<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934/1/
------------------------------------
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
--------------------------------------------------------------------------
(Name of Issuer)
Class B Common Stock, par value $.01 per share
----------------------------------------------
(Title of Class of Securities)
45950M 10 6
-----------------------------------------------
(CUSIP Number)
Arthur M. Siskind, Esq.
c/o News America Publishing Incorporated
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
(212) 852-7000
-----------------------------------------------
with copies to:
<TABLE>
<CAPTION>
<S> <C> <C>
Jay Itzkowitz, Esq. C. N. Franklin Reddick, III, Esq. Jeffrey W. Rubin, Esq.
Fox Television Troop Meisinger Steuber & Pasich, LLP Squadron, Ellenoff, Plesent & Sheinfeld, LLP
10201 West Pico Blvd. 10940 Wilshire Blvd. 551 Fifth Avenue
Los Angeles, California 90035 Los Angeles, California 90024 New York, New York 10176
</TABLE>
(Name, address and telephone number of person
authorized to receive notices and communications)
June 11, 1997
------------------------------------
(Date of event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]
Note. Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
(Page 1 of 24 Pages)
- ----------------------
/1/The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE>
<TABLE>
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<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
The News Corporation Limited
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF, WC
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
South Australia, Australia
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
-0-
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially 25,263,659
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting -0-
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
25,263,659
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-2-
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
K. Rupert Murdoch
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States of America
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
-0-
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially 25,263,659
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting -0-
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
25,263,659
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-3-
<PAGE>
<TABLE>
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<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
Twentieth Holdings Corporation
95-4066193
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, USA
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
-0-
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially 25,263,659
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting -0-
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
25,263,659
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-4-
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
Fox Television Stations, Inc.
52-1408474
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, USA
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
-0-
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially 25,263,659
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting -0-
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
25,263,659
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-5-
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
Haim Saban
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States of America
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
-0-
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially 25,263,659
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting -0-
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
25,263,659
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-6-
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
Fox Kids Worldwide, Inc.
95-4596247
- --------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [X]
(b) [_]
- --------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4 Source of Funds
AF, BK, OO
- --------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, USA
- --------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
25,263,659
Number of -----------------------------------------------------------------------------
Shares 8 Shared Voting Power
Beneficially
Owned by -----------------------------------------------------------------------------
Each 9 Sole Dispositive Power
Reporting 25,263,659
Person with -----------------------------------------------------------------------------
10 Shared Dispositive Power
- --------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
25,263,659
- --------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
51.9%
- --------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SEE INSTRUCTIONS BEFORE FILLING OUT!
-7-
<PAGE>
Item 1. Security and Issuer.
-------------------
The title of the class of equity securities to which this statement
relates is Class B common stock, $.01 par value per share (the "Class B Common
Stock"), of International Family Entertainment, Inc., a Delaware corporation
("IFE"). The address of the principal executive offices of IFE is 2877 Guardian
Lane, Virginia Beach, Virginia 23452.
Item 2. Identity and Background.
-----------------------
This statement is being filed by (i) The News Corporation Limited, a
South Australia, Australia corporation ("News Corporation"), with its principal
executive offices located at 2 Holt Street, Sydney, New South Wales 2010,
Australia, (ii) K. Rupert Murdoch, a United States citizen, with his business
address at 10201 West Pico Boulevard, Los Angeles, California 90035,
(iii) Twentieth Holdings Corporation, a Delaware corporation ("Twentieth
Holdings"), with its principal executive offices located at 10201 West Pico
Boulevard, Los Angeles, California 90035, (iv) Fox Television Stations, Inc., a
Delaware corporation ("Fox Television"), with its principal executive offices
located at 1999 South Bundy Drive, Los Angeles, California 90066, (v) Haim
Saban, a United States citizen, with his business address at 10960 Wilshire
Boulevard, Los Angeles, California 90024 and (vi) Fox Kids Worldwide, Inc., a
Delaware corporation ("FKWW"), with its principal executive offices located at
10960 Wilshire Boulevard, Los Angeles, California 90024. News Corporation, K.
Rupert Murdoch, Twentieth Holdings, Fox Television, Haim Saban and FKWW are
referred herein collectively as the "Reporting Persons." The name, residence or
business address, principal occupation or employment and the name, principal
business, and address of any corporation or other organization in which such
employment is conducted with respect to each director and executive officer of
News Corporation, Twentieth Holdings, Fox Television and FKWW are set forth in
Schedule 1 attached hereto, which is incorporated herein by reference. To the
knowledge of the Reporting Persons, each of the persons named on Schedule 1 (the
"Schedule 1 Persons") is a United States citizen unless otherwise indicated.
K. Rupert Murdoch holds voting preferred shares of Twentieth Holdings
representing 76% of the voting power thereof. Such preferred stock is redeemable
at the option of Fox, Inc., a wholly-owned subsidiary of News Corporation. News
Corporation through Fox, Inc. holds all of the common stock of
- 8 -
<PAGE>
Twentieth Holdings (representing substantially all of the equity and 24% of the
voting securities thereof). Twentieth Holdings owns 100% of the outstanding
common stock of Fox Television.
Twentieth Holdings is the holding company for Fox Television and Fox
Broadcasting Company.
Fox Television owns and operates 22 broadcast television stations in the
United States.
Fox Television owns 49.5% of the outstanding common stock of FKWW,
representing 49.95% of the voting power of FKWW. Of the remaining shares of
outstanding common stock of FKWW, Haim Saban and entities which he controls own
49.5% representing 49.95% of the voting power of FKWW, and Allen & Company
Incorporated owns 1.0% representing 0.1% of the voting power of FKWW. Haim Saban
is the Chairman of the Board and Chief Executive Officer of FKWW and Chairman
and Chief Executive Officer of Saban Entertainment, Inc.
FKWW is a fully-integrated global children's television entertainment
company which develops, acquires, produces, broadcasts and distributes quality
animated and live-action children's programming.
