on Transactions With Completion
Guarantors. Enter into an arrangement with a completion guarantor unless the
arrangement would qualify as a Completion Bond and the Agent for the benefit of
the Lenders is the named beneficiary of such arrangement; but in no event shall
any Debtor enter into an arrangement with a completion guarantor which provides
for the completion guarantor to:
(i) receive a fee in excess of 6% of the Budgeted
Negative Cost of the item of Product involved;
(ii) receive any profit participation;
(iii) recoup any of its contribution to the cost of
the item of Product before such Debtor recoups (either from
Proceeds of exploitation of such item of Product or from
payments by such completion guarantor) its share of Budgeted
Negative Cost; or
(iv) receive interest at a rate per annum in excess
of the Alternate Base Rate plus 2%.
SECTION 6.23. Change in Business. (a) Engage in theatrical
film exhibition (i.e. exhibition of feature films theatrically) or in any line
of business other than the development, production, acquisition, exploitation,
exhibition and worldwide distribution of made- for-television Product, recorded
Product and other entertainment Product.
- 79 -
87
(b) Engage in theatrical film production unless (i) neither
the Parent nor any Subsidiary incurs any print and advertising exposure in
connection with such Product, (ii) the Parent or the Subsidiary producing such
Product has obtained a Completion Bond for such Product from an Approved
Guarantor, (iii) if such Product is to be released domestically, the Parent or
Subsidiary producing such Product has entered into a distribution agreement
with a major distributor (on terms and conditions acceptable to the Agent),
(iv) the Parent or Subsidiary producing such Product has entered into written
agreements with Approved Obligors providing for payments equal to at least 100%
of the Budgeted Negative Cost of such Product and (v) an amount equal to the
strike price under the Completion Bond has been reserved from the Commitment;
provided, however, that at no time shall the Parent and its Subsidiaries
(unless previously consented to by the Agent) have more than one uncompleted
theatrical motion picture in production.
(c) FDF shall not engage in any business other than such
activities which are incident to its holding the shares of Fremantle
(Deutschland) Fernsehproduktions GmbH and other Foreign Subsidiaries but not
Additional Foreign Subsidiaries.
SECTION 6.24. ERISA Compliance. Engage in a "prohibited
transaction", as defined in Section 406 of ERISA or Section 4975 of the Code,
with respect to any Plan or Multiemployer Plan or knowingly consent to any
other "party in interest" or any "disqualified person", as such terms are
defined in Section 3(14) of ERISA and Section 4975(e)(2) of the Code,
respectively, engaging in any "prohibited transaction", with respect to any
Plan or Multiemployer Plan maintained by any Debtor; or permit any Plan
maintained by any Debtor to incur any "accumulated funding deficiency", as
defined in Section 302 of ERISA or Section 412 of the Code, unless such
incurrence shall have been waived in advance by the Internal Revenue Service;
or terminate any Plan in a manner which could result in the imposition of a
Lien on any property of any Debtor pursuant to Section 4068 of ERISA; or breach
or knowingly permit any employee or officer or any trustee or administrator of
any Plan maintained by any Debtor to breach any fiduciary responsibility
imposed under Title I of ERISA with respect to any Plan; engage in any
transaction which would result in the incurrence of a liability under Section
4069 of ERISA; or fail to make contributions to a Plan or Multiemployer Plan
which results in the imposition of a Lien on any property of any Debtor
pursuant to Section 302(f) of ERISA or Section 412(n) of the Code.
SECTION 6.25. Subsidiaries. Acquire (subject to Section 6.4)
or create any new direct or indirect Subsidiary unless (i) each such Subsidiary
executes an instrument of joinder satisfactory to the Agent whereby such
Subsidiary becomes a Debtor and Guarantor hereunder and (ii) the capital stock
of such Subsidiary owned by a Debtor becomes part of the Pledged Securities
hereunder or the Parent takes such other action in connection with the stock of
such Subsidiary as is deemed appropriate by the Agent to protect the Lenders'
security interest therein; provided, however, that any new Additional Foreign
Subsidiary created in connection with the distribution or licensing of "Sinbad"
or "Baywatch Nights" shall not be required to become a Guarantor of the
Domestic Loans.
- 80 -
88
SECTION 6.26. Bank Accounts. After the date hereof, open or
maintain any bank account other than (a) at the office of the Agent as
contemplated by Section 8.3 hereof, (b) those accounts listed on Schedule 5.21
or (c) a production account for a specific item of Product which is in
production, as to which the Agent shall have received notice and as to which
the Agent shall have been granted a perfected first priority security interest
in such account.
SECTION 6.27. Hazardous Materials. Except as set forth on
Schedule 3.21, cause or permit any of its properties or assets to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance in all
material respects with all applicable Environmental Laws, nor release,
discharge, dispose or of permit or suffer any release or disposal as a result
of any intentional act or omission on its part of Hazardous Materials onto any
such property or asset in material violation of any Environmental Law.
SECTION 6.28. Production/Acquisition Commitments. (a)
Commence active preproduction for any item of episodic television
"Self-Produced Product" or incur any Program Acquisition Guarantee unless (i)
the Budgeted Negative Cost is no more than $1,250,000 per week of episodes
(i.e. one episode in the case of a weekly television series or five episodes in
the case of daily strip) (ii) (x) the Debtors have licensed such Product to a
U.S. broadcast network or major cable television network or (y)(1) pre-sale or
co-production arrangements have been executed with Approved Debtors pursuant to
which foreign rights to such item of Product are granted in return for minimum
payments of at least 40% of Budgeted Negative Cost and (2) the Debtors have
licensed such Product to stations or networks or cable networks in television
markets representing at least 70% of U.S. television households as determined
based on the most recent Xxxxxxx Rankings (or the payment of such Program
Acquisition Guarantee is expressly conditioned upon such licensing), (iii)
Budgeted Negative Cost of such item of Self-Produced Product or such Program
Acquisition Guarantor, as the case may be, does not exceed the sum of good
faith projected cash receipts (based on reasonable assumptions) anticipated to
be received by the Debtors during the initial license period including minimum
payments under executed pre-sale or co-production arrangements with Approved
Debtors due either upon completion of the item of Product or within 15 months
after completion and (iv) no Debtor is obligated to make a payment under any
such Program Acquisition Guarantee for an item of Product, or episode thereof,
prior to delivery thereof to such Debtor in accordance with broadcast
obligations undertaken by the Debtors and in conformity with technical
broadcast and other customary industry standards unless the producer has
obtained a completion bond (naming the appropriate Debtor as beneficiary
thereunder) and has granted a security interest in such item of Product to the
appropriate Debtor to secure the producer's obligation to deliver such item of
Product.
(b) In connection with all movies-of-the-week or television
specials licensed to a U.S. broadcast network or major cable television network
which is an Approved Obligor, make Program Acquisition Guarantees or commence
active preproduction for any such movie-of- the-week which constitutes
Self-Produced Product or incurs any Program Acquisition Guaranty, unless (x)
the total of (1) the license fee payable (or previously paid) by such U.S.
broadcast
- 81 -
89
network (i.e. CBS, ABC, NBC, Fox, UPN or Warner) or such major cable television
network and (2) the aggregate fees payable (or previously paid) in connection
with foreign pre-sales for such movie-of-the-week (the terms of which otherwise
meet the criteria for an Eligible Receivable), in each case payable no later
than delivery of such movie-of-the-week, is an amount equal to at least 100% of
the Program Acquisition Guarantee, or Budgeted Negative Cost, as applicable,
minus $1,250,000; provided, however, that the aggregate production deficits at
any one time outstanding for all such items of Product shall not exceed
$6,250,000.
(c) In connection with a game show, reality-based show or
talk show intended for distribution and exploitation in the U.S. television
market, incur a Program Acquisition Guaranty or commence active preproduction
for any such show which constitutes Self-Produced Product if the Budgeted
Negative Cost or the amount of such Program Acquisition Guaranty per episode is
in excess of $150,000 unless the aggregate domestic and foreign pre-sales
constituting Eligible Receivables for such item of Product equals 100% of its
Budgeted Negative Cost; provided that the aggregate Budgeted Negative Cost for
all such items of Product for which any Debtor has direct production
responsibility with a Budgeted Negative Cost of $150,000 or less per episode
shall not exceed $25 Million per year exclusive of game shows, reality-based
shows and talk shows intended for exploitation in the foreign television
market. In connection with a game show, reality-based show or talk show
intended for distribution and exploitation in the foreign television market,
incur a Program Acquisition Guarantee or commence active preproduction for any
such show which constitutes Self-Produced Product unless the aggregate
pre-sales constituting Eligible Receivables for such item of Product equals
100% of Budgeted Negative Cost.
(d) Incur any Program Acquisition Guaranty or commence active
preproduction for any item of Self-Produced Product (other than items of
Product referred to in clauses (a), (b) and (c) above) unless (i) Budgeted
Negative Cost of such item of Product does not exceed the sum of good faith
projected cash receipts (based on reasonable assumptions) anticipated to be
received during the initial license period including minimum payments under
executed pre-sale or co-production arrangements with Approved Debtors due
either upon completion of the item of Product or within 15 months after
completion and (ii) pre-sale or co-production arrangements have been executed
with Approved Debtors pursuant to which foreign rights to such item of Product
are granted in return for minimum payments of at least 40% of Budgeted Negative
Cost.
(e) In addition to the obligations described in clauses (a),
(b), (c) and (d) above, the Debtors may incur obligations not in excess of
$1,500,000 outstanding in each calendar year relating to development costs and
production of other items of Product.
SECTION 6.29. Advertiser Guaranties. Guaranty any advertiser
a minimum rating (i) of higher than 7.0 for the first broadcast season of any
new item of Product (unless the Majority Lenders have consented to a higher
minimum rating for such item of
- 82 -
90
Product) or (ii) for any item of Product, in excess of 2 points above the
average rating received for such item of Product for the prior broadcast season
or the latest available rating if there is no prior broadcast season for such
item of Product.
SECTION 6.30. Unrecouped Expenses. Permit unrecouped
expenses on Recorded Product at any time to exceed $6,500,000.
SECTION 6.31. NBV. (a) Neither NBV nor any of its
Subsidiaries shall incur, create, assume or suffer to exist any Indebtedness,
Guaranties or liabilities other than:
(i) the Indebtedness represented by the Foreign Notes and
the Guaranty hereunder and
(ii) normal business liabilities or trade payables which
are not the result of a transaction which is the
equivalent of borrowing of money; provided, however,
that at no time shall the total amount of such
liabilities (or guaranties thereof by NBV or any of
its Subsidiaries of such liabilities) under this
Section 6.31(a)(ii) exceed $250,000.
