Exhibit 10.15
ASSET ASSIGNMENT AGREEMENT
This Asset Assignment Agreement is entered into as of this 22nd day of
December, 1995 by and between Fox Kids Worldwide L.L.C. (the "Management
Company"), on the one hand, and Fox, Inc. ("Fox"), Fox Broadcasting Company
("FBC"), Twentieth Century Fox Film Corporation ("Twentieth"), Fox Television
Stations, Inc. ("FTSI") and FCN Holding, Inc. ("FCNH") (Fox, FBC, Twentieth,
FTSI and FCNH being collectively referred to herein as the "Fox Parties" and
each being individually referred to as a "Fox Party"), on the other hand.
WHEREAS, the Management Company, a Delaware limited liability company,
currently owned by Saban Entertainment, Inc. ("SEI"), FBC and FCNH, and the Fox
Parties desire to enter into this Agreement in connection with the Management
Company's creation, operation and management of an integrated children's
entertainment business; and
WHEREAS, the Fox Parties, other than FBC, are direct or indirect Affiliates
of FBC, each of which will be directly or indirectly benefitted by the formation
and capitalization of the Management Company; and
WHEREAS, pursuant to Section 1.2 of that certain LLC Formation Agreement
dated as of November 1, 1995 ("LLC Formation Agreement") by and among SEI, FBC
and FCNH, FBC is obligated to deliver this Agreement to the Management Company,
in consideration for the acquisition by FBC of a membership interest therein;
and
WHEREAS, as an inducement to SEI to enter into and perform its obligations
under that certain Operating Agreement of the Management Company dated as of the
date hereof ("Operating Agreement") by and among SEI, FCNH Sub and FBC, the Fox
Parties desire to enter into and perform their obligations under this Agreement;
and
WHEREAS, FCNH currently controls the Fox Children's Network, Inc. ("FCN"),
as a wholly-owned second tier subsidiary;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged by each of the parties
hereto), the Management Company and the Fox Parties hereby agree as follows:
1. DEFINITIONS: Capitalized terms used but not defined herein shall have the
-----------
respective meanings ascribed thereto in Exhibit "A" attached hereto and
incorporated herein by this reference.
1
2. ASSIGNMENT OF MERCHANDISING AGREEMENT:
-------------------------------------
2.1. Assignment: The Fox Parties hereby irrevocably and unconditionally
----------
assign and transfer to the Management Company, effective as of June 1, 1995, all
of the Fox Parties' right, title and interest in and to, and arising under, that
certain Merchandising Rights Acquisition Agreement dated as of July 1, 1990
between Fox Licensing and FCN (the "Merchandising Agreement"), free and clear of
any Liens, other than Excepted Liens; in addition, the Fox Parties hereby
irrevocably and unconditionally assign and transfer to the Management Company,
effective as of June 1, 1995, all of the Fox Parties' right, title and
interest, in their capacity as the licensor or transferor thereunder, in and to
and arising under the Existing Merchandising Licenses (as defined in Paragraph
16.4.2 below), free and clear of any Liens.
2.2. Assumption of Obligations: The Management Company hereby assumes and
-------------------------
agrees to perform all of the executory obligations of the Fox Parties under the
Merchandising Agreement; in addition, the Management Company hereby assumes and
agrees to perform all of the executory obligations of the Fox Parties, in their
capacity as the licensor or transferor thereunder, under the Existing
Merchandising Licenses.
2.3. Payment Adjustment: Concurrently with the execution of this
------------------
Agreement, the Fox Parties shall, and hereby agree to, pay to the Management
Company an amount equal to the aggregate of the distribution fees and
commissions received by or credited to the account of the Fox Parties in
connection with the Merchandising Agreement during the period commencing on June
1, 1995 and concluding on the date hereof.
2.4. Remittance of Funds: If, at any time from and after the date hereof
-------------------
and notwithstanding the assignment set forth in Paragraph 2.1 above, the Fox
Parties, in their capacity as the former licensor or transferor thereunder,
shall receive (or have credited to their account) any further sums under any
Existing Merchandising Agreement, the Fox Parties shall be deemed to hold the
same in trust for the Management Company and shall, and hereby agree to,
promptly remit an amount equal to such sums, without deduction of any kind, to
the Management Company.
3. ASSIGNMENT OF DISTRIBUTION AGREEMENT:
------------------------------------
3.1. Assignment: The Fox Parties hereby irrevocably and unconditionally
----------
assign and transfer to the Management Company, effective as of June 1, 1995, all
of the Fox Parties' right, title and interest in and to, and arising under, that
certain Distribution Agreement dated as of September 1, 1990 between Twentieth
and FCN (the "Distribution Agreement"), free and clear of
2
any Liens, other than Excepted Liens; in addition, the Fox Parties hereby
irrevocably and unconditionally assign and transfer to the Management Company,
effective as of June 1, 1995, all of the Fox Parties' right, title and interest,
in their capacity as the distributor or transferor thereunder, in and to and
arising under the Existing Distribution Licenses (as defined in Paragraph 16.5.2
below), free and clear of any Liens.
3.2. Assumption of Obligations: The Management Company hereby assumes and
-------------------------
agrees to perform all of the executory obligations of the Fox Parties under the
Distribution Agreement; in addition, the Management Company hereby assumes and
agrees to perform all of executory obligations of the Fox Parties, in their
capacity as the distributor or transferor thereunder, under the Existing
Distribution Licenses.
3.3. Payment Adjustment: Concurrently with the execution of this
------------------
Agreement, the Fox Parties shall, and hereby agree to, pay to the Management
Company an amount equal to the aggregate of the distribution fees and
commissions received by or credited to the account of the Fox Parties in
connection with the Distribution Agreement during the period commencing on June
1, 1995 and concluding on the date hereof.
3.4. Remittance of Funds: If, at any time from and after the date hereof
-------------------
and notwithstanding the assignment set forth in Paragraph 3.1 above, the Fox
Parties, in their capacity as the former distributor or transferor thereunder,
shall receive (or have credited to their account) any further sums under any
Existing Distribution Agreement, the Fox Parties shall be deemed to hold the
same in trust for the Management Company and shall, and hereby agree to,
promptly remit an amount equal to such sums, without deduction of any kind, to
the Management Company.
4. ASSIGNMENT OF EXISTING SERIES PROPERTIES:
----------------------------------------
4.1. Assignment: The Fox Parties, on behalf of the Fox Group, hereby
----------
irrevocably and unconditionally assign and transfer to the Management Company,
effective as of June 1, 1995, all of the Fox Group's right, title and interest
in and to, and in connection with, each of the television series described on
Schedule "4.1" attached hereto (and incorporated herein by this reference) (each
an "Existing Series Property" and collectively the "Existing Series
Properties"), including, without limitation, the Fox Group's right to hereafter
Exhibit and Exploit the same; without limiting the foregoing, the Fox Parties,
on behalf of the Fox Group, hereby irrevocably and unconditionally assign and
transfer to the Management Company, effective as of June 1, 1995, with respect
to each Existing Series Property, all of the Fox Group's right, title and
interest in and to: (i) the component parts of such Existing
3
Series Property, including, without limitation, the individual episodes thereof,
the characters, storylines, music and artwork created in connection therewith
and title(s) thereof; (ii) any and all physical materials embodying such
Existing Series Property, or any episode thereof, including, without limitation,
any and all filmed or videotaped materials, any and all sound materials and any
and all animation cels; (iii) the right to produce (and/or authorize any Person
to produce) additional theatrical, television or other productions based on such
Existing Series Property (or on the component parts thereof), including new
episodes thereof; and (iv) any and all agreements with third Persons, if any,
relating to the Fox Group's acquisition, development and/or production of such
Existing Series Property.
4.2. Restrictions: The Management Company's right to Exhibit and Exploit
------------
the rights assigned to the Management Company pursuant to Paragraph 4.1 above
with respect to each Existing Series Property is: (i) subject to any pre-
existing obligations or commitments in favor of third Persons arising under (a)
any Existing Merchandising License and/or Existing Distribution License in
connection with such Existing Series Property and/or (b) any of the agreements
referred to in clause (iv) of Paragraph 4.1 above; and (ii) limited to the
rights with respect to such Existing Series Property actually owned or
controlled by the Fox Group (as set forth on Schedule "4.1").
4.3. Payment Adjustment: Concurrently with the execution of this
------------------
Agreement, the Fox Parties shall, and hereby agree to, pay to the Management
Company an amount equal to the aggregate "net" revenues (i.e., revenues less
actual direct third party out-of-pocket costs) received by (or credited to the
account of) the Fox Group, in their capacity as the Person(s) owning or
controlling rights in and to the Existing Series Properties, during the period
commencing on June 1, 1995 and concluding on the date hereof from the Exhibition
or Exploitation of the Fox Group's rights with respect to the Existing Series
Properties.
4.4. Remittance of Funds: If, at any time from and after the date hereof
-------------------
and notwithstanding the assignment set forth in Paragraph 4.1 above, the Fox
Group, in their capacity as the Person(s) formerly owning or controlling rights
in and to the Existing Series Properties, shall receive (or have credited to
their account) any further revenues from the Exhibition or Exploitation of the
Fox Group's rights with respect to the Existing Series Properties, the Fox
Parties shall be deemed to hold the same in trust for the Management Company and
shall, and hereby agree to, promptly remit an amount equal to such "net"
revenues, without any further deduction of any kind, to the Management Company.
4
5. FOX KIDS CLUB:
-------------
5.1. Assignment: The Fox Parties hereby assign and transfer to the
----------
Management Company, effective as of June 1, 1995 and free and clear of all
Liens, other than Excepted Liens, the unincorporated division/operation of FBC
which is doing business as the "Fox Kids Club".
5.2. Assumption of Obligations: The Management Company hereby assumes and
-------------------------
agrees to perform all of the executory obligations of the "Fox Kids Club".
5.3. Access to Subscriber List: Notwithstanding the assignment set forth
-------------------------
in Paragraph 5.1 above, the Fox Group shall continue to have a non-exclusive
right of access to the Fox Kids Club subscriber list; the foregoing right of
access shall be at no cost to the Fox Group.
6. FOX KIDS COUNTDOWN:
------------------
6.1. Assignment: The Fox Parties hereby assign and transfer to the
----------
Management Company, effective as of June 1, 1995 and free and clear of all
Liens, other than Excepted Liens, the unincorporated division/operation of FBC
which is doing business as the "Fox Kids Countdown".
6.2. Assumption of Obligations: The Management Company hereby assumes and
-------------------------
agrees to perform all of the executory obligations of the "Fox Kids Countdown".