News Corporation is a diversified international communications company
principally engaged in the production and distribution of motion pictures and
television programming, television broadcasting, publication of newspapers,
magazines, books and promotional free-standing inserts, developing digital
broadcasting, conditional access and subscription management systems and
providing computer information services.
K. Rupert Murdoch is the Chairman and Chief Executive of News
Corporation; a director of News Limited, News Corporation's principal subsidiary
in Australia; a director of News International plc, News Corporation's principal
subsidiary in the United Kingdom; Chairman, Chief Executive Officer, President
and a director of News America Holdings Incorporated, News Corporation's
principal subsidiary in the United States; Chairman and a director of Satellite
Television Asian Region Limited, the Asia Pacific Region's largest satellite
television broadcaster; a director of British Sky Broadcasting Group plc, which
operates the leading pay television broadcasting services in the United Kingdom
and the Republic of Ireland; and a director of FKWW.
Approximately 30% of the voting stock of News Corporation is owned by
Cruden Investments Pty. Limited, a subsidiary thereof, Mr. Murdoch, members of
his immediate family and a corporation which is
- 9 -
<PAGE>
controlled by trustees of settlements and trusts set up for the benefit of the
Murdoch family, certain charities and other persons.
Cruden Investments Pty. Limited is a private Australian incorporated
investment company owned by Mr. Murdoch, members of his family and various
corporations and trusts, the beneficiaries of which include Mr. Murdoch, members
of his family and charities. By virtue of shares of News Corporation owned by
corporations which are controlled by the trustees of settlements and trusts set
up for the benefit of the Murdoch family, certain charities and other persons,
and Mr. Murdoch's positions as Chairman and Chief Executive of News Corporation,
Mr. Murdoch may be deemed to control the operations of News Corporation.
During the last five years, neither any of the Reporting Persons nor, to
the best of the knowledge of the Reporting Persons, any director or executive
officer of News Corporation, Twentieth Holdings, Fox Television and FKWW, has
(i) been convicted in a criminal proceeding (excluding minor traffic violations
or similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction a result of which it
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The amount of the funds to be used to purchase the securities reported
as beneficially owned in Item 5 is estimated to be approximately $545,000,000.
In order to finance the acquisition of the outstanding common stock of IFE
(excluding the shares being acquired from Liberty IFE, Inc. ("LIFE") described
below), FKWW has established, pursuant to a letter of commitment dated as of
June 6, 1997 (the "Letter of Commitment"), a $500,000,000 7-year Secured
Reducing Revolving Credit Facility (the "Tranche A Revolving Credit"), a
$400,000,000 7-year Secured Reducing Revolving Credit Facility (the "Tranche B
Revolving Credit") and a $350,000,000 9-year Secured Term Loan Facility (the
"Term Loan; and together with the Tranche A Revolving Credit and the Tranche B
Revolving Credit, the "Facilities") with Citibank, N.A. ("Citibank") acting as
the sole agent for a syndicate of financial institutions providing the
Facilities.
- 10 -
<PAGE>
FKWW is acquiring the Class C Common Stock and IFE Notes (as hereinafter
defined) from LIFE in exchange for a new series of 8.5% preferred stock of FKWW
having a liquidation preference equivalent to $35 per Class C share, plus an
amount designed to compensate LIFE for forgoing interest on the IFE Notes and
for certain tax consequences, and which are exchangeable at the option of LIFE
upon the occurrence of certain events into 8.5% preferred stock of News
Publishing Australia Limited. The Contribution and Exchange Agreement, dated as
of June 11, 1997, by and among FKWW, LIFE and Liberty Media Corporation, a
Delaware corporation ("Liberty") (the "Contribution Agreement"), provides that
in the event of certain changes or proposed changes to tax laws, the parties
shall negotiate the terms of a substitute security to be issued to LIFE. In
addition, FKWW will be advanced approximately $250,000,000 to $350,000,000 from
Fox Broadcasting Company or an affiliate thereof in exchange for a new series of
12.5% preferred stock of FKWW. These funds will come from the working capital of
News Corporation or an affiliate thereof.
Item 4. Purpose of Transaction.
----------------------
The purpose of the transactions is to acquire all of the outstanding
common stock of IFE through the transactions described in Item 6 and to cause
the Class B Common Stock to be delisted from the New York Stock Exchange.
Item 5. Interest in Securities of the Issuer.
------------------------------------
The number of shares of Class B Common Stock beneficially owned as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, by
the Reporting Persons as of the date hereof is 25,263,659 shares, representing
(i) 3,891,121 shares of Class B Common Stock to be purchased from The Christian
Broadcasting Network, Inc., a Virginia corporation ("CBN"); (ii) 4,214,325
shares of Class B Common Stock to be purchased from Regent University, a
Virginia corporation ("Regent"); (iii) 5,000,000 shares of Class A Common Stock
in the form of Class B Common Stock issuable upon conversion thereof and
2,481,981 shares of Class B Common Stock to be purchased from the Robertsons (as
hereinafter defined); and (iv) 7,088,732 shares of non-voting Class C Common
Stock, par value $.01 per share (the "Class C Common Stock"), and $23 million
principal amount of 6% Convertible Secured Notes due 2004 (which are convertible
into 2,587,500 shares of Class C Common Stock) (the "IFE Notes") to be acquired
from LIFE, with each share of Class C Common Stock, either directly or following
conversion of the IFE Notes, convertible into an equal number of shares of Class
B Common Stock. This aggregate amount represents approximately 51.9% of the
outstanding shares of Class B Common Stock assuming full conversion of the Class
A and Class C Common Stock into Class B Common Stock. Assuming consummation of
the transactions described in Item 6, FKWW has sole voting and dispositive power
with respect to the shares of Class
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<PAGE>
B Common Stock which it beneficially holds. Assuming consummation of the
transactions described in Item 6, the other Reporting Persons share voting and
dispositive power among themselves with respect to all shares of Class B Common
Stock which they beneficially hold. For purposes of computing the percentage of
beneficial ownership of the Reporting Persons, the total number of shares of
Class B Common Stock considered to be outstanding is 48,707,777.