(b) Except as permitted under clause (a), neither NBV nor any
of its Subsidiaries shall incur, assume or suffer to exist any contractual
obligations to a third party other than pursuant to standard Distribution
Agreements generating accounts receivable in the ordinary course of business.
(c) Neither NBV nor any of its Subsidiaries shall commit to
provide funds for production, make any Program Acquisition Guarantee or
otherwise become responsible for direct production funding for any item of
Product other than in favor of a production services company and/or
co-production partner which is a Debtor hereunder.
SECTION 6.32. Use of Proceeds of Loans. Use the proceeds of
the Loans for any purpose other than as contained in Section 5.24.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of any
of the following events (herein called "Events of Default"):
(a) any representation or warranty made by any Debtor in this
Credit Agreement or any other Fundamental Document or in connection with this
Credit Agreement or with the execution and delivery of the Notes or the
Borrowings hereunder, or any statement or representation made in any report,
financial statement, certificate or other document furnished by or on behalf of
any Debtor to the Agent or any Lender under or in connection with this Credit
- 83 -
91
Agreement and not corrected prior to the Closing Date, shall prove to have been
false or misleading in any material respect when made or delivered;
(b) default shall be made in the payment of any principal of
or interest on the Notes or of any fees or other amounts payable by the Parent
hereunder, when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise and in the case of payments of any amounts other than
principal, such default shall continue unremedied for five (5) days after
receipt by the Parent of an invoice therefor;
(c) default shall be made by any Debtor in the due observance
or performance of any covenant, condition or agreement contained in Section 5.4
or Article 6 of this Credit Agreement;
(d) default shall be made with respect to any payment of any
Indebtedness of any Debtor in excess of $500,000 when due or the performance of
any other obligation incurred in connection with any such Indebtedness, if the
effect of such default is to accelerate the maturity of such Indebtedness or to
permit the holder thereof to cause such Indebtedness to become due prior to its
stated maturity and such default shall not be remedied, cured, waived or
consented to within the period of grace with respect thereto, or any other
circumstance which arises (other than the mere passage of time) by reason of
which the Parent is required to repurchase or offer to holders of the Senior
Subordinated Notes, the opportunity to have repurchased, any such Indebtedness;
(e) any Debtor shall generally not pay its debts as they
become due or shall admit in writing its inability to pay its debts, or shall
make a general assignment for the benefit of creditors; or any Debtor shall
commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property or shall file an answer or
other pleading in any such case, proceeding or other action admitting the
material allegations of any petition, complaint or similar pleading filed
against it or consenting to the relief sought therein; or any Debtor shall take
any action to authorize any of the foregoing;
(f) any involuntary case, proceeding or other action against
any Debtor shall be commenced seeking to have an order for relief entered
against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case,
- 84 -
92
proceeding or other action (i) results in the entry of any order for relief
against it or (ii) shall remain undismissed for a period of thirty (30) days;
(g) final judgment(s) for the payment of money in excess of
$500,000 shall be rendered against any Debtor which within thirty (30) days
from the entry of such judgment shall not have been discharged or stayed
pending appeal or which shall not have been discharged or bonded in full within
thirty (30) days from the entry of a final order of affirmance on appeal;
(h) any Person shall have a right in the Collateral prior or
equal to that of the Lenders (except Permitted Encumbrances) or any Person or
any Debtor shall assert that any Person has such right and such Person or such
Debtor (as applicable) shall not renounce such right within 10 days after the
Agent has requested such renunciation;
(i) failure to deliver a Borrowing Base Certificate to the
Agent within 10 Business Days of the date such Certificate was due pursuant to
Section 5.1(d) hereof, provided, however, that any failure to deliver a
Borrowing Base Certificate shall not give rise to an Event of Default under
this clause (i) in the event there are no outstanding Loans;
(j) a Change in Control shall occur;
(k) a Change in Management shall occur;
(l) as long as Xxxxxxx Xxxxxx is an employee of the Parent,
the Keyman Life Insurance shall be cancelled or terminated;
(m) default shall be made by any Debtor in the due observance
or performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms of this Credit Agreement, or any other
Fundamental Document and such default shall continue unremedied for thirty (30)
consecutive days after any Debtor obtains knowledge of such occurrence; or
(n) commencing November 29, 1996, the Parent or a Subsidiary
shall cease to be the legal and beneficial owner of at least 78.5% of the
Voting Stock of Fremantle;
then, in every such event and at any time thereafter during the continuance of
such event, the Agent may, or if directed by the Majority Lenders shall, take
either or both of the following actions, at the same or different times:
terminate forthwith the Commitments and/or declare the principal of and the
interest on the Loans and the Notes and all other amounts payable hereunder or
thereunder to be forthwith due and payable, whereupon the same shall become and
be forthwith due and payable, without presentment, demand, protest, or other
notice of any kind, all of which are hereby expressly waived, anything in this
Credit Agreement or in the Notes to the contrary notwithstanding. If an Event
of Default specified in paragraphs (e) or (f) above shall have occurred with
respect to the Parent, the Commitments shall automatically terminate and the
- 85 -
93
Notes shall automatically become due and payable, both as to interest and
principal, without presentment, demand, protest, or other notice of any kind,
all of which are hereby expressly waived, anything in this Credit Agreement or
the Notes to the contrary notwithstanding. Such remedies shall be in addition
to any other remedy available to the Lenders pursuant to Applicable Law or
otherwise.
8. GRANT OF SECURITY INTEREST; REMEDIES
SECTION 8.1. Security Interests. Each Borrower, as security
for the due and punctual payment of its respective Obligations, and the
Guarantors, as security for their obligations under Article 9 hereof, hereby
mortgage, pledge, assign, transfer, set over, convey and deliver to the Agent
(for the benefit of the Lenders) and grant to the Agent (for the benefit of the
Lenders) a security interest in the Collateral.
SECTION 8.2. Use of Collateral. So long as no Event of
Default shall have occurred and be continuing, and subject to the various
provisions of this Credit Agreement and the other Fundamental Documents, a
Debtor may use the Collateral in any lawful manner permitted hereunder.
SECTION 8.3. Collection Accounts. (a) The Debtors will
establish a lockbox arrangement and related collection bank accounts (each, a
"Collection Account") with the Agent and will direct all Persons who become
licensees, buyers or account debtors under receivables with respect to any item
included in the Collateral to make payments under or in connection with the
license agreements, sales agreements or receivables directly to the appropriate
lockbox or Collection Account. To the extent practicable, the Debtors, will
amend existing agreements to direct all Persons who are licensees, buyers or
account debtors under receivables with respect to any item included in the
Collateral, to make payments under or in connection with the license
agreements, sales agreements or receivables directly to the appropriate lockbox
or Collection Account.
(b) In connection with productions relating to Product in
countries other than the United States and Canada, the broadcasters to which
such Product is to be licensed shall pay into a collection account established
by AAF or the Agent in such country the amount due to AAF in connection with
such production (including production costs (to the extent such broadcaster is
responsible for providing production funds for such Product) and the license
fee payable to AAF).
(c) All amounts on deposit in the Collection Accounts shall
be remitted to the Chase Account and provided that no Event of Default has
occurred and is continuing, the amount on deposit in the Chase Account will be
available to the Parent each Business Day and the Parent may instruct that the
Agent transfer such amounts to the Parent's operating account or to another
account designated by the Parent.
- 86 -
94
(d) The Debtors will execute such documentation as may be
required by the Agent in order to provide for the deposit into the Collection
Accounts of all items received in the lockbox and to otherwise effectuate the
provisions of this Section 8.3.
SECTION 8.4. Debtors to Hold in Trust. Upon the occurrence
and during the continuance of an Event of Default, the Debtors will, upon
receipt by them of any revenue, income, profits or other sums in which a
security interest is granted by this Article 8, payable pursuant to any
agreement or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the sum in trust
for the Lenders, and forthwith, without any notice or demand whatsoever (all
notices, demands, or other actions on the part of the Lenders being expressly
waived), endorse, transfer and deliver any such sums or instruments or both, to
the Agent to be applied to the repayment of the Obligations in accordance with
the provisions of Section 8.7 hereof.
SECTION 8.5. Collections, etc. Upon the occurrence and
during the continuance of an Event of Default, the Agent may, in its sole
discretion, in its name or in the name of any Debtor or otherwise, demand, xxx
for, collect or receive any money or property at any time payable or receivable
on account of or in exchange for, or make any compromise or settlement deemed
desirable with respect to, any of the Collateral, but shall be under no
obligation so to do, or the Agent may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, or release, any of
the Collateral, without thereby incurring responsibility to, or discharging or
otherwise affecting any liability of, any Debtor. The Agent will not be
required to take any steps to preserve any rights against prior parties to the
Collateral. If any Debtor fails to make any payment or take any action
required hereunder, the Agent may, after notice to the Parent, make such
payments and take all such actions as the Agent reasonably deems necessary to
protect the Agent's security interests in the Collateral and/or the value
thereof, and the Agent is hereby authorized (without limiting the general
nature of the authority herein above conferred) to pay, purchase, contest or
compromise any Liens that in the judgment of the Agent appear to be equal to,
prior to or superior to the security interests of the Lenders in the Collateral
and any Liens not expressly permitted by this Credit Agreement.