7. LICENSE OF FOX NAME: The Management Company shall have the right to use
-------------------
the name "Fox" and certain related trade and service names, marks, emblems and
logos in connection with the Management Company's business, subject to and in
accordance with the Fox License Agreement attached hereto as Exhibit "B" (and
incorporated herein by this reference).
8. ACTIONS OF THE MANAGEMENT COMPANY HEREUNDER: The approval/decision-making
-------------------------------------------
rights of the Management Company under this Agreement (including, without
limitation, Paragraph 12 hereof), unless otherwise noted, shall be exercised by
"Saban" (as defined in the Operating Agreement), until such time as a
"Terminating Event" (as defined in the Operating Agreement) has occurred.
5
9. FBC AFFILIATION AGREEMENTS:
--------------------------
9.1. Affiliation Clearance Levels/Maintenance:
----------------------------------------
9.1.1. Current Clearance Agreements: Schedule "9.1.1" attached
----------------------------
hereto (and incorporated herein by this reference) sets forth the existing
clearance arrangements for FCN as of November 1, 1995. FBC shall use its best
efforts to enforce all existing agreements with current FCN Station Affiliates.
The existing agreements are substantially in the form of Exhibit "C" to the FBC
Station Affiliation Agreement, a copy of which is attached hereto as Exhibit "C-
1" (and incorporated herein by this reference) and largely expire in 1998.
9.1.2. Clearance Levels: In the course of renewing Station
----------------
Affiliation Agreements, FBC shall (a) clear FCN in substantially the same
percentage of U.S. television households as is currently the case; and (b) clear
FCN in 75% of U.S. television households in substantially the same time periods
as is currently the case. These obligations will run through the tenth
anniversary hereof. In determining whether or not FBC has met its clearance
obligations, the following will apply:
(a) If FBC ensures continuing clearance on an existing FCN
Station Affiliate in a market or ensures comparable clearance in that market,
FBC will be deemed to have satisfied its clearance obligations as to that
market.
(b) If FBC deems it necessary to offer economic consideration to
a Station Affiliate to ensure clearance of FCN in a market, FBC will have the
right, subject to the Management Company's approval, to offer such economic
consideration at the Management Company's expense. If the Management Company
does not approve the offer of economic consideration, FBC will be deemed to have
satisfied its clearance obligation as to that market. In any case, FBC will
have the right to offer, at a minimum, the current economic arrangement embodied
in Exhibit "C" to Exhibit "C-1" hereof to Station Affiliates on a going forward
basis.
9.1.3. Fox O&Os: FBC will have the following obligations with
--------
regard to the Fox O&Os (in addition to its obligations under Paragraphs 9.1.1
and 9.1.2 above):
(a) FBC shall cause current Fox O&Os (i.e., the Stations which
constitute the Fox O&Os as of the date hereof) to continue to clear FCN in a
manner substantially equivalent to their current practice. If a Fox O&O in a
market wishes to cease clearing FCN and FBC can assure, at no cost to the
Management Company, comparable clearance in the relevant market on another
Station, the Fox O&O will be free to cease clearing FCN.
6
(b) With respect to any new Fox O&O (i.e., any Station which
becomes a Fox O&O after the date hereof) which is clearing children's
programming at the time of its acquisition by the Fox Group, FBC shall cause
such Station to offer to clear FCN in a manner comparable to such Station's then
existing clearance of children's programming, subject to then existing
contractual arrangements.
(c) With respect to any new Fox O&O (i.e., any Station which
becomes a Fox O&O after the date hereof) which is not clearing children's
programming at the time of its acquisition by the Fox Group, FBC will not be
required to cause such Station to clear FCN; provided, however, that FBC shall
use its best efforts and shall work together with the Management Company to
clear FCN on another Station in the market serviced by such new Fox O&O.
9.1.4. For the Benefit of the Management Company: The Fox Parties
-----------------------------------------
hereby acknowledge and agree that the undertakings and agreements by FBC
pursuant to this Paragraph 9.1 are for the express benefit of, and are
enforceable by, the Management Company.
9.2. Waiver of Right to Receive Certain Payments/Certain FBC
--------------------------------------------------------
Payments/Dropped Stations/Re-Categorizing Stations:
--------------------------------------------------
9.2.1. Waiver of Rights to Receive FCN Net Profits: FTSI, on behalf of
-------------------------------------------
the Designated Fox O&Os and effective as of June 1, 1995, hereby irrevocably and
unconditionally releases FBC and FCN from making, and waives any further right
to receive or demand, any payment of FCN Net Profits which would have otherwise
have become due and payable to the Designated Fox O&Os pursuant to the Station
Affiliation Agreements to which they are a party (collectively, the "Designated
Fox O&Os Waived Payments"). FTSI, for itself and on behalf of the Designated
Fox O&Os, and FBC hereby agree to execute an amendment to each of the Station
Affiliation Agreements to which the Designated Fox O&Os are a party confirming
the waiver and release set forth in this Paragraph 9.2.1. Such amendments are
attached hereto as Schedule 9.2.1.
9.2.2. Payment Adjustment: Concurrently with the execution of this
------------------
Agreement, the Fox Parties shall, and hereby agree to, cause FTSI, on behalf of
the Designated Fox O&Os, to return and rebate to FCN an amount equal to any and
all payments of FCN Net Profits (if any) received by (or credited to the account
of) FTSI, for the account of the Designated Fox O&Os, during the period
commencing on June 1, 1995 and concluding on the date hereof.
9.2.3. Dropped Stations: If one or more of the Designated Fox O&Os
----------------
shall cease to be an FCN Affiliate Station (a "Dropped Station"), then,
thereafter, FBC shall pay directly to the
7
Management Company an amount equal to the total FCN Net Profits available for
distribution in the relevant year multiplied by the following percentage: the
fraction, expressed as a percentage, whose numerator is the applicable Station's
cumulative aggregate audience delivery for FCN Programming from the commencement
of such Station becoming an FCN Affiliated Station through the date such Station
ceased to be an FCN Affiliated Station ("Exit Date") and whose denominator is
equal to the cumulative, aggregate audience delivery for FCN Programming for all
FCN Station Affiliates, past and present, through the Exit Date; for purposes of
this measurement, audience delivery shall be determined in accordance with the
method utilized as of September 3, 1990 by FBC with respect to FBC programming
(other than FCN Programming) in its formula for distribution of station
compensation to its Station Affiliates (except that the rating base shall be
kids, ages 2 to 11). The current applicable percentage figures for the
Designated Fox O&Os are set forth on Schedule "9.2.3" attached hereto (and
incorporated herein by this reference). Any sum payable pursuant to this
Paragraph 9.2.3 shall be paid by FBC to the Management Company concurrently with
the payment corresponding of FCN Net Profits to the then current FCN Affiliated
Stations.
9.2.4. Re-Categorizing Fox O&OS: Notwithstanding the parties'
current designation of the Fox O&Os which are to be included within the
"Designated Fox O&Os" for purposes of this Agreement, if, at any time hereafter,
the Fox O&Os which do not constitute "Designated Fox O&Os" (the "Excluded Fox
O&Os) become entitled, in the aggregate, to a distributive share of the FCN Net
agreed that, for purposes of calculating FCN Net Profits, the ratings of the
Designated Fox O&Os will continue to be included in the applicable computations,
notwithstanding the waiver of payment set forth in Paragraph 9.2.1 above), FBC
shall designate one or more of the Excluded O&Os to thereafter be included
within the "Designated Fox O&Os", on terms and conditions to be negotiated in
good faith at the time between FBC and the Management Company.
10. ADMINISTRATION AGREEMENT:
------------------------
10.1. Administration Agreement: The Fox Parties hereby irrevocably and
------------------------
unconditionally assign and transfer to the Management Company, effective as of
June 1, 1995, all of the Fox Parties' right, title and interest in and to, and
arising under, that certain Administration Agreement dated as of February 7,
1990 between FBC and FCN (the "Administration Agreement"), free and clear of any
Liens, other than Excepted Liens.
10.2. Assumption of Obligations: The Management Company hereby assumes
-------------------------
and agrees to perform all of the executory obligations of FBC under the
Administration Agreement.
8
10.3. Payment Adjustment: Concurrently with the execution of this
------------------
Agreement, the Fox Parties shall, and hereby agree to, pay to the Management
Company an amount equal to the aggregate of the fees and commissions received by
or credited to the account of FBC in connection with the Administration
Agreement during the period commencing on June 1, 1995 and concluding on the
date hereof.
10.4. Remittance of Funds: If, from and after the date hereof and
-------------------
notwithstanding the assignment set forth in Paragraph 10.2 above, FBC shall
receive (or have credited to its account) any further fees and commissions under
the Administration Agreement, FBC shall be deemed to hold the same in trust for
the Management Company and shall, and hereby agrees to, promptly remit an amount
equal to such sums, without deduction of any kind, to the Management Company.
11. FOX NON-COMPETITION PROVISIONS:
------------------------------
The Fox Parties, on behalf of the Fox Group, hereby agree that the Fox
Group will not compete with the Management Company (except and to the limited
extent provided in Paragraph 12.2 below) as follows:
(a) by operating a U.S. terrestrial broadcasting service featuring
multiple programs transmitted as one or more discrete blocks of programming
targeted at the 2-11 year old audience, other than FCN; and/or
(b) by operating a programming service primarily targeted at the 2-11
year old audience in the U.S. by means of cable or other Non-Standard Television
technology (specifically, excluding, however, any "on-line" computer service
such as Delphi).
For purposes of this Agreement, a programming service primarily targeted at
the 2-11 year old audience, whether delivered by means of terrestrial broadcast
television or Non-Standard Television, shall constitute a "Kids Service".
12. MANAGEMENT COMPANY OPPORTUNITIES:
--------------------------------
12.1. Programming Service Opportunities:
---------------------------------
(a) The Fox Parties, on behalf of the Fox Group, shall offer
("Programming Service Offer") the Management Company the opportunity to own the
following (each, an "Offered Programming Service"): any non-U.S. Kids Service
which would bear the "Fox" name (in whole or in part).
(b) If the Management Company does not decide to accept or
conditionally accept (as set forth in Paragraph 12.1(d) below)
9
the Programming Service Offer within 20 days of the Management Company's receipt
thereof, the Fox Group will be free to itself pursue the applicable Offered
Programming Service on substantially the same terms as were offered to the
Management Company pursuant to Paragraph 12.1.(a) above. In the case of a
Programming Service Offer relating to an Offered Programming Service which
broadcasts during only a portion of a day on a given satellite transponder or
broadcast or cable channel, the Programming Service Offer presented by the Fox
Parties will relate only to the portion of program time actually occupied by the
Offered Programming Service.