No transactions were effected by the Reporting Persons in the Class B
Common Stock during the 60 days preceding the date hereof.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
------------------------------------------------------------------------
Securities of the Issuer.
------------------------
Pursuant to a Stock Purchase Agreement dated as of June 11, 1997, by and
between FKWW and CBN (the "CBN Purchase Agreement"), CBN agreed, subject to the
terms and conditions thereof, to sell to FKWW all of the voting securities of
IFE owned by CBN, consisting of 3,891,121 shares of Class B Common Stock. The
purchase price of these shares is $35 per share.
Pursuant to a Stock Purchase Agreement as of dated June 11, 1997, by and
between FKWW and Regent (the "Regent Purchase Agreement"), Regent agreed,
subject to the terms and conditions thereof, to sell to FKWW all of the voting
securities of IFE owned by Regent, consisting of 4,214,325 shares of Class B
Common Stock. The purchase price of these shares is $35 per share.
Pursuant to a Stock Purchase Agreement dated as of June 11, 1997, by and
among FKWW, M.G. "Pat" Robertson, individually and as trustee of each of the
Robertson Charitable Remainder Unitrust, (the "PR Charitable Trust"), the Gordon
P. Robertson Irrevocable Trust, the Elizabeth F. Robinson Irrevocable Trust, and
the Ann R. Lablanc Irrevocable Trust (collectively, the "PR Trusts"), Lisa N.
Robertson and Timothy B. Robertson ("Tim Robertson"), as joint tenants, and Tim
Robertson, individually, as trustee of each of the Timothy and Lisa Robertson
Children's Trust (the "TR Family Trust") and the Timothy B. Robertson Charitable
Trust (the "TR Charitable Trust" and collectively, the "TR Trusts"), and as
custodian to and for each of his five children (Pat Robertson, the PR Trusts,
Lisa N. Robertson, Tim Robertson and the TR Trusts, collectively the
"Robertsons") (the "Robertson Purchase Agreement", and together with the CBN
Purchase Agreement and the Regent Agreement, the "Stock Purchase Agreements"),
M.G. "Pat" Robertson agreed,
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<PAGE>
subject to the terms and conditions thereof, on his behalf and on behalf of the
PR Trusts to sell 506,375 shares of Class B Common Stock and 3,125,000 shares of
Class A Common Stock (in the form of Class B Common Stock) to FKWW for a cash
price of $35 per share. In addition, pursuant to the Robertson Purchase
Agreement and subject to the terms and conditions thereof, following the sale of
such shares, M.G. "Pat" Robertson agreed to exercise all options held by him to
acquire 625,000 shares of Class B Common Stock and to immediately sell such
shares to FKWW for a cash price of $35 per share.
Pursuant to the Robertson Purchase Agreement, Tim Robertson agreed,
subject to the terms and conditions thereof, to sell 725,606 shares of Class B
Common Stock and 1,875,000 shares of Class A Common Stock (in the form of Class
B Common Stock) to FKWW for a cash price of $35 per share. In addition, pursuant
to the Robertson Purchase Agreement and subject to the terms and conditions
thereof, following the sale of such shares, Tim Robertson has agreed to exercise
all options held by him to acquire 625,000 shares of Class B Common Stock and to
immediately sell such shares to FKWW for a cash price of $35 per share.
Pursuant to the terms and conditions of the Contribution Agreement, FKWW
agreed to acquire all of the shares of Class C Common Stock of IFE, consisting
of 7,088,732 shares of Class C Common Stock and $23 million principal amount of
the IFE Notes from LIFE, in exchange for shares of a newly issued series of 8.5%
preferred stock of FKWW. The Class C Common Stock is immediately convertible
into shares of Class B Common Stock of IFE, and the IFE Notes are ultimately
convertible into shares of Class B Common Stock of IFE after first being
converted into shares of Class C Common Stock. Upon consummation of the Stock
Purchase Agreements and the Contribution Agreement, FKWW will own a majority of
IFE's voting securities on a fully diluted basis.
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<PAGE>
Immediately following the consummation of the private purchases pursuant
to the Stock Purchase Agreements and the Contribution Agreement, FKWW will
acquire the remaining voting securities of IFE by way of a merger (the "Merger")
of Fox Kids Merger Corporation, a Delaware corporation and wholly-owned
subsidiary of FKWW ("FKWW Sub"), with and into IFE, pursuant to the terms and
conditions of an Agreement and Plan of Merger by and among FKWW, FKWW Sub and
IFE, dated as of June 11, 1997 (the "Merger Agreement"). As a result of the
Merger, IFE, as the surviving corporation in the Merger (the "Surviving
Corporation"), will become a wholly-owned subsidiary of FKWW, and each issued
and outstanding share of Class B Common Stock (other than shares owned by FKWW,
FKWW Sub, IFE or any of their respective subsidiaries, or by stockholders who
have validly perfected their appraisal rights under the Delaware General
Corporation Law (the "DGCL")) will be converted into the right to receive $35 in
cash, subject to certain adjustment. After the consummation of the Merger, FKWW
will own all of the outstanding voting securities of the Surviving Corporation.
The consummation of the transactions contemplated hereby are subject to
the satisfaction of certain conditions, including, without limitation,
expiration or termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and, in any event, will not
occur until the expiration of 20 days from the date a definitive information
statement is sent to IFE's stockholders.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
<TABLE>
<CAPTION>
Document Exhibit No.
-------- -----------
<S> <C>
CBN Stock Purchase Agreement dated as of June 11, 1997 1
Regent Stock Purchase Agreement dated as of June 11, 1997 2
Robertson Stock Purchase Agreement dated as of June 11, 1997 3
Contribution and Exchange Agreement dated as of June 11, 1997 4
Agreement and Plan of Merger dated as of June 11, 1997 5
Letter of Commitment dated as of June 6, 1997 6
Agreement of Joint Filing 7
</TABLE>
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
----------------------------------
Name: Arthur M. Siskind
Title: Director
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
/s/ K. Rupert Murdoch
----------------------------
K. Rupert Murdoch
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
TWENTIETH HOLDINGS CORPORATION
By: /s/ Jay Itzkowitz
-------------------------------
Name: Jay Itzkowitz
Title: Senior Vice President
and Secretary
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
FOX TELEVISION STATIONS, INC.