SECTION 8.6. Possession, Sale of Collateral, etc. Upon the
occurrence and during the continuance of an Event of Default, the Agent may
enter upon the premises of any Debtor or wherever the Collateral may be, and
take possession of the Collateral (to the fullest extent permitted by
Applicable Law), and may demand and receive such possession from any Person who
has possession thereof (to the fullest extent permitted by Applicable Law), and
the Agent may take such measures as it may deem necessary or proper for the
care or protection thereof, including the right to remove all or any portion of
the Collateral, and with or without taking such possession may sell or cause to
be sold, whenever the Agent shall decide, in one or more sales or parcels, at
such prices as the Agent may deem best, and for cash or on credit or for future
delivery, without assumption of any credit risk, all or any portion of the
Collateral, at any broker's board or at public or private sale, without demand
of performance or notice of intention to sell or of time or place of sale
(except 7 days' written notice to the Parent of the time and place
- 87 -
95
of any such public sale or sales and such other notices as may be required by
Applicable Law and cannot be waived), and any Person may be the purchaser of
all or any portion of the Collateral so sold and thereafter hold the same
absolutely, free (to the fullest extent permitted by Applicable Law) from any
claim or right of whatever kind, including any equity of redemption, of any
Debtor, any such demand, notice, claim, right or equity being hereby expressly
waived and released. At any sale or sales made pursuant to this Article 8, the
Agent may bid for or purchase, free (to the fullest extent permitted by
Applicable Law) from any claim or right of whatever kind, including any equity
of redemption, of any Debtor, any such demand, notice, claim, right or equity
being hereby expressly waived and released, any part of or all of the
Collateral offered for sale, and may make any payment on account thereof by
using any claim for moneys then due and payable to the Agent and the Lenders by
any Debtor hereunder as a credit against the purchase price. The Agent shall
in any such sale make no representations or warranties with respect to the
Collateral or any part thereof, and the Agent shall not be chargeable with any
of the obligations or liabilities of any Debtor. Each Debtor hereby agrees (i)
that it will indemnify and hold the Agent and the Lenders harmless from and
against any and all claims with respect to the Collateral asserted before the
taking of actual possession or control of the relevant Collateral by the Agent
pursuant to this Article 8, or arising out of any act of, or omission to act on
the part of, any party other than the Agent prior to such taking of actual
possession or control by the Agent (whether asserted before or after such
taking of possession or control), or arising out of any act on the part of any
Debtor, or its agents before or after the commencement of such actual
possession or control by the Agent; and (ii) the Agent shall have no liability
or obligation to any Debtor arising out of any such claim except for acts of
willful misconduct or gross negligence or not taken in good faith. Subject
only to the lawful rights of third parties, any laboratory which has possession
of any of the Collateral is hereby constituted and appointed by the Debtors as
pledgeholder for the Agent and, upon the occurrence of an Event of Default,
each such pledgeholder is hereby authorized (to the fullest extent permitted by
Applicable Law) to sell all or any portion of the Collateral upon the order and
direction of the Agent, and each Debtor hereby waives any and all claims, for
damages or otherwise, for any action taken by such pledgeholder in accordance
with the terms of the UCC not otherwise waived hereunder. In any action
hereunder, the Agent shall be entitled if permitted by Applicable Law to the
appointment of a receiver without notice, to take possession of all or any
portion of the Collateral and to exercise such powers as the court shall confer
upon the receiver. Notwithstanding the foregoing, upon the occurrence of an
Event of Default, and during the continuation of such Event of Default, the
Agent shall be entitled to apply, without prior notice to the Debtors, any cash
or cash items constituting Collateral in the possession of the Agent to payment
of the Obligations.
SECTION 8.7. Application of Proceeds on Default. During the
continuance of an Event of Default, the balances in the Chase Account,
Collection Account(s), Cash Collateral Account, or in any account of any Debtor
with the Agent, all other income on the Collateral, and all proceeds from any
sale of the Collateral pursuant hereto shall be applied (in such order as the
Agent shall in its sole discretion determine, but subject to instructions
received, if any, from the Super Majority Lenders and to the rights of the
Lenders) to the payment in full of the Obligations, provided, however, that,
the Majority Lenders may in their discretion apply funds
- 88 -
96
comprising the Collateral to pay the cost (i) of completing any Product owned
in whole or in part by any Debtor in any stage of production and (ii) of making
delivery to the licensees of such Product. Any amounts remaining after such
indefeasible payment in full shall be remitted to an account maintained by the
Debtors with the Agent or as a court of competent jurisdiction may otherwise
direct.
SECTION 8.8. Power of Attorney. Upon the occurrence of an
Event of Default, (a) each Debtor does hereby irrevocably make, constitute and
appoint the Agent or any of its officers or designees its true and lawful
attorney-in-fact with full power in the name of the Agent or such other Person
to receive, open and dispose of all mail addressed to any Debtor, and to
endorse any notes, checks, drafts, money orders or other evidences of payment
relating to the Collateral that may come into the possession of the Agent with
full power and right to cause the mail of such Persons to be transferred to the
Agent's own offices or otherwise, and to do any and all other acts necessary or
proper to carry out the intent of this Credit Agreement and the grant of the
security interests hereunder, and each Debtor hereby ratifies and confirms all
that the Agent or its substitutes shall properly do by virtue hereof; (b) each
Debtor does hereby further irrevocably make, constitute and appoint the Agent
or any of its officers or designees its true and lawful attorney-in-fact in the
name of the Agent or any Debtor (i) to enforce all of each Debtor's rights
under and pursuant to all agreements with respect to the Collateral, all for
the sole benefit of the Agent on behalf of the Lenders, (ii) to enter into and
perform such agreements as may be necessary in order to carry out the terms,
covenants and conditions of the Fundamental Documents that are required to be
observed or performed by any Debtor, (iii) to execute such other and further
mortgages, pledges and assignments of the Collateral, and related instruments
or agreements, as the Agent may reasonably require for the purpose of
perfecting, protecting, maintaining or enforcing the security interests granted
to the Agent on behalf of the Lenders hereunder, and (iv) to do any and all
other things necessary or proper to carry out the intention of this Credit
Agreement and the grant of the security interests hereunder.
SECTION 8.9. Financing Statements, Direct Payments. Each
Debtor hereby authorizes the Agent to file UCC financing statements and any
amendments thereto or continuations thereof, any Copyright Security Agreement,
any Copyright Security Agreement Supplement and any other appropriate security
documents or instruments and to give any notices necessary or desirable to
perfect the Lien of the Agent on behalf of the Lenders on the Collateral, in
all cases without the signatures of any Debtor or to execute such items as
attorney-in-fact for any Debtor. Each Debtor further authorizes the Agent upon
the occurrence of an Event of Default, and during the continuation of such
Event of Default, to notify any account debtors that all sums payable to any
Debtor relating to the Collateral shall be paid directly to the Agent.
SECTION 8.10. Further Assurances. Upon the request of the
Agent, each Debtor hereby agrees to duly execute and deliver, or cause to be
duly executed and delivered, at the cost and expense of the Debtors, such
further instruments as may be necessary or proper, in the judgment of the
Agent, to carry out the provisions and purposes of this Article 8, necessary,
in the judgment of the Agent, to perfect and preserve the Liens of the Agent on
behalf of the
- 89 -
97
Lenders hereunder and under the Fundamental Documents, and in the Collateral or
any portion thereof.
SECTION 8.11. Termination. The security interests granted
under this Article shall terminate when all the Obligations have been
indefeasibly fully paid and performed, the Commitments shall have terminated
and all Letters of Credit shall have expired or been terminated or cancelled.
Upon request by any Debtor (and at the sole expense of the Debtors) after such
termination, the Agent will take all reasonable action and do all things
reasonably necessary, including executing UCC terminations, Pledgeholder
Agreement terminations, termination letters to account debtors and copyright
reassignments, to release the security interest granted to it hereunder.
SECTION 8.12. Remedies Not Exclusive. The remedies conferred
upon or reserved to the Agent in this Article are intended to be in addition
to, and not in limitation of, any other remedy or remedies available to the
Agent. Without limiting the generality of the foregoing, the Agent and the
Lenders shall have all rights and remedies of a secured creditor under Article
9 of the UCC.
SECTION 8.13. Quiet Enjoyment. The Lenders acknowledge that
their security interest hereunder is subject to the rights of Quiet Enjoyment
of parties to Distribution Agreements, Licensing Agreements and other similar
agreements, whether existing on the date hereof or hereafter executed. For the
purpose hereof, "Quiet Enjoyment" shall mean in connection with the rights of
licensees under Licensing Agreements, the Lenders' agreement that their rights
under this Credit Agreement and the Fundamental Documents and in the Collateral
are subject to the rights of such parties to distribute, exhibit and/or to
exploit the Product licensed to them, and to receive prints or tapes or have
access to preprint material or master tapes in connection therewith and that
even if the Lenders shall become the owner of the Collateral in case of an
Event of Default, the Lenders' ownership rights shall be subject to the rights
of said parties under such agreements, provided, however, that the Lenders
shall not be responsible for any liability or obligation of any Debtor under
any license agreement.
SECTION 8.14. Continuation and Reinstatement. Each Debtor
further agrees that the security interest granted hereunder shall continue to
be effective or be reinstated, as the case may be, if at any time payment or
any part thereof, of principal or interest on any Obligation is rescinded or
must otherwise be restored by the Agent or the Lenders upon the bankruptcy or
reorganization of any Debtor or otherwise.
9. GUARANTY
SECTION 9.1. Guaranty. (a) Each Guarantor unconditionally
and irrevocably guarantees the due and punctual payment by, and performance of,
the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of the
- 90 -
98
obligor whether or not post filing interest is allowed in such proceeding).
Each Guarantor further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice or further assent from it (except as may be
otherwise required herein), and it will remain bound upon this guaranty
notwithstanding any extension or renewal of any Obligation.
(b) Each Guarantor waives presentation to, demand for payment
from and protest to, as the case may be, the Borrowers or any other Guarantor,
and also waives notice of protest for nonpayment. The obligations of each
Guarantor hereunder shall not be affected by (i) the failure of the Agent or
the Lenders to assert any claim or demand or to enforce any right or remedy
against the Borrowers or any other guarantor under the provisions of this
Credit Agreement or any other agreement or otherwise; (ii) any extension or
renewal of any provision hereof or thereof; (iii) the failure of the Agent or
the Lenders to obtain the consent of the Guarantor with respect to any
rescission, waiver, compromise, acceleration, amendment or modification of any
of the terms or provisions of this Credit Agreement, the Notes or of any other
agreement; (iv) the release, exchange, waiver or foreclosure of any security
held by the Agent for the Obligations or any of them; (v) the failure of the
Agent or the Lenders to exercise any right or remedy against any other
guarantor of the Obligations; or (vi) the release or substitution of any
guarantor. Without limiting the generality of the foregoing or any other
provision hereof, to the extent permitted by Applicable Law, each Guarantor
hereby expressly waives any and all benefits which might otherwise be available
to it under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849,
2850, 2899 and 3433.
(c) Each Guarantor further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Agent
or the Lenders to any security held for payment of the Obligations or to any
balance of any deposit, account or credit on the books of the Agent or the
Lenders in favor of any Borrower, any other Guarantor or to any other Person.
(d) Each Guarantor hereby expressly assumes all
responsibilities to remain informed of the financial condition of the Parent
and any circumstances affecting the ability of the Parent to perform under this
Credit Agreement.
(e) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations, the
Notes or any other instrument evidencing any Obligations, or by the existence,
validity, enforceability, perfection, or extent of any collateral therefor or
by any other circumstance relating to the Obligations which might otherwise
constitute a defense to this Guaranty. The Agent and the Lenders make no
representation or warranty with respect to any such circumstances and have no
duty or responsibility whatsoever to each Guarantor in respect to the
management and maintenance of the Obligations or any collateral security for
the Obligations.