(c) In the event that the Fox Group is prepared to pursue an Offered
Programming Service (which had been offered to but was ultimately not accepted
by the Management Company) on terms which are not substantially the same terms
as were offered to the Management Company pursuant to Paragraph 12.1.(a), the
Fox Parties, on behalf of the Fox Group, shall first offer the Offered
Programming Service to the Management Company on such other terms and conditions
(a "Revised Programming Service Offer") before pursuing the same. If the
Management Company does not decide to accept or conditionally accept (as set
forth in Paragraph 12.1(d) below) the Revised Programming Service Offer within
20 days of the Management Company's receipt thereof, the Fox Group will be free
to pursue the Offered Programming Service on substantially the same terms as
were offered to the Management Company pursuant to this Paragraph 12.1.(c).
The provisions of this Paragraph 12.1.(c) shall apply each time that the Fox
Group is prepared to pursue an Offered Programming Service on terms which are
not substantially the same as those last offered to the Management Company.
(d) The Management Company shall have the right to condition its
acceptance of a Programming Service Offer or a Revised Programming Service
Offer, as applicable, upon the Management Company's securing of financing (on
terms acceptable to the Management Company) for the applicable transaction
and/or upon the Management Company's satisfaction with the outcome of its due
diligence review of the Offered Program Service. If the Management Company gives
a conditional acceptance, but does not, within the 25 business day period
following immediately thereafter, unconditionally accept the applicable
Programming Service Offer or Revised Programming Service Offer, the Fox Group
will be free to itself pursue the applicable Offered Programming Service on
substantially the same terms as were offered to the Management Company pursuant
to applicable offer and the Management Group shall be deemed to have rejected
the applicable offer (subject always, however, to the Management Company's
continuing rights and the Fox Parties' continuing obligations under Paragraph
12.1(c) above).
(e) If the Management Company accepts (as distinguished from the
Management Company conditionally accepting) a Programming
10
Service Offer or a Revised Programming Service Offer pursuant to this Paragraph
12.2, the parties shall use good faith efforts to conclude the purchase and sale
(or the creation, if applicable) of the applicable Offered Programming Service
as expeditiously as is reasonably practicable, taking into account any and all
regulatory or other legal requirements.
12.2. New Acquisitions:
----------------
(a) If the Fox Group acquires a business which includes a U.S. Kids
Service (a "Business Acquisition"), the Fox Parties shall cause the Fox Group to
allocate, in good faith, a portion of the Fox Group's total purchase price for
the acquired business to such U.S. Kids Service (the "Proportionate Price").
(b) The Fox Parties shall then, on behalf of the Fox Group, offer
("Service Acquisition Offer") the Management Company the opportunity to acquire
such U.S. Kids Service for the Proportionate Price.
(c) If the Management Company does not decide to accept or
conditionally accept (pursuant to Paragraph 12.2(e) below) the Service
Acquisition Offer within 20 days of the date of the Management Company's receipt
thereof, the Fox Group will be free to retain or dispose of such U.S. Kids
Service as it sees fit, subject to Paragraph 12.2.(d) below.
(d) If the Fox Group is prepared to dispose of a U.S. Kids Service
(which had been offered to but was ultimately not accepted by the Management
Company) for less than the Proportionate Price (the "Reduced Price"), the Fox
Parties shall, on behalf of the Fox Group, first offer ("Revised Service
Acquisition Offer") the U.S. Kids Service to the Management Company at the
Reduced Price. If the Management Company does not decide to accept or
conditionally accept (pursuant to Paragraph 12.2(e) below) the Revised Service
Acquisition Offer within 20 days after the date of the Management Company's
receipt thereof, the Fox Group will be free to retain or dispose of such U.S.
Kids Service as it sees fit, subject to being obligated to re-offer the same to
the Management Company pursuant to this Paragraph 12.2.(d) if (and each time
that) the Fox Group offers to dispose of such U.S. Kids Service to a third
Person at a price below the Reduced Price last offered to the Management Company
pursuant to this Paragraph 12.2.(d).
(e) The Management Company shall have the right to condition its
acceptance of a Service Acquisition Offer or a Revised Service Acquisition
Offer, as applicable, upon the Management Company's securing of financing (on
terms acceptable to the Management Company) for the applicable transaction
and/or upon the Management Company's satisfaction with the outcome of its due
11
diligence review of the offered U.S. Kids Service. If the Management Company
gives a conditional acceptance, but does not, within the 25 business day period
following immediately thereafter, unconditionally accept the applicable Service
Acquisition Offer or Revised Service Acquisition Offer, the Fox Group will be
free to retain or dispose of such U.S. Kids Service, subject always, however, to
the Management Company's continuing rights and the Fox Parties' continuing
obligations under Paragraph 12.2(d) above.
(f) If the Management Company accepts (as distinguished from the
Management Company conditionally accepting) a Service Acquisition Offer or
Revised Service Acquisition Offer pursuant to this Paragraph 12.2, the parties
shall use good faith efforts to conclude the purchase and sale of the applicable
U.S. Kids Service as expeditiously as is reasonably practicable, taking into
account any and all regulatory or other legal requirements.
(g) In connection with any U.S. Kids Service which the Management
Company has elected to acquire hereunder, it shall be incumbent upon the
Management Company to provide or otherwise secure the financing necessary to
make the purchase thereof. If, notwithstanding the Management Company having
exhausted all reasonable, commercially practicable means of securing the
financing for such purchase, the Management Company is unable to secure the
necessary financing, then the Fox Parties shall provide the necessary financing
to the Management Company, on a market rate basis (with the balance of the terms
and conditions of such financing to be negotiated at the time, in good faith and
upon commercially reasonable terms, between the Fox Parties and the Management
Company).
(h) In the event that the Proportionate Price for a U.S. Kids Service
allocated by the Fox Group is greater than or equal to fifty percent (50%) of
the price of the corresponding Business Acquisition, the Management Company
shall have the right, at any time within 20 days after the Management Company's
receipt of the applicable Service Acquisition Offer (or 25 business days after
the Management Company's conditional acceptance of the applicable Service
Acquisition Offer, if applicable), to elect to submit the issue of the proper
valuation of the Proportionate Price to binding arbitration (in accordance with
the rules and procedures of the American Arbitration Association). In such
event, all relevant time periods set forth in this Paragraph 12.2 shall be
"tolled" until the resolution of the arbitration.
12.3. Fox Originated Programs:
-----------------------
(a) The Fox Parties shall, on behalf of the Fox Parties and their
Controlled Affiliates, offer ("First Run Exhibition Offer") the Management
Company the opportunity to acquire the first
12
run exhibition rights (at a minimum) to any new programming suitable to a Kids
Service ("New Kids Programming") prior to its sale/license to any third Person;
provided, that the foregoing shall be subject to Paragraph 12.3(b) below. The
parties specifically acknowledge that the rights offered by the Fox Parties as
part of a First Run Exhibition Offer may (but need not) include, without
limitation, the right to produce the applicable New Kids Programming and/or the
right to acquire and exploit the motion picture and/or the allied and ancillary
rights in connection with the applicable New Kids Programming.
(b) Notwithstanding the provisions of Paragraph 12.3(a) above: (i)
the Fox Parties are free to license, in their sole discretion, the first run
exhibition rights to any New Kids Programming to any broad based entertainment
network (which is not a Kids Service) for (but only for) prime time or late
night broadcast/cablecast (e.g., such rights may be licensed to ABC, CBS, NBC,
----
USA or HBO for prime time or late night broadcast/cablecast, but not the Cartoon
Channel or Nickelodeon); and (ii) the term "New Kids Programming" shall not
include programming produced for or on behalf of the Fox Group which is derived
from properties originally launched by the Fox Group other than on FCN (e.g.,
----
none of the following would constitute "New Kids Programming" for purposes of
this Paragraph 12.3: a children's version of THE SIMPSONS, an animated show
------------
featuring characters from HOME ALONE, or an animated version of a Xxxxxx Xxxxxxx
----------
book such as Where The Wild Things Are).
-------------------------
(c) If the Management Company does not decide to accept (or
conditionally accept, pursuant to Paragraph 12.3(e) below) the First Run
Exhibition Offer within 20 days of the Management Company's receipt thereof, the
Fox Group will be free to enter into a first run exhibition agreement with a
third Person with respect to the applicable New Kids Programming, subject to
Paragraph 12.3.(d) below.
(d) In the event that the Fox Group is prepared to enter into an
agreement with a third Person with respect to any New Kids Programming (which
had been offered to but was ultimately not accepted by the Management Company)
on terms and conditions less favorable to the Fox Group than those last offered
to the Management Company, the Fox Parties shall, on behalf of the Fox Group,
first offer ("Revised First Run Exhibition Offer") the applicable New Kids
Programming to the Management Company on such other terms and conditions. If the
Management Company does not decide to accept (or conditionally accept, pursuant
to Paragraph 12.3(e) below) the Revised First Run Exhibition Offer within 20
days after the date of the Management Company's receipt thereof, the Fox Group
will be free to enter into a first run exhibition agreement with a third Person
with respect to the applicable New
13
Kids Programming, subject to being obligated to re-offer the same to the
Management Company pursuant to this Paragraph 12.3.(d) if (and each time that)
the Fox Group offers to license the first run exhibition rights to such New Kids
Programming to a third Person on terms and conditions less favorable to the Fox
Group than those last offered to the Management Company pursuant to this
Paragraph 12.3.(d).
(e) The Management Company shall have the right to condition its
acceptance of a First Run Exhibition Offer or a Revised First Run Exhibition
Offer, as applicable, upon the Management Company's securing of financing (on
terms acceptable to the Management Company) for the applicable transaction
and/or upon the Management Company's satisfaction with the outcome of its due
diligence review of the offered New Kids Programming. If the Management Company
gives a conditional acceptance, but does not, within the 25 business day period
following immediately thereafter, unconditionally accept the applicable First
Run Exhibition Offer or Revised First Run Exhibition Offer, the Fox Group will
be free to enter into a first run exhibition agreement with a third Person with
respect to the applicable New Kids Programming, subject always, however, to the
Management Company's continuing rights and the Fox Parties continuing
obligations under Paragraph 12.3(d) above.
