EXHIBIT 10(b)
Note: This is a composite text of the Limited Recourse Financing Facility
Agreement as amended by an amendment to be dated as of April 30, 1997 and as
such agreement will be in effect on that date. This text has been prepared for
informational purposes only and does not purport to create any legal rights or
liabilities of the parties named herein who are and will be bound only by the
Agreement and amendments thereto.
COMPOSITE DRAFT
LIMITED RECOURSE FINANCING FACILITY AGREEMENT
DATED AS OF APRIL 27, 1988
between
DISNEY ENTERPRISES, INC.
and
TDL FUNDING COMPANY
As amended through
April 30, 1997
TABLE OF CONTENTS
Page
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SECTION 1: DEFINITIONS.......................................................................................... 1
SECTION 2: THE FACILITY......................................................................................... 6
2.01 Agreement to Make Advances........................................................................... 6
2.02 Drawing Procedures................................................................................... 6
2.03 Recovery of Advances................................................................................. 6
2.04 Interest............................................................................................. 8
2.05 Cancellation of Commitment; Prepayment............................................................... 8
2.06 Payments............................................................................................. 9
2.07 Security Agreement................................................................................... 10
2.08 Facility Account..................................................................................... 10
SECTION 3: DISNEY'S LIABILITIES................................................................................. 10
3.01 Limited Recourse Liability........................................................................... 10
3.02 Shortfall Indemnities................................................................................ 11
3.03 Basic Agreement Indemnities.......................................................................... 13
3.04 Facility Agreement Indemnities....................................................................... 14
3.05 Other Parties' Liabilities........................................................................... 14
3.06 Expenses Included.................................................................................... 15
SECTION 4: YIELD PROTECTION..................................................................................... 15
4.01 Taxes................................................................................................ 15
4.02 Compliance Costs; Illegality........................................................................ 16
4.03 Mitigation........................................................................................... 17
4.04 Yield Protection Prepayment.......................................................................... 17
4.05 Yen Transaction...................................................................................... 17
SECTION 5: FEES AND EXPENSES.................................................................................... 18
5.01 Management Fee....................................................................................... 18
5.02 Expenses............................................................................................. 18
SECTION 6: REPRESENTATIONS AND WARRANTIES....................................................................... 18
6.01 Organization, Power and Authority.................................................................... 19
6.02 Compliance with Law and Other Agreements............................................................. 19
6.03 Authorization........................................................................................ 19
6.04 Registrations and Approvals.......................................................................... 19
6.05 Agreement Binding.................................................................................... 19
6.06 Other Obligations.................................................................................... 20
6.07 Litigation........................................................................................... 20
6.08 Information Memorandum; Financial Statements......................................................... 20
6.09 Basic Agreement...................................................................................... 21
6.10 Designated Receivables............................................................................... 21
6.11 Records.............................................................................................. 22
SECTION 7: COVENANTS............................................................................................ 22
7.01 Performance of Obligations........................................................................... 22
7.02 Financial Statements; Other Information.............................................................. 22
7.03 Performance and Notice............................................................................... 23
7.04 Mortgages; Liens..................................................................................... 23
7.05 Maintenance and Continuity of Business............................................................... 24
7.06 Maintenance of Governmental Approvals................................................................ 25
7.07 Taxes................................................................................................ 25
7.08 ERISA................................................................................................ 25
7.09 Maintenance of Records............................................................................... 26
7.10 Protection of the Company's Interest................................................................. 26
7.11 Basic Agreement...................................................................................... 27
SECTION 8: CONDITIONS PRECEDENT
8.01 Conditions Precedent................................................................................. 28
SECTION 9: TERMINATION EVENTS................................................................................... 31
9.01 Termination Events................................................................................... 31
SECTION 10: COLLECTION AGENT.................................................................................... 33
10.01 Appointment of Collection Agent..................................................................... 33
10.02 Collections......................................................................................... 33
10.03 Change of Collection Agent.......................................................................... 34
10.04 Application of Collections.......................................................................... 34
10.05 Compensation of Collection Agent.................................................................... 34
10.06 Termination of Collection Agency.................................................................... 35
SECTION 11: MISCELLANEOUS....................................................................................... 35
11.01 Term................................................................................................ 35
11.02 Entire Agreement.................................................................................... 35
11.03 Waiver; Cumulative Rights........................................................................... 35
11.04 Assignment.......................................................................................... 36
11.05 Governing Law....................................................................................... 37
11.06 Submission to Jurisdiction.......................................................................... 37
11.07 Notices............................................................................................. 38
11.08 Confidentiality..................................................................................... 39
11.09 Severability........................................................................................ 39
11.10 Counterparts........................................................................................ 40
SCHEDULE 1 - Designated Receivables
EXHIBIT A - Disney Acknowledgment
EXHIBIT B - Lock Box Notice
EXHIBIT C - Pledge Agreement
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THIS AGREEMENT is made as of the 27th day of April, 1988 by and among:
DISNEY ENTERPRISES, INC., a corporation organized and existing under
the laws of the State of Delaware in the United States of America with its
principal office located at 000 Xxxxx Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000 (hereinafter referred to as "Disney");
TDL FUNDING COMPANY, a company organized and existing under the laws
of the Cayman Islands with its registered office located c/o Caledonian Bank and
Trust Limited, X.X. Xxx 0000, Xxxxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
(hereinafter referred to as the "Company"); and
The Company as manager of the limited recourse financing established
hereunder (hereinafter referred to in such capacity as the "Manager").
W I T N E S S E T H:
WHEREAS, pursuant to an agreement with Oriental Land Co., Ltd. Disney
is entitled to receive certain royalty payments relating to the operations of
the Tokyo Disneyland theme park; and
WHEREAS, Disney desires to receive certain advances from the Company
and to grant to the Company a security interest in collections of a portion of
such royalties to secure the Company's advances, the principal amount of which
advances, together with accrued interest, is to be recovered by the Company on a
limited recourse basis from the collection of such royalties, subject to the
terms and conditions of this Agreement; and
WHEREAS, the Company is prepared, subject to the terms and conditions
of this Agreement, to make such advances to Disney;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS
The following terms shall have the meanings set forth below:
1.1 "Advance" shall mean, with respect to each Quarterly Receivables
Period and the Designated Receivables for such Quarterly Receivables Period, the
amount set forth on Schedule 1 annexed hereto under the heading "Advance" for
such Quarterly Receivables Period, and "Advances" shall mean, where the context
so requires, the aggregate amount of such Advances for all Quarterly Receivables
Periods during the term of this Agreement. The aggregate Advances received by
Disney on the Drawing Date equalled (Yen)90,592,014,000.
1.2 "Affiliate" shall mean, with respect to Disney or the Company,
any Person
controlling, controlled by or under common control with Disney or the Company,
as the case may be. As used herein, the term "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
1.3 "Annual Receivables Period" shall mean the Quarterly Receivables
Period during which the Drawing Date occurs and the three consecutive Quarterly
Receivables Periods thereafter, and each period of four consecutive Quarterly
Receivables Periods occurring thereafter during the term of this Agreement.
1.4 "Basic Agreement" shall mean the agreement made as of April 30,
1979 by and between Oriental Land (as hereinafter defined) and Xxxx Disney
Productions (Xxxx Disney Productions having been subsequently renamed Disney
Enterprises, Inc.) as amended by a letter agreement dated April 7, 1983
providing for the construction and operation of Tokyo Disneyland Park, Amendment
No. 1 dated April 7, 1983, Amendment No. 2 dated November 2, 1994, Amendment No.
3 dated April 30, 1996 and as such agreements may be amended or otherwise
modified from time to time.
1.5 "Business Day" shall mean a day on which banks are not authorized
or required to close in (i) Tokyo, Japan, (ii) Los Angeles, California and (iii)
New York, New York.
1.6 "Collateral" shall mean, with respect to any Designated
Receivables, all collections and other proceeds of such Designated Receivables
or, where the context so requires, the aggregate collections and other proceeds
of the Designated Receivables for all Quarterly Receivables Periods during the
term of this Agreement.
1.7 "Collection Agent" shall mean the Person from time to time
appointed pursuant to Section 10.01 to collect the Tokyo Disneyland Receivables
and the Designated Receivables and to make distributions therefrom in accordance
with the terms and conditions of this Agreement.
1.8 "Commitment" shall mean the obligation of the Company to make
Advances subject to the terms and conditions of this Agreement.
1.9 "Conditions Precedent Date" shall have the meaning set forth in
Section 8.01.
1.10 "Designated Receivables" shall mean, with respect to each
Quarterly Receivables Period, that portion of the Tokyo Disneyland Receivables
identified in Schedule 1 annexed hereto as the "Designated Receivables" for such
Quarterly Receivables Period or, where the context so requires, the aggregate
amount of such Designated Receivables for all Quarterly Receivables Periods
during the term of this Agreement.
1.11 "Disney Acknowledgment" shall mean the acknowledgment by Disney
of
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the Company's granting of a security interest in this Agreement to certain
institutions, which acknowledgment shall be in the form of Exhibit A annexed
hereto.
1.12 "Disney Agreements" shall have the meaning set forth in Section
6.01.
1.13 "Drawing Date" shall mean April 30, 1988 or such other date as
Disney and the Company shall agree in writing as the date on which Disney shall
draw the Advances.
1.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.15 "Indebtedness" shall mean, in regard to any Person, all
indebtedness (including guarantees and other contingent obligations) with
respect to borrowed money or for the deferred purchase price of property or
services, all indebtedness of others secured by or benefiting from any charge
against, or any encumbrance on or with respect to, properties, contract rights
or revenues of such Person, whether or not such Person has become liable for
such indebtedness.
1.16 "Information Memorandum" shall mean the undated ten page
information memorandum entitled "Information memorandum: Limited Recourse
Financing for Disney Enterprises, Inc. relating to royalties for Tokyo
Disneyland" regarding Disney, Tokyo Disneyland Park and the transactions
contemplated by this Agreement, but shall not include the separate summary of
the Basic Agreement referred to therein.
1.17 "Lock Box Account" shall mean account no. 000-000000-000 standing
in the name of Disney Enterprises, Inc. at The Hongkong and Shanghai Banking
Corporation Limited, Kyobashi Itchome Xxxxxxxx, 00-0, Xxxxxxxx 0-xxxxx, Xxxx-xx,
Xxxxx 000, Xxxxx into which Disney has instructed Oriental Land to deposit the
Tokyo Disneyland Receivables in accordance with the terms and conditions of this
Agreement and the Basic Agreement.
1.18 "Lock Box Notice" shall mean a notice from Disney to the bank at
which the Lock Box Account is maintained, which notice shall be in the form of
Exhibit B annexed hereto.
1.19 "Long Term Prime Lending Rate" shall mean the interest rate per
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annum from time to time announced by The Long-Term Credit Bank of Japan, Limited
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as its long term prime lending rate in Japan for Yen loans with a tenor
exceeding one year extended to prime corporate customers.
1.20 "Mortgage" shall have the meaning set forth in Section 7.04(a).
1.21 "Oriental Land" shall mean Oriental Land Co., Ltd., a kabushiki
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kaisha organized and existing under the laws of Japan with its principal office
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located at 0-0, Xxxxxxx,
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Xxxxxxx-xxx, Xxxxx Xxxxxxxxxx, 000-00 Xxxxx, its
successors and its permitted assigns under the Basic Agreement.
1.22 "Other Taxes" shall have the meaning set forth in Section
4.01(b).
1.23 "Person" shall mean an individual, a corporation, a partnership,
an association, a trust or any other entity or organization (including a
government or political subdivision or an agency or instrumentality thereof) and
the equivalent of any such juridical entity or organization under the laws of
any relevant jurisdiction.
1.24 "Pledge Agreement" shall mean a pledge agreement under the laws
of Japan pledging the Lock Box Account to the Company as security for Disney's
obligations hereunder, which pledge agreement shall be in the form of Exhibit C
annexed hereto.
1.25 "Quarterly Receivables Period" shall mean each of the calendar
quarters commencing on January lst, April 1st, July 1st and October lst in each
year during the term of this Agreement, commencing with the calendar quarter
during which the Drawing Date occurs.
1.26 "Records" shall mean the Basic Agreement and other documents,
books, records and other information (including without limitation computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained by Disney with respect to the Tokyo Disneyland
Receivables.
1.27 "Restricted Subsidiary" shall have the meaning set forth in
Section 7.04(a).
1.28 "Settlement Date" shall mean, with respect to each Quarterly
Receivables Period and the Designated Receivables for such Quarterly Receivables
Period, the date thirty (30) days following the last day of such Quarterly
Receivables Period.
1.29 "Subsidiary" means any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether capital stock of any other class shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned
by Disney, by Disney and one or more of such corporations, or by one or more of
such corporations.
1.30 "Tangible Property" shall have the meaning set forth in Section
7.04(a).
1.31 "Taxes" shall have the meaning set forth in Section 4.01(a).
1.32 "Termination Event" shall have the meaning set forth in Section
9.01.
1.33 "Theme Park Asset" shall have the meaning set forth in Section
7.04(a).
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1.34 "Tokyo Disneyland Park" shall mean the theme park known as Tokyo
Disneyland Park located at Maihama, Urayasu, Higashi-Katsushika-gun, Chiba,
Japan which is owned and operated by Oriental Land pursuant to the Basic
Agreement.