By: /s/ Jay Itzkowitz
-------------------------------
Name: Jay Itzkowitz
Title: Senior Vice President
and Secretary
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
/s/ Haim Saban
-----------------------
Haim Saban
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: June 20, 1997
FOX KIDS WORLDWIDE, INC.
By: /s/ Haim Saban
-----------------------------------
Name: Haim Saban
Title: Chief Executive Officer
- 20 -
<PAGE>
Schedule 1
- ----------
Directors, Executive Officers and Controlling Persons of The News
Corporation Limited ("News Corporation"), Fox Television Stations, Inc. ("Fox
Television"), Twentieth Holdings Corporation ("Twentieth Holdings") and Fox Kids
Worldwide, Inc. ("FKWW")
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Such Employment is
Name Principal Occupation and Business Address Conducted
---- ----------------------------------------- ---------
<S> <C> <C>
K. Rupert Murdoch Chairman and Chief Executive of News News Corporation
Corporation; Director of News Limited;
Director of News International plc; Chairman,
Chief Executive Officer, President and
Director of News America Holdings
Incorporated ("NAHI"), Chairman and Director
of Satellite Television Asian Region Limited
("STAR TV"); Director of British Sky
Broadcasting Group plc ("BSkyB"); Director of
FKWW; Director of Fox Television; Director of
Twentieth Holdings
10201 West Pico Boulevard
Los Angeles, CA 90035
Chase Carey Executive Director and Co-Chief Operating Fox Television
Officer of News Corporation; Director and
Executive Vice President of NAHI; Chairman and
Chief Executive Officer of Fox Television; Chief
Operating Officer and Executive Vice President of
Fox, Inc.; Director of FKWW; Director and
President of Twentieth Holdings
10201 West Pico Boulevard
Los Angeles, CA 90035
Peter Chernin Executive Director, President and Chief Operating News Corporation
Officer of News Corporation; Director, Chairman
and Chief Executive Officer of NAHI and the
"Fox Group", which consists of the North
American operations of News Corporation
10201 West Pico Boulevard
Los Angeles, CA 90035
Samuel H. Chisholm/1/ Executive Director of News Corporation; Chief BSkyB
Executive and Managing Director of BSkyB;
Director of STAR TV
6 Centaurs Business Park
Grant Way
Isleworth
Middlesex TW7 5QD
</TABLE>
- -----------------------
/1/ Citizen of New Zealand
- 21 -
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Such Employment is
Name Principal Occupation and Business Address Conducted
---- ----------------------------------------- ---------
<S> <C> <C>
Ken E. Cowley/2/ Executive Director of News Corporation; News Corporation
Chairman and Director of News Limited;
Managing Director of Australian operations;
Executive Chairman and Director of Ansett
Holdings Limited; Director and Executive Vice
President of NAHI
2 Holt Street
Sydney, New South Wales 2010
Australia
David F. DeVoe Executive Director, Senior Executive Vice News Corporation
President and Chief Financial Officer and Finance
Director of News Corporation; Director and
Executive Vice President of NAHI; Director of
STAR TV; Director of BSkyB; Director of Fox
Television; Director of Twentieth Holdings
1211 Avenue of the Americas
New York, New York 10036
Aatos Erkko/3/ Non Executive Director of News Corporation; Saroma
Chairman and Chief Executive Officer of Saroma
Group and Saroma Corporation ("Saroma"),
privately owned media companies in Finland
P.O. Box 144
SF00101 Helsinki, Finland
Andrew S.B. Knight/4/ Non Executive Director of News Corporation News Corporation
c/o News International plc
1 Virginia Street
London E19X4 England
Hamish Maxwell Non Executive Director of News Corporation News Corporation
100 Park Avenue
New York, New York
Keith H. McDonald/5/ Non Executive Director of News Corporation; News Corporation
Non Executive Chairman of Queensland Press
Limited
41 Campbell Street
Bowen Hills
Queensland 4006
Anna M. Murdoch Non Executive Director of News Corporation; News Corporation
Director of NAHI
10201 West Pico Boulevard
Los Angeles, CA 90035
</TABLE>
- ---------------------
/2/ Citizen of Australia
/3/ Citizen of Finland
/4/ Citizen of United Kingdom
/5/ Citizen of Australia
- 22 -
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Such Employment is
Name Principal Occupation and Business Address Conducted
---- ----------------------------------------- ---------
<S> <C> <C>
Lachlan K. Murdoch Executive Director of News Corporation; News Corporation
Chairman and Director of Queensland Press
Limited; Director of Herald & Weekly Times
Limited; Managing Director and Director of News
Limited; Deputy Chairman of STAR TV
2 Holt Street
Sydney, New South Wales 2010
Australia
Thomas J. Perkins Non Executive Director of News Corporation; Kleiner Perkins
Senior Partner at Kleiner Perkins Canfield &
Byers ("Kleiner Perkins"); Chairman of the Board
of Tandem Computers; Director of Philips
Electronics N.V.