(f) If the Management Company accepts (as distinguished from the
Management Company conditionally accepting) a First Run Exhibition Offer or
Revised First Run Exhibition Offer pursuant to this Paragraph 12.3, the parties
shall use good faith efforts to conclude the documentation evidencing such
transaction as expeditiously as is reasonably practicable, taking into account
any and all regulatory or other legal requirements.
13. OPPORTUNITIES TO BE MADE AVAILABLE TO THE FOX PARTIES:
-----------------------------------------------------
13.1. Programming:
-----------
13.1.1. Undertaking: The Management Company, on its own behalf and
-----------
on behalf of FCN and the Management Company's Operating Entities, hereby agrees:
(i) to make the programming of the Management Company, FCN and/or the Management
Company's Operating Entities (collectively, the "MC Programming") available, at
market rates, to program services which are offered to and rejected by the
Management Company (pursuant to Paragraph 12.1 above) and which thereafter
become owned or operated by the Fox Group (collectively, the "Covered Fox
Services"); and (ii) to negotiate in good faith with any presently existing Fox
or Fox-Affiliate-owned program services that desires to license some or all of
the MC Programming. Notwithstanding the foregoing: (a) the Management Company
shall have no obligation to the Fox Group in connection with any
14
particular Covered Fox Service above unless such Covered Fox Service shall
commit to license, on a "pay-or-play" basis, not less than 80% of the MC
Programming made available by the Management Company in the applicable market
serviced by such Covered Fox Service; (b) the obligations set forth in clauses
(i) and (ii) above, as they relate to the programming of the SEI Group, is
subject to any pre-existing contractual obligations of the SEI Group in favor of
third Persons; and (c) the Covered Fox Services shall not include any U.S. Kids
Service offered to but rejected by the Management Company pursuant to Paragraph
12.2 above.
13.1.2. Exceptions/Restrictions: Notwithstanding the foregoing, the
-----------------------
Management Company's obligation to make any particular MC Programming available
to a Covered Fox Service shall be subject to: (i) any and all applicable Laws,
(ii) any "holdback"-type restrictions applicable to such programming and (iii)
any limitations or restrictions (including, without limitation, any limitations
or restrictions expressed in terms of term, territory or media) on the rights
controlled by the Management Company with respect to such programming.
13.1.3 Right to Sublicense: With respect to any MC Programming made
-------------------
available to and licensed by a Covered Fox Service pursuant to this Paragraph
13.1.1, such Covered Fox Service shall have the right to sublicense the same
(within the limits and restrictions of the applicable license); provided, that
in no event shall any Covered Fox Service be entitled to sublicense any MC
Programming within the United States.
13.2. Third Party Services: The Fox Group will have a right of first
--------------------
negotiation and first refusal to provide, on market terms, any of the
distribution services which the Fox Group provides in the normal course of their
business and which are described on Schedule "13.2" attached hereto (and
incorporated herein by this reference), which the Management Company, itself or
on behalf of FCN and the Management Company Operating Entities, desires to
obtain from a third Person provider ("Required Third Party Services"), as
follows:
(a) With respect to any such Required Third Party Services, the
Management Company shall offer (a "Required Third Party Services Offer") the Fox
Parties the opportunity to have the Fox Group perform such Required Third Party
Services; provided, that the Management Company's foregoing obligation, as set
forth above and as it relates to the programming of the SEI Group, is subject to
any pre-existing contractual obligations of the SEI Group in favor of third
Persons; provided further, that notwithstanding the foregoing obligation, the
Management Company and any Management Company Operating Entities shall have the
right to obtain the Required Third Party Services from Ventura Film
15
Distributors, B.V., a Netherlands corporation and/or Atalanta Films Australia
(Pty) Ltd., an Australian corporation, without first offering the Fox Parties
the opportunity to perform the same.
(b) If the Fox Parties, on behalf of the Fox Group, do not decide to
accept the Required Third Party Services Offer within 20 days of the Fox
Parties' receipt thereof, the Management Company will be free to engage a third
Person to perform the Required Third Party Services, subject to Paragraph
13.2.(c) below.
(c) If the Management Company is prepared to enter into an agreement
with a third Person to perform any Required Third Party Services (which had been
offered to but not accepted by the Fox Parties) on terms and conditions less
favorable to the Management Company than those last offered to the Fox Parties,
the Management Company shall first offer ("Revised Required Third Party Services
Offer") the applicable Required Third Party Services to the Fox Parties on such
other terms and conditions. If the Fox Parties do not decide to accept the
Revised Required Third Party Services Offer within 20 days after the date of the
Fox Parties' receipt thereof, the Management Company will be free to enter into
an agreement with a third Person with respect to the Required Third Party
Services on such terms and conditions, subject to being obligated to re-offer
the same to the Fox Parties pursuant to this Paragraph 13.2.(c) if (and each
time that) the Management Company offers to engage a third Party to perform the
applicable Required Third Party Services on terms and conditions less favorable
to the Management Company than those last offered to the Fox Group pursuant to
this Paragraph 13.2.(c).
(d) If the Fox Parties accept a Required Third Party Services Offer or
Revised Required Third Party Services Offer pursuant to this Paragraph 13.2, the
parties shall use good faith efforts to conclude the documentation evidencing
such transaction as expeditiously as is reasonably practicable, taking into
account any and all regulatory or other legal requirements.
(e) By way of clarification, the Fox Group's rights under this
Paragraph 13.2 do not apply in the circumstance where the Management Company
intends to perform the applicable distribution function itself or through a
member thereof. For example, the Management Company is free to produce a motion
picture version of one of its properties on its own, provided, however, that if
the Management Company desires to engage an un-Affiliated third Person to
distribute such motion picture, the Fox Group would have the rights described in
Paragraphs 13.2(a)-(c) above.
14. FCN INDEMNIFICATION AGREEMENT: Concurrently herewith, FBC and FCN are
-----------------------------
entering into an Indemnification Agreement in the form of Exhibit "D" attached
hereto (and incorporated herein by this
16
reference). FBC hereby acknowledges and agrees that the Management Company, on
behalf of (and if necessary, in the name of) FCN shall have the right to enforce
FCN's rights arising thereunder.
15. COVENANT REGARDING CERTAIN FOX "PLATFORMS": The Fox Parties, on behalf of
------------------------------------------
the Fox Group, hereby agree they will not, and will not permit, any non-U.S.
programming "platform" which is controlled by the Fox Group to solicit from any
third Persons an equity interest in any Kids Service intended for possible
inclusion within the applicable programming "platform"; however, the Fox Parties
or such non-U.S. programming "platform" may take an equity interest in a third
Person's Kids Service so long as that third Person initiated the discussions.
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FOX PARTIES:
------------------------------------------------------------
The Fox Parties hereby represent, warrant and covenant as follows:
16.1. Corporate Power: Each of the Fox Parties has the requisite
---------------
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder.
16.2. Duly Authorized: The execution and delivery of this Agreement
---------------
by each of the Fox Parties and the consummation by each of the Fox Parties of
the transactions contemplated hereby have been duly authorized and no other
corporate proceeding or consent on the part of the Fox Parties is necessary to
authorize this Agreement and the transactions contemplated hereby.
16.3. Power to Act on Behalf of the Fox Group: The Fox Parties have
---------------------------------------
the right to act on behalf of, and to commit and obligate, the Fox Group in the
manner contemplated by this Agreement.
16.4. Merchandising Agreement:
-----------------------
16.4.1. Exhibit "E" attached hereto (and incorporated herein by this
reference) is a true and correct copy of the Merchandising Agreement (including
any and all amendments, supplements, exhibits and/or schedules thereto).
16.4.2. Schedule "16.4.2" attached hereto (and incorporated herein
by this reference) sets forth a true and complete listing of each and every
presently effective license entered into by Fox Licensing pursuant to the
exercise of its rights under the Merchandising Agreement (the "Existing
Merchandising Licenses").
17
16.4.3. Fox Licensing has not heretofore transferred or assigned any
of its rights or interests in the Merchandising Agreement.
16.4.4. Fox Licensing has the right to freely assign to the
Management Company (a) Fox Licensing's right, title and interest in and to the
Merchandising Agreement and (b) Fox Licensing's right, title and interest in and
to each of the Existing Merchandising Licenses.
16.4.5. Fox Licensing is not in breach or default of the
Merchandising Agreement, nor, to the best knowledge of Fox Licensing (including
that which it should have known in the exercise of reasonable prudence), is FCN;
with respect to the each of the Existing Merchandising Licenses, Fox Licensing
is not in breach or default thereof, nor, to the best knowledge of Fox Licensing
(including that which it should have known in the exercise of reasonable
prudence), is the licensee thereunder.
16.5. Distribution Agreement:
----------------------
16.5.1. Exhibit "F" attached hereto (and incorporated herein by this
reference) is a true and correct copy of the Distribution Agreement (including
any and all amendments, supplements, exhibits and/or schedules thereto).
16.5.2. Schedule "16.5.2" attached hereto (and incorporated herein
by this reference) sets forth a true and complete listing of each and every
presently effective license entered into by Twentieth pursuant to the exercise
of its rights under the Distribution Agreement (the "Existing Distribution
Licenses").
16.5.3. Twentieth has not heretofore transferred or assigned any of
its rights or interests in the Distribution Agreement.
16.5.4. Twentieth has the right to freely assign to the Management
Company (a) Twentieth's right, title and interest in and to the Distribution
Agreement and (b) Twentieth's right, title and interest in and to each of the
Existing Distribution Licenses.
16.5.5. Twentieth is not in breach or default of the Merchandising
Agreement, nor, to the best knowledge of Twentieth (including that which it
should have known in the exercise of reasonable prudence), is FCN; with respect
to the each of the Existing Distribution Licenses, Twentieth is not in breach or
default thereof, nor, to the best knowledge of Twentieth (including that which
it should have known in the exercise of reasonable prudence), is the licensee
thereunder.
18
16.6. Administration Agreement:
------------------------
16.6.1. Exhibit "G" attached hereto (and incorporated herein by this
reference) is a true and correct copy of the Administration Agreement (including
any and all amendments, supplements, exhibits and/or schedules thereto).
16.6.2. FBC has not heretofore transferred or assigned any of its
rights or interests in the Administration Agreement.
16.6.3. FBC has the right to freely assign to the Management Company
all of FBC's right, title and interest in and to the Administration Agreement.
16.6.4. FBC is not in breach or default of the Administration
Agreement, nor, to the best knowledge of FBC (including that which it should
have known in the exercise of reasonable prudence), is FCN.