1.35 "Tokyo Disneyland Receivables" shall mean all royalties
receivable by Disney from Oriental Land during the period commencing on the
Drawing Date and to and including April 30, 2008 pursuant to Paragraphs 11.1.1
and 11.1.2 of the Basic Agreement after deduction by Oriental Land of Japanese
withholding tax from such royalties. Tokyo Disneyland Receivables shall not
include any deferred royalties receivable by Disney from Oriental Land pursuant
to Paragraph 11.1.1 of the Basic Agreement with respect to any period prior to
the date of this Agreement and shall not include any payments due under the
Basic Agreement with respect to the reimbursement of costs incurred by Disney in
rendering services to Oriental Land pursuant to the Basic Agreement.
1.36 "Yen" and the symbol "(Yen)" shall mean Yen in the lawful
currency of Japan.
1.37 "Yen Equivalent" shall mean the amount of Yen obtained by
converting the amount of other currency involved in such computation into Yen at
the spot rate for the purchase of Yen with such other currency as quoted by the
principal Tokyo branch of Citibank, N.A. at approximately 11:00 a.m. (Tokyo
time) on the day two (2) Business Days prior to any determination thereof.
1.38 "Yen Lenders" shall mean the financial institutions that are
parties to the Yen Loan Agreement.
1.39 "Yen Loan Agreement" shall mean any agreement providing for
borrowing secured (in whole or in part) by the obligations of Disney under this
Agreement. Without limiting the generality of the foregoing, such term shall
include the DWARFS Secured Yen Loan Agreement (the "DWARFS Loan Agreement"),
dated as of April 24, 1997, among the Company, The Hongkong and Shanghai Banking
Corporation Limited, as Collateral Agent and as Administrative Agent, and the
financial institutions listed on Schedule I thereto as Lenders .
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States, consistently applied. Terms not specifically defined herein
which are defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York shall, unless the context otherwise requires, have the
meanings set forth therein.
SECTION 2: THE FACILITY
2.1 Agreement to Make Advances
--------------------------
In reliance upon Disney's representations and warranties and subject
to the terms
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and conditions of this Agreement, the Company hereby agrees to make the Advances
to Disney and Disney hereby grants to the Company a security interest in the
Collateral to secure the recovery of the principal amount of such Advances and
accrued interest thereon. The Company shall recover the aggregate principal
amount of such Advances and accrued interest thereon from the collection of the
Designated Receivables and with recourse to Disney with respect to the recovery
of such amounts, but only to the extent hereinafter expressly provided.
2.2 Drawing Procedures
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(a) Disney may utilize the Commitment in whole but not in part in a
single drawing on the Drawing Date. The Company shall not have any obligation
hereunder to made the Advances after the Drawing Date.
(b) Subject to the satisfaction by Disney on the Drawing Date of all
applicable conditions precedent (including without limitation the filing of all
required financial statements (Form UCC-1) in accordance with the provisions of
this Agreement), the Company shall, not later than 11:00 a.m. (Tokyo time) on
the Drawing Date, make the Advances to Disney.
2.3 Recovery of Advances
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(a) Each Advance made by the Company to Disney hereunder with respect
to a Quarterly Receivables Period and accrued interest thereon shall be
recovered from the collection of the Designated Receivables for such Quarterly
Receivables Period. Following receipt by Disney (or, in the event that a
Collection Agent shall have been appointed pursuant to Section 10.01, then the
Collection Agent) of any Tokyo Disneyland Receivables to the Lock Box Account,
Disney (or the Collection Agent, as the case may be) shall, on the next
succeeding Settlement Date (or, if the, date of such receipt is a Settlement
Date, then on such Settlement Date), apply the amounts so received as follows:
(i) first, to any other account which Disney may designate, the
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amount of any Tokyo Disneyland Receivables or any other amounts received in
the Lock Box Account other than the Designated Receivables relating to such
Settlement Date;
(ii) second, to the Company, an amount equal to interest accrued
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on the Advance for the Quarterly Receivables Period to which such
Settlement Date relates, from the Drawing Date to such Settlement Date in
accordance with Section 2.04;
(iii) third, to the Company, an amount equal to the Advance for
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the Quarterly Receivables Period to which such Settlement Date relates; and
(iv) fourth, to any other account which Disney may designate, any
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balance then remaining in the Lock Box Account (other than any overpayment
or prepayment of Tokyo Disneyland Receivables by Oriental Land which is
subject to the
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provisions of Section 2.03(b)).
(b) Should Oriental Land make payment of any Tokyo Disneyland
Receivables on a date later than that provided in the Basic Agreement for such
payment to be made, Disney (or the Collection Agent, as the case may be) shall,
on the date of receipt of such payment in the Lock Box Account, apply the
amounts so received in accordance with Section 2.03(a) as if such payment had
been made on the Settlement Date by which such payment was due. Any overpayment
of Tokyo Disneyland Receivables by Oriental Land to the Lock Box Account shall
be refunded by Disney (or the Collection Agent, as the case may be) to Oriental
Land without interest. Any prepayment of Tokyo Disneyland Receivables by
Oriental Land to the Lock Box Account shall be held in the Lock Box Account
until the Settlement Date by which such payment would otherwise be due from
Oriental Land and interest shall accrue thereon to such Settlement Date in
accordance with Section 2.03(d).
(c) In the event that Oriental Land makes a late payment to the Lock
Box Account relating to a Quarterly Receivables Period or an Annual Receivables
Period with respect to which Disney has made an indemnity payment to the Company
pursuant to Section 3.02, the amount of such late payment by Oriental Land shall
be applied by Disney (or the Collection Agent, as the case may be), on the date
of report of such payment to the Lock Box Account, first (i) to the Company to
the extent, if any, that the sum of (A) the Designated Receivables with respect
to such Quarterly Receivables Period or Annual Receivables Period actually
received from Oriental Land prior to the receipt of such late payment and (B)
any indemnity payment made by Disney to the Company pursuant to Section 3.02
with respect to such Quarterly Receivables Period or Annual Receivables Period
(other than a payment of interest pursuant to Section 3.02(c)) is less than the
Designated Receivables as set forth on Schedule 1 with respect to such Quarterly
Receivables Period or Annual Receivables Period and the deferred shortfall
amounts, if any, payable pursuant to Section 3.02(d) (without reference to the
limitations on such payments set forth therein) with respect to such Quarterly
Receivables Period or Annual Receivables Period, and, second (ii) to Disney and
the Company, in accordance with Section 2.03(a).
(d) Disney (or the Collection Agent, as the case may be) shall, to the
extent permitted by applicable law and prevailing banking practice, cause the
bank at which the Lock Box Account is maintained to pay overnight interest on
amounts on deposit in the Lock Box Account, and the interest so paid shall be
added to the amounts on deposit in the Lock Box Account. Any such interest on
deposit in the Lock Box Account on any Settlement Date shall be paid over to
Disney on such Settlement Date.
2.4 Interest
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Each Advance shall bear interest at the rate of two and ninety and
one-half hundredths percent (2.905%) per annum (based on a year of 365 days and
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four quarters of equal duration, in accordance with the calculation of the
Advances set forth on Schedule 1) from and
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including April 30, 1997 to but excluding the Settlement Date for the Quarterly
Receivables Period to which such Advance relates. The interest amount so due on
any Settlement Date shall be equal to the difference between the amounts of the
Designated Receivables and the Advance set forth on Schedule 1 for the Quarterly
Receivables Period to which such Settlement Date relates. Such interest shall be
recoverable by the Company in accordance with the provisions of Section 2.03.
2.5 Cancellation of Commitment; Prepayment
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(a) Disney may, upon five (5) Business Days' notice to the Company,
cancel the Commitment in whole but not in part. Upon such cancellation Disney
shall pay to the Company the sum of all reasonable expenses, including
reasonable fees and expenses of counsel, printing, communication, travel and all
other out-of-pocket expenses incurred by the Company in connection with the
preparation, negotiation and execution of this Agreement and the documentation
required hereunder, less any amount previously paid to the Company in
reimbursement of expenses hereunder pursuant to Section 5.02(a).
(b) Disney shall have the right to prepay the Advances in whole or in
part (in a minimum amount of (Yen)1,000,000,000) on any Settlement Date upon
fifteen (15) days prior written notice to the Company by the payment on such
Settlement Date of (i) the Advances to be prepaid on such Settlement Date and
(ii) accrued interest thereon calculated at the rate set forth in Section 2.04
from and including April 30, 1997 to but excluding the date of Disney's payment
to the Company hereunder. Upon such prepayment, the Company shall, subject to
applicable legal requirements, prepay its corresponding obligations under the
Yen Loan Agreement. Disney's right to prepay in accordance with the preceding
sentence shall include the right to prepay the Advances in whole or in part (in
a minimum amount of (Yen)1,000,000,000) on fifteen (15) days prior written
notice by giving to the Company an irrevocable instruction to prefinance all or
part of the obligations of Disney through the Company to the Yen Lenders; a
prefinancing shall, for the purposes hereof, be a prepayment within the meaning
of this section if (i) it is arranged pursuant to a structure and documents to
be approved by Disney and the Company; (ii) the payment obligations of the
Company pursuant to the Yen Loan Agreement as to which the direction to
prefinance has been given are refinanced; (iii) such payment obligations
continue to be secured by an assignment and security interest in the Designated
Receivables; and (iv) the benefit of any reduction of interest rate or financing
charges realized by the Company in such refinancing is passed on to Disney.
2.6 Payments
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(a) All sums payable to Disney by the Company hereunder or under any
document contemplated hereby shall be payable in Tokyo, Japan in Yen and in
immediately available funds (or such other Yen funds as may then be customary
for the settlement of international banking transactions denominated in Yen) not
later than 11:00 a.m. (Tokyo time) on the day in question to the account of
Disney (account no. 14297-025) at Bank of America,
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Tokyo.
(b) All sums payable to the Company or the Manager hereunder or under
any document contemplated hereby, including without limitation the recovery of
Advances and accrued interest, indemnity payments by Disney pursuant to Section
3, the management fee and costs and expenses, shall be payable in Tokyo, Japan
in Yen and in immediately available funds (or such other Yen funds as may then
be customary for the settlement of international banking transactions
denominated in Yen) not later than 11:00 a.m. (Tokyo time) on the day in
question, to its account at The Hongkong and Shanghai Banking Corporation
Limited, Kyobashi Itchome Xxxxxxxx, 00-0, Xxxxxxxx 0-xxxxx, Xxxx-xx, Xxxxx 000,
Xxxxx.
(c) If Disney shall fail to make any payment when due of any sum
hereunder, other than a payment with respect to which recourse is limited to the
Collateral, Disney shall pay default interest on the unpaid amount, to the
extent permitted by applicable law, from and including such due date until the
payment of said sum in full (after as well as before judgment) at the rate that
is two percent (2%) per annum above the rate set forth in Section 2.04. Such
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interest shall be payable on the Company's demand therefor.
(d) Except as otherwise expressly provided in this Agreement, any
payments made to the Company and the Manager hereunder or under any document
contemplated hereby shall be applied first against costs and expenses due
hereunder, then against fees due to the Manager, then against interest on past
due amounts, then against unrecovered interest which is due and payable pursuant
to Section 2.04, then against unrecovered Advances and thereafter to Disney's
indemnity obligations pursuant to Section 3.
2.7 Security Agreement
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This Agreement shall constitute a security agreement between Disney
and the Company, and Disney hereby grants to the Company a security interest in
the Collateral to secure the recovery by the Company of the Advances and accrued
interest thereon. It is the intention of the parties hereby to create a
security interest in the Collateral consisting of the cash collections and other
cash proceeds of the Designated Receivables and in the proceeds of such
Collateral, and such security interest shall not constitute a security interest
in the Basic Agreement or any of the Tokyo Disneyland Receivables (including the
Designated Receivables).
2.8 Facility Account
----------------
The Company shall open and maintain on its books a facility account in
Disney's name and showing the making of Advances, the accrual of interest, the
recovery of Advances and accrued interest, and other amounts due and sums paid
hereunder. Such facility account shall be prima facie evidence as to the
amounts at any time due hereunder, absent manifest error.
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SECTION 3: DISNEY'S LIABILITIES
3.1 Limited Recourse Liability
--------------------------
The liability of Disney under this Agreement with respect to the
recovery of Advances and accrued interest thereon shall, except as otherwise
expressly provided in this Section 3, be limited to the Designated Receivables
actually received from Oriental Land under the Basic Agreement (whether such
payments shall be received from Oriental Land by collection in the ordinary
course of business, by legal proceedings to enforce Oriental Land's payment
obligations under the Basic Agreement or otherwise). In the event that Oriental
Land shall not, under the terms of the Basic Agreement or by reason of the
termination of the Basic Agreement, be obligated to make payment of any
Designated Receivables, Disney shall have no liability to the Company with
respect thereto except as otherwise expressly provided in this Section 3. The
obligations of Disney hereunder, other than with respect to the Advances and
accrued interest thereon, are general obligations of Disney ranking pari passu
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in priority of payment and in all other respects with all other unsecured and
unsubordinated Indebtedness of Disney.