4 Embarcadero Center
Suite 3520
San Francisco, CA 94111
Bert C. Roberts, Jr. Non Executive Director of News Corporation; MCI
Chairman, Director and Chief Executive Officer
of MCI Communications Corporation ("MCI");
Director of British Telecommunications plc
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Stanley S. Shuman Non Executive Director of News Corporation; Allen & Company
Executive Vice President and Managing Director
of Allen & Company Incorporated ("Allen &
Company"); Director of NAHI
711 Fifth Avenue
New York, New York 10176
Arthur M. Siskind Executive Director, Senior Executive Vice News Corporation
President and Group General Counsel of News
Corporation; Director of BSkyB; Director and
Executive Vice President of NAHI; Director of
STAR TV
1211 Avenue of the Americas
New York, New York 10036
Haim Saban Chairman of the Board and Chief Executive Saban
Officer of FKWW; Chairman and Chief Executive
Officer of Saban Entertainment, Inc. ("Saban")
10960 Wilshire Boulevard
Los Angeles, CA 90024
Margaret Loesch President and Director of FKWW; Chairman and FKWW
Chief Executive Officer of Fox Kids Network
Worldwide
10960 Wilshire Boulevard
Los Angeles, CA 90024
</TABLE>
- 23 -
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Such Employment is
Name Principal Occupation and Business Address Conducted
---- ----------------------------------------- ---------
<S> <C> <C>
Mel Woods President, Chief Operating Officer, Chief FKWW
Financial Officer and Director of FKWW;
President and Chief Operating Officer of Saban
10960 Wilshire Boulevard
Los Angeles, CA 90024
Shuki Levy Executive Vice President and Director of FKWW FKWW
10960 Wilshire Boulevard
Los Angeles, CA 90024
William Josey Senior Vice President, Business Affairs and Saban
General Counsel-Saban; Secretary of FKWW
10960 Wilshire Boulevard
Los Angeles, CA 90024
Mitchell Stern President and Chief Operating Officer of Fox Fox Television
Television
1999 South Bundy Drive
Los Angeles, CA 90066
Lawrence Jacobson Executive Vice President of Fox; Executive Vice Fox Television
President of Twentieth Holdings
10201 West Pico Boulevard
Los Angeles, CA 90035
Jay Itzkowitz Senior Vice President of Fox Television; Senior Fox Television
Vice President of Twentieth Holdings
10201 West Pico Boulevard
Los Angeles, CA 90035
Gerald Friedman Senior Vice President of Fox Television Fox Television
1999 South Bundy Drive
Los Angeles, CA 90066
Raymond L. Parrish Vice President of Fox Television; Vice President Fox Television
of Twentieth Holdings
10201 West Pico Boulevard
Los Angeles, CA 90035
Elisabeth Swanson Vice President of Fox Television Fox Television
1999 South Bundy Drive
Los Angeles, CA 90035
Molly Pauker Vice President of Fox Television; Vice President Fox Television
of Twentieth Holdings
5151 Wisconsin Avenue N.W.
Washington, D.C. 20016
Muriel Reis Vice President of Fox Television Fox Television
205 East 67th Street
New York, NY 10021
</TABLE>
- 24 -
<PAGE>
Exhibit 1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of June 11,
---------
1997, is entered into by and between Fox Kids Worldwide, Inc., a Delaware
corporation (the "Purchaser") and The Christian Broadcasting Network, Inc., a
---------
Virginia corporation (the "Seller") on the following terms and conditions:
------
R E C I T A L S
---------------
WHEREAS, as of the date hereof, the Seller beneficially owns 3,891,121
shares of Class B Common Stock, par value $0.01 per share, of International
Family Entertainment, Inc. (the "Company") (the "Class B Stock");
------- -------------
WHEREAS, the Purchaser desires to purchase the Class B Stock from the
Seller, and the Seller desires to sell the Class B Stock to the Purchaser, all
on the terms and subject to the conditions contained herein;
WHEREAS, concurrently herewith, the Purchaser, Fox Kids Merger
Corporation, a Delaware corporation ("FKW Sub"), and the Company are entering
-------
into that certain Agreement and Plan of Merger (as the same may be amended from
time to time in accordance with its terms, the "Merger Agreement"), providing
----------------
for the merger of FKW Sub into the Company (the "Merger"), which shall be the
------
surviving corporation, pursuant to which each share of Company Stock and Non
Voting Class C Common Stock, par value $0.01 per share, of the Company (the
"Class C Stock") which is issued and outstanding immediately prior to the
- --------------
effective time (the "Effective Time") of the Merger (other than shares held by
the Company, the Purchaser or FKW Sub, or any direct or indirect subsidiary of
the Company, the Purchaser or FKW Sub) shall be canceled and extinguished and be
converted into and become a right to receive a cash payment equal to $35.00 per
share (subject to adjustment), without interest (except that any Dissenting
Shares (as defined in the Merger Agreement) shall be converted into and become a
right to receive the payment provided for under the Delaware General Corporation
Law);
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser has requested that the Seller enter into this Agreement
and as a condition to its willingness to enter into this Agreement, the Seller
has required that the Purchaser and FKW Sub enter into the Merger Agreement;
WHEREAS, the Purchaser, Liberty Media Corporation, a Delaware
corporation ("Liberty"), and Liberty IFE, Inc., a Colorado corporation ("LIFE"),
------- ----
have entered into that certain Contribution and Exchange Agreement, dated as of
the date hereof (as the same may be amended from time to time in accordance with
its terms, the "Contribution Agreement"), pursuant to which LIFE has agreed, on
----------------------
the terms and subject to the conditions therein, to contribute its
<PAGE>
shares of Class C Stock and its $23 million principal amount of 6% Convertible
Secured Notes due 2004 of the Company (the "Convertible Notes"), to the
----------- -----
Purchaser in exchange for shares of a newly issued class of preferred stock of
the Purchaser;
WHEREAS, in connection with the Contribution Agreement, Satellite
Services, Inc., a Delaware corporation and an affiliate of Liberty, has entered
into an amendment to its Affiliation Agreement with the Company (the "Amended
-------
Affiliation Agreement");
- ---------------------
WHEREAS, in connection with sale of the Class B Stock to the Purchaser
hereunder, the Company, M.G. "Pat" Robertson ("Pat Robertson"), individually and
-------------
as trustee of the Robertson Charitable Remainder Unitrust, u/t/a dated January
22, 1990 (the "PR Charitable Trust"), Timothy B. Robertson ("Tim Robertson"),
------------------- -------------
individually and as trustee of the Timothy and Lisa Robertson Children's Trust,
u/t/a dated September 18, 1995 (the "TR Family Trust"), LIFE and CBN have
---------------
entered into that certain Termination to Amended and Restated Shareholder
Agreement, dated as of even date herewith (the "Termination Agreement"),
---------------------
terminating the Shareholder Agreement dated September 1, 1995, by and among the
Company, Pat Robertson, the PR Charitable Trust, Tim Robertson, the TR Family
Trust, LIFE and CBN;
WHEREAS, in connection with the sale of the Class B Stock to the
Purchaser hereunder, CBN and Regent University, a Virginia corporation
("Regent") have entered into that certain Termination to Assignment and
------
Assumption Agreement, dated as of even date herewith (the "Assignment
----------
Termination Agreement") terminating the Assignment and Assumption Agreement,
- ---------------------
dated June 30, 1992, by and between CBN and Regent (the "Assignment and
--------------
Assumption Agreement");
- --------------------
WHEREAS, concurrently herewith, the Purchaser and Regent are entering
into that certain Stock Purchase Agreement with respect to the purchase by the
Purchaser of the shares of Class B Stock owned by Regent (as the same may be
amended from time to time in accordance with its terms, the "Regent Purchase
---------------
Agreement");
- ---------
WHEREAS, concurrently herewith, the Purchaser has entered into a Stock
Purchase Agreement with Pat Robertson, individually and as trustee of each of
the PR Charitable Trust, the Gordon P. Robertson Irrevocable Trust, u/t/a dated
December 18, 1996, the Elizabeth F. Robinson Irrevocable Trust, u/t/a dated
December 18, 1996, and the Ann R. Lablanc Irrevocable Trust, u/t/a dated
December 18, 1996 (the Gordon P. Robertson Irrevocable Trust, the Elizabeth F.