16.7. Existing Series Properties:
--------------------------
16.7.1. Schedule 4.1 attached hereto (and incorporated herein by
this reference): (i) sets forth, as the "Existing Series Properties", a true and
accurate list of the television series programming which was originally launched
on FCN or which is derived from any television series programming which was
originally launched on FCN; and (ii) fully and accurately sets forth, in summary
form, the nature and extent of the Fox Group's rights in connection with each of
the Existing Series Properties.
16.7.2. Neither the Existing Series Properties nor any part thereof
infringes upon the copyright, common-law right or literary, dramatic, musical or
motion picture right of any Person whomsoever; neither the Existing Series
Properties nor any part thereof constitute a libel or defamation of any Person
or an invasion of any other rights (including, without limitation, privacy or
publicity rights) of any Person. Neither the use, reproduction, performance or
exhibition of the Existing Series Properties, nor any part thereof, by or on
behalf of the Management Company, nor the exercise of any of the rights therein
which are included in the assignment set forth in Paragraph 4.1, will in any way
infringe upon the rights of any Person.
16.7.3. The Fox Group has not granted, assigned, mortgaged, pledged
or hypothecated any right, title and interest of any kind whatsoever in or to
any of the Existing Series Properties, other than pursuant to the Merchandising
License Agreement and/or the Distribution Agreement.
19
16.7.4. There are no Liens, other than Excepted Liens, on the
Existing Literary Properties or adverse claims with respect thereto, nor is
there pending any litigation involving the Existing Literary Properties or any
part thereof.
16.8. FOX KIDS CLUB:
-------------
16.8.1. Schedule "16.8.1" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which the "Fox Kids Club" is a party or to which the
business or assets of the "Fox Kids Club" are subject which (i) creates any
liability on the part of the "Fox Kids Club" or which commits or obligates the
"Fox Kids Club" to incur any liability which is in excess of $200,000 and/or
(ii) calls for the performance of services on the part of the "Fox Kids Club"
over a time period in excess of one year.
16.8.2. FBC is the sole owner of all of the rights, businesses and
assets of the "Fox Kids Club" and has not heretofore transferred or assigned any
of its rights or interests therein to any third Person.
16.8.3. FBC has the right to freely assign to the Management Company
all of FBC's right, title and interest in and to rights, businesses and assets
of the "Fox Kids Club".
16.8.4. FBC is not in breach or default of any of the agreements,
written or oral, to which the "Fox Kids Club" is a party or to which the
businesses or assets of the "Fox Kids Club" are subject.
16.8.5. The aggregate liabilities of the "Fox Kids Club", both "on-
balance sheet" and "off-balance sheet," (i) do not exceed, in the aggregate,
$1,000,000 and (ii) do not include any liabilities arising after June 1, 1995
except in the ordinary course of the business of "Fox Kids Club."
16.8.6. The $5,000,000 indebtedness owed by "Fox Kids Club" to FBC
as of November 1, 1995, has been irrevocably and unconditionally forgiven by
FBC.
16.9. FOX KIDS COUNTDOWN:
------------------
16.9.1. Schedule "16.9.1" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which "Fox Kids Countdown" is a party or to which the
business or assets of "Fox Kids Countdown" are subject which (i) creates any
liability on the part of "Fox Kids Countdown" or which commits or obligates
20
"Fox Kids Countdown" to incur any liability which is in excess of $200,000
and/or (ii) calls for the performance of services on the part of "Fox Kids
Countdown" over a time period in excess of one year.
16.9.2. FBC is the sole owner of all of the rights, businesses and
assets of "Fox Kids Countdown" and has not heretofore transferred or assigned
any of its rights or interests therein to any third Person.
16.9.3. FBC has the right to freely assign to the Management Company
all of FBC's right, title and interest in and to rights, businesses and assets
of "Fox Kids Countdown".
16.9.4. FBC is not in breach or default of any of the agreements,
written or oral, to which "Fox Kids Countdown" is a party or to which the
businesses or assets of "Fox Kids Countdown" are subject.
16.9.5 The aggregate liabilities of "Fox Kids Countdown", both "on-
balance sheet" and "off-balance sheet", (i) do not exceed, in the aggregate,
$1,000,000 and (ii) do not include any liabilities arising after June 1, 1995
except in the ordinary course of the business of "Fox Kids Countdown".
16.10. STORY MAKERS, INC.:
------------------
16.10.1. Story Makers, Inc., a Delaware corporation ("Story"), is a
first-tier wholly-owned direct subsidiary of FCP and a second-tier wholly-owned
indirect subsidiary of FCNH Sub.
16.10.2. Schedule "16.10.2" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which Story is a party or to which the business or assets of
Story are subject which (i) creates any liability on the part of Story or which
commits or obligates Story to incur any liability which is in excess of $200,000
and/or (ii) calls for the performance of services on the part of Story over a
time period in excess of one year.
16.10.3. The aggregate liabilities of Story, both "on-balance sheet"
and "off-balance sheet", (i) do not exceed, in the aggregate, $1,000,000 and
(ii) do not include any liabilities arising after June 1, 1995 except in the
ordinary course of the business of Story.
16.10.4. The $124,000 indebtedness owed by Story to FBC as of
November 1, 1995, has been irrevocably and unconditionally forgiven by FBC.
21
16.11. FOX CHILDREN'S PRODUCTIONS, INC.:
--------------------------------
16.11.1. Fox Children's Productions, Inc., a Delaware corporation
("FCP"), is a first-tier wholly-owned direct subsidiary of FCNH Sub.
16.11.2. Schedule "16.11.2" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which FCP is a party or to which the business or assets of
FCP are subject which (i) creates any liability on the part of FCP or which
commits or obligates FCP to incur any liability which is in excess of $200,000
and/or (ii) calls for the performance of services on the part of FCP over a time
period in excess of one year.
16.11.3. The aggregate liabilities of FCP, both "on-balance sheet"
and "off-balance sheet", (i) do not exceed, in the aggregate, $1,000,000 and
(ii) do not include any liabilities arising after June 1, 1995 except in the
ordinary course of the business of FCP.
16.12. FOX CHILDREN'S MUSIC, INC.:
--------------------------
16.12.1. Fox Children's Music, Inc., a Delaware corporation ("FC
Music"), is a first-tier wholly-owned direct subsidiary of FCN and a second-tier
wholly-owned indirect subsidiary of FCNH Sub.
16.12.2. Schedule "16.12.2" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which FC Music is a party or to which the business or assets
of FC Music are subject which (i) creates any liability on the part of FC Music
or which commits or obligates FC Music to incur any liability which is in excess
of $200,000 and/or (ii) calls for the performance of services on the part of FC
Music over a time period in excess of one year.
16.12.3. The aggregate liabilities of FC Music, both "on-balance
sheet" and "off-balance sheet", (i) do not exceed, in the aggregate, $1,000,000
and (ii) do not include any liabilities arising after June 1 1995 except in the
ordinary course of the business of FC Music.
16.13. FOX KID'S MUSIC, INC.:
---------------------
16.13.1. Fox Kid's Music, Inc., a Delaware corporation ("FK Music"),
is a first-tier wholly-owned direct subsidiary of FCN and a second-tier wholly-
owned indirect subsidiary of FCNH Sub.
22
16.13.2. Schedule "16.13.2" attached hereto (and incorporated herein
by this reference) sets forth a true and correct list of any and all agreements,
written or oral, to which FK Music is a party or to which the business or assets
of FK Music are subject which (i) creates any liability on the part of FK Music
or which commits or obligates FC Music to incur any liability which is in excess
of $200,000 and/or (ii) calls for the performance of services on the part of FK
Music over a time period in excess of one year.
16.13.3. The aggregate liabilities of FK Music, both "on-balance
sheet" and "off-balance sheet", (i) do not exceed, in the aggregate, $1,000,000
and (ii) do not include any liabilities arising after June 1, 1995 except in the
ordinary course of the business of FK Music.
16.14. Consents: Except as set forth on Schedule 16.14 attached hereto
--------
(and incorporated herein by this reference), neither the execution and delivery
of this Agreement by the Fox Parties nor the consummation of the transactions
pursuant hereto will require any consent, approval, or authorization of, waiver
by, notification to, or filing with, any court, governmental agency or
regulatory or administrative authority (each, a "Governmental Entity") on the
part of the Fox Group.
16.15. No Violation: The execution and delivery of this Agreement by
------------
the Fox Parties and the performance by the Fox Parties of their obligations
hereunder do not and will not (i) violate, conflict with, or constitute or
result in a breach of, any term, condition or provision of, or constitute a
default (or an event which, with notice or the lapse of time, or both, would
constitute a default) under (A) the constitutive documents of any of the Fox
Parties, or (B) any mortgage, indenture, loan or credit agreement or any other
agreement or instrument to which any of the Fox Parties is a party, or pursuant
to which any of the Fox Parties is the direct or indirect obligor, or by which
any of the Fox Parties or any of their Affiliates' properties are bound or
affected, (ii) violate any law, regulation, judgment, injunction, order or
decree binding upon any of the Fox Parties or any of their Affiliates, (iii)
result in the loss of any license, franchise, permit, legal privilege or legal
right enjoyed or possessed by any of the Fox Parties or any of their Affiliates,
or (iv) require the consent of any third Person (including a Governmental
Entity). None of the Fox Parties and none of their Affiliates are in violation
of any statute, judgement, decree, order, rule or regulation applicable to it,
which, singly or in the aggregate, has materially adversely affected or could
reasonably be expected to materially adversely affect such Person's ability to
perform its obligations hereunder.
23
16.16. FCN Affiliated Stations: Schedule 9.1.1 sets forth a true and
-----------------------
correct list of all current FCN Affiliated Stations as of November 1, 1995. The
Fox Parties have heretofore provided the Management Company with a true and
correct copy of the Station Affiliation Agreement (together with any and all
Exhibits, Schedules, amendments or supplements thereto) currently in effect for
each current FCN Affiliated Station.
16.17. Undertaking re Warner Bros. Agreement: The Fox Parties shall
-------------------------------------
indemnify and hold harmless the "Management Company Indemnified Parties" (as
defined in Paragraph 18.1 below), as well as FCN and the Management Company's
Operating Entities, from and against all loss, cost, liabilities and expenses
(including, without limitation, reasonable attorneys' fees, court costs and any
judgment and settlement payments) or claims suffered by, incurred by or imposed
upon any of the foregoing Persons by reason of any penalties arising under
and/or any breach, or alleged breach, by FCN pursuant to, the May 29, 1991
"blind programming" agreement between FCN and Warner Bros. Domestic Television.