3.2 Shortfall Indemnities
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(a) QUARTERLY SHORTFALL PAYMENTS. If, on the Settlement Date for any
Quarterly Receivables Period, the amount of the Designated Receivables which has
actually been received from Oriental Land is less than the Designated
Receivables set forth on Schedule 1 annexed hereto with respect to such
Quarterly Receivables Period, then Disney shall make a payment to the Company on
such Settlement Date in an amount equal to the lesser of (i) the amount of such
shortfall and (ii) twenty percent (20%) of the Designated Receivables set forth
on Schedule 1 annexed hereto with respect to such Quarterly Receivables Period,
provided, however, that the aggregate amount payable pursuant to this Section
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3.02 (other than any amount payable pursuant to Section 3.02(b)(ii)(C)) shall
not exceed twenty percent (20%) of the aggregate Advances received by Disney on
the Drawing Date.
(b) ANNUAL ADJUSTMENT OF QUARTERLY SHORTFALL PAYMENTS. If, on the
Settlement Date for the fourth Quarterly Receivables Period in any Annual
Receivables Period, the sum of (A) the Designated Receivables with respect to
such Annual Receivables Period which have actually been received from Oriental
Land and (B) the quarterly shortfall indemnity payments made by Disney to the
Company pursuant to Section 3.02(a) during such Annual Receivables Period is
less than the aggregate Designated Receivables set forth on Schedule 1 annexed
hereto with respect to such Annual Receivables Period, then Disney shall make a
payment to the Company equal to the lesser of (i) the amount of such shortfall
and accrued interest thereon pursuant to Section 3.02(c) and (ii) the sum of (C)
the Tokyo Disneyland Receivables in excess of the Designated Receivables
actually received by Disney in each of the Quarterly Receivables Periods during
such Annual Receivables Period and (D) twenty percent (20%) of the Designated
Receivables set forth on Schedule 1 annexed hereto with respect to such Annual
Receivables Period, as such sum is reduced by (E) the quarterly shortfall
indemnity
-10-
payments previously made by Disney to the Company pursuant to Section 3.02(a)
during such Annual Receivables Period, provided, however, that the aggregate
-------- -------
amount payable by Disney pursuant to this Section 3.02 (other than any amount
payable pursuant to Section 3.02(b)(ii)(C)) shall not exceed twenty percent
(20%) of the aggregate Advances received by Disney on the Drawing Date. Payments
pursuant to this Section 3.02(b) shall be made by Disney to the Company not
later than five (5) Business Days following the Company's written demand
hereunder, which demand shall set forth the Company's calculations as to the
amounts so due, such calculations to be conclusive and binding on the parties
hereto absent manifest error.
(c) INTEREST ON ANNUAL ADJUSTMENT PAYMENTS. For any Annual
Receivables Period with respect to which an annual adjustment payment is due
pursuant to Section 3.02(b), the annual adjustment payment so due shall, for the
purpose of the determination of interest due pursuant thereto and to this
Section 3.02(c), be allocated to each Settlement Date with respect to such
Annual Receivables Period on which the sum of the Designated Receivables
actually received from Oriental Land and the quarterly shortfall indemnity
payment made by Disney to the Company on such Settlement Date pursuant to
Section 3.02(a) was less than the Designated Receivables set forth on Schedule 1
annexed hereto for the Quarterly Receivables Period to which such Settlement
Date relates (the amount of such deficiency for each such Settlement Date being
hereinafter sometimes referred to as the "residual quarterly shortfall"), such
allocation of the amount of the annual adjustment payment to each such
Settlement Date being in the amount of such residual quarterly shortfall,
provided, however, that if the limitations set forth in Section 3.02(b) on the
-------- -------
amount of such annual adjustment payment result in the amount of such payment
being less than the aggregate amount of the residual quarterly shortfalls with
respect to such Annual Receivables Period, the annual adjustment payment shall
be allocated to the residual quarterly shortfalls for the earliest Settlement
Dates with respect to such Annual Receivables Period until fully allocated.
Interest shall be payable on such residual quarterly shortfalls, for the period
from and including the relevant Settlement Date to but excluding the date on
which payment of the relevant annual adjustment payment hereunder is made by
Disney, at the Long Term Prime Lending Rate prevailing during such period,
subject to the limitations set forth in Section 3.02(b).
(d) DEFERRED SHORTFALL PAYMENTS. In the event that Disney shall have
made payments to the Company pursuant to Sections 3.02(a) and (b) with respect
to any four consecutive Quarterly Receivables Periods to the full extent of the
twenty percent (20%) limitations for such Quarterly Receivables Periods
(including the annual adjustment payments attributable to such Quarterly
Receivables Periods in accordance with Section 3.02(c)) as set forth in Sections
3.02(a)(ii) and 3.02(b)(ii)(D) and, during such period of four consecutive
Quarterly Receivables Periods Tokyo Disneyland Park or any substantial portion
thereof shall have been closed to the public for more than thirty (30)
consecutive days for any reason whatsoever other than normal public holidays and
regularly scheduled maintenance, then the aggregate amount of (i) the residual
quarterly shortfalls for such four consecutive Quarterly Receivables Periods or
(ii) if greater, the residual quarterly shortfalls for the four consecutive
Quarterly Receivables Periods commencing with the Quarterly Receivables Period
immediately
-11-
following that in which the first day of such thirty (30) day closure period
fell, which residual quarterly shortfalls in either case remain after Disney's
quarterly shortfall payments and annual adjustment payments attributable to such
Quarterly Receivables Periods pursuant to Sections 3.02(a) and (b), as
determined on the Settlement Date at the end of the last Annual Receivables
Period in which such Quarterly Receivables Periods fall (such aggregate amount
being hereinafter sometimes referred to as the "deferred shortfall amount"),
shall be payable by Disney to the Company in equal quarterly installments on
each Settlement Date thereafter, together with accrued interest thereon from the
Settlement Date at the end of the Annual Receivables Period on which the
deferred shortfall amount is determined at the rate which is three-tenths-of-one
percent (3/10%) per annum in excess of the Long Term Prime Lending Rate
--- -----
prevailing on such Settlement Date. In the event that a deferred shortfall
amount is payable pursuant to the provisions of the preceding sentence, Disney
shall also pay to the Company the deferred shortfall amount for the four
consecutive Quarterly Receivables Periods immediately following the four
Quarterly Receivables Period for which the original deferred shortfall amount
was determined (the "Second Period"), which deferred shortfall amount shall be
calculated and payable on a deferred basis and with interest thereon as
specified in the preceding sentence (i.e., to the extent that for each of the
Quarterly Receivables Periods in the Second Period, a residual shortfall amount
for each quarter during such Second Period remains after Disney has made all
payments to the full extent of the 20% limitation for each such quarter). It is
understood that recovery of all deferred shortfall amounts determined under this
Section 3.02(d) shall be made solely on the same terms and subject to the same
limits as to recourse and recovery as Advances hereunder are recoverable in
accordance with this Agreement. The amount of any deferred shortfall amount
payable hereunder shall be subject to the quantitative limitations on payments
by Disney which are set forth in Sections 3.02(a) and (b), as such limitations
shall be modified in accordance with the provisions of this Section 3.02(d).
During any Annual Receivables Period in which a deferred shortfall amount is
payable hereunder (without reference to such quantitative limitations), all
references in Sections 3.02(a) and (b) to "the Designated Receivables set forth
on Schedule 1 annexed hereto" shall be read as references to the relevant
Designated Receivables as so set forth increased by the deferred shortfall
amounts due on the same Settlement Date(s) as such Designated Receivables, and
Disney's payment obligations thereunder (encompassing its payment obligations
under this Section 3.02(d) and its interest payment obligations under Section
3.02(c)) shall be determined accordingly, subject always to the limitation that
all payments by Disney pursuant to Section 3.02 (other than its payment
obligations pursuant to Section 3.02(b)(ii)(C)), including payments under this
Section 3.02(d), shall not exceed in the aggregate twenty percent (20%) of the
aggregate Advances received by Disney on the Drawing Date. The provisions of
this Section 3.02(d) shall be triggered only once, and shall operate only with
reference to up to two consecutive periods of four consecutive Quarterly
Receivables Periods to which the conditions to the operation of this Section (as
set forth in the first sentence hereof) apply.
(e) SHORTFALL CALCULATIONS. For the purposes of all calculations to
be made pursuant to this Section 3.02, any payment by Disney to the Company
hereunder shall be deemed to have been made to the full extent of the Tokyo
Disneyland Receivables in excess of the
-12-
Designated Receivables actually received by Disney on any relevant Settlement
Date(s) before any payment by Disney shall be deemed to have been made under the
other provisions of Section 3.02(a) or (b) which are subject to the twenty
percent (20%) limitations set forth therein.
(f) PAYMENTS APPLICATION. Payments received by the Company under this
Section 3.02 (other than any interest paid pursuant to Section 3.02(c)) shall be
applied by the Company to the recovery of the Advances with respect to the
Quarterly Receivables Periods to which payments hereunder relate and to the
recovery of accrued interest on such Advances pursuant to Section 2.03.
3.3 Basic Agreement Indemnities
---------------------------
(a) In the event that Oriental Land reduces (by means of set-off or
otherwise), or does not make payment of, any of the Designated Receivables or
terminates the Basic Agreement on the basis, in any such event, that Disney has
defaulted in the performance of any of its obligations to Oriental Land under
the Basic Agreement or on the basis that Disney has withheld or withdrawn
certain material intellectual property licenses pursuant to Paragraph 13.9 of
the Basic Agreement, Disney agrees to indemnify the Company and to hold the
Company harmless against any cost, expense, damage or liability arising out of
or resulting from such reduction, non-payment or termination. Disney's
liability with respect to any such reduction or non-payment of any of the
Designated Receivables, if paid on the date each of such Designated Receivables
would otherwise have been paid in full by Oriental Land, shall not exceed the
amount by which the Designated Receivables (if any) actually received from
Oriental Land is less than the Designated Receivables for the relevant Quarterly
Receivables Period set forth on Schedule 1. Upon termination of the Basic
Agreement by Oriental Land on the basis of any such default, withholding or
withdrawal, Disney shall pay to the Company in settlement of Disney's
obligations under this Section 3.03(a), and the Company agrees to accept in
settlement of such obligations, an amount equal to the sum of (i) the Advances
then outstanding and (ii) accrued interest thereon calculated at the rate set
forth in Section 2.04 from and including the Drawing Date to but excluding the
date of Disney's payment to the Company hereunder.
(b) Payments pursuant to this Section 3.03 shall be made by Disney to
the Company not later than the date which is five (5) Business Days following
the Company's written demand hereunder, which demand shall set forth the
Company's calculations as to the amounts so due.
(c) Payments received by the Company under this Section 3.03 shall be
applied by the Company in accordance with Section 2.06(d).
3.4 Facility Agreement Indemnities
------------------------------
(a) Disney agrees to indemnify the Company and to hold the Company
harmless against any cost, expense, damage or liability directly arising out of
or resulting from
-13-
(i) any representation or warranty made by Disney in this Agreement or in any
certificate or other document delivered pursuant to this Agreement having been
incorrect in any material respect when made or (ii) any Termination Event other
than a Termination Event pursuant to Section 9.01(a).
(b) Payments pursuant to this Section 3.04 shall be made by Disney to
the Company not later than the date which is five (5) Business Days following
the Company's written demand hereunder, which demand shall set forth the
Company's calculations as to the amounts so due, such calculations to be
conclusive and binding on the parties hereto absent manifest error.
(c) Payments received by the Company under this Section 3.04 shall be
applied by the Company in accordance with Section 2.06(d).
3.5 Other Parties' Liabilities
--------------------------
No obligation or liability of Disney to Oriental Land or any other
third party (including without limitation any governmental authority in Japan)
under or with respect to the Basic Agreement is assumed by the Company, the
Manager or any Collection Agent by reason of the execution, delivery or
performance of this Agreement and the transactions contemplated hereby, and any
such assumption is hereby expressly disclaimed. Disney shall indemnify and hold
harmless each of the Company, the Manager and any Collection Agent against any
cost, expense, damage or liability arising out of or resulting from any
assertion or determination that any of such parties has assumed any such
obligation or liability (other than any cost, expense, damage or liability
arising out of or resulting from the negligence or wilful misconduct of the
Company, the Manager or such Collection Agent).
3.6 Expenses Included
-----------------
Indemnification pursuant to the provisions of this Section 3 shall
include without limitation reasonable counsel fees and expenses and other out-
of-pocket expenses, including expenses of investigation, incurred in connection
with the matter or transaction giving rise to a claim for indemnification.
SECTION 4: YIELD PROTECTION
4.1 Taxes
-----
(a) To the extent that the amount of any Designated Receivables
actually received by Disney from Oriental Land with respect to any Quarterly
Receivables Period and available for application by Disney (or the Collection
Agent, as the case may be) in payment of Disney's obligations to the Company
hereunder is less than the Designated Receivables for such Quarterly Receivables
Period as set forth on Schedule 1 by virtue of such Designated
-14-
Receivables received by Disney from Oriental Land being subject to any present
or future withholding taxes, or any liabilities with respect thereto, imposed by
Japan or any political subdivision or taxing authority thereof or therein (all
such taxes being hereinafter referred to as "Taxes") at a rate greater than ten
percent, Disney shall pay such additional amounts to the Company hereunder as
may be required to indemnify the Company for the reduction in such amount
received by Disney from Oriental Land which is attributable to Japanese tax
being payable thereon at a rate in excess of ten percent.