SECTION 9.2. No Impairment of Guaranty, etc. The obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination
- 91 -
99
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 Obligations. Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Agent or the Lenders to assert any claim or demand or to enforce
any remedy under this Credit Agreement 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 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 such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law, unless
and until the Obligations are paid in full, the Commitments have terminated and
each outstanding Letter of Credit has expired or otherwise been terminated.
SECTION 9.3. Continuation and Reinstatement, etc. (a) Each
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 any
part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be restored by the Agent or the Lenders upon the bankruptcy or
reorganization of any Borrower or any Guarantor, or otherwise. In furtherance
of the provisions of this Article 9, and not in limitation of any other right
which the Agent or the Lenders may have at law or in equity against any
Borrower or Guarantor by virtue hereof, upon failure of any Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice or otherwise, each Guarantor hereby promises to and
will, upon receipt of written demand by the Agent on behalf of the Lenders,
forthwith pay or cause to be paid to the Agent on behalf of the Lenders in cash
an amount equal to the unpaid amount of all the Obligations with interest
thereon at a rate of interest equal to the rate specified in Section 2.7(a)
hereof.
(b) All rights of the Guarantors against any Borrower,
arising as a result of the payment by any Guarantor of any sums to the Agent
for the benefit of the Lenders or directly to the Lenders 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 the Obligations. If any amount shall be paid to such Guarantor for the
account of the Parent, such amount shall be held in trust for the benefit of
the Agent and shall forthwith be paid to the Agent on behalf of the Lenders to
be credited and applied to the Obligations, whether matured or unmatured.
SECTION 9.4. Limitation on Guaranteed Amount etc.
Notwithstanding any other provision of this Article 9, the amount guaranteed by
the Guarantor hereunder shall be limited to the extent, if any, required so
that its obligations under this Article 9 shall not be subject to avoidance
under Section 548 of the 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 any Guarantor's obligations hereunder
pursuant to the preceding sentence, it is the intention of the parties thereto
that any rights of subrogation or contribution which such
- 92 -
100
Guarantor may have under this Article 9 (or as a result of the operation of
Article 8 with regard to assets of other Debtors) or any other Agreement or
under Applicable Law shall be taken into account.
10. PLEDGE
SECTION 10.1. Pledge. As security for the Obligations, each
Pledgor hereby pledges, hypothecates, assigns, transfers, sets over and
delivers unto the Agent for the benefit of the Lenders, a security interest in
all Pledged Securities now owned or hereafter acquired by it; provided,
however, that notwithstanding anything herein to the contrary, any Pledged
Securities representing shares of the Foreign Borrower or any Additional
Foreign Subsidiary shall be pledged by the Parent (or appropriate Debtor) (i)
as to 66% thereof to secure the Obligations of the Parent as the Domestic
Borrower or the Obligations of such appropriate Guarantor of the Domestic Loans
and (ii) as to 100% thereof to secure the Obligations of the Parent (or
appropriate Debtor) as a Guarantor (or Borrower) of the Foreign Loans. On the
Closing Date, the Pledgors shall deliver to the Agent the definitive
instruments representing all Pledged Securities, accompanied by executed
undated stock powers, duly endorsed or executed in blank by the appropriate
Pledgor, and such other instruments or documents as the Agent on behalf of the
Lenders or its counsel shall reasonably request. Each Pledgor hereby
represents and warrants to the Agent and the Lenders that (i) there are no
restrictions on the transfer of such Pledgor's portion of the Pledged
Securities which limit its ability to pledge such shares to the Agent
hereunder, (ii) there are no restrictions on the transfer of such shares by the
Agent upon the occurrence of an Event of Default except for restrictions
created herein, under applicable securities laws or, as to shares of NBV, any
mandatory share transfer restriction which requires compliance with certain
formalities to effectuate a transfer in the event of foreclosure, (iii) such
Pledgor has good title to the respective shares of the Pledged Securities
pledged hereby, (iv) the Pledged Securities that such Pledgor is pledging
hereunder are not subject to any prior Liens, and (v) such Pledgor has the
right to pledge the Pledged Securities that it is pledging hereunder free of
any Liens and without the consent of the creditors of such Pledgor or any other
Person or any Governmental Authority whatsoever.
SECTION 10.2. Registration in Nominee Name; Denominations.
The Agent shall (x) have the right (in its sole and absolute discretion) to
hold the certificates representing any Pledged Securities (a) in its own name
or in the name of its nominee or (b) in the name of the appropriate Pledgor,
endorsed or assigned in blank or in favor of the Agent and (y) in the case of
the shares of NBV, be a party to the NBV Share Pledge in its capacity as Agent
hereunder. The Agent shall have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Credit Agreement.
SECTION 10.3. Voting Rights; Dividends; etc. (a) The
appropriate Pledgor shall be entitled to exercise any and all voting and/or
consensual rights and powers accruing to
- 93 -
101
owners of the Pledged Securities or any part thereof for any purpose not
inconsistent with the terms hereof, at all times, except as expressly provided
in (c) below.
(b) Any dividends or distributions of any kind whatsoever
(other, so long as an Event of Default is not continuing, than cash) received
by a Pledgor, whether resulting from a subdivision, combination, or
reclassification of the outstanding capital stock of the issuer or received in
exchange for Pledged Securities or any part thereof or as a result of any
merger, consolidation, acquisition, or other exchange of assets to which the
issuer may be a party, or otherwise, shall be and become (to the fullest extent
permitted under Applicable Law) part of the Pledged Securities pledged
hereunder and shall immediately be delivered to the Agent to be held subject to
the terms hereof.
(c) Upon the occurrence and during the continuance of an
Event of Default and notice from the Agent of the transfer of such rights to
the Agent, all rights of the Pledgors to exercise the voting and/or consensual
rights and powers which it is entitled to exercise pursuant to this Section
shall cease, and all such rights shall thereupon become vested in the Agent,
which shall have the sole and exclusive right and authority to exercise such
voting and/or consensual rights.
SECTION 10.4. Remedies Upon Default. If an Event of Default
shall have occurred and be continuing, the Agent on behalf of the Lenders may
sell the Pledged Securities, or any part thereof, at public or private sale or
at any broker's board or on any securities exchange, for cash, upon credit or
for future delivery as the Agent shall deem appropriate subject to the terms
hereof or as otherwise provided in the New York Uniform Commercial Code or, as
to the NBV shares, in accordance with the laws of the Netherlands. The Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict to the full extent permitted by Applicable Law the prospective bidders
or purchasers to persons who will represent and agree that they are purchasing
the Pledged Securities for their own account for investment and not with a view
to the distribution or sale thereof, and upon consummation of any such sale the
Agent shall have the right to assign, transfer, and deliver to the purchaser or
purchasers thereof the Pledged Securities so sold. Each such purchaser at any
such sale shall hold the property sold absolutely, free from any claim or right
on the part of the Pledgors; provided, however, that prior to the consummation
of such sale the Pledgors shall be entitled to redeem the Pledged Securities by
paying (i) all the Obligations and (ii) any additional costs or expenses
incurred by the Agent in connection with the proposed sale of the Pledged
Securities. The Agent shall give ten days' written notice of its intention to
make any such public or private sale, or sale at any broker's board or on any
such securities exchange, or of any other disposition of the Pledged
Securities. Such notice, in the case of public sale, shall state the time and
place for such sale and, in the case of sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Pledged Securities, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Agent may fix and shall state in the notice of such
sale. At any such sale, the Pledged
- 94 -
102
Securities, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Agent may (in its sole and absolute
discretion) determine. The Agent shall not be obligated to make any sale of
the Pledged Securities if it shall determine not to do so, regardless of the
fact that notice of sale of the Pledged Securities may have been given. The
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. In case the sale of all
or any part of the Pledged Securities is made on credit or for future delivery,
the Pledged Securities so sold shall be retained by the Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Agent shall not
incur any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Pledged Securities so sold and, in case of any such failure,
such Pledged Securities may be sold again upon like notice. At any sale or
sales made pursuant to this Section 10.4, the Agent may bid for or purchase,
free from any claim or right of whatever kind, including any equity of
redemption, of the Pledgors, any such demand, notice, claim, right or equity
being hereby expressly waived and released, any or all of the Pledged
Securities offered for sale, and may make any payment on the account thereof by
using any claim for moneys then due and payable to the Agent or any consenting
Lender by any Debtor as a credit against the purchase price; and the Agent,
upon compliance with the terms of sale, may hold, retain and dispose of the
Pledged Securities without further accountability therefor to the Pledgors or
any third party (other than the Lenders). The Agent shall in any such sale
make no representations or warranties with respect to the Pledged Securities or
any part thereof, and shall not be chargeable with any of the obligations or
liabilities of the Pledgors with respect thereto. Each Pledgor hereby agrees
(i) it will indemnify and hold the Agent and the Lenders harmless from and
against any and all claims with respect to the Pledged Securities asserted
before the taking of actual possession or control of the Pledged Securities by
the Agent pursuant to this Credit Agreement or arising out of any act of, or
omission to act on the part of, any party prior to such taking of actual
possession or control by the Agent (whether asserted before or after such
taking of possession or control), or arising out of any act on the part of any
Pledgor, their agents or Affiliates before or after the commencement of such
actual possession or control by the Agent and (ii) the Agent and the Lenders
shall have no liability or obligation arising out of any such claim. As an
alternative to exercising the power of sale herein conferred upon it, the Agent
may proceed by a suit or suits at law or in equity to foreclose upon the
Collateral and Pledged Securities under this Credit Agreement and to sell the
Pledged Securities, or any portion thereof, pursuant to a judgment or decree of
a court or courts having competent jurisdiction.
SECTION 10.5. Application of Proceeds of Sale and Cash. The
proceeds of sale of the Pledged Securities sold pursuant to Section 10.4 hereof
shall be applied by the Agent on behalf of the Lenders as follows:
(i) to the payment of all reasonable out-of-pocket
costs and expenses incurred by the Agent in connection with
such sale, including, but not limited to, all court costs and
the reasonable fees and expenses of counsel for the Agent in
- 95 -
103
connection therewith, and the payment of all other costs and
expenses paid or incurred by the Agent in connection with this
Credit Agreement, or the exercise of any right or remedy
hereunder or otherwise in connection with the Obligations;
and
(ii) to the payment in full of the Obligations in
such order as determined by the Majority Lenders;
provided, however, that the Majority Lenders may in their discretion apply
funds from the proceeds of sale of Pledged Securities to pay the cost (i) of
completing any Product owned in whole or in part by any Debtor in any stage of
production and (ii) of making delivery to the licensees of such Product. Any
amounts remaining after such indefeasible payment in full shall be remitted to
an account maintained by the Debtors with the Agent or as a court of competent
jurisdiction may otherwise direct.