For purposes of the indemnification obligation undertaken by the Fox Parties in
this Paragraph 16.17, the indemnification provisions of 18.4 below shall apply
hereto, as if herein set forth in full and as if all of the Persons entitled to
indemnification under this Paragraph 16.17 were included in the collective term
"Management Company Indemnified Parties" (as used therein).
16.18. Designated Fox O&Os Waived Payments: The waiver by FTSI, on
-----------------------------------
behalf of the Designated Fox O&Os, of the right to receive the Designated Fox
O&Os Waived Payments pursuant to Paragraph 9.2.1: (i) will not result in the
Designated Fox O&Os Waived Payments being made available, or deemed available,
for distribution as FCN Net Profits to any other FCN Affiliated Station(s); and
(ii) will not give rise, under any FCN Affiliated Station's Station Affiliation
Agreement, to any FCN Affiliated Station having the right to challenge or claim
an interest in the dividend(s) from FCN to FCNH Sub contemplated under Section
5.9 of the Operating Agreement.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MANAGEMENT COMPANY:
-------------------------------------------------------------------
The Management Company hereby represents, warrants and covenants, as
follows:
17.1. Power as L.L.C.: The Management Company has the requisite power
---------------
and authority as a limited liability company to enter into this Agreement and to
perform it obligations hereunder.
17.2. Duly Authorized: The execution and delivery of this
---------------
Agreement by the Management Company and the consummation by
24
the Management Company of the transactions contemplated hereby have been duly
authorized and no other limited liability company proceeding or consent on the
part of the Management Company is necessary to authorize this Agreement and the
transactions contemplated hereby.
17.3. Consents: Except as set forth on Schedule 17.3 attached hereto
--------
(and incorporated herein by this reference), neither the execution and delivery
of this Agreement by the Management Company nor the consummation of the
transactions pursuant hereto will require any consent, approval, or
authorization of, waiver by, notification to, or filing with, any Governmental
Entity on the part of the Management Company.
17.4. No Violation: The execution and delivery of this Agreement by
------------
the Management Company and the performance by the Management Company of its
obligations hereunder do not and will not (i) violate, conflict with, or
constitute or result in a breach of, any term, condition or provision of, or
constitute a default (or an event which, with notice or the lapse of time, or
both, would constitute a default) under (A) the constitutive documents of the
Management Company, or (B) any mortgage, indenture, loan or credit agreement or
any other agreement or instrument to which the Management Company is a party, or
pursuant to which the Management Company is the direct or indirect obligor, or
by which the Management Company's properties are bound or affected, (ii) violate
any law, regulation, judgment, injunction, order or decree binding upon any of
the Management Company, (iii) result in the loss of any license, franchise,
permit, legal privilege or legal right enjoyed or possessed by any of the
Management Company, or (iv) require the consent of any third Person (including a
Governmental Entity). The Management Company is not in violation of any statute,
judgement, decree, order, rule or regulation applicable to it, which, singly or
in the aggregate, has materially adversely affected or could reasonably be
expected to materially adversely affect the Management Company's ability to
perform its obligations hereunder.
18. INDEMNIFICATION:
---------------
18.1. The Fox Parties Indemnification of the Management Company: The Fox
---------------------------------------------------------
Parties shall indemnify and hold harmless the Management Company (and the
Management Company's Affiliates, and its and their respective directors,
officers, employees, agents, successors, assigns and licensees) (collectively,
the "Management Company Indemnified Parties") from and against all loss, cost,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees, court costs and any judgment and settlement payments) or claims suffered
by, incurred by or imposed upon the Management Company Indemnified Parties by
reason of any breach by
25
the Fox Parties of any of the Fox Parties' representations, warranties,
undertakings and covenants hereunder.
18.2. The Management Company's Indemnification of the Fox Parties: The
-----------------------------------------------------------
Management Company shall indemnify and hold harmless the Fox Parties (and the
Fox Parties' Affiliates, and its and their respective directors, officers,
employees, agents, successors, assigns and licensees) (collectively, the "Fox
Indemnified Parties") from and against all loss, cost, liabilities and expenses
(including, without limitation, reasonable attorneys' fees, court costs and any
judgment and settlement payments) or claims suffered by, incurred by or imposed
upon the Fox Indemnified Parties by reason of any breach by the Management
Company of any of the Management Company's representations, warranties,
undertakings and covenants hereunder.
18.3. Limitations:
-----------
(i) The parties' rights to indemnification under this Paragraph 18.
shall be available only if the party entitled to indemnification pursuant to
this Paragraph 18 delivers written notice to the party or parties required to
provide indemnification, setting forth in detail the factual basis for
indemnification and the amount thereof, or a good faith estimate thereof, sought
to be indemnified (the "Indemnification Notice"). The indemnified party or
parties shall use its or their best efforts to provide in its or their
Indemnification Notice sufficient detail to enable the indemnifying party or
parties to evaluate the claim. Except with respect to Indemnification Claims
covered by Paragraph 18.4 (which relates to third party claims), within 30 days
(the "Objection Period") of the date such Indemnification Notice is given, the
indemnifying party shall respond to the Indemnification Notice. The indemnifying
party shall be entitled to cure any default which is capable of cure during the
Objection Period, and the amount of the claim for indemnification contained in
the Indemnification Notice shall be reduced by the amount of the damages
mitigated by cure. If the indemnifying party or parties agree in writing during
the Objection Period to accept any of the claims included in the Indemnification
Notice, such party shall promptly pay the amounts so agreed upon. In all other
cases, the indemnified party or parties and the indemnifying party or parties
shall use their respective good faith reasonable efforts to resolve the dispute
within 60 days of the date such Indemnification Notice is given (the "Settlement
Period"). If the dispute is not resolved within the Settlement Period, the
parties shall be free to commence litigation to enforce their rights to
indemnification under this Paragraph 18; provided, however, that if such
-------- -------
litigation has not been commenced on or prior to twelve months following the
date such Indemnification Notice is given, all rights of the indemnified party
or parties to indemnification with respect to the matters set
26
forth in that Indemnification Notice shall be deemed to have been irrevocably
waived and released by the indemnified party or parties, and shall terminate and
expire.
(ii) Notwithstanding any provisions of this Section 18. to the
contrary, the Management Company's right to indemnification for breaches of the
representations, warranties and covenants contained in Section 16 (other than
Sections 16.17 and 16.18) shall be available only if the Management Company
delivers an Indemnification Notice with respect to such claim prior to the date
which is 24 months after the date of this Agreement (the "Section 18.3.(ii)
Indemnification Period"). The rights of the Management Company to
indemnification under this Section 18 relating to any other representation,
warranty or covenant of the Fox Parties shall not be subject to the Section
18.3.(ii) Indemnification Period.
(iii) Notwithstanding any provisions of this Section 18. to the
contrary, the Fox Parties' rights to indemnification for breaches of the
representations, warranties and covenants contained in Section 17 shall be
available only if the Fox Parties deliver an Indemnification Notice with respect
to such claim prior to the date which is 24 months after the date of this
Agreement (the "Section 18.3.(iii) Indemnification Period"). The rights of the
Fox Parties to indemnification under this Section 18 relating to any other
representation, warranty or covenant of the Management Company shall not be
subject to the Section 18.3.(iii) Indemnification Period.
18.4. Defense: If any of the indemnified parties is made or threatened
-------
to be made a defendant in or party to any action or proceeding, judicial or
administrative, instituted by any third Person for the liability under which or
the costs or expenses of which any of the indemnified parties is entitled to be
indemnified pursuant to Paragraph 18 (any such third party action or proceeding
being referred to as an "Indemnification Claim"), the indemnified party or
parties shall give prompt notice thereof to the indemnifying party; provided
--------
that the failure to give such notice shall not affect the indemnified party or
parties' ability to seek indemnification hereunder unless such failure has
materially and adversely affected the indemnifying party or parties' ability to
prosecute successfully an Indemnification Claim. Each indemnified party shall
permit the indemnifying party, at its own expense, to assume the defense of any
such claim or any litigation to which this Paragraph 18.4 may be applicable, by
counsel reasonably satisfactory to the indemnified party or parties; provided,
--------
that the indemnified party or parties shall be entitled at any time, at its or
their own cost and expense (which expense shall not be recoverable from the
indemnifying party unless the indemnifying party is not adequately representing
or, because of a conflict of interest, may not adequately represent, the
indemnified party or
27
parties' interests), to participate in such claim, action or proceeding and to
be represented by attorneys of its or their own choosing. If the indemnified
party or parties elects to participate in such defense, such party or parties
will cooperate with the indemnifying party in the conduct of such defense. The
indemnified party or parties may not concede, settle or compromise any
Indemnification Claim without the consent of the indemnifying party. The
indemnifying party, in the defense of any such claim or litigation, shall not,
except with the approval of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
or parties of a full and complete release from all liability in respect to such
claim or litigation.
19. MISCELLANEOUS:
-------------
19.1. Assignment: Neither this Agreement nor either party's rights and
----------
obligations hereunder may be assigned or otherwise transferred by the Fox
Parties or the Management Company, either voluntarily or by operation of law,
without the prior written consent of the other. Notwithstanding the foregoing
either the Fox Parties or the Management Company may assign this Agreement or
such party's rights and obligations hereunder, with or without the other's
consent, to any Person with which it may be merged or consolidated or which
acquires all or substantially all of its assets, provided that such assignee or
transferee agrees in writing to assume all of the Fox Parties' or the Management
Company's (as applicable) obligations hereunder; provided, that without the
prior written consent of the non-assigning party, the assignor shall remain
liable for its obligations hereunder. Any purported assignment or transfer by
either party of any of its rights or obligations under this Agreement other than
in accordance with the provisions of this Agreement shall be invalid and void
and shall be of no force or effect whatsoever.
19.2. References, Etc.: In this Agreement, headings are for
----------------
convenience only and shall not affect interpretation, and except to the extent
that the context otherwise requires: (i) references to any legislation or to any
provision of any legislation include any modification or re-enactment of, or any
legislative provision substituted for, and all statutory instruments issued
under, such legislation or such provision; (ii) words denoting the singular
include the plural and vice versa; (iii) words denoting individuals include
corporations and other Persons and vice versa; (iv) words denoting any gender
include all genders; (v) references to any document, agreement or other
instrument (including this Agreement) include references to such document,
agreement or other instrument as amended, novated, supplemented or replaced from
time to time; (vi) "or" is not
28
exclusive; (vii) references to any party to this Agreement or any other
document, agreement or other instrument referred to herein includes its
permitted successors and assigns; and (vii) "writing" and cognate expressions
include all means of reproducing words in a tangible and permanently visible
form.