(b) In addition, Disney agrees to pay any present or future stamp or
documentary taxes or any excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery,
registration, performance or enforcement of, or otherwise with respect to, this
Agreement or any other documents contemplated hereby (hereinafter referred to as
"Other Taxes", which term shall not include any Taxes as heretofore defined),
provided, however, that (i) Disney shall have no liability under any provision
-------- -------
of this Agreement for Other Taxes arising solely by reason of the assignment or
transfer by the Company or any of its assignees of all or any portion of their
interest hereunder to any other Person, and (ii) Disney's liability hereunder
with respect to Other Taxes applicable through the Drawing Date shall not exceed
Fifty Thousand United States dollars ($50,000).
(c) Disney shall indemnify the Company for the full amount of Taxes or
Other Taxes (including without limitation any Taxes or Other Taxes imposed on
amounts payable under this Section 4.01) paid by the Company or any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Such indemnification shall be made within thirty (30) days from the
date the Company makes written demand therefor. The Company shall use
reasonable efforts to cooperate with Disney in seeking a refund of any such
Taxes or Other Taxes paid which, in the opinion of Disney's independent
certified public accountants, has not been correctly and legally asserted,
provided that the Company shall be entitled to prompt reimbursement from Disney
--------
with respect to reasonable costs and expenses (including without limitation
reasonable counsel fees and expenses) incurred by the Company in such refund
application and proceedings.
(d) Within thirty (30) days after the date of any payment of Taxes or
any other tax, levy, impost, deduction, charge or withholding with respect to
any payment hereunder, Disney or the Collection Agent, as the case may be, shall
furnish to the Company the original or a certified copy of a receipt evidencing
payment thereof, if available.
(e) Without prejudice to the survival of any other agreement of Disney
hereunder, the agreements and obligations of Disney contained in this Section
4.01 shall survive the recovery in full of the Advances and accrued interest
thereon.
(f) The provisions of Section 7.02(a) and 7.03 of the DWARFS Loan
Agreement (including all defined terms therein) shall be incorporated by
reference herein and shall apply, mutatis mutandis, to payments made by Disney
----------------
on the Advances. For purposes of
-15-
this Agreement, each reference in Section 7.02(a) and Section 7.03 of the DWARFS
Loan Agreement to the Company as payor under the Loans or otherwise shall be
treated as a reference to Disney as payor under the Advances. In addition, if
the Company is obligated to make any payment under Section 7.02 or 7.03 of the
DWARFS Loan Agreement, then upon submission to Disney of the notice or other
evidence establishing the requirement for and amount of such gross up payment,
Disney shall reimburse and indemnify the Company for such payments and shall, so
long as such requirement shall continue, make such gross up payments to the
Company.
4.2 Compliance Costs; Illegality
-----------------------------
(a) If (i) compliance by the Company with any law, regulation or
condition imposed after the date hereof by the United States or Japan or any
political subdivision or authority thereof or therein with respect to this
Agreement, the Commitment, the unrecovered Advances or any funds obtained by the
Company to meet or maintain its obligations hereunder and any restraint,
guideline or policy not having the force of law of any central bank or
governmental monetary authority (other than a change in any reserve or deposit
requirement or rate of interest payable by the Company or such funding sources
in respect of their obligations related to this transaction), or (ii) any change
imposed by a taxing authority in Japan or any political subdivision thereof
(other than changes in the rate of tax or a tax or charge having the effect of a
tax which is a capital, consumption or franchise tax or is imposed on the income
of the Company or such funding sources) shall (A) result in an increase (net of
any related tax reduction) in the cost to the Company of advancing or
maintaining the Commitment or the unrecovered Advances, or (B) result in a net
reduction of any amount received or receivable by the Company hereunder, then
the Company shall furnish to Disney a statement of the nature and amount of such
cost or reduction and Disney shall pay to the Company on demand from time to
time such additional amounts as may be necessary to compensate the Company for
such additional cost or reduction.
(b) In the event that it shall become unlawful under the laws of the
United States or Japan or any political subdivision thereof or therein for the
Company to honor the Commitment or to fund or maintain the Commitment or the
unrecovered Advances, then the Commitment shall be canceled and, if the Advances
have been made, Disney shall pay to the Company within forty-five (45) days of
the Company's written demand hereunder or on such earlier date as payment may be
required to cure such illegality in settlement of Disney's obligations under
this Section 4.02(b), and the Company agrees to accept in settlement of such
obligations, an amount equal to the sum of (i) the Advances then outstanding,
and (ii) accrued interest thereon calculated at the rate set forth in Section
2.04 from and including the Drawing Date to but excluding the date of Disney's
payment to the Company hereunder. Upon the occurrence of any event giving rise
to the application of this Section 4.02(b), the Company shall promptly notify
Disney thereof and shall furnish Disney evidence certified by the Company as to
such illegality.
4.3 Mitigation
----------
-16-
The Company shall act in good faith to mitigate the consequences to
the Company and Disney of any yield protection payment which becomes due under
Section 4.01 or Section 4.02(a) or of any illegality under Section 4.02(b)
including without limitation, if appropriate, the assignment of its rights and
obligations hereunder with Disney's consent to an Affiliate of the Company or to
any other Person upon Disney's indemnifying the Company for any reasonable costs
and expenses incurred or liabilities assumed by the Company with respect to such
assignment.
4.4 Yield Protection Prepayment
---------------------------
If Disney is required to pay any amount to the Company pursuant to
Section 4.01 (other than any immaterial stamp or documentary tax payable under
Section 4.01(b)) or Section 4.02, Disney shall have the right on any Settlement
Date within one hundred twenty (120) days of the date of such payment, upon not
less than thirty (30) days' prior written notice to the Company (which notice
shall be irrevocable), to prepay the Advances then outstanding, either in whole
or in part, with accrued interest thereon calculated at the rate set forth in
Section 2.04 from and including the Drawing Date to but excluding the Date of
Disney's payment to the Company hereunder.
4.5 Yen Transaction
---------------
This is an international financial transaction in which the
specification of Yen and payment in Tokyo, Japan are of the essence, and Yen
shall be the currency of account and of payment in all events. The payment
obligations hereunder shall not be discharged by an amount paid in another
currency or in another place, whether pursuant to a judgment or otherwise, to
the extent that the amount so paid on prompt conversion to Yen and transfer to
Tokyo, Japan under normal banking procedures does not yield the amount of Yen
due hereunder. In the event that any payment, whether pursuant to a judgment or
otherwise, upon such conversion and transfer does not result in payment of such
amount of Yen in Tokyo, Japan, the Company shall be entitled to demand immediate
payment of, and shall have a separate cause of action for, the Yen deficiency in
respect of the payment due to it.
SECTION 5: FEES AND EXPENSES
5.1 Management Fee
--------------
Disney shall pay to the Manager a management fee for services to be
rendered during the first year of the term of this Agreement in an amount as
separately agreed between Disney and the Manager. The management fee shall be
payable on the Drawing Date.
5.2 Expenses
--------
-17-
(a) Within thirty (30) days of the Company's invoice therefor, Disney
shall, whether or not the Commitment is utilized, promptly reimburse the Company
for all reasonable expenses, including reasonable fees and expenses of counsel,
printing, communication, publicity, travel and all other out-of-pocket expenses
incurred by the Company (i) up to a maximum of the Yen Equivalent of Xxx Xxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx dollars ($100,000) in connection with the negotiation,
preparation and execution of this Agreement and the documentation required
hereunder, and (ii) in connection with any amendments, waivers or consents
relating to this Agreement or the transactions or any document contemplated
hereby required during the term hereof.
(b) Disney shall also reimburse the Company on demand for all
reasonable expenses incurred by the Company (including without limitation fees
and expenses of counsel and other professional advisors) (i) in the
determination that there has occurred a Termination Event or an event that, with
the giving of notice or the passing of time, or both, would constitute a
Termination Event, and (ii) in the administration and enforcement of this
Agreement from and after the occurrence of such a Termination Event or event.
Such expenses shall be reimbursed whether or not they arise during the term of
this Agreement and whether or not the Company gives notice of such Termination
Event or event or takes other action to enforce the provisions of this Agreement
or any related documentation.
SECTION 6: REPRESENTATIONS AND WARRANTIES
Disney hereby represents and warrants to, and covenants with, the
Company as follows:
6.1 Organization, Power and Authority
---------------------------------
Disney is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware in the United States of America
and has full legal right, power and authority to execute, deliver and perform
its obligations under this Agreement, the Disney Acknowledgment, the Pledge
Agreement, the Lock Box Notice and the Form UCC-1 financing statement to be
delivered hereunder (hereinafter referred to collectively as the "Disney
Agreements"). Disney is duly qualified to do business and is in good standing
in the State of California.
6.2 Compliance with Law and Other Agreements
----------------------------------------
There is no law, regulation, decree or similar authority binding on
Disney, no provision of the Certificate of Incorporation or By-laws of Disney
and no provision of any existing contract, agreement or instrument to which
Disney is a party or by which any of its properties or assets is bound which has
been or would be contravened, or which (other than the Disney Agreements) would
result in the imposition of any mortgage, lien, charge or encumbrance on any of
its properties or assets, by reason of the execution and delivery of any of
-18-
the Disney Agreements by Disney or by reason of the performance or observance by
Disney of any of the terms and conditions hereof or thereof.
6.3 Authorization
-------------
The execution, delivery and performance by Disney of each of the
Disney Agreements have been duly authorized by all appropriate corporate action
on the part of Disney.
6.4 Registrations and Approvals
---------------------------
All consents, approvals, licenses and authorizations of, and all
filings and registrations with, any governmental agency or authority necessary
for the due execution and delivery of this Agreement by Disney have been
obtained, and all consents, approvals, licenses, authorizations, filings and
registrations necessary for the due execution and delivery of the other Disney
Agreements by Disney and for the performance or enforceability hereof and
thereof by or against Disney shall have been obtained and shall be in full force
and effect prior to the date on which Disney gives the Notice of Drawing to the
Company hereunder.
6.5 Agreement Binding
-----------------
This Agreement constitutes, and each of the other Disney Agreements
when executed and delivered hereunder will constitute, the legal, valid and
binding obligations of Disney, enforceable in accordance with their respective
terms, except as such enforcement may be limited (i) by bankruptcy, insolvency,
liquidation, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' right generally and (ii) by the application or general
equitable principles (regardless of whether considered in a proceeding in equity
or at law). Disney's obligations under each of the Disney Agreements, other than
those obligations with respect to which recourse is limited to the Collateral,
are general Indebtedness of Disney ranking pari passu in priority of payment and
---- -----
in all other respects with all other unsecured and unsubordinated Indebtedness
of Disney.
6.6 Other Obligations
-----------------
Disney is not in default under any agreement, obligation or duty to
which it is a party or by which it or any of its properties or assets is bound
which would have a material adverse effect on the ability of Disney to perform
its obligations under any of the Disney Agreements.
6.7 Litigation
----------
There are no pending or, to the knowledge of Disney, threatened legal
actions, arbitration or other legal or administrative proceedings which, if
adversely determined, would (i) materially impair the ability of Disney to carry
on its business as now conducted or materially affect the consolidated financial
condition of Disney, (ii) adversely affect the ability of Oriental
-19-
Land (to the best of Disney's knowledge), Disney or any Collection Agent to pay
any amounts due under the Basic Agreement or any of the Disney Agreements or
(iii) adversely affect the validity or enforceability of the Basic Agreement or
any of the Disney Agreements against Oriental Land (to the best of Disney's
knowledge) or Disney.
6.8 Information Memorandum; Financial Statements
--------------------------------------------
The information contained in the Information Memorandum relating to
Disney, Tokyo Disneyland Park and the Basic Agreement, taken as a whole, is
true, complete and accurate in all material respects, contains no misleading
statement of a material fact and does not omit to state any material fact
necessary to make the statements therein not misleading, provided, however, that
-------- -------
with respect to estimates and projections contained therein (including without
limitation projected Tokyo Disneyland Receivables and projected Designated
Receivables during the term of this Agreement) Disney represents and warrants
only that such estimates and projections have been made in good faith in
reliance upon information which Disney reasonably believes to be complete and
accurate. The audited consolidated financial statements of Disney as set forth
in its most recent Annual Report to Shareholders are complete and correct and
fairly present the consolidated financial condition and results of operations of
Disney as at the dates stated therein and for the periods then ended in
accordance with generally accepted accounting principles in the United States,
consistently applied. Since the date of the latest financial statements set
forth in such Annual Report to Shareholders, there has been no material adverse
change in the consolidated financial condition or results of operations of
Disney.
6.9 Basic Agreement
---------------
The copy of the Basic Agreement heretofore delivered by Disney to the
Company is a true and correct copy of the Basic Agreement as in effect on the
date of this Agreement, and there exists no other agreement between Disney and
Oriental Land regarding their respective rights and obligations with respect to
the Tokyo Disneyland Receivables. The Basic Agreement constitutes the legal,
valid and binding obligation of the parties thereto, enforceable in accordance
with its terms, except as such enforcement may be limited (i) by bankruptcy,
insolvency, liquidation, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' right generally and (ii) by the
application or general equitable principles (regardless of whether considered in
a proceeding in equity or at law). All consents, approvals, licenses and
authorizations of, and all filings and registrations with, any governmental
agency or authority with respect to the Basic Agreement or to the parties'
performance of their respective obligations thereunder have been duly obtained
and continue in full force and effect. To the knowledge of Disney, no event has
occurred and no circumstance or condition exists which would entitle (or, with
the giving of notice or the passing of time, or both, would entitle) either
party to the Basic Agreement to terminate the Basic Agreement, to seek damages
thereunder against the other party, to give notice of an event of force majeure
or of a condition of material business or economic hardship, to suspend its
performance thereunder, to reduce any
-20-
Tokyo Disneyland Receivables otherwise payable thereunder or to withhold or
withdraw any intellectual property rights licensed thereunder. No substantial
dispute exists between Disney and Oriental Land with respect to the Basic
Agreement or any of their respective rights and obligations thereunder or with
respect to Tokyo Disneyland Park which could affect adversely the payment of the
Designated Receivables by Oriental Land under the Basic Agreement. None of
Disney's rights under the Basic Agreement is the subject of any mortgage, lien,
pledge or other security interest or of any segregation of proceeds or other
preferential arrangement other than the security interest in the Collateral in
favor of the Company established pursuant to the terms and conditions of this
Agreement.