Any amounts remaining after such applications shall be remitted to the
appropriate Pledgor, or as a court of competent jurisdiction may otherwise
direct.
SECTION 10.6. Securities Act, etc. In view of the position
of each Pledgor in relation to the Pledged Securities pledged by it, or because
of other present or future circumstances, a question may arise under the
Securities Act of 1933, as amended, as now or hereafter in effect, or any
similar statute hereafter enacted analogous in purpose or effect (such Act and
any such similar statute as from time to time in effect being hereinafter
called the "Federal Securities Laws"), with respect to any disposition of the
Pledged Securities permitted hereunder, each Pledgor understands that
compliance with the Federal Securities Laws may very strictly limit the course
of conduct of the Agent if the Agent were to attempt to dispose of all or any
part of the Pledged Securities, and may also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Securities may dispose
of the same. Similarly, there may be other legal restrictions or limitations
affecting the Agent in any attempt to dispose of all or any part of the Pledged
Securities under applicable Blue Sky or other state securities laws, or similar
laws analogous in purpose or effect. Under applicable law, in the absence of
an agreement to the contrary, the Agent may perhaps be held to have certain
general duties and obligations to the Pledgors to make some effort towards
obtaining a fair price even though the Obligations may be discharged or reduced
by the proceeds of a sale at a lesser price. Each Pledgor waives to the
fullest extent permitted by Applicable Law any such general duty or obligation
to it, and the Pledgors and/or the Debtors will not attempt to hold the Agent
responsible for selling all or any part of the Pledged Securities at an
inadequate price, even if the Agent shall accept the first offer received or
does not approach more than one possible purchaser. Without limiting the
generality of the foregoing, the provisions of this Section 10.6 would apply
if, for example, the Agent were to place all or any part of the Pledged
Securities for private placement by an investment banking firm, or if such
investment banking firm purchased all or any part of the Pledged Securities for
its own account, or if the Agent placed all or any part of the Pledged
Securities privately with a purchaser or purchasers.
- 96 -
104
SECTION 10.7. Continuation and Reinstatement. Each Pledgor
further agrees that its pledge hereunder shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must otherwise be
restored by Agent or the Lenders upon the bankruptcy or reorganization of any
Pledgor or otherwise.
SECTION 10.8. Termination. The pledge referenced herein
shall terminate when all of the Obligations shall have been indefeasibly fully
paid, the Commitments shall have terminated and all Letters of Credit shall
have expired or been terminated or cancelled, at which time the Agent shall
assign and deliver to the appropriate Pledgor, or to such Person or Persons as
such Pledgor shall designate, against receipt, such of the Pledged Securities
(if any) as shall not have been sold or otherwise applied by the Agent pursuant
to the terms hereof and shall still be held by it hereunder, together with
appropriate instruments of reassignment and release. Any such reassignment
shall be free and clear of all Liens, arising by, under or through any Lender
but shall otherwise be without recourse upon or warranty by the Agent and at
the expense of the Pledgors.
SECTION 10.9. Acknowledgment. NBV hereby acknowledges the
pledge by the Company of the Pledged Securities of NBV (owned beneficially and
of record) by the Company, pursuant to Article 10 of this Credit Agreement and
the NBV Security Documents.
11. CASH COLLATERAL
SECTION 11.1. Cash Collateral Account. On or prior to the
Closing Date, there shall be established with the Agent a collateral account in
the name of the Agent the "Cash Collateral Account"), into which the
appropriate Debtors shall from time to time deposit Dollars pursuant to the
express provisions of this Credit Agreement requiring or permitting such
deposits. Except to the extent otherwise provided in this Article 11, the Cash
Collateral Account shall be under the sole dominion and control of the Agent.
SECTION 11.2. Investment of Funds. (a) The Agent is hereby
authorized and directed to invest and reinvest the funds from time to time
deposited in the Cash Collateral Account on the instructions of the Parent
(provided that such notice may be given verbally to be confirmed promptly in
writing) or, if the Parent shall fail to give such instruction upon delivery of
any such funds, in the sole discretion of the Agent, provided that in no event
may the Parent give instructions to the Agent to, or may the Agent in its
discretion, invest or reinvest funds in the Cash Collateral Account in other
than Cash Equivalents described in clause (i) of the definition of Cash
Equivalents, or described in clauses (ii) and (iii) of the definition of Cash
Equivalents to the extent issued by The Chase Manhattan Bank.
(b) Any net income or gain on the investment of funds from
time to time held in the Cash Collateral Account shall be promptly reinvested
by the Agent as a part of the Cash
- 97 -
105
Collateral Account; and any net loss on any such investment shall be charged
against the Cash Collateral Account.
(c) Neither the Agent nor the Lenders shall be a trustee for
the Debtors, or shall have any obligations or responsibilities, or shall be
liable for anything done or not done, in connection with the Cash Collateral
Account, except as expressly provided herein and except that the Agent shall
have the obligations of a secured party under the UCC. The Agent and the
Lenders shall not have any obligation or responsibilities and shall not be
liable in any way for any investment decision made pursuant to this Section
11.2 or for any decrease in the value of the investments held in the Cash
Collateral Account.
SECTION 11.3. Grant of Security Interest. For value received
and to induce the Lenders to make Loans from time to time to the Borrowers as
provided for in this Credit Agreement, as security for the payment of all of
the Obligations, the Debtors hereby assign to the Agent (for the benefit of the
Lenders), and grant to the Agent (for the benefit of the Lenders), a first and
prior Lien upon all the Debtors' rights in and to the Cash Collateral Account
all cash, documents, instruments and securities from time to time held therein,
and all rights pertaining to investments of funds in the Cash Collateral
Account and all products and proceeds of any of the foregoing. All cash,
documents, instruments and securities from time to time on deposit in the Cash
Collateral Account, and all rights pertaining to investments of funds in the
Cash Collateral Account, shall immediately and without any need for any further
action on the part of any of the Debtors, any Lender or the Agent, become
subject to the Lien set forth in this Section 11.3, be deemed Collateral for
all purposes hereof and be subject to the provisions of this Credit Agreement.
SECTION 11.4. Remedies. At any time during the continuation
of an Event of Default, the Agent may sell any documents, instruments and
securities held in the Cash Collateral Account and may immediately apply the
proceeds thereof and any other cash held in the Cash Collateral Account to the
satisfaction of the Obligations in such order as the Agent may determine, but
subject to the rights of the Lenders. Any amounts remaining after such
application shall be paid or delivered to the Parent or as a court of competent
jurisdiction may direct.
12. THE AGENT
SECTION 12.1. Administration by Agent. (a) The general
administration of the Fundamental Documents and any other documents
contemplated by this Credit Agreement shall be by the Agent or its designees.
Each of the Lenders hereby irrevocably authorizes the Agent, at its discretion,
to take or refrain from taking such actions as agent on its behalf and to
exercise or refrain from exercising such powers under the Fundamental
Documents, the Notes and any other documents contemplated by this Credit
Agreement as are expressly delegated by the terms hereof
- 98 -
106
or thereof, as appropriate, together with all powers reasonably incidental
thereto. The Agent shall have no duties or responsibilities except as set
forth in the Fundamental Documents.
(b) The Lenders hereby authorize the Agent (in its sole
discretion):
(i) in connection with the sale or other
disposition of any asset included in the Collateral, in
accordance with the terms of this Credit Agreement, to release
a Lien granted to it (for the benefit of the Lenders) on such
asset;
(ii) to determine that the cost to the Parent or
another Debtor is disproportionate to the benefit to be
realized by the Lenders by perfecting a Lien in a given asset
or group of assets included in the Collateral (other than any
item which is to be included in the Borrowing Base) and that
the Borrowers or other Debtor should not be required to
perfect such Lien in favor of the Agent (for the benefit of
the Lenders);
(iii) to appoint subagents or Lenders to be the
holder of record of a Lien to be granted to the Agent (for the
benefit of the Lenders) or to hold on behalf of the Agent such
Collateral or instruments relating thereto;
(iv) to grant the right of Quiet Enjoyment to
licensees pursuant to the terms of Section 8.13;
(v) to modify any of the Fundamental Documents
(other than this Credit Agreement and the Notes) in order to
(x) cure any ambiguity, omission, defect or inconsistency, (y)
comply with the terms of transactions which are permitted by
the terms of Articles 5 or 6 hereof or which are otherwise
consented to by the requisite Lenders in accordance with the
terms hereof and (z) to add covenants of a Debtor for the
benefit of the Lenders; and
(vi) enter guild subordination agreements with the
guilds with respect to the security interests in favor of the
guilds required pursuant to the terms of the collective
bargaining agreements.
SECTION 12.2. Advances and Payments. (a) On the date
requested by the Parent for the funding of each Loan, the Agent shall be
authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with its
Commitment hereunder. Each of the Lenders hereby authorizes and requests the
Agent to advance for its account, pursuant to the terms hereof, the amount of
the Loan to be made by it, and each of the Lenders agrees forthwith to
reimburse the Agent in immediately available funds for the amount so advanced
on its behalf by the Agent. If any such reimbursement is not made in
immediately available funds on the same day on which the Agent shall have made
any such amount available on behalf of any Lender, such Lender shall pay
interest to the Agent at a rate
- 99 -
107
per annum equal to the Agent's cost of obtaining overnight funds in the New
York Federal Funds Market.
(b) Any amounts received by the Agent in connection with this
Credit Agreement or the Notes the application of which is not otherwise
provided for shall be applied, in accordance with each of the Lenders'
Percentages, first, to pay accrued but unpaid Commitment Fees, second, to pay
accrued but unpaid interest on the Notes, third, the principal balance
outstanding on the Notes and fourth, to pay other amounts payable to the Agent.
All amounts to be paid to any of the Lenders by the Agent shall be credited to
the Lenders, after collection by the Agent, in immediately available funds
either by wire transfer or deposit in such Lender's correspondent account with
the Agent, or as such Lender and the Agent shall from time to time agree.