Robinson Irrevocable Trust and the Ann R. Lablanc Irrevocable Trust, together,
the "Irrevocable Trusts"), Lisa N. Robertson and Tim Robertson as joint tenants,
------------------
and Tim Robertson, individually, as trustee of each of the TR Family Trust and
the Timothy B. Robertson Charitable Trust, u/t/a dated December 30, 1996 (the
"TR Charitable Trust"), and custodian to and for each of Abigail H. Robertson,
- --------------------
Laura N. Robertson, Elizabeth C. Robertson, Willis H. Robertson and Caroline S.
Robertson under the Virginia Uniform Transfers to Minors Act (Pat Robertson, the
PR Charitable Trust, the Irrevocable Trusts, Lisa N. Robertson, Tim Robertson,
the TR Family Trust and the TR Charitable Trust, collectively, the
"Robertsons"), as of even date herewith,
2
<PAGE>
which provides, inter alia, for the purchase of all of the shares of Class A
----- ----
Common Stock, par value $0.01 per share, of the Company (the "Class A Stock",
-------------
and together with all of the Class B Stock, the Class C Stock and any other
shares of any other class of common stock of the Company, the "Common Stock")
------------
in the form of Class B Stock issuable upon conversion thereof, by the Purchaser
from the Pat Charitable Trust, Tim Robertson and the Tim Family Trust, and the
purchase by the Purchaser of all of the shares of Class B Stock of the Company
owned by the Robertsons (as the same may be amended from time to time in
accordance with its terms, the "Robertson Purchase Agreement"); and
----------------------------
WHEREAS, as a condition to its willingness to enter into this
Agreement, the Seller has required that, in connection with the transactions to
be effected pursuant to this Agreement, The News Corporation Limited, a
corporation organized and existing under the laws of South Australia, Australia
(the "Guarantor") guarantee the obligations of the Purchaser to the Seller
---------
hereunder and the Guarantor has given a guaranty (the "Guaranty") in accordance
--------
with such determination.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows.
1. Purchase and Sale of Class B Stock. On the terms and subject to the
conditions set forth in this Agreement, the Seller agrees to sell and
deliver the Class B Stock to the Purchaser, free and clear of any mortgage,
pledge, lien, security interest or other encumbrance (each, a "Lien") or
----
Restriction created by or binding upon the Seller or the Class B Stock, and the
Purchaser agrees to purchase and acquire the Class B Stock from the Seller. For
purposes of this Agreement, "Restriction" means, when used with respect to any
specified security, any stockholders or other trust agreement, option, warrant,
escrow, proxy, buy-sell agreement, power of attorney or other contract,
agreement or arrangement which (i) grants to any Person the right to sell or
otherwise dispose of, such specified security or any interest therein, or (ii)
restricts the transfer of, or the exercise of any rights or the enjoyment of any
benefits arising by reason of the ownership of such specified security. For
purposes of this Agreement, "Person" means any individual, corporation, general
or limited partnership, limited liability company, trust, joint venture,
association or unincorporated entity of any kind.