6.10 Designated Receivables
----------------------
Disney owns each of the Designated Receivables, free and clear of any
adverse claim. On making the Advances (assuming the Lock Box Notice has been
duly acknowledged by the depositary bank at which the Lock Box Account is
maintained) and upon Oriental Land making payment into the Lock Box Account of
any Designated Receivables constituting Collateral hereunder, the Company shall
acquire a valid and perfected security interest in such Collateral. No
effective financing statement or other instrument similar in effect covering the
Basic Agreement, any Designated Receivables or the proceeds thereof is or shall
at any time during the term of this Agreement be on file in any relevant
recording office except the financing statement in favor of the Company with
respect to this Agreement and the other Disney Agreements.
6.11 Records
-------
The chief place of business and chief executive offices of Disney and
the office at which the Records are kept are located in the State of California
in the United States of America.
SECTION 7: COVENANTS
In addition to the other undertakings herein, Disney hereby covenants
with the Company that during the term of this Agreement Disney shall act as
follows and shall perform the following obligations:
7.1 Performance of Obligations
--------------------------
Disney shall punctually pay all amounts due from Disney under this
Agreement and the other Disney Agreements at the places and times and on the
dates specified herein or therein. Disney shall perform all of its other
obligations, undertakings and covenants under each of the Disney Agreements and
under, and with respect to, the Basic Agreement to the extent non-performance of
any such obligations, undertakings or covenants would entitle Oriental Land to
reduce (by means of set-off or otherwise), or not to make payment of, any of the
Designated
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Receivables or to terminate the Basic Agreement.
7.2 Financial Statements; Other Information
---------------------------------------
Disney shall maintain an accounting system in accordance with
generally accepted accounting principles in the United States consistently
applied and shall furnish to the Company the following:
(a) as soon as available but not later than one hundred twenty (120)
days after the end of each of its fiscal years, consolidated financial
statements of The Xxxx Disney Company (each including, at least, a balance
sheet, a statement of income and a statement of sources and application of funds
with related notes specifying significant accounting policies and their impact
on such financial statements and all related schedules) as at and for the
accounting period then ended, audited and certified by independent certified
public accountants of international standing;
(b) promptly upon receipt, a copy of each statement of account
submitted by Oriental Land to Disney pursuant to Paragraph 11.1.6 of the Basic
Agreement;
(c) as soon as available but not later than one hundred twenty (120)
days after the end of each of its fiscal years, a statement certified by
Disney's independent certified public accountants setting forth, on the basis of
their audit examination of Disney, the Tokyo Disneyland Receivables for such
fiscal year and further setting forth a reconciliation of receipts and
disbursements from the Lock Box Account for such fiscal year;
(d) not later than September 15th in each year, projections prepared
by Disney setting forth projected Tokyo Disneyland Receivables and projected
receipts with respect to Designated Receivables for the following fiscal year
which projections shall contain at least the same items of information as
Oriental Land is required to provide in each statement of account pursuant to
Paragraph 11.1.6 of the Basic Agreement; and
(e) such other information respecting the business, properties,
condition or operations, financial or otherwise, of Disney as Disney discloses
to the public from time to time and, with respect to Tokyo Disneyland Park, such
other information respecting its business, properties, condition or operations,
financial or otherwise, as the Company may from time to time reasonably request.
Disney shall permit representatives of the Company from time to time during
Disney's normal business hours to inspect, audit and make copies of any and all
Records.
7.3 Performance and Notice
----------------------
Disney shall give notice to the Company promptly after Disney has
knowledge of (i) any substantial dispute between Disney and Oriental Land with
respect to the Basic Agreement which could adversely affect the payment of any
Tokyo Disneyland Receivables by
-22-
Oriental Land, (ii) any substantial labor dispute affecting the continued normal
business operations of Tokyo Disneyland Park, (iii) any loss or damage to the
properties or assets of Tokyo Disneyland Park resulting from any casualty if the
initial estimated cost of replacement is in excess of Four Billion Five Hundred
Million Yen ((Yen)4,500,000,000) or its then equivalent in any currency, (iv)
any notice received from Oriental Land or given by Disney to Oriental Land under
the Basic Agreement regarding a default or alleged default thereunder or the
bankruptcy, etc. (as therein defined) of either of the parties, regarding the
occurrence of an event of force majeure or of any condition of material business
or economic hardship as contemplated by Paragraph 21 of the Basic Agreement,
regarding the imposition of foreign exchange controls or regarding the
withholding or withdrawal by Disney of certain intellectual property rights
licensed under the Basic Agreement, (v) any proposed amendment to, or other
modification of, the Basic Agreement, (vi) the commencement of any litigation or
proceeding (whether by service of process or by attachment or arrest of any
property or asset) involving total claims against Disney in excess of Twelve
Billion Eight Hundred Million Yen ((Yen)12,800,000,000) or its then equivalent
in any currency, or (vii) the occurrence of any Termination Event or event that,
with the giving of notice or the passing of time, or both, would constitute a
Termination Event.
7.4 Mortgages; Liens
----------------
(a) Neither Disney nor any Restricted Subsidiary (as hereinafter
defined) shall create, issue, assume, guarantee or allow to be secured any bonds
or other instruments for Indebtedness issued or sold privately or to the public
which:
(i) are or are intended to be quoted, listed or dealt in on any
stock exchange or over-the-counter market; and
(ii) are secured by a mortgage, lien, security interest or other
encumbrance ("Mortgage") upon (a) any Tangible Property (as hereinafter
defined) except any Theme Park Asset (as hereinafter defined) or (b) any
shares of stock or Indebtedness of any Restricted Subsidiary;
unless Disney's Indebtedness hereunder is secured equally and ratably with such
Indebtedness. The foregoing restrictions shall not apply to Mortgages on
property of a corporation existing at the time such corporation becomes a
Restricted Subsidiary or is merged into or consolidated with Disney or a
Restricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary substantially all of the
property of which is located, or substantially all of the business of which is
carried on, within the United States of America and which owns Tangible
Property. "Tangible Property" means any land, building, machinery or equipment
or leasehold interest or improvement which would be reflected on a consolidated
balance sheet of Disney or Disney and its consolidated Subsidiaries prepared in
accordance with United States generally accepted accounting principles,
excluding (i) in the case of Disney, all such Tangible Property located outside
the United States of America, (ii) all
-23-
intangible assets of any nature whatsoever as reflected on a consolidated
balance sheet of Disney or Disney and its consolidated Subsidiaries prepared in
accordance with United States generally accepted accounting principles, and
(iii) all films, programs, and film and program rights. "Theme Park Asset" means
any Tangible Property which forms a part of or is used, operated or employed by
Disney and its Subsidiaries in connection with Disneyland, Magic Kingdom or
Epcot Center or any other theme park, resort or attraction owned or operated by
Disney and its Subsidiaries (whether now or hereafter in existence).
(b) Notwithstanding the foregoing, Disney shall not create, assume,
incur or suffer to exist, or permit to be created, assumed, incurred or suffered
to exist, any mortgage, lien, pledge, security interest or other charge or
encumbrance or other preferential arrangement of any kind upon or with respect
to the Basic Agreement, any of the Tokyo Disneyland Receivables or the
Designated Receivables or in any proceeds of any of the foregoing, other than
the security interest in the Collateral in favor of the Company established
pursuant to the terms and conditions of this Agreement, without the prior
written consent of the Company.
7.5 Maintenance and Continuity of Business
--------------------------------------
Disney shall maintain its corporate existence, rights, privileges and
franchises under and in compliance with all applicable corporate and tax laws
and shall conduct its business, in all material respects, in compliance with all
applicable laws and with all regulations and governmental guidelines having the
force of law.
7.6 Maintenance of Governmental Approvals
-------------------------------------
Disney shall maintain in full force and effect all necessary
governmental consents, approvals, licenses, authorizations, filings and
registrations obtained in connection with the Basic Agreement, this Agreement or
any of the other Disney Agreements, and shall take all such additional action as
may be necessary in connection therewith. Disney undertakes to obtain and to
effect any new or additional consents, approvals, licenses, authorizations,
filings and registrations in connection with the performance by Disney and the
enforceability of the terms and conditions of each such agreement, document and
instrument, which consents, approvals, licenses, authorizations, filings and
registrations are necessary to prevent the reduction or non-payment of any Tokyo
Disneyland Receivables or the termination of the Basic Agreement.
7.7 Taxes
-----
Disney shall pay and discharge all taxes and governmental charges upon
it or any of its properties or assets prior to the date after which penalties
attach for failure to pay, the non-payment of which might have a material
adverse effect on the business or financial condition of Disney on a
consolidated basis, except to the extent that Disney shall be contesting in good
faith its obligation to pay such taxes or charges, adequate reserves having been
set aside for the payment thereof. Disney shall make timely filings of all tax
returns and governmental reports
-24-
required to be filed or submitted under any applicable laws or regulations.
7.8 ERISA
-----
(a) Disney shall pay and discharge promptly, but in no event later
than such time as is required by ERISA or as is required pursuant to any
notification assessing such liability, any liability imposed upon it pursuant to
the provisions of Title IV of ERISA, provided, however, that Disney shall not be
-------- -------
required to pay any such liability if (i) the amount, applicability or validity
thereof shall be diligently contested in good faith by appropriate proceedings,
and (ii) Disney shall have set aside on its books adequate reserves with respect
thereto.
(b) Disney shall not (i) without the prior written consent of the
Company terminate any employee pension benefit plan (as defined in Section 3(2)
of ERISA) which is subject to Title IV of ERISA in a "distress termination"
under Section 4041 of ERISA, (ii) permit the "amount of unfunded benefit
commitments" (as defined in Section 4001(a)(18) of ERISA) under all employee
pension benefit plans which are subject to Title IV of ERISA (excluding employee
pension benefit plans with assets greater than vested benefits) to exceed
Twenty-Five Million United States dollars ($25,000,000), or (iii) incur any
withdrawal liability under Section 4201 of ERISA in an aggregate amount greater
than Twenty-Five Million United States dollars ($25,000,000) to all
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) for
contributions that Disney may be required to make under any agreement relating
to such multiemployer plans or any law pertaining thereto.
(c) For purposes of Section 7.08 of this Agreement, the term "Disney"
shall mean Disney, any Affiliate of Disney and each trade or business (whether
or not incorporated) which together with Disney would be treated as a single
employer under the provisions of Title I or IV of ERISA.
7.9 Maintenance of Records
----------------------
(a) Subject to Section 10.03(a), Disney shall maintain all such
Records as may be necessary or advisable for the administration, servicing and
collection of all Designated Receivables (including without limitation duplicate
records and/or system redundancy so as to enable the reconstruction of essential
records in the event of any reasonably foreseeable casualty).
(b) Subject to Section 10.03(a), Disney shall hold in trust for the
Company the Records and shall maintain and xxxx the Records in a manner such
that the Designated Receivables are segregated from all other accounts and
receivables and are readily identifiable.
7.10 Protection of the Company's Interest
------------------------------------
-25-
(a) Disney shall, from time to time, do and perform any and all acts
and execute any and all documents (including without limitation the execution,
amendment or supplementation of any financing statements and continuation
statements for filing under the provisions of the Uniform Commercial Code of any
applicable jurisdiction and of any documents appropriate for filing under the
provisions of applicable law to perfect and protect the Company's interest in
the Collateral in any jurisdiction in which the Uniform Commercial Code is not
in effect, the execution, amendment or supplementation of any instrument of
transfer and the making of notations in the Records) as may be necessary, or as
may be reasonably requested by the Company, in order to effect the purposes of
the Disney Agreements, to protect the Company's interest in the Collateral and
to effect collection of the Designated Receivables upon Disney's failure to
effect such collection in accordance will the provisions of this Agreement.
Disney hereby irrevocably constitutes and appoints the Company as its true and
lawful attorney-in-fact, with full power of substitution, during the term of
this Agreement to execute and deliver any and all documents and to do and
perform any and all acts referred to in, or contemplated by, this Section 7.10
in Disney's name, place and stead, Disney hereby ratifying and confirming all
that its said attorney-in-fact shall lawfully do hereunder and pursuant hereto.
Disney acknowledges that its said attorney-in-fact shall have no duty, by virtue
of this Section 7.10, to execute and deliver any of such documents or to do and
perform any of such acts and that the failure of said attorney-in-fact to do so
shall not excuse Disney of its obligations hereunder with respect to such
documents and acts. The Company hereby agrees that it shall not initiate any
legal or arbitral proceedings against Oriental Land in the name of Disney to
enforce collection of any Designated Receivables due from Oriental Land pursuant
to the Basic Agreement except upon the occurrence of a Termination Event
hereunder and that the Company shall give Disney thirty (30) days' prior notice
of the initiation of any such proceeding unless in the opinion of the Company
such delay in the initiation of proceedings may result in irreparable injury to
its interests hereunder (in which event the initiation of such proceedings shall
not require such prior notice to Disney).