SECTION 12.3. Sharing of Setoffs and Cash Collateral. Each
of the Lenders agrees that if it shall, through the exercise of a right of
bank's lien, setoff or counterclaim against any Debtor, including, but not
limited to, a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim and received by such Lender under any applicable bankruptcy, insolvency
or other similar law, or otherwise, obtain payment in respect of its Loans as a
result of which the unpaid portion of its Loans and L/C Exposure is
proportionately less than the unpaid portion of any of the other Lenders (a) it
shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Lenders a participation in the Loans or Letters of
Credit of such other Lenders, so that the aggregate unpaid principal amount of
each of the Lenders' Loans and its participation in Loans and Letters of Credit
of the other Lenders shall be in the same proportion to the aggregate unpaid
principal amount of all Loans then outstanding and L/C Exposure as the
principal amount of its Loans and L/C Exposure prior to the obtaining of such
payment was to the principal amount of all Loans outstanding and L/C Exposure
prior to the obtaining of such payment and (b) such other adjustments shall be
made from time to time as shall be equitable to ensure that the Lenders share
such payment pro rata. The Debtors expressly consent to the foregoing
arrangements and agree that any Lender or Lenders holding (or deemed to be
holding) a participation in a Note or Letters of Credit may exercise any and
all rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by any Borrower to such Lender or Lenders as fully as if such
Lender or Lenders held a Note and was the original obligee thereon or was the
issuer of the Letter of Credit, in the amount of such participation.
SECTION 12.4. Notice to the Lenders. Upon receipt by the
Agent from any of the Debtors of any communication calling for an action on the
part of the Lenders, or upon notice to the Agent of any Event of Default, the
Agent will in turn immediately inform all the other Lenders in writing (which
shall include telegraphic communications) of the nature of such communication
or of the Event of Default, as the case may be.
SECTION 12.5. Liability of Agent. (a) The Agent, when
acting on behalf of the Lenders, may execute any of its duties under this
Credit Agreement by or through its officers,
- 100 -
108
agents, or employees and neither the Agent nor such officers, agents or
employees shall be liable to the Lenders or any of them for any action taken or
omitted to be taken in good faith, nor be responsible to the Lenders or to any
of them for the consequences of any oversight or error of judgment, or for any
loss, unless the same shall happen through its gross negligence or willful
misconduct. The Agent and its directors, officers, agents, and employees shall
in no event be liable to the Lenders or to any of them for any action taken or
omitted to be taken by it pursuant to instructions received by it from the
Majority Lenders or in reliance upon the advice of counsel selected by it with
reasonable care. Without limiting the foregoing, neither the Agent nor any of
its directors, officers, employees, or agents shall be responsible to any of
the Lenders for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty, or
representation in, or for the perfection of any security interest contemplated
by, this Credit Agreement or any related agreement, document or order, or shall
be required to ascertain or to make any inquiry concerning the performance or
observance by any Debtor of any of the terms, conditions, covenants, or
agreements of this Credit Agreement or any related agreement or document.
(b) Neither the Agent, as Agent hereunder, nor any of its
directors, officers, employees, or agents shall have any responsibility to the
Parent or any other Debtor on account of the failure or delay in performance or
breach by any of the Lenders or the Parent of any of their respective
obligations under this Credit Agreement or the Notes or any related agreement
or document or in connection herewith or therewith.
(c) The Agent, as Agent hereunder, shall be entitled to rely
on any communication, instrument, or document reasonably believed by it to be
genuine or correct and to have been signed or sent by a person or persons
believed by it to be the proper person or persons, and it shall be entitled to
rely on advice of legal counsel, independent public accountants, and other
professional advisers and experts selected by it.
SECTION 12.6. Reimbursement and Indemnification. Each of the
Lenders agrees (i) to reimburse the Agent in accordance with each Lender's
Percentage, for any expenses and fees incurred for the benefit of the Lenders
under the Fundamental Documents, including, without limitation, counsel fees
and compensation of agents and employees paid for services rendered on behalf
of the Lenders, and any other expense incurred in connection with the
operations or enforcement thereof not reimbursed by the Parent or any other
Debtor, and (ii) to indemnify and hold harmless the Agent and any of its
directors, officers, employees, or agents, on demand, in accordance with each
Lender's Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against it or any of them in any way relating to or
arising out of the Fundamental Documents or any action taken or omitted by it
or any of them under the Fundamental Documents to the extent not reimbursed by
the Parent or any other Debtor (except such as shall result from their gross
negligence or willful misconduct). Promptly upon receipt by the Agent from the
Parent or any other Debtor of any amount described herein previously reimbursed
to the
- 101 -
109
Agent by any of the Lenders, the Agent shall distribute to each Lender (who
previously had reimbursed the Agent) such Lender's pro rata share of such
amount.
SECTION 12.7. Rights of Agent. It is understood and agreed
that The Chase Manhattan Bank shall have the same rights and powers as a Lender
hereunder (including the right to give such instructions) as the other Lenders
and may exercise such rights and powers, as well as its rights and powers under
other agreements and instruments to which it is or may be party, and engage in
other transactions with the Parent or any Subsidiary thereof, as though it were
not the Agent of the Lenders under this Credit Agreement. The fact that The
Chase Manhattan Bank may at any time engage in any such other transaction with
the Parent or any Subsidiary or Affiliate shall not however in any way diminish
the obligations and responsibilities of The Chase Manhattan Bank as Agent
hereunder.
SECTION 12.8. Independent Investigation by Lenders. Each of
the Lenders acknowledges that it has decided to enter into this Credit
Agreement and to make the Loans hereunder based on its own analysis of the
transactions contemplated hereby and of the creditworthiness of the Parent and
agrees that the Agent shall bear no responsibility therefor.
SECTION 12.9. Execution by Agent of Security Documentation on
behalf of the Lenders. The Agent hereby agrees to expressly indicate in all
the security documentation (including the UCC-1 Financing Statements, Copyright
Security Agreement, Trademark Security Agreement, Pledgeholder Agreements and
any payment instructions) that it obtains or executes that it is doing such on
behalf of the Lenders.
SECTION 12.10. Agreement of Majority Lenders or Super
Majority Lenders. Upon any occasion requiring or permitting an approval,
consent, waiver, election or other action on the part of the Majority Lenders
or Super Majority Lenders, action shall be taken by the Agent for and on behalf
or for the benefit of all Lenders upon the direction of the Majority Lenders or
the Super Majority Lenders, as the case may be, and any such action shall be
binding on all Lenders. No amendment, modification, consent or waiver shall be
effective except in accordance with the provisions of Section 13.10 hereof.
SECTION 12.11. Notice of Transfer. The Agent may deem and
treat any Lender which is a party to this Credit Agreement as the owner of such
Lender's respective portions of the Loans for all purposes, unless and until a
written notice of the assignment or transfer thereof executed by any such
Lender shall have been received by the Agent and become effective in accordance
with Section 13.3 hereof.
SECTION 12.12. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Parent, but such
resignation shall not become effective until acceptance by a successor Agent of
its appointment pursuant hereto. Upon any such resignation, the retiring Agent
shall promptly appoint a successor Agent from among the Lenders which is
experienced and sophisticated in entertainment industry lending, provided that
- 102 -
110
such replacement is reasonably acceptable (as evidenced in writing) to the
Parent and the Majority Lenders. If no successor Agent shall have been so
appointed by the retiring Agent and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation, the
Parent may appoint a successor Agent (which successor may be replaced by the
Majority Lenders; provided that such replacement is experienced and is
sophisticated in entertainment industry lending and reasonably acceptable to
the Parent), which shall be either a Lender or a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $250,000,000 and which is
experienced and sophisticated in entertainment industry lending. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the credit
documentation. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 12 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
SECTION 12.13. NBV Remedies. All parties hereto agree that,
solely for purposes of the laws of the Netherlands, in connection with any
rights of enforcement, foreclosure, collection or other remedies of the Lenders
under this Credit Agreement or under any and all other agreements delivered
pursuant to this Credit Agreement which create a security interest in favor of
the Lenders or in favor of the Agent (for the benefit of the Lenders), the
Agent shall be deemed to be a joint creditor of the Lenders with respect to the
Indebtedness of NBV hereunder (or the Obligations of any Guarantor with respect
thereto) owing to all the Lenders under this Credit Agreement. As such, the
Agent shall have its own separate and independent right to enforce such
foreclosure rights, collection rights or other remedies; provided, however,
that payment to the Agent of such Indebtedness or satisfaction of the
Obligations relating thereto will be deemed to also serve as payment to the
Lenders (or satisfaction, as the case may be) of such Indebtedness and that
payment to the Lenders of such Indebtedness or satisfaction of the Obligations
relating thereto will also serve as payment to the Agent (or satisfaction, as
the case may be) of such Indebtedness.
13. MISCELLANEOUS
SECTION 13.1. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered or mailed (or in
the case of telegraphic communication, if by telegram, delivered to the
telegraph company and, if by telex, graphic scanning or other telegraphic or
facsimile communications equipment of the sending party hereto, delivered by
such equipment) addressed, if to the Agent or The Chase Manhattan Bank, to it
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx X. Xxxxx, facsimile
no.: (000) 000-0000, with a copy to CBC-USA, Inc., 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxx or if to any
Debtor at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief
Financial Officer, facsimile no. (000) 000-0000, with a copy to the
- 103 -
111
Parent at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx 00000, Attn: Chief
Financial Officer, facsimile no. (000) 000-0000, or if to a Lender, to it at
its address set forth on the signature page, or such other address as such
party may from time to time designate by giving written notice to the other
parties hereunder. Any failure of the Agent or a Lender giving notice pursuant
to this Section 13.1, to provide a courtesy copy to a party as provided herein,
shall not affect the validity of such notice. All notices and other
communications given to any party hereto in accordance with the provisions of
this Credit Agreement shall be deemed to have been given on the fifth Business
Day after the date when sent by registered or certified mail, postage prepaid,
return receipt requested, if by mail, or when delivered to the telegraph
company, charges prepaid, if by telegram, or upon receipt by such party, if by
any telegraphic or facsimile communications equipment, in each case addressed
to such party as provided in this Section 13.1 or in accordance with the latest
unrevoked written direction from such party.
SECTION 13.2. Survival of Agreement, Representations and
Warranties, etc. All warranties, representations and covenants made by the
Debtors herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Credit Agreement shall be considered to have
been relied upon by the Agent and the Lenders and shall survive the making of
the Loans herein contemplated and the issuance and delivery to the Agent of the
Notes regardless of any investigation made by the Agent or the Lenders or on
their behalf and shall continue in full force and effect so long as any amount
due or to become due hereunder is outstanding and unpaid and so long as the
Commitments have not been terminated. All statements in any such certificate
or other instrument shall constitute representations and warranties by the
Debtors hereunder.