2. Purchase Price. The Shares shall be purchased by the Purchaser from
the Seller thereof for a purchase price (the "Purchase Price") equal to $35.00
--------------
per share. Notwithstanding the foregoing, the Purchase Price shall be increased
to an amount which equals (if greater than the Purchase Price provided for
herein) the per share amount actually paid, directly or indirectly, by FKWW or
any of its Affiliates, with respect to the purchase of, or agreement to
purchase, Company Stock, or securities convertible into Company Stock, which
purchase is effected or agreement is entered into after the date hereof and
through the earlier to occur of (a) the Effective Time (as defined in the Merger
Agreement) or (b) the termination of the Merger Agreement, (x) in the Merger,
(y) from (i) LIFE, (ii) the Robertsons, (iii) Regent, (iv) any holder or "group"
3
<PAGE>
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) that owns, or
has the right to dispose of, or to direct the disposition of, 2-1/2% or more of
any class of common stock of the Company, or (v) any of the Affiliates of the
entities referred to in clauses (i), (ii), (iii) or (iv) above, or (z) in any
transaction, or series of related or unrelated transactions (excluding for
purposes of this clause (z), any transaction referred to in clauses (y)(i),
(ii), (iii) or (v)), after the date hereof and through the Effective Time,
involving, in the aggregate, 5% or more of the outstanding shares of any class
of common stock of the Company. For these purposes, it is acknowledged and
agreed that (x) the $3.5 million to be paid to LIFE under the Contribution
Agreement with respect to forfeited interest income on the Convertible Notes,
and (y) amounts to be paid with respect to any "tax gross up" with respect to
the Exchange Rights under the Contribution Agreement, shall not constitute an
amount paid, directly or indirectly, with respect to the purchase of Company
Stock. Further, the Purchase Price shall not be adjusted as a result of the
provisions of the preceding sentence with respect to any purchase effected under
any of the Contribution Agreement, the Merger Agreement, the Robertson Agreement
or the Regent Agreement unless the applicable agreement has been amended after
the date hereof so as to increase the consideration to be paid by the Purchaser
or any of its Affiliates, directly or indirectly, with respect to the Company
Stock or securities convertible into Company Stock. The Purchaser shall
promptly provide notice to the Seller of any agreement or amendment to an
existing agreement entered into by the Purchaser or any of its Affiliates with
the Company, the Robertsons or Regent, or any amendment to an Other Transaction
Agreement (as defined herein) to which LIFE or any of its Affiliates is a party,
from and after the date hereof and through the Closing Date. If the Purchase
Price is adjusted pursuant to the foregoing, following the closing under such
other agreement (or the Effective Time, if applicable), the Purchaser shall
promptly pay to the Seller the amount of any increase in the Purchase Price
resulting from such agreement. For purposes of this Agreement, "Affiliate"
---------
means, when used with reference to a specified Person, any Person that directly
or indirectly through one or more intermediaries controls or is controlled by,
or is under common control with, such specified Person and, in the case of an
individual, such Person's spouse, parents, children, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law.
For the purposes of this definition, "control" (including the terms controlled
by and under common control with), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For the purposes of
this Agreement, the Purchaser shall be deemed to be an Affiliate of Fox, Inc., a
Delaware corporation, and of Saban Entertainment, Inc., a Delaware corporation,
but shall not be deemed to be an Affiliate of any of the Sellers, the Company,
LIFE, the Seller, Regent nor any of their respective Affiliates.
3. The Closing. The closing (the "Closing") of the purchase and sale of
-------
the Class B Stock shall take place on the third business day following
satisfaction or waiver of each and every one of the conditions set forth in
Sections 6 and 7 hereof, or such other date and time as the parties shall
otherwise agree to. The date of the Closing is referred to herein as the
"Closing Date". At the Closing, the Seller shall deliver to the Purchaser
certificates representing the Shares (accompanied by signature guarantees in
customary form) against delivery by the Purchaser of
4
<PAGE>
payment of the Purchase Price therefor, by wire transfer or by immediately
available funds, to such accounts as Seller may specify.
4. Representations and Warranties. The Seller hereby makes the
following representations and warranties. The representations and warranties
contain exceptions set forth in a written disclosure letter (the "Seller
------
Disclosure Letter") delivered to the Purchaser concurrently with the execution
- -----------------
hereof, which is numbered to correspond to the various Sections of this
Agreement and which also sets forth certain other information called for by this
Agreement.
4.1 Organization, Standing and Corporate Power. The Seller is a
------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, with adequate corporate power and authority
to own its properties and carry on its business as presently conducted. The
Seller has the corporate power to enter into, execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
4.2 Execution, Delivery and Performance. The execution, delivery and
-----------------------------------
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by its Board of Directors, and the
Seller has taken all other actions required by law, its charter and its bylaws
in order to consummate the transactions contemplated by this Agreement. This
Agreement constitutes the valid and binding obligations of the Seller and is
enforceable in accordance with its terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally.
4.3 No Consents. Other than filings required under the Hart-Scott-
-----------
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
-------
filing of Forms 4 and Schedules 13D under the Securities Exchange Act of 1934,
as amended and the rules and regulations thereunder (the "Exchange Act"), no
------------
consent, authorization, order or approval of, or filing with or registration
with, any governmental authority, commission, board or other regulatory body of
the United States or any state or political subdivision thereof (each, a
"Governmental Entity"), is required to be made or obtained by the Seller for or
- --------------------
in connection with the sale by the Seller of the Class B Stock to the Purchaser
as contemplated hereby.
4.4 Title. The Seller has, and at the Closing will have, good and
-----
valid title to the Class B Stock it is selling pursuant to this Agreement, free
and clear of any Liens or Restrictions (other than those Restrictions set forth
in the Shareholder Agreement) and (subject to such Restrictions) it has the full
legal right, power and authority to sell, assign, transfer and deliver the Class
B Stock to the Purchaser and to make the representations, warranties, covenants
and agreements made by it herein; upon the delivery of and payment for such
Class B Stock as contemplated hereby the Purchaser will acquire good and valid
title thereto, free and clear of all Liens or Restrictions created by or binding
upon the Seller. The Seller has sole voting power, and sole power of
disposition, with respect to all of its Class B Stock, with no Restrictions
(other
5
<PAGE>
than those Restrictions set forth in the Shareholder Agreement) subject to
applicable federal and state securities laws, on the Seller's rights of
disposition pertaining thereto. The Class B Stock constitutes all equity or debt
securities issued by the Company held by the Seller and the Seller has no right,
title or interest in or to any other equity or debt securities of the Company
(other than as remainderman in certain of the Class A Stock) or any option or
right to acquire any such equity or debt securities (other than as set forth in
the Shareholder Agreement).
4.5 No Conflicts. The execution, delivery and performance by the
------------
Seller of this Agreement will not violate any other agreement to which the
Seller is a party, including, without limitation, any voting agreement,
stockholders agreement or voting trust, or otherwise contravene, conflict with
or result in a violation of, any federal, state, local, municipal, foreign,
international, multi-national or other administrative order, constitution, law,
ordinance, regulation, statute or treaty, or give any individual, corporation,
partnership, governmental authority or regulatory body or any other person the
right to prevent the consummation of the sale of the Class B Stock contemplated
hereby.