(b) Disney shall not change its name, identity or corporate structure
(within the meaning of Section 9-402(7) of the Uniform Commercial Code) unless
it shall have given the Company at least thirty (30) days' prior notice thereof.
(c) Disney shall not relocate its chief place of business, chief
executive offices or any office where Records are kept unless it has given the
Company at least thirty (30) days' prior notice thereof.
(d) To the fullest extent permitted by applicable law, the Company
shall be permitted to sign and file financing and continuation statements with
respect to its interest in the Collateral and amendments thereto without
Disney's execution thereof. The Company shall promptly send to Disney copies of
any such documents so signed and filed, provided that no failure by the Company
to send such copies to Disney shall affect the validity or effectiveness of any
such document.
-26-
(e) Disney does not have, at no time has had, and at no time during
the term of this Agreement or the DWARFS Loan Agreement will have, any permanent
establishment in Japan. No Advance extended under this Agreement was used
within Japan.
7.11 Basic Agreement
---------------
(a) Disney shall use its best efforts to ensure the performance by
Oriental Land of its obligations under the Basic Agreement to make timely
payments of the Designated Receivables to the Lock Box Account.
(b) Disney shall not, with respect to the Basic Agreement as it
relates to Tokyo Disneyland Park, (i) amend, otherwise modify or waive the
benefit of any of the provisions of Paragraph 3 entitled "Term", Paragraph 9.3
entitled "WDP Participation in Operations", Paragraph 11 entitled "Payments to
WDP and Financial Reporting" (other than the provisions of Paragraphs 11.1.3,
11.1.4 and 11.1.5), Paragraph 20 entitled "Termination", Paragraph 21 entitled
"Business or Economic Hardship", Paragraph 25 entitled "Force Majeure" or
Paragraph 30.11 entitled "Successors and Assigns" of the Basic Agreement, (ii)
amend, otherwise modify or waive the benefit of any other of the provisions of
the Basic Agreement which could have a material adverse effect on the Company's
interest in or collection of any of the Designated Receivables or any portion
thereof, or (iii) consent to any sublicense, assignment, delegation, mortgage or
hypothecation of any of Oriental Land's rights, privileges, duties or
obligations under the Basic Agreement pursuant to Paragraph 30.11 thereof,
without in each such case obtaining the prior written consent of the Company.
The foregoing provisions of this Section 7.11(b) shall not restrict the right of
Disney and Oriental Land to amend, otherwise modify or waive the benefit of any
provision of the Basic Agreement to the extent that such amendment, modification
or waiver does not relate to Tokyo Disneyland Park. In the event that Disney
shall undertake, on such terms and conditions as shall be reasonably
satisfactory to the Company, that all obligations hereunder with respect to the
recovery of the Advances, the payment of accrued interest thereon and the
payment of all other amounts due hereunder and under the other Disney Agreements
shall be general recourse obligations of Disney, Disney shall have the
unrestricted right to amend, otherwise modify or waive the benefit of any
provision of the Basic Agreement and the foregoing restrictions contained in
this Section 7.11(b) shall be of no further force or effect.
(c) Disney shall not exercise any right of termination under the Basic
Agreement, consent to a termination of the Basic Agreement by Oriental Land or
take any other enforcement or remedial action thereunder (including giving
notice of any event of force majeure or of any condition of material business or
economic hardship or of any disposition of funds on the imposition of foreign
exchange controls) without the prior written consent of the Company. Disney
shall not assign any of its rights or obligations under the Basic Agreement
without the prior consent of the Company (which consent shall not unreasonably
be withheld).
(d) Disney shall give prompt notice to the Company, upon becoming
aware
-27-
thereof, that any of the Designated Receivables will not be timely paid in full
by Oriental Land, and such notice shall state, to the best of Disney's
knowledge, the reasons such Designated Receivables will not be timely paid in
full.
(e) Upon the occurrence of a default by Oriental Land in the
performance of any of its obligations under the Basic Agreement which, in the
reasonable opinion of the Company, will or is likely to cause Oriental Land to
fail to pay or to reduce any of the Designated Receivables, Disney shall take
such enforcement or remedial action with respect to the collection of the
Designated Receivables for the Company's benefit as the Company may reasonably
request.
(f) During the term of this Agreement, Disney shall irrevocably direct
Oriental Land to make all payments of Tokyo Disneyland Receivables due under the
Basic Agreement in Yen to the Lock Box Account. Should Oriental Land make any
payment with respect to the Tokyo Disneyland Receivables or any Designated
Receivables directly to Disney rather than to the Lock Box Account, Disney shall
immediately deposit such payment, or cause such payment to be deposited, to the
Lock Box Account. Disney shall not use the Lock Box Account or permit the Lock
Box Account to be used for any purpose other than the receipt of Tokyo
Disneyland Receivables and the application of such payments in accordance with
the provisions of this Agreement.
(g) Disney shall extend the initial term of the Basic Agreement to
expire on March 31, 2008 in accordance with the provisions of Paragraph 3 of the
Basic Agreement.
SECTION 8: CONDITIONS PRECEDENT
8.1 Conditions Precedent
--------------------
The obligation of the Company to make available the Advances on the
Drawing Date is subject to the fulfillment, as determined by the Company and its
counsel, of the following conditions precedent three (3) Business Days prior to
the Drawing Date (the "Conditions Precedent Date") (except as otherwise
indicated below).
(a) AUTHORIZATIONS. The Company shall have received, in form and
substance satisfactory to it and to its counsel:
(i) certified copies of the Certificate of Incorporation of
Disney together with a good standing certificate from the Secretary of
State of the State of Delaware, each to be dated with a recent date prior
to the Conditions Precedent Date;
(ii) a copy of the By-laws of Disney, certified as of the
Conditions Precedent Date by the Secretary or an Assistant Secretary of
Disney;
-28-
(ii) a copy of the resolutions of the Board of Directors of
Disney authorizing the execution, delivery and performance of the Disney
Agreements, certified as of the Conditions Precedent Date by the Secretary
or an Assistant Secretary of Disney; and
(iv) a certificate of the Secretary or an Assistant Secretary of
Disney certifying as of the Conditions Precedent Date the names and
specimen signatures of each person duly authorized to execute and deliver
any of the Disney Agreements on behalf of Disney and to execute any
notices, statements or certificates required hereunder or thereunder. The
Company shall be entitled to rely on the authenticity of such
authorization, and Disney shall be bound by the signature of any such
person regardless of the actual powers of such person, unless the Company
has actual knowledge to the contrary.
(b) DISNEY ACKNOWLEDGEMENT. The Company shall have received on or
prior to the Drawing Date the Disney Acknowledgement, duly executed by Disney.
(c) PLEDGE AGREEMENT. The Company shall have received on or prior to
the Drawing Date the Pledge Agreement, duly executed.
(d) LOCK BOX NOTICE. The Company shall have received on or prior to
the Drawing Date a Lock Box Notice to the depositary bank at which the Lock Box
Account is maintained, which Lock Box Notice shall have been duly acknowledged
by such depositary bank.
(e) UNIFORM COMMERCIAL CODE REQUIREMENTS. The Company shall have
received, in form and substance satisfactory to it and to its counsel:
(i) acknowledgement copies of proper financing statements (Form
UCC- 1), naming Disney as the debtor with respect to the Collateral and the
Company as the secured party, and such other similar instruments or
documents as may be necessary or reasonably desirable in the opinion of the
Company under the laws of any jurisdiction in order to perfect the
Company's security interest in the Collateral; and
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), dated a date reasonably near to the Drawing Date, listing all
effective financing statements (including those referred to in Section
8.01(e)(i)) which name Disney as debtor and which are filed in the
jurisdictions in which filings are made pursuant to Section 8.01(e)(i),
together with copies of such financing statements or such other similar
instruments or documents, none of which (other than those filed pursuant to
Section 8.01(e)(i)) shall cover the Basic Agreement or any of the Tokyo
Disneyland Receivables or the Designated Receivables or any of the proceeds
of any of the foregoing.
-29-
(f) GOVERNMENT APPROVALS. The Company shall have received, in form
and substance reasonably satisfactory to it and to its counsel, certified copies
of each consent, approval, license or authorization of, and each filing or
registration with, any relevant government agency (if any) necessary in
connection with the execution, delivery and performance by Disney of each of the
Disney Agreements.
(g) BASIC AGREEMENT. The Company shall have received (i) a copy of
the Basic Agreement, certified as of the Drawing Date by the Secretary or an
Assistant Secretary of Disney, and (ii) evidence reasonably satisfactory to the
Company that Disney has directed Oriental Land to make payments of the Tokyo
Disneyland Receivables to the Lock Box Account.
(h) LEGAL OPINIONS. The Company shall have received on or prior to
the Drawing Date:
(i) the legal opinion of White & Case, special United States
counsel to Disney, dated as of the Drawing Date, in the form of Exhibit D
annexed hereto;
(ii) the legal opinion of Xxxxxxxxx & Mitsuki, special Japanese
counsel to Disney, dated as of the Drawing Date, in the form of Exhibit E
annexed hereto;
(ii) the legal opinion of Nishi, Tanaka & Takahashi, special
Japanese counsel to the Company, dated as of the Drawing Date, in form and
substance satisfactory to the Company; and
(iv) the legal opinion of Coudert Brothers, special United States
counsel to the Company, dated as of the Drawing Date, in form and substance
satisfactory to the Company.
(i) BOOK ENTRIES. The Company shall have received evidence, in form
and substance satisfactory to it and to its counsel, of the establishment by
Disney of the book entry system to record beneficial interests held in this
Agreement as required by Section 11.04(b), and there shall be recorded in such
book entry system on the Drawing Date the beneficial interests of the financial
institutions identified in the Disney Acknowledgment.
(j) REPRESENTATIONS AND WARRANTIES. Disney's representations and
warranties contained in this Agreement shall remain true and correct as of the
Conditions Precedent Date and as of the Drawing Date.
(k) NO TERMINATION EVENT. No Termination Event and no event that,
with the giving of notice or the passing of time, or both, would constitute a
Termination Event shall have occurred and be continuing.
(l) DRAWING DATE CERTIFICATE. The Company shall have received a
certificate
-30-
from Disney, dated as of the Drawing Date, certifying that all conditions
precedent required by this Section 8.01 which have been previously delivered to
the Company or otherwise fulfilled continue in full force and effect on the
Drawing Date.
SECTION 9: TERMINATION EVENTS
9.1 Termination Events
------------------
If any of the following events (hereinafter referred to as a
"Termination Event") shall have occurred and be continuing:
(a) Disney shall fail to perform any obligation under the Basic
Agreement or there shall occur any event, circumstance or condition which would
entitle (or, with the giving of notice or the passing of time, or both, would
entitle) Oriental Land to terminate the Basic Agreement, to receive damages
thereunder against Disney, to suspend its performance under the Basic Agreement
or to reduce any Tokyo Disneyland Receivables otherwise payable thereunder;
(b) Disney shall fail to make any payment hereunder on the due date
and such default continues for a period of thirty (30) days after written notice
thereof has been given to Disney by the Company;
(c) Disney shall default in the performance of any agreement or
undertaking hereunder (other than as provided in Section 9.01(a) above) and such
default shall continue unremedied for thirty (30) days after written notice
thereof has been given to Disney by the Company, provided that with respect to
any such default, the continuation of such default for thirty (30) days or
longer after such notice shall not constitute a Termination Event if such
failure is curable but cannot be cured within thirty (30) days and Disney, to
the reasonable satisfaction of the Company, institutes curative action as
promptly as practicable and diligently pursues such action to completion within
a reasonable period;
(d) any representation, warranty, certification or statement made by
Disney in this Agreement or in any certificate or other document delivered
pursuant to this Agreement shall prove to have been incorrect in any material
respect when made;
(e) any material governmental consent, approval, license or
authorization and any registration or filing required in connection with the
Basic Agreement or any of the Disney Agreements expires or is terminated or
revoked or materially and adversely modified or restricted;
(f) it becomes unlawful for Disney to perform any obligation under any
of the Disney Agreements or the Basic Agreement or Disney shall seek to
repudiate its obligations under any of the Disney Agreements or the Basic
Agreement;
-31-
(g) if any other loan, guarantee or other Indebtedness for money
borrowed of Disney or any of its Subsidiaries becomes due and repayable
prematurely by reason of an event of default in relation thereto or Disney or
any of its Subsidiaries fails to make any payment in respect thereof on the due
date for such payment as extended by any applicable grace period or the security
for any such other loan, guarantee or other Indebtedness for money borrowed
becomes subject to foreclosure or other enforcement action, provided, that the
--------
aggregate amount of Indebtedness affected by all or any of the foregoing events
exceeds Ten Million United States dollars ($10,000,000) or its then equivalent
in any other currency; the expression "money borrowed" as used herein means
money borrowed and premium and interest in respect thereof and liabilities under
acceptance credit or under any bond, note, debenture or other security issued as
consideration for assets or services but excluding such liabilities incurred
solely in relation to the acquisition of goods and services in the ordinary
course of business; or
(h) Disney shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(i) an involuntary case or other proceeding shall be commenced against
Disney seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of ninety (90) days, or an order for relief shall be
entered against Disney under the federal bankruptcy laws in the United States as
now or hereafter in effect;
then, and in any such event,
(x) if such event is a Termination Event specified in Section 9.01(h)
or (1) above, the Commitment shall automatically terminate, without any notice
to Disney or any other action by the Company, and
(y) if such an event is any other Termination Event, the Company may
by notice to Disney declare the Commitment terminated, in which event the
Commitment shall thereupon terminate.