SECTION 13.3. Successors and Assigns; Syndications; Loan
Sales; Participations. (a) Whenever in this Credit Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party (provided, however, that the Borrowers may
not assign their rights hereunder without the prior written consent of all the
Lenders), and all covenants, promises and agreements by or on behalf of any of
the Debtors which are contained in this Credit Agreement shall inure to the
benefit of the successors and assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Agent, which consent shall not be unreasonably withheld) assign
to an Eligible Assignee all or a portion of its interests, rights and
obligations under this Credit Agreement (including, without limitation, all or
a portion of its Commitment and the same portion of all Loans at the time owing
to it and the Notes held by it); provided, however, that (i) each assignment
shall be of a constant, and not a varying, percentage of the assigning Lender's
rights and obligations under this Credit Agreement, (ii) the amount of the
original Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Lender) shall be in a minimum principal amount
of $5,000,000, (iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with
- 104 -
112
any Note or Notes subject to such assignment and a processing and recordation
fee of $2,000 to be paid to the Agent by the assigning Lender and (iv) The
Chase Manhattan Bank as Lender shall not assign its entire interest under this
Credit Agreement without the prior written consent of the Debtors which may be
granted or withheld in their sole discretion. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be not earlier than five
Business Days after the date of acceptance and recording by the Agent, (x) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of the assigning Lender's rights and obligations under
this Credit Agreement, such assigning Lender shall cease to be a party hereto).
(c) Notwithstanding the other provisions of this Section
13.3, each Lender may at any time make an assignment of its interests, rights
and obligations under this Credit Agreement to (i) any Affiliate of such Lender
or (ii) any other Lender hereunder, provided that after giving effect to such
assignment, the assignee's Percentage shall not exceed 50%. Any such
assignment to any Affiliate of the assigning Lender or any other Lender
hereunder shall not be subject to the requirement of Section 13.3(b) that the
amount of the Commitment of the assigning Lender subject to each assignment be
in a minimum principal amount of $5,000,000 and shall not release the assigning
Lender of its remaining obligations hereunder, if any.
(d) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental
Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Debtors or the performance or observance by the Debtors of any of their
obligations under the Fundamental Documents; (iii) such assignee confirms that
it has received a copy of this Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Sections 5.1(a) and
5.1(b) (or if none of such financial statements shall have then been delivered,
then copies of the financial statements referred to in Section 3.5 hereof) and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the assigning
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Credit Agreement; (v) such assignee appoints and authorizes
the Agent to take such action as the Agent
- 105 -
113
on its behalf and to exercise such powers under this Credit Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Credit Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address at which notices
are to be given to it pursuant to Section 13.1 a copy of each Assignment and
Acceptance and a register for the recordation of the names and addresses of the
Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Debtors, the
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of the Fundamental Documents.
The Register shall be available for inspection by the Parent or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee together with any Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit I hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt written notice thereof to the Parent. Within five
Business Days after receipt of the notice, the Borrowers, at their own expense,
shall execute and deliver to the Lender, in exchange for the surrendered Notes,
new Notes to the order of such assignee in an amount equal to the Commitments
assumed by it pursuant to such Assignment and Acceptance and new Notes to the
order of the assigning Lender in an amount equal to the Commitments retained by
it hereunder. Such new Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such retained Commitment, shall be dated
the date of the surrendered Notes and shall otherwise be in substantially the
form of Exhibit A hereto. In addition each Debtor will promptly, at its own
expense, execute such amendments to the Fundamental Documents to which it is a
party and such additional documents, and take such other actions as the Agent
or the assignee Lender may reasonably request in order to give such assignee
Lender the full benefit of the Liens contemplated by the Fundamental Documents.
(g) Each of the Lenders may without the consent of the
Debtors sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Commitment and the Loans owing to
it and the Note or Notes held by it); provided, however, that (i) any such
Lender's obligations under this Credit Agreement shall remain unchanged, (ii)
such participant shall not be granted any voting rights under this Credit
Agreement, except with respect to proposed changes to interest rates, amount of
Commitment, final maturity of Loans, releases of all or substantially all the
Collateral and fees (as applicable to such participant), (iii) any such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iv) the participating banks or other entities shall be
entitled to the cost protection provisions contained in Sections 2.9, 2.10 and
2.13(e) hereof but a participant shall not be
- 106 -
114
entitled to receive pursuant to such provisions an amount larger than its share
of the amount to which the Lender granting such participation would have been
entitled and (v) the Debtors, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Debtors furnished to the Agent by
or on behalf of the Debtors; provided that prior to any such disclosure, each
such assignee or participant or proposed assignee or participant shall agree,
by executing a confidentiality letter in form and substance equivalent to the
confidentiality letter executed by the Lenders in connection with information
received by such Lenders relating to this transaction to preserve the
confidentiality of any confidential information relating to the Parent received
from such Lender.
(i) Any assignment pursuant to paragraph (a) or (b) of this
Section 13.3 shall constitute an amendment of the Schedule of Commitments as of
the effective date of such assignment.
(j) The Borrowers consent that any Lender may at any time and
from time to time pledge or otherwise grant a security interest in any Loan or
in any of the Notes evidencing such Loans (or any part thereof) to any Federal
Reserve Bank.
SECTION 13.4. Expenses; Documentary Taxes. Whether or not
the transactions hereby contemplated shall be consummated, the Borrowers agree
to pay all reasonable out-of-pocket expenses incurred by the Agent in
connection with performance of due diligence by the Agent in connection with
the transactions hereby contemplated and the syndication, preparation,
execution, delivery, waiver or modification and administration of this Credit
Agreement and any other documentation contemplated hereby, the Notes and the
making of the Loans, including but not limited to any internally allocated
audit costs, the fees and disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel
for the Agent, and any other counsel that the Agent shall retain, fees and
expenses of technical or other consultants engaged by the Agent to the extent
previously approved by the Borrowers, as well as all reasonable out-of-pocket
expenses incurred by the Lenders in the enforcement or protection of the rights
of the Lenders in connection with this Credit Agreement or the Notes, and with
respect to any action which may be instituted by any Person other than the
Debtors against any Lender in respect of the foregoing, or as a result of any
transaction, action or non-action arising from the foregoing, including but not
limited to the fees and disbursements of any counsel for the Lenders. Such
payments shall be made on the date of execution of this Credit Agreement and
thereafter on demand. The Borrowers agree that they shall indemnify the Agent
and the Lenders from and hold them harmless against any documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Credit Agreement or the
- 107 -
115
Notes. The obligations of the Borrowers under this Section shall survive the
termination of this Credit Agreement and/or the payment of the Loans and/or the
expiration of the Letters of Credit.
SECTION 13.5. Indemnification of Lenders. The Borrowers
agree (a) to indemnify and hold harmless the Lenders (to the full extent
permitted by law) from and against any and all claims, demands, losses,
judgments and liabilities (including liabilities for penalties) of whatsoever
nature, and (b) to pay to the Agent an amount equal to the amount of all costs
and expenses, including reasonable legal fees and disbursements, and with
regard to both (a) and (b) growing out of or resulting from any Collateral,
this Credit Agreement (including the preparation of this Credit Agreement and
all related documents whether or not the transactions contemplated hereby are
consummated), the Copyright Security Agreements and the Pledgeholder
Agreements, the making of the Loans, or the administration and enforcement or
exercise of any right or remedy granted to the Lenders hereunder or thereunder
but excluding therefrom all costs arising out of or resulting from (i) the
gross negligence or willful misconduct of the Lender claiming indemnification
hereunder and (ii) litigation between the Parent and the Agent or the Lenders
in connection with the Fundamental Documents or in any way relating to the
transactions contemplated hereby if, after final non-appealable judgment, the
Agent or the Lenders are not the prevailing party or parties in such
litigation. The foregoing indemnity agreement includes any reasonable costs
incurred by the Lenders in connection with any action or proceeding which may
be instituted in respect of the foregoing by the Agent, or by any other Person
either against the Lenders or in connection with which any officer or employee
of the Lenders is called as a witness or deponent, including, but not limited
to, the reasonable fees and disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP,
counsel to the Agent, and any out-of-pocket costs incurred by the Lenders in
appearing as a witness or in otherwise complying with legal process served upon
them. In no event shall the Lenders be liable to the Parent for any matter or
thing in connection with this Credit Agreement other than to make Loans and
account for moneys actually received by them in accordance with the terms
hereof.
Whenever the provisions of this Credit Agreement or any other
Fundamental Document provide that, if any Debtor shall fail to do any act or
thing which it has covenanted to do hereunder or any representation or warranty
of any of the Debtors shall be breached, the Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach and
the Agent does the same or causes it to be done, there shall be added to the
Obligations hereunder the cost or expense incurred by the Agent in so doing,
and any and all amounts expended by the Agent in taking any such action shall
be repayable to it upon its demand therefor and shall bear interest at 4% in
excess of the Alternate Base Rate from time to time in effect from the date
advanced to the date of repayment.
All indemnities contained in this Section shall survive the
expiration or earlier termination of this Credit Agreement.
SECTION 13.6. CHOICE OF LAW. THIS CREDIT AGREEMENT AND THE
NOTES HAVE BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
- 108 -
116
YORK AND SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE.
SECTION 13.7. WAIVER OF JURY TRIAL. TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH DEBTOR HEREBY WAIVES,
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
CREDIT AGREEMENT OR THE SUBJECT MATTER HEREOF OR ANY FUNDAMENTAL DOCUMENT, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE. EACH DEBTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE
LENDERS THAT THE PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT
UPON WHICH THE LENDERS HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO
THIS CREDIT AGREEMENT AND ANY OTHER FUNDAMENTAL DOCUMENT. THE AGENT OR ANY
LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH DEBTOR TO THE WAIVER OF ITS
RIGHTS TO TRIAL BY JURY.
SECTION 13.8. No Waiver. No failure on the part of the Agent
or any Lender to exercise, and no delay in exercising, any right, power or
remedy hereunder or under the Notes shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 13.9. Extension of Maturity. Except as otherwise
specifically provided in Article 13 hereof, should any payment of principal of
or interest on the Notes or any other amount due hereunder become due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, in the case of principal,
interest shall be payable thereon at the rate herein specified during such
extension.