19.3. Confidentiality: All information submitted or disclosed by the Fox
---------------
Parties or the Management Company to the other (the "Recipient") in accordance
with the terms of this Agreement shall be deemed confidential, shall not be
disclosed to any third Person, and shall be protected with the same degree of
care as the Recipient uses for the protection of its own confidential and
proprietary information. Such confidentiality obligations shall not apply to
information which (i) has become available to the general public without breach
of this Agreement by the Recipient; (ii) is disclosed to the Recipient by a
third Person, without a similar restriction on such third Person's rights; (iii)
is disclosed to the Recipient's bank or other financing institution provided
that such Person agrees to keep the information confidential; (iv) is disclosed
pursuant to judicial or administrative process, or in the opinion of Recipient's
counsel, by the requirements of Law (state or federal) including, without
limitation, a filing required under the Securities Act of 1933, the Securities
Exchange Act of 1934 or any state securities law; (v) is disclosed to the
Recipient's auditors or other advisers or (vi) is disclosed, to the limited
extent required, to a third Person entitled to a profit participation in
connection with an Existing Television Series, provided that such third Person
to whom it is disclosed agrees to keep such information confidential.
19.4. Governing Law: THE TERMS OF THIS AGREEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE
TO CONTRACTS MADE WITHIN, AND TO BE PERFORMED WITHIN, SUCH STATE, EXCLUDING
CHOICE OF LAW PRINCIPLES OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE
LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
19.5. No Adverse Construction: The rule that a contract is to be
-----------------------
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or the terms of this
Agreement.
19.6. Counterparts: This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
29
19.7. Costs and Attorneys' Fees: In the event that any action, suit,
-------------------------
or other proceeding is instituted concerning or arising out of this Agreement,
the prevailing party shall recover all of such party's costs and attorneys' fees
incurred in each and every such action, suit, or other proceeding, including any
and all appeals or petitions therefrom. As used herein, "attorneys' fees" shall
mean the full and actual costs of any legal services actually rendered in
connection with the matters involved, calculated on the basis of the usual fee
charged by the attorneys performing such services, and shall not be limited to
"reasonable attorneys' fees" as defined by any statute or rule of court.
19.8. Successors and Assigns: Except as otherwise provided in this
----------------------
Agreement, all rights, covenants and agreements of the parties contained in this
Agreement shall be binding upon and inure to the benefit of their respective
permitted successors and assigns.
19.9. Amendments and Waivers: Neither this Agreement nor any term
----------------------
hereof may be changed, waived, discharged or terminated orally or in writing,
except that any term of this Agreement may be amended and the observance of any
such term may be waived (either generally or in a particular instance and either
retroactively or prospectively) with (but only with) the written consent of all
of the parties hereto; provided, however, that no such amendment or waiver shall
-------- -------
extend to or affect any obligation not expressly waived or impair any right
consequent therein. No delay or omission to exercise any right, power or remedy
accruing to any party hereto shall impair any such right, power or remedy of
such party nor be construed to be a waiver of any such right, power or remedy
nor constitute any course of dealing or performance hereunder.
19.10. Consent to Jurisdiction; Forum Selection: Any actions, suits or
----------------------------------------
proceedings instituted in connection with this Agreement or the performance by
the parties of their obligations hereunder shall be instituted and maintained
exclusively in the Superior Court for the State of California, County of Los
Angeles or in the United States District Court for the Central District of
California. By execution and delivery hereof, each party hereto hereby
consents, for itself and in respect of its property, to the jurisdiction of the
aforesaid courts solely for the purpose of adjudicating its rights or
obligations under, or any disputes involving, this Agreement or any document
related hereto. Each party hereto hereby irrevocably waives, to the extent
permitted by applicable law, any objection, including, without limitation, any
objection that the other corporate party or parties lack the capacity to xxx or
defend based upon its or their lack of a certificate of qualification to conduct
intrastate business in California, and any objection to the laying of venue or
based on
30
the grounds of forum non conveniens, which it may now or hereafter have
----- --- ----------
to the bringing of any action or proceeding in such jurisdiction in respect of
this Agreement or any document related hereto.
19.11. Capital Contribution: For purposes of this Agreement, all
--------------------
rights, assets, monies and obligations transferred, assigned or delegated to the
Management Company under or pursuant to this Agreement by any party hereto other
than FBC shall constitute part of the capital contribution obligation of FBC
under and pursuant to Section 1.2 of the LLC Formation Agreement, and, as
between the Fox Parties, shall constitute a direct or indirect contribution to
the capital of FBC.
19.12. Notice: Any notice or demand which either the Management Company
------
or the Fox Parties is required, or may desire, to give to the other shall be in
writing and shall be given by addressing the same to the other at the address
hereinafter set forth, or at such other address as may be designated in writing
by any such party by notice given to the other in the manner prescribed in this
Paragraph 19.12 and shall be deemed given by being so addressed and (i)
delivered personally, (ii) deposited postage prepaid in the United States mail,
(iii) delivered to a telegraph or cable company toll prepaid or (iv) sent by
telecopy (or telefax), and the date of said personal delivery, deposit,
telegraphing or the sending of such telecopy shall be the date of the giving of
such notice; provided, however, that any notice alleging a default must be given
by the means set forth in (i), (iii) or (iv) above. Any notice or demand to
the Management Company shall be addressed as follows:
Fox Kids Worldwide, L.L.C.
c/o Fox Children's Network, Inc.
00000 X. Xxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx
and
Fox Kids Worldwide, L.L.C.
c/o Saban Entertainment, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
31
With a copy to:
Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Troop, Esq.
Fax: (000) 000-0000
Any notice or demand to the Fox Parties shall be addressed as follows:
c/o Fox, Inc.
00000 X. Xxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
SVP Legal Affairs
Fox Television Group
Attention: Xxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
With a copy to:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
19.13. Severability: If any provision of this Agreement shall, for any
------------
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. If,
moreover, any restriction or other provision of this Agreement shall for any
reason be held to be too broad as to duration, geographical scope, activity or
subject, it shall be construed by limiting and reducing such provision or
restriction so as to be enforceable to the extent compatible with applicable
law, the parties hereby agreeing that said restrictions and other provisions of
this Agreement are fair and reasonable as at the date hereof. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
19.14. No Third Party Beneficiaries: Except as expressly otherwise
----------------------------
provided to the contrary in Paragraph 18.1 for the benefit of the Management
Company Indemnified Parties and the Fox Indemnified Parties, as applicable, this
Agreement is not for the
32
benefit of any third party and shall not be deemed to give any right or remedy
to any such party whether referred to herein or not.
19.15. Audit Rights: The Management Company shall have the right, upon
------------
reasonable advance notice during normal business hours, to audit the books and
records of the Fox Parties for the limited purpose of ensuring the Fox Parties
compliance with their obligations hereunder.
19.16. Further Assurances: Each party to this Agreement agrees to
------------------
execute, acknowledge, deliver, file and record such further certificates,
amendments, instruments, agreements and documents, and to do all such other acts
and things, as may be required by Law or as may reasonably be necessary or
advisable to carry out the intent and purposes of this Agreement.
19.17. Entire Agreement: This Agreement, the attached Exhibits and
----------------
Schedules, together contain the entire understanding of the parties, and there
are no further or other agreements or understandings, written or oral, in effect
between the parties relating to the subject matter hereof unless expressly
referred to herein. No party to this Agreement makes any representation or
warranty except as expressly set forth herein.
33
IN WITNESS WHEREOF, the Management Company and the Fox Parties have
executed this Agreement as of the date first above written.
FOX KIDS WORLDWIDE, L.L.C.
By: /s/ Xxxx Xxxxx
----------------------------------
Its: Senior Executive - Saban Entertainment
FOX BROADCASTING COMPANY
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Its: Senior Vice President
TWENTIETH CENTURY FOX FILM CORPORATION
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Its: Secretary
FOX TELEVISION STATIONS, INC.
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Its: Senior Vice President
FOX, INC.
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Its: Senior Vice President
FCN HOLDING, INC.
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Its: Senior Vice President
34
EXHIBIT "A"
DEFINITIONS
As used in the Asset Assignment Agreement (and the other Exhibits and Schedules
thereto) to which this Exhibit "A" is attached, the following terms shall have
the following meanings:
(a) "Administration Agreement" shall have the meaning ascribed thereto in
--------------------------
Paragraph 10.1 of the Agreement.
(b) "Affiliate" means, when used with reference to a specified Person, any
-----------
Person that directly or indirectly through one or more intermediaries controls
or is controlled by, or is under common control with, the specified Person.
(c) "Affiliate Board" shall mean the Fox Broadcasting Company Affiliates'
-----------------
Association Board of Governors.
(d) "Affiliate Time" shall mean any commercial time occurring during FCN
----------------
Programming which has been allocated by FCN to the FCN Affiliated Stations, but
for which FCN has been appointed, by the Affiliate Board, to administer the sale
thereof on a national basis.
(e) "Affiliated Station" shall mean a Station which is party to a Station
--------------------
Affiliation Agreement with FBC.
(f) "Agreement" shall mean the Asset Assignment Agreement to which this
-----------
Exhibit "A" is attached, including all Exhibits thereto.
(g) "Business Acquisition" shall have the meaning ascribed thereto in
----------------------
Paragraph 12.2.(a) of the Agreement.
(h) "Control" (including as used in the terms "controlling", "controlled
---------
by" and "under common control with") shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract (whether written or oral) or otherwise.
(i) "Designated Fox O&Os" shall mean and refer to the following Stations
---------------------
which are currently owned and operated by FTSI: WNYW (New York), KTTV (Los
Angeles), WFLD (Chicago), KRIV (Houston), WTTG (Washington, D.C.), KSTU (Salt
Lake City), WTXF (Philadelphia) and WFXT (Boston).
1
(j) "Designated Fox O&Os Waived Payments" shall have the meaning ascribed
-------------------------------------
thereto in Paragraph 9.2.1 of the Agreement.
(k) "Distribution Agreement" shall have the meaning ascribed thereto in
------------------------
Paragraph 3.1 of the Agreement.
(l) "Excepted Liens", with respect to any particular asset(s), business(es)
----------------
or interest(s), shall mean liens which do not materially impair or diminish the
value of the particular asset(s), business(es) or interest(s) at issue.
(m) "Excluded Fox O&Os" shall have the meaning ascribed thereto in
-------------------
Paragraph 9.4.4 of the Agreement.
(n) "Exhibition" shall mean distribution, transmission, display,
------------
exhibition or performance and "Exhibit" shall mean to cause the Exhibition.