SECTION 10: COLLECTION AGENT
10.1 Appointment of Collection Agent
-------------------------------
-32-
The collection and application of the Tokyo Disneyland Receivables and
the Designated Receivables shall be performed in accordance with Section 2.03 by
Disney. If at any time after the Drawing Date either (i) a Termination Event
pursuant to Section 9.01(h) or (i) shall occur, or (ii) any other Termination
Event shall occur and Disney shall have thereafter failed to act in accordance
with the reasonable instructions of the Company with respect to the collection
and application of the Tokyo Disneyland Receivables and the Designated
Receivables, the Company may or at any time after the Drawing Date and after
obtaining the prior written consent of the Company, Disney may appoint a
Collection Agent (which shall be the Company, The Hongkong and Shanghai Banking
Corporation Limited, Tokyo Branch or an affiliate of any of them) to perform
such collection and application functions in substitution for the performance of
such functions by Disney. Disney and the Company, to the extent of their
respective interests in the Tokyo Disneyland Receivables and the Designated
Receivables, hereby authorize the Collection Agent to exercise as their agent
the rights and powers conferred upon the Collection Agent in this Agreement.
10.2 Collections
-----------
The Collection Agent shall endeavor to collect or cause to be
collected from Oriental Land under the Basic Agreement, as and when due, all
amounts payable thereunder and the Collection Agent may take or permit to be
taken such action with respect thereto as it may deem advisable or as it may be
directed by the Company. The Collection Agent shall comply with all applicable
legal requirements in the performance of its functions hereunder. In the event
of a default in the payment of any Designated Receivables, the Collection Agent
shall be entitled to xxx thereon in the name of Disney. The Collection Agent
shall not grant, or permit to be granted to Oriental Land under the Basic
Agreement, any rebate, refund, credit or other adjustment with respect to any
Designated Receivables without the prior written consent of the Company. The
Collection Agent shall agree that, prior to the initiation of any legal or
arbitral proceedings against Oriental Land in the name of Disney to enforce
collection of any Designated Receivables due from Oriental Land pursuant to the
Basic Agreement, the Collection Agent shall give Disney thirty (30) days' prior
notice thereof, unless in the opinion of the Company such delay in the
initiation of proceedings may result in irreparable injury to its interests
hereunder, in which event the initiation of such proceedings by the Collection
Agent shall not require such prior notice to Disney.
10.3 Change of Collection Agent
--------------------------
If at any time a Collection Agent shall be appointed pursuant to
Section 10.01:
(i) Disney shall deliver to the Collection Agent, and the
Collection Agent shall hold in trust for Disney and the Company, all such
Records as the Collection Agent may request.
-33-
(ii) Disney shall, as promptly as practicable thereafter, cause
to be transmitted and delivered directly to the Collection Agent, forthwith
upon receipt and in the exact form received, cash, checks, drafts and other
instruments for the payment of money (properly endorsed, where required,
for collection) which may be received by it as payment on account or
otherwise in respect of any of the Tokyo Disneyland Receivables or the
Designated Receivables. Disney hereby irrevocably constitutes and appoints
the Collection Agent as its true and lawful attorney-in-fact, with full
power of substitution, to take in the name of Disney all steps necessary or
advisable to endorse, negotiate or otherwise realize on any instrument or
other writing in connection with any of the Tokyo Disneyland Receivables or
the Designated Receivables.
(iii) The Collection Agent shall be entitled to notify Oriental
Land to make payment directly to the Collection Agent of amounts payable in
respect of any of the Tokyo Disneyland Receivables and the Designated
Receivables. Upon the request of the Company, Disney shall so notify
Oriental Land in its own name.
10.4 Application of Collections
--------------------------
The Collection Agent shall apply all amounts received with respect to
the Tokyo Disneyland Receivables and the Designated Receivables and interest
thereon (if any) in accordance with the provisions of Section 2.03.
10.5 Compensation of Collection Agent
--------------------------------
In the event a Collection Agent is appointed in accordance with
Section 10.01, Disney shall be obligated to pay all reasonable expenses,
including the agreed compensation of such Collection Agent and any legal
expenses, thereafter incurred in the performance of the collection and
application functions specified herein, as well as all reasonable expenses
incurred in effecting the transfer of such functions from Disney to such
Collection Agent. Such amounts shall be payable on each Settlement Date with
respect to the Quarterly Receivables Period to which such Settlement Date
relates and may be withheld by the Collection Agent from any amount otherwise
payable to the account of Disney pursuant to Section 2.03.
10.6 Termination of Collection Agency
--------------------------------
The rights and powers granted to any Collection Agent appointed from
time to time under this Agreement shall be irrevocable by Disney and the Company
during the term of this Agreement. Upon termination of this Agreement in
accordance with its terms, such appointment shall terminate without further
action by any party to this Agreement. Upon such termination, the Collection
Agent shall return to Disney all Records held by it, and such Collection Agent
and the Company shall do such further acts and things, and execute such further
documents and instruments, at the request and expense of Disney, as may be
reasonably required to evidence such termination.
-34-
SECTION 11: MISCELLANEOUS
11.1 Term
----
The term of this Agreement shall commence on the date first set forth
above and shall end on the date of termination of the Commitment hereunder or,
if later, upon the recovery by the Company in full of the Advances and interest
accrued thereon and the payment in full of all other sums payable by Disney
hereunder. The indemnities of Disney set forth in Sections 3 and 4 shall
survive the recovery of the Advances and interest accrued thereon.
11.2 Entire Agreement
----------------
This Agreement and the documents referred to herein constitute the
entire obligation of the parties hereto with respect to the subject matter
hereof and shall supersede any prior expressions of intent or understandings
with respect to this transaction. This Agreement may be amended only by an
instrument in writing signed by the parties hereto.
11.3 Waiver; Cumulative Rights
-------------------------
The failure or delay of the Company or the Manager to require
performance by Disney or Oriental Land of any provision of any of the Disney
Agreements or the Basic Agreement shall not affect its right to require
performance of such provision unless and until such performance has been waived
in writing by the Company or the Manager, as the case may be, in accordance with
the terms hereof. Each and every right granted to the Company or the Manager
hereunder or under any other document or instrument delivered hereunder or in
connection herewith, or allowed to it at law or in equity, shall be cumulative
and may be exercised in part or in whole from time to time.
11.4 Assignment
----------
(a) This Agreement shall be binding upon and shall be enforceable by
Disney, the Company, the Manager and their respective successors and assigns,
except that Disney shall have no right to assign or otherwise transfer its
rights or obligations hereunder without the prior written consent of the
Company. The Company or the Manager may assign or otherwise transfer all or any
portion of its rights and obligations hereunder, and any such assignment shall
be effective and binding upon Disney as of the date of such assignment or
transfer upon Disney's written consent thereto and, in the case of an assignment
or transfer by the Company, the Company and Disney having complied with the
requirements of Sections 11.04(b) and (c) unless Disney shall have waived such
provisions to be complied with by the Company by written consent. Upon any such
assignment or transfer by the Company, the assignee or transferee shall be
entitled, to the extent of the interest transferred, to the benefit of the
indemnities, the covenants and the yield protection provisions pursuant to the
provisions of this Agreement as
-35-
fully as if a party hereto. The acts of the Company and the Manager or the
failure of the Company or the Manager to act hereunder shall in all
circumstances be conclusive and binding on any assignee or transferee of the
Company's or the Manager's interest hereunder.
(b) It is agreed that Disney shall have the right to consent to any
transfer of any interest in this Agreement. Disney shall not unreasonably
withhold its consent to any assignment, provided that Disney has received from
the Company, the transferor and the transferee such information, representations
and warranties which in its commercially reasonable judgment are appropriate for
such transfer. Such consent or the procedures for obtaining such consent may be
included in any consent given by Disney to assignments or transfers hereunder.
Disney shall, during the term of this Agreement, maintain on its books a record
of the beneficial interests held in this Agreement based on the information
which the Company is required to provide pursuant to this Section 11.04(b).
Disney shall have no liability to the Company or any such assignee or transferee
for any error in the recordation of such information on its books.
(c) Upon any further assignment or other transfer of an interest in
this Agreement by an assignee or transferee of the Company hereunder, the
assignor or transferor with respect to such further assignment or transfer shall
provide to the Company such information and undertakings from its assignee or
transferee as will permit the Company to comply with the requirements of
Sections 11.04(a) and (b), which requirements shall apply equally to any such
further assignment or transfer as to the original assignment or transfer from
the Company to its assignee or transferee. Notwithstanding the foregoing, the
prior written consent of Disney shall not be required with respect to any such
further assignment or transfer within twelve months of the Drawing Date by any
of the financial institutions holding beneficial interests in the Advances on
the Drawing Date (as set forth in the book entry system maintained pursuant to
Section 11.04(b)) which assignment or transfer creates a security interest in
the assignor's or transferor's rights hereunder solely to secure its obligations
with respect to its funding of its interest in the Advances and which assignment
or transfer, prior to foreclosure of the security interest constituted thereby,
does not convey any beneficial interest in the Advances to the assignee or
transferee.
11.5 Governing Law
-------------
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York in the United States of America.
11.6 Submission to Jurisdiction
--------------------------
(a) Disney hereby irrevocably consents that any legal action or
proceeding against it or any of its properties or assets with respect to any of
the obligations arising under or relating to any of the Disney Agreements may be
brought in any court of the State of New York or any Federal court of the United
States of America located in the City and State of New York, United States of
America, or in the Tokyo District Court, Tokyo, Japan, as the Company or the
-36-
Manager may elect, and by execution and delivery of this Agreement Disney hereby
irrevocably submits to and accepts with regard to any such action or proceeding,
for itself and in respect of its properties and assets, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Disney
hereby irrevocably designates, appoints and empowers (i) Disney Enterprises,
Inc., presently located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attn:
Xxxxxxx X. Xxxxxx, as its agent to receive for and on its behalf service of
process in the State of New York in any such legal action or proceeding with
respect to any of the Disney Agreements and (ii) Disney Enterprises, Inc., c/o
Xxxx Disney Enterprises of Japan, Ltd. presently located at Xx. 00 Xxxx
Xxxxxxxx, 0-0-00 Xxxxxx-Xxxxx, Xxxxxx-xx, Xxxxx 000, Xxxxx Attn: Vice President
- Counsel, as its agent to receive for and on its behalf service of process in
Japan in any such legal action or proceeding with respect to any of the Disney
Agreements. A copy of any such process served on such agent shall be promptly
forwarded by airmail by the person commencing such proceeding to Disney at its
address set forth in Section 11.07, but the failure of Disney to receive such
copy shall not affect in any way the service of such process as aforesaid.
Disney further irrevocably consents to the service of process in any such action
or proceeding by the mailing of copies thereof by registered or certified
airmail, postage prepaid, to Disney at its address set forth in Section 11.07.
The foregoing, however, shall not limit the rights of the Company or the Manager
to serve process in any other manner permitted by law or to bring any legal
action or proceeding or to obtain execution of judgment in any jurisdiction.
(b) Disney hereby irrevocably waives any objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to any of the Disney Agreements in the State of New
York and hereby further irrevocably waives any claim that the State of New York
is not a convenient forum for any such suit, action or proceeding.
11.7 Notices
-------
Any notice required or permitted to be given hereunder shall be in
writing and shall be (i) personally delivered, (ii) transmitted by postage
prepaid registered mail (airmail if international), (iii) transmitted by
internationally recognized courier service, or (iv) transmitted by telex or
facsimile to the parties as follows, as elected by the party giving such notice:
To Disney: Disney Enterprises, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Telex: 674480
Answerback: DISNEY BUBK A
Facsimile: (000) 000-0000
Attention: Legal Department
-37-
with copies to:
--------------
Vice President - Assistant Treasurer
Facsimile: (000) 000-0000
To the Company
or the Manager: TDL Funding Company
c/o Caledonian Bank and Trust Limited
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
with copies to:
--------------
The Hongkong and Shanghai Banking Corporation
Limited,
Tokyo
Branch
as Collateral Agent
Kyobashi Itchome Xxxxxxxx
00-0, Xxxxxxxx 0-xxxxx
Xxxx-xx, Xxxxx 000, Xxxxx
Except as otherwise specified herein, all notices and other communications shall
be deemed to have been duly given on (i) the date of receipt if delivered
personally or if transmitted by facsimile, (ii) the date ten (10) days after
posting if transmitted by mail or, if earlier, the date of receipt, (iii) the
date three (3) days after delivery to the courier if sent by internationally
recognized courier service, or (iv) the date of transmission with confirmed
answerback if transmitted by telex, whichever shall first occur. Each party may
change its address for purposes hereof by notice to the other. All notices
hereunder and all documents or instruments delivered in connection with this
transaction shall be in the English language.