SECTION 13.10. Amendments, etc. No modification, amendment
or waiver of any provision of this Credit Agreement, and no consent to any
departure by the Debtors herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders or the Super
Majority Lenders if so required, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given;
provided, however, that no such modification or amendment shall without the
written consent of all of the Lenders (i) change the Commitment of any Lender,
(ii) amend or modify any provision of this Credit Agreement which provides for
the unanimous consent or approval of the Lenders, (iii)
- 109 -
117
release any Collateral or any of the Pledged Securities (except as contemplated
herein) or release any Guarantor from its obligations hereunder, (iv) alter the
fixed scheduled maturity or principal amount of any Loan, or the rate of
interest payable thereon, or the rate at which the Commitment Fees accrue or
the fixed scheduled maturity or amount of any other payment required to be made
under this Credit Agreement, (v) amend the definition of "Majority Lenders" or
"Super Majority Lenders" or (vi) amend this Section 13.10. No such amendment
or modification may adversely affect the rights and obligations of the Agent
hereunder without its prior written consent. No notice to or demand on any of
the Debtors shall entitle the Debtors to any other or further notice or demand
in the same, similar or other circumstances. Each holder of a Note shall be
bound by any amendment, modification, waiver or consent authorized as provided
herein, whether or not a Note shall have been marked to indicate such
amendment, modification, waiver or consent and any consent by any holder of a
Note shall bind any Person subsequently acquiring a Note, whether or not a Note
is so marked.
SECTION 13.11. Severability. Any provision of this Credit
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 13.12. SERVICE OF PROCESS. EACH DEBTOR (EACH A
"SUBMITTING PARTY") HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE
COURTS OF THE STATE OF NEW YORK AND TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSES OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS CREDIT
AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE AGENT OR A LENDER. THE
SUBMITTING PARTY TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES,
AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS
NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS
PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS CREDIT AGREEMENT OR THE
SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY
WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS
OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE
FROM THE SAME SUBJECT MATTER. THE SUBMITTING PARTY HEREBY CONSENTS TO SERVICE
OF PROCESS BY MAIL AT ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO
SECTION 13.1 HEREOF. THE SUBMITTING PARTY
- 110 -
118
AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY
MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE AGENT AND THE LENDERS. FINAL
JUDGMENT AGAINST THE SUBMITTING PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING
SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (A) BY SUIT,
ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL
BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS OR LIABILITY
OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED
BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT
THE AGENT OR A LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL
PROCEEDINGS AGAINST THE SUBMITTING PARTY OR ANY OF ITS ASSETS IN ANY XXXXX XX
XXXXXXX XXXXX XX XXX XXXXXX XXXXXX OR OF ANY COUNTRY OR PLACE WHERE THE
SUBMITTING PARTY OR SUCH ASSETS MAY BE FOUND.
SECTION 13.13. Headings. Section headings used herein are
for convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Credit Agreement.
SECTION 13.14. Execution in Counterparts. This Credit
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one
and the same instrument.
SECTION 13.15. Subordination of Intercompany Advances. (a)
Each Debtor hereby agrees that any Indebtedness or other intercompany
receivables or advances of any other Debtor, directly or indirectly, in favor
of such Debtor of whatever nature at any time outstanding shall be completely
subordinate in right of payment to the prior payment in full of the
Obligations, and that no payment on any such Indebtedness shall be made (i)
except intercompany receivables and advances permitted pursuant to the terms
hereof may be repaid in the ordinary course of business so long as no Default
or Event of Default, shall have occurred and be continuing and (ii) except as
specifically consented to by all the Lenders in writing, until the prior
payment in full all Obligations and termination of the Commitments.
(b) In the event that any payment on any such indebtedness
shall be received by such Debtor other than as permitted by Section 13.15(a)
before payment in full of all Obligations and termination of the Commitments,
such Debtor shall receive such payments and hold the same in trust for, and
shall immediately pay over to, the Agent on behalf of the Lenders all such sums
to the extent necessary so that the Lenders shall have been paid all
Obligations owed or which may become owing.
SECTION 13.16. Orbis. The Lenders hereby acknowledge that
upon the exercise of (and payment for) the call by the Selling Shareholders
under the Orbis Agreement as provided
- 111 -
119
for in Section 2.4(a) of the Orbis Agreement, and provided that no Default or
Event of Default has occurred and is continuing, AAO shall be released from its
obligations as a Guarantor and Debtor hereunder and the shares of AAO shall be
released from the pledge hereunder.
SECTION 13.17. Effectiveness with Regard to NBV. This Credit
Agreement shall become effective as to all parties (other than NBV) hereto,
upon execution by all such parties (other than NBV). Notwithstanding anything
in this Credit Agreement to the contrary, until this Credit Agreement has been
executed by NBV, (i) this Credit Agreement shall not become effective with
respect to NBV nor shall NBV be deemed to have made any of the representations
or warranties contained herein and (ii) no Debtor shall be deemed to have made
the representations and warranties contained in Sections 3.1 and 3.2 with
respect to the due authorization by NBV of the execution, delivery and
performance of this Credit Agreement and the other Fundamental Documents and
the taking of the actions described therein, or as to the enforceability
against NBV of this Credit Agreement and the Fundamental Documents, until this
Credit Agreement and the Fundamental Documents have been duly authorized by the
board of directors of NBV. The Domestic Borrower shall cause NBV to execute
and deliver this Credit Agreement pursuant to due authorization as promptly as
practicable following the incorporation
- 112 -
120
of NBV and the execution by NBV shall not be a condition to the making of the
initial Domestic Loan, the issuance of the initial Letter of Credit or the
effectiveness of this Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed as of the day and the year first written.
BORROWERS:
ALL AMERICAN COMMUNICATIONS, INC.
AS DOMESTIC BORROWER AND AS GUARANTOR
By /s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
ALL AMERICAN NETHERLANDS B.V.
AS FOREIGN BORROWER
By
---------------------------------
Name:
Title:
GUARANTORS:
THE BAYWATCH PRODUCTION COMPANY
THE BAYWATCH NIGHTS PRODUCTION
COMPANY
ALL AMERICAN FREMANTLE
INTERNATIONAL, INC.
ALL AMERICAN ENTERTAINMENT, INC.
ALL AMERICAN MUSIC GROUP
ALL AMERICAN XXXXXXX, INC.
ALL AMERICAN ORBIS, INC.
SBSVTV, INC.
ALL AMERICAN TELEVISION, INC.
ALL AMERICAN FDF HOLDINGS, INC.
- 113 -
121
ALL AMERICAN TELEVISION
PRODUCTION, INC.
LBS COMMUNICATIONS, INC.
THE MALIBU BRANCH PRODUCTION
COMPANY
SANTA XXXXXX SOUND RECORDERS, INC.
ALL AMERICAN CONSUMER
MARKETING GROUP, INC.
By /s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Authorized Signatory
XXXX XXXXXXX PRODUCTIONS, LLC
By: All American Communications, Inc.,
its operator
By /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Executive
Vice President
GOOD GAMES PRODUCTIONS, INC.
KICKOFF PRODUCTIONS, INC.
OTL PRODUCTIONS, INC.
THE SPRING COLLECTION PRODUCTION
COMPANY
TERRAPIN COMMUNICATIONS, INC.
By /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
- 000 -
000
XXXXXXXXX (XX) PRODUCTIONS LTD.
By /s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Managing Director
FREMANTLE INTERNATIONAL, INC.
By /s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Secretary
LENDERS:
THE CHASE MANHATTAN BANK,
individually and as Agent
By /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
- 115 -
123
DE NATIONALE INVESTERINGSBANK N.V.
By /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: General Manager
By /s/ Lars van't Hoenderdaal
---------------------------------
Name: Lars van't Hoenderdaal
Title: Senior Account Manager
Address: Carnegieplein #4
2501 BH The Hague
Box 380
The Netherlands
Attn: Lars van't Hoenderdaal,
Account Manager
Telephone No.: 000-00-00-000-0000
Telecopy No.: 011-31-70-365-1071
- 116 -
124
XXXXXX & CO.
By /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Partner
Address: 000 Xxxxxx
Xxxxxx XX0X XXX
Xxxxxxx
Attn: Xxxxxx X. Xxxx
Telephone No.: (000) 0000-000-0000
Telecopy No.: (000) 0000-000-0000
with a copy to:
NATIONAL WESTMINSTER BANK plc
000 Xxxxx Xxxxx Xxxxxx
00xx xxxxx
Xxx Xxxxxxx, XX 00000
Attn.: Xxx Xxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
THE FUJI BANK LTD., LOS ANGELES
AGENCY
By /s/ Xxxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Joint General Manager
Address: 000 Xxxxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx,
Vice President and Manager
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
- 117 -
000
XXXXX XXXX XX XXXXXXXXXX N.A.
By /s/ Xxxxx X. Xxxxxx XX
---------------------------------
Name: Xxxxx X. Xxxxxx XX
Title: Vice President
Address: 000 Xxxxxxxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
BANK OF HAWAII
By /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
Address: 0000 X. Xxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx XxxXxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
- 118 -
126
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By /s/ Xxxxxx Touffu
---------------------------------
Name: Xxxxxx Touffu
Title: First VP and Regional Manager
By /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
Address: 000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Touffu,
First Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
BANQUE NATIONALE DE PARIS
By /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: SVP & Manager
By /s/ Xxxxxx X. X. Xx
---------------------------------
Name: Xxxxxx X. X. Xx
Title: Vice President
Address: 000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xx,
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
- 119 -
127
FIRST HAWAIIAN BANK
By /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: A.V.P.
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
METROBANK
By /s/ D. Xxxxxxx Xxxxxxx
---------------------------------
Name: D. Xxxxxxx Xxxxxxx
Title: Vice President
Address: 00000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: D. Xxxxxxx Xxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
SOCIETE GENERALE
By /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
- 120 -
128
THE SUMITOMO TRUST & BANKING CO.
LTD., NEW YORK BRANCH
By /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Manager, Corporate
Finance Dept.
Address: 000 Xxxxxxx Xxxxxx
0xx xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx,
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
CALIFORNIA UNITED BANK
By /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Address: 00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
- 121 -
129
Schedule 1
Schedule of Commitments
LENDER COMMITMENT PERCENTAGE
The Chase Manhattan Bank $ 17,000,000 10.967742%
De Nationale Investeringsbank N.V. 15,000,000 9.677419
Xxxxxx & Co. 15,000,000 9.677419
The Fuji Bank, Ltd. 15,000,000 9.677419
Union Bank of California 15,000,000 9.677419
Bank of Hawaii 10,000,000 6.451613
Banque Francaise Du Commerce Exterieur 10,000,000 6.451613
Banque Nationale de Paris 10,000,000 6.451613
First Hawaiian Bank 10,000,000 6.451613
Metrobank 10,000,000 6.451613
Societe Generale 10,000,000 6.451613
The Sumitomo Trust & Banking Co. Ltd.
New York Branch 10,000,000 6.451613
California United Bank 8,000,000 5.161290
TOTAL: $155,000,000 100%
============ ===