--------
(o) "Existing Distribution Licenses" shall have the meaning ascribed
--------------------------------
thereto in Paragraph 16.5.2 of the Agreement.
(p) "Existing Merchandising Licenses" shall have the meaning ascribed
---------------------------------
thereto in Paragraph 16.4.2 of the Agreement.
(q) "Existing Series Properties" shall have the meaning ascribed thereto in
----------------------------
Paragraph 4.1 of the Agreement.
(r) "Exploitation" shall include, without limitation, Exhibition,
--------------
dissemination, publication, promotion, publicizing, advertising, reproduction,
rental, lease, license, sublicense, transfer, disposing of, commercializing,
merchandising, marketing, usage, trading in, turning to account, dealing with
and in and otherwise exploiting by all means, methods, modes, processes, media
devices and delivery systems of every kind and character (whether now known or
hereafter created), and "Exploit" shall mean to cause the Exploitation.
--------
(s) "FBC" shall mean Fox Broadcasting Company, a Delaware corporation.
-----
(t) "FCN" shall mean Fox Children's Network, Inc., a Delaware corporation.
-----
(u) "FCN Affiliated Station" shall mean an Affiliated Station which
------------------------
carries the FCN Programming.
(v) "FCN Net Profits" shall mean the compensation paid by FBC to its
-----------------
Affiliated Stations with respect to the "Net Profits" of FCN programming, as
determined in accordance with FBC's current, standard, performance-based station
compensation formula (as
2
modified to reflect a ratings base of kids) (or such other methodology as FBC,
FCN and the Management Company shall hereafter mutually determine).
(w) "FCN Programming" shall mean the programming made available by FCN to
-----------------
FCN Affiliated Stations for broadcasting in the United States.
(x) "FCNH" shall mean FCN Holdings, Inc., a Delaware corporation.
------
(y) "FCNH Sub" shall mean FCNH Sub, Inc., a Delaware corporation and a
----------
wholly-owned subsidiary of FCNH.
(z) "First Run Exhibition Offer" shall have the meaning ascribed thereto
----------------------------
in Paragraph 12.3.(a) of the Agreement.
(aa) "Fox" shall mean Fox, Inc., a Colorado corporation.
-----
(ab) "Fox Group" shall mean, collectively, the Fox Parties and any and all
-----------
Affiliates of the Fox Parties; provided, that for purposes of this Agreement,
the "Fox Group" shall not include FCN (or any division or wholly-owned
subsidiary of FCN); provided further, that the parties expressly acknowledge and
agree that, for purposes of this Agreement, the Management Company shall not be
included in the Fox Group.
(ac) "Fox Indemnified Parties" shall have the meaning ascribed thereto in
-------------------------
Paragraph 18.2 of the Agreement.
(ad) "Fox Licensing" shall mean Fox Licensing and Merchandising, an
---------------
unincorporated unit of Fox.
(ae) "Fox O&O" shall mean the Stations in the United States which are, from
---------
time to time, owned and operated by the Fox Group.
(af) "Fox Partner" shall mean the member of the Fox Group which, from
-------------
time-to-time, holds the Fox Group's interest in the Management Company;
currently, FCNH is the Fox Partner.
(ag) "FTSI" shall mean Fox Television Stations, Inc., a Delaware
------
corporation.
(ah) "Governmental Entity" shall have the meaning ascribed thereto in
---------------------
Paragraph 16.14 of the Agreement.
(ai) "Indemnification Claim" shall have the meaning ascribed thereto in
-----------------------
Paragraph 18.4 of the Agreement.
3
(aj) "Indemnification Notice" shall have the meaning ascribed thereto in
------------------------
Paragraph 18.3 of the Agreement.
(ak) "Kids Service" shall have the meaning ascribed thereto in Paragraph
--------------
11. of the Agreement.
(al) "Laws" shall mean any present or future statute or ordinance, whether
------
municipal, county, state, national or territorial; any executive, administrative
or judicial regulation, order, judgment or decree; any treaty or international
convention; any rule or principle of common law or equity, or any requirement
with force of law.
(am) "Lien" means, with respect to any asset, any mortgage, lien, pledge,
------
charge, security interest or encumbrance of any kind in respect to such asset.
For purposes of the Agreement, any Person shall be deemed to own, subject to a
Lien, any asset which it has acquired or holds, subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
(an) "LLC Formation Agreement" shall mean the LLC Formation Agreement dated
-------------------------
as of November 1, 1995 among SEI, FBC and FCNH.
(ao) "Management Company" shall mean Fox Kids Worldwide L.L.C., a Delaware
--------------------
limited liability company.
(ap) "Management Company Indemnified Parties" shall have the meaning
----------------------------------------
ascribed thereto in Paragraph 18.2 of the Agreement.
(aq) "MC Programming" shall have the meaning ascribed thereto in Paragraph
----------------
13.1 of the Agreement.
(ar) "Merchandising Agreement" shall have the meaning ascribed thereto in
-------------------------
Paragraph 2.1 of the Agreement.
(as) "New Kids Programming" shall have the meaning ascribed thereto in
----------------------
Paragraph 12.3.(a) of the Agreement.
(at) "Non-Standard Television" shall mean and refer to any and all means of
-------------------------
television Exhibition, other than Standard Broadcast Television, whether now
known or hereafter derived and regardless of the mode or method of delivery;
without limiting the generality of the foregoing, "Non-Standard Television"
shall include pay cable, basic cable, pay-per-view, satellite delivered, DBS,
STV, MDS, MMDS, SMATV and so-called "on demand" television.
(au) "Offered Programming Service" shall have the meaning ascribed thereto
-----------------------------
in Paragraph 12.1.(a) of the Agreement.
4
(av) "Operating Agreement" shall mean the Operating Agreement dated
---------------------
concurrently herewith among SEI, FBC and FCNH Sub.
(aw) "Operating Entities", when used with reference to the Management
--------------------
Company, shall have the meaning ascribed thereto in the LLC Formation Agreement.
(ax) "Person" includes an individual, partnership, trust, corporation,
--------
joint venture, limited liability company, association, government bureau or
agency or other entity of whatsoever kind or nature.
(ay) "Programming Service Offer" shall have the meaning ascribed thereto in
---------------------------
Paragraph 12.1.(a) of the Agreement.
(az) "Proportionate Price" shall have the meaning ascribed thereto in
---------------------
Paragraph 12.2.(a) of the Agreement.
(ba) "Required Third Party Services" shall have the meaning ascribed
-------------------------------
thereto in Paragraph 13.2 of the Agreement .
(bb) "Required Third Party Services Offer" shall have the meaning ascribed
-------------------------------------
thereto in Paragraph 13.2.(a) of the Agreement.
(bc) "Revised First Run Exhibition Offer" shall have the meaning ascribed
------------------------------------
thereto in Paragraph 12.3.(d) of the Agreement.
(bd) "Revised Programming Service Offer" shall have the meaning ascribed
-----------------------------------
thereto in Paragraph 12.1.(c) of the Agreement.
(be) "Revised Required Third Party Services Offer" shall have the meaning
---------------------------------------------
ascribed thereto in Paragraph 13.2.(c) of the Agreement.
(bf) "Revised Service Acquisition Offer" shall have the meaning ascribed
-----------------------------------
thereto in Paragraph 12.2.(d) of the Agreement.
(bg) "Saban" shall have the meaning ascribed to such term in the Operating
-------
Agreement.
(bh) "Saban Group" shall mean, collectively, SEI and any and all Affiliates
-------------
of SEI; provided, that for purposes of this Agreement, the "Saban Group" shall
not include FCN (or any division or wholly-owned subsidiary of FCN); provided
further, that the parties expressly acknowledge and agree that, for purposes of
this Agreement, the Management Company shall not be included in the Saban Group.
(bi) "SEI" shall mean Saban Entertainment, Inc., a Delaware corporation.
-----
5
(bj) "Settlement Period" shall have the meaning ascribed thereto in
-------------------
Paragraph 18.3 of the Agreement.
(bk) "Standard Broadcast Television" shall mean television Exhibition over
-------------------------------
standard VHF and/or UHF frequencies, the video and audio portions of which are
intelligibly receivable without charge for such reception by means of a standard
home television set.
(bl) "Station" shall mean an over-the-air television station broadcasting
---------
over standard VHF and/or UHF frequencies.
(bm) "Station Affiliation Agreement" shall refer to an agreement between
-------------------------------
FBC (on its own behalf and/or on behalf of FCN) and the Station which is other
party thereto for the carriage of FBC programming (and/or FCN Programming) over
the facilities of such Station.
(bn) "Twentieth" shall mean Twentieth Century Fox Film Corporation, a
-----------
Delaware corporation.
END OF EXHIBIT "A"
6
LIST OF EXHIBITS/SCHEDULES TO ASSET ASSIGNMENT AGREEMENT
EXHIBIT "A" -- DEFINITIONS
EXHIBIT "B" -- FOX LICENSE AGREEMENT
EXHIBIT "C-1" -- FORM OF FBC STATION AFFILIATION AGREEMENT
EXHIBIT "D" -- INDEMNIFICATION AGREEMENT
EXHIBIT "E" -- MERCHANDISING AGREEMENT
EXHIBIT "F" -- DISTRIBUTION AGREEMENT
EXHIBIT "G" -- ADMINISTRATION AGREEMENT
SCHEDULE 4.1 -- EXISTING SERIES PROPERTIES
SCHEDULE 9.1.1 -- CURRENT CLEARANCE ARRANGEMENTS
SCHEDULE 9.2.1 -- AMENDMENTS TO STATION AFFILIATION
AGREEMENTS
SCHEDULE 9.2.3 -- DROPPED STATION PERCENTAGES
SCHEDULE 13.2 -- FOX DISTRIBUTION SERVICES
SCHEDULE 16.4.2 - EXISTING MERCHANDISING LICENSES
SCHEDULE 16.5.2 - EXISTING DISTRIBUTION LICENSES
SCHEDULE 16.8.1 - FOX KIDS CLUB
SCHEDULE 16.9.1 - FOX KIDS COUNTDOWN
SCHEDULE 16.10.2 - STORY MAKERS, INC.
SCHEDULE 16.11.2 - FOX CHILDREN'S PRODUCTIONS, INC.
SCHEDULE 16.12.2 - FOX CHILDREN'S MUSIC, INC.
SCHEDULE 16.13.2 - FOX KIDS MUSIC, INC.
SCHEDULE 16.14 -- CONSENTS
SCHEDULE 17.3 -- CONSENTS
1