11.8 Confidentiality
---------------
The Company shall hold all non-public information obtained from Disney
pursuant to the requirements of this Agreement and which has been identified as
such by Disney in accordance with the Company's customary procedures for
handling confidential information
-38-
of such a nature and in accordance with safe and sound banking practices,
provided, that the Company may disclose any such information to any potential
--------
assignee or other transferee of any of its interest hereunder pursuant to
Section 11.04, as required or requested by any governmental authority or
pursuant to legal process. The Company shall obtain from any such potential
assignee or transferee a confidentiality undertaking in favor of Disney on terms
substantially identical to this Section 11.08.
11.9 Severability
------------
If any one or more of the provisions contained in this Agreement or
any document executed in connection herewith shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired.
11.10 Counterparts
------------
This Agreement may be signed in any number of counterparts. Any
single counterpart or a set of counterparts signed, in either case, by all the
parties hereto shall constitute a full and original agreement for all purposes.
-39-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized signatories as of the day and
year first written above.
DISNEY ENTERPRISES, INC.
By:
----------------------------
Name:
Title:
TDL FUNDING COMPANY
By:
-----------------------------
Name:
Title:
-40-
SCHEDULE 1
EXHIBIT A
DISNEY ACKNOWLEDGMENT
[Date]
Disney Enterprises, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Re: Tokyo Disneyland Receivables Facility
-------------------------------------
Gentlemen:
We write to notify you by this letter that, under that certain
Beneficial Assignment and Security Agreement dated as of April __, 1997 between
TDL Funding Company (hereinafter referred to with its successors and assigns as
"the Company") and The Hongkong and Shanghai Banking Corporation Limited as
collateral agent (the "Collateral Agent"), the Company has granted to the
Collateral Agent on its own behalf and on behalf of certain financial
institutions (hereinafter referred to with their respective successors and
assigns as the "Lenders") a first priority security interest in and to, among
other things, (i) the rights of the Company under the limited recourse agreement
dated as of April 27, 1988 (as amended at any time and from time to time, the
"Facility Agreement") among Disney Enterprises, Inc. (hereinafter referred to
with its successors and assigns as "Disney") and the Company, (ii) the
Collateral (as therein defined), and (iii) the Lock Box Account.
Please acknowledge receipt of this notification by signing the
enclosed copy of this letter. This acknowledgment evidences (i) Disney's
consent to the granting of the above-referenced security interest, (ii) Disney's
acknowledgment that it has not received any prior notice of assignment or of the
creation of a security interest in the Company's rights under the Facility
Agreement or with respect to the Collateral, and (iii) Disney's agreement, given
irrevocably as of the date hereof, that upon the written or telex certification
by the Collateral Agent (which shall be binding and conclusive) that an Event of
Default has occurred under the terms of that certain DWARFS Secured Yen Loan
Agreement dated as of April 30, 1997 among the Company, HSBC Markets Limited, as
Administrative Agent, the Collateral Agent and the Lenders, Disney will consider
the Collateral Agent and the Lenders as entitled to exercise all of the rights
of the Company under the Facility Agreement and with respect to the Collateral
to the exclusion of the Company. Upon receipt of the certification of the
Collateral Agent referred to in this paragraph, Disney's only obligation with
respect to the Facility Agreement and the Designated Receivables shall be toward
the Collateral Agent and its assigns and the Lenders and their assigns and
Disney shall have no further obligation to the Company in respect thereto.
In addition, this acknowledgment evidences Disney's renunciation of
all rights of
set-off which Disney may enjoy under the laws of the State of New York or
otherwise with respect to the debts owing by Disney under the Facility Agreement
to the Company, the Collateral Agent or any Lender against sums owing by the
Company, the Collateral Agent or any Lender to Disney.
This letter shall be governed by and interpreted in accordance with
the laws of the State of New York.
Yours faithfully,
TDL FUNDING COMPANY
By:
---------------------------
Name:
Title:
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
By:
---------------------------
Name:
Title:
Acknowledged and agreed this _____
day of ______, 1988
DISNEY ENTERPRISES, INC.
By:
------------------
Name:
Title:
A-2
EXHIBIT B
LOCK BOX NOTICE
[Date]
The Hongkong and Shanghai Banking Corporation
Limited
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
Gentlemen:
This notice is given to you by the undersigned, pursuant to the
facility agreement dated as of April 27, 1988 (as amended to date, the "Facility
Agreement") among Disney Enterprises, Inc. ("Disney") and TDL Funding Company
(the "Company") in connection with your maintenance of Disney's account no.
[_________] at your head office located at Xxxxxxxx 0-xxxxx, Xxxx-xx, Xxxxx 000,
Xxxxx (the "Lock Box Account").
Pursuant to the terms of the Facility Agreement and a pledge agreement
dated April 24, 1997 between Disney and the Company executed thereunder (the
"Pledge Agreement"), Disney has assigned the Lock Box Account and all moneys
from time to time deposited therein to the Company as security for Disney's
obligations to the Company under the Facility Agreement. A copy of the Pledge
Agreement, as executed by Disney and the Company, is being delivered to you with
this notice.
Upon receipt of a written notice from the Company that a termination
event has occurred under the Facility Agreement, you shall (i) transfer all or
any portion of the amounts then on deposit in, or thereafter deposited to, the
Lock Box Account to such other account as the Company may designate or to such
account as may be designated by any collection agent named by the Company in its
written notice to you and (ii) otherwise act in accordance with such written
instructions relating to the Lock Box Account as the Company or such collection
agent may from time to time deliver to you.
We hereby request you to issue each time when any deposit is made in
the Lock Box Account a written consent to the pledge prescribed in the Pledge
Agreement with an officially established date of such consent in the form of
Annex A hereto.
Please confirm your receipt of this notice and the copy of the Pledge
Agreement annexed hereto and your agreement to the terms hereof by
countersigning this letter below. Such countersignature will also constitute
your confirmation that (i) you have received no prior notice
of the assignment or pledge of, or the creation of any other security interest
in or any attachment in respect of, the Lock Box Account and (ii) all payments
from the Lock Box Account shall be made by you irrespective of, and without
deduction for, any counterclaim, defense, recoupment or set-off and shall be
final, and you will not seek to recover from either of us for any reason any
such payment once made.
Very truly yours,
DISNEY ENTERPRISES, INC.
By:
_______________________
Name:
Title:
TDL FUNDING COMPANY
By:
_______________________
Name:
Title:
B-2
enc.
Acknowledged and agreed to this
___ day of April, 1997
THE HONGKONG AND SHANGHAI BANKING CORPORATION,
LIMITED
By:
_______________________
Name:
Title:
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
( )
------------------------
Confirmed date of Japanese
Notary
(kakutei hizuke)
------- ------
ANNEX A
CONSENT AND ACKNOWLEDGEMENT
Disney Enterprises, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
TDL Funding Company
c/o Caledonian Bank and Trust Limited
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Dear Sirs,
Reference is hereby made to the Pledge Agreement made between Disney
Enterprises, Inc. ("Disney") and TDL Funding Company (the "Company") and dated
as of April 24, 1997 (the "Pledge Agreement") and the letter issued by Disney
and the Company to our Bank and dated April 24, 1997 containing, inter alia,
notice by Disney and the Company and acknowledgment by our Bank of the pledge of
the Lock Box Account (as referred to therein) (the "Letter").
Pursuant to the terms of the Pledge Agreement and the Letter, our Bank
hereby gives consent to and acknowledges the pledge to the Company of the
deposit existing in the Lock Box Account in the amount of [Amount] as of [Date]
19__, as security for the due performance of the secured obligations
respectively set out in the Pledge Agreement.
Very truly yours,
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
By:
_____________________________
Name:
Title:
(Confirmed date of Japanese
Notary) (kakutei hizuke)
------- ------
EXHIBIT C
PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement") made between TDL FUNDING COMPANY
(the "Company") and DISNEY ENTERPRISES, INC. ("Disney") whereby the parties
agree as follows:
1. So as to secure the due performance of the monetary obligations
as stated in Schedule A attached hereto, Disney hereby assigns to the Company
all deposits from time to time in the deposit account described in Schedule B
attached hereto (the "Account") and the right to withdraw and receive all such
-------
deposits.
2. Disney hereby irrevocably appoints the Company as an attorney-in-
fact for Disney and authorizes the Company to take the following actions on
behalf of Disney:
a. to obtain at the time of the establishment of the Account and
thereafter each time when any deposit is made therein a written consent of the
bank maintaining the Account (the "Bank") to the pledge of all deposits from
----
time to time in the Account with an officially established date of such
consent; and
b. to take any action necessary for or incidental to the foregoing.
3. In furtherance of the foregoing, Disney and the Company shall
cause notice of the pledge hereby established to be given to the Bank in the
form of the Lock Box Notice appended hereto as Annex 1 and shall cause the Bank
to countersign such Lock Box Notice.
4. This Agreement shall be governed by and construed in accordance
with the laws of Japan.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate, and the parties hereto shall hold one copy each thereof.
DATED: April 24, 1997
TDL FUNDING COMPANY
By:________________________
Name:
Title:
DISNEY ENTERPRISES, INC.
By:________________________
Name:
Title:
C-2
SCHEDULE A TO PLEDGE AGREEMENT
Monetary Obligations
All amounts from time to time payable by Disney with respect to the
Advances and accrued interest thereon pursuant to the limited recourse agreement
dated as of April 27, 1988 between Disney and the Company relating to the
limited recourse financing of royalty receipts from the Tokyo Disneyland Park.
SCHEDULE B TO PLEDGE AGREEMENT
Pledged Deposits
Any and all deposits, whether present or future, in the following
account:
Name of Account: Disney Enterprises, Inc.
Number of Account: [____________]
Location of Account: The Hongkong and Shanghai Banking Corporation
Limited
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
ANNEX 1 TO PLEDGE AGREEMENT
LOCK BOX NOTICE
[Date]
The Hongkong and Shanghai Banking Corporation
Limited
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
Gentlemen:
This notice is given to you by the undersigned, pursuant to the
facility agreement dated as of April 27, 1988 (as amended to date, the "Facility
Agreement") among Disney Enterprises, Inc. ("Disney") and TDL Funding Company
(the "Company") in connection with your maintenance of Disney's account no.
[_________] at your head office located at Xxxxxxxx 0-xxxxx, Xxxx-xx, Xxxxx 000,
Xxxxx (the "Lock Box Account").
Pursuant to the terms of the Facility Agreement and a pledge agreement
dated April 24, 1997 between Disney and the Company executed thereunder (the
"Pledge Agreement"), Disney has assigned the Lock Box Account and all moneys
from time to time deposited therein to the Company as security for Disney's
obligations to the Company under the Facility Agreement. A copy of the Pledge
Agreement, as executed by Disney and the Company, is being delivered to you with
this notice.
Upon receipt of a written notice from the Company that a termination
event has occurred under the Facility Agreement, you shall (i) transfer all or
any portion of the amounts then on deposit in, or thereafter deposited to, the
Lock Box Account to such other account as the Company may designate or to such
account as may be designated by any collection agent named by the Company in its
written notice to you and (ii) otherwise act in accordance with such written
instructions relating to the Lock Box Account as the Company or such collection
agent may from time to time deliver to you.
We hereby request you to issue each time when any deposit is made in
the Lock Box Account a written consent to the pledge prescribed in the Pledge
Agreement with an officially established date of such consent in the form of
Annex A hereto.
Please confirm your receipt of this notice and the copy of the Pledge
Agreement
annexed hereto and your agreement to the terms hereof by countersigning this
letter below. Such countersignature will also constitute your confirmation that
(i) you have received no prior notice of the assignment or pledge of, or the
creation of any other security interest in or any attachment in respect of, the
Lock Box Account and (ii) all payments from the Lock Box Account shall be made
by you irrespective of, and without deduction for, any counterclaim, defense,
recoupment or set-off and shall be final, and you will not seek to recover from
either of us for any reason any such payment once made.
Very truly yours,
DISNEY ENTERPRISES, INC.
By:
_______________________
Name:
Title:
TDL FUNDING COMPANY
By:
_________________________
Name:
Title:
-2-
enc.
Acknowledged and agreed to this
___ day of April, 1997
THE HONGKONG AND SHANGHAI BANKING CORPORATION,
LIMITED
By:
________________________
Name:
Title:
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
( )
------------------------
Confirmed date of Japanese
Notary
(kakutei hizuke)
------- ------
-3-
ANNEX A
CONSENT AND ACKNOWLEDGMENT
Disney Enterprises, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
TDL Funding Company
c/o Caledonian Bank and Trust Limited
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Dear Sirs,
Reference is hereby made to the Pledge Agreement made between Disney
Enterprises, Inc. ("Disney") and TDL Funding Company (the "Company") and dated
as of April 24, 1997 (the "Pledge Agreement") and the letter issued by Disney
and the Company to our Bank and dated April 24, 1997 containing, inter alia,
notice by Disney and the Company and acknowledgment by our Bank of the pledge of
the Lock Box Account (as referred to therein) (the "Letter").
Pursuant to the terms of the Pledge Agreement and the Letter, our Bank
hereby gives consent to and acknowledges the pledge to the Company of the
deposit existing in the Lock Box Account in the amount of [Amount] as of [Date]
19__, as security for the due performance of the secured obligations
respectively set out in the Pledge Agreement.
Very truly yours,
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
Xxxxxxxx 0-xxxxx
Xxxx-xx
Xxxxx 000, Xxxxx
By:
_____________________________
Name:
Title:
(Confirmed date of Japanese
Notary) (kakutei hizuke)
------- ------