4.6 No Broker. The Seller has not employed any investment banker,
---------
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
5. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Seller as follows:
5.1 Organization, Standing and Corporate Power of the Purchaser. The
-----------------------------------------------------------
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with adequate corporate power and
authority to own its properties and carry on its business as presently
conducted. The Purchaser has the corporate power and authority to enter into,
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
5.2 Organization, Standing and Corporate Power of the Guarantor. The
-----------------------------------------------------------
Guarantor is a corporation organized and existing under the laws of South
Australia, Australia, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. The Guarantor has
the corporate power and authority to enter into, execute and deliver the
Guaranty and to guarantee the obligations of the Purchaser hereunder pursuant to
such Guaranty.
5.3 Execution, Delivery and Performance by the Purchaser. The
----------------------------------------------------
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser, and the Purchaser has taken all other actions
required by law, its Amended and Restated Certificate of Incorporation and its
Bylaws in order to consummate the transactions contemplated by this
6
<PAGE>
Agreement. This Agreement constitutes the valid and binding obligations of the
Purchaser and is enforceable in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
5.4 Execution, Delivery and Performance by the Guarantor. The
----------------------------------------------------
execution, delivery and performance of the Guaranty and the consummation of the
transactions thereby have been duly authorized by the Board of Directors of the
Guarantor, and the Guarantor has taken all other actions required by law and its
organizational documents in order to consummate the transactions contemplated by
the Guaranty. The Guaranty constitutes the valid and binding obligations of the
Guarantor and is enforceable in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
5.5 Consents. Other than filings required under the HSR Act and the
--------
filing of a Form 4 and Schedule 13D under the Exchange Act, no consent,
authorization, order or approval of, or filing with or registration with, any
Governmental Entity is required to be made or obtained by the Purchaser for the
purchase of the Class B Stock from the Seller as contemplated hereby or by the
Guarantor for the execution, delivery and performance of the Guaranty.
5.6 No Conflicts. The execution, delivery and performance by the
------------
Purchaser of this Agreement or by the Guarantor of the Guaranty will not violate
any other agreement to which the Purchaser or the Guarantor is a party, or
otherwise contravene, conflict with or result in a violation of, any federal,
state, local, municipal, foreign, international, multi-national or other
administrative order, constitution, law, ordinance, regulation, statute or
treaty, or give any individual, corporation, partnership, governmental authority
or regulatory body or any other person the right to prevent the consummation of
the sale of the Class B Stock contemplated hereby or the enforcement by the
Seller of the Guaranty.
5.7 Purchase For Investment. The Purchaser is acquiring the Class B
------------------------
Stock for its own account, for investment purposes only, and not with a view to
or for the resale or distribution thereof, in whole or in part. The Purchaser
acknowledges and represents (i) that it is aware that the Class B Stock is not
registered under the Securities Act of 1933, as amended, and are subject to the
restrictions thereof, including pursuant to Rule 144 promulgated thereunder;
(ii) that no federal or state agency has passed upon the Class B Stock or made
any finding or determination as to the fairness of the Purchaser's investment in
the Class B Stock; (iii) that there are risks of loss associated with the
Purchaser's purchase of the Class B Stock; (iv) that the investment in the Class
B Stock is an illiquid investment and the Purchaser may bear the risk of its
investment for an indefinite period of time; and (v) that it is a sophisticated
investor, able to evaluate the risks and merits of its investment and to bear
such financial risk.
5.8 No Broker. The Purchaser has not employed any investment banker,
---------
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this
7
<PAGE>
Agreement which would be entitled to any investment banking, brokerage, finder's
or similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
5.9 Transaction Agreements. This Agreement, the Merger Agreement,
----------------------
the Other Transaction Agreements (as defined herein), and the other agreements
listed in the recitals above, are the only agreements existing as of the date
hereof between the Purchaser, on the one hand, and the respective counterparties
to such agreements and any Affiliates of such parties, on the other hand, with
respect to the acquisition of Class A Stock, Class B Stock, Class C Stock or
Convertible Notes of the Company.
6. Conditions to Obligations of Purchaser. Unless waived, in whole or in
part, in writing by the Purchaser, the obligations of the Purchaser to purchase
the Class B Stock and to perform any and all of its post-closing obligations
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions:
6.1 Accuracy of Representations and Warranties. All representations
------------------------------------------
and warranties of the Seller contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
6.2 Performance of Agreements. The Seller shall have performed in
-------------------------
all material respects all obligations and agreements contained in this Agreement
to be performed or complied with by the Seller on or prior to or at the Closing
Date.
6.3 Certificates. The Sellers shall be prepared to deliver
------------
certificates for all the Class B Stock to the Purchaser upon the Closing.
6.4 Purchase of Control Stock. The Purchaser has acquired the
-------------------------
Control Stock (as defined in the Robertson Purchase Agreement) from the
Robertsons pursuant to the Robertson Purchase Agreement.
6.5 No Injunctions. Neither of the parties hereto shall be subject
--------------
to any order or injunction of a court of competent jurisdiction which prohibits
the consummation of the sale of the Class B Stock to the Purchaser contemplated
by this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable efforts to have any such
injunction lifted.
6.6 No Adverse Enactments. There shall not have been any statute,
---------------------
rule, regulation or order promulgated, enacted or issued by any Government
Entity or court of competent jurisdiction, which would make the consummation of
the sale of the Class B Stock hereunder or the Merger illegal.
6.7 Banking Moratorium. There shall not have occurred and be
------------------
continuing any
8
<PAGE>
declaration of any banking moratorium or suspension of payments
by banks in the United States or any general limitation on the extension of
credit by lending institutions in the United States.
6.8 Consummation of Other Transactions. All conditions to the
----------------------------------
consummation of the transactions (the "Other Transactions") to be effected
------------------
pursuant to the Contribution Agreement, the Robertson Purchase Agreement and the
Regent Purchase Agreement (collectively, the "Other Transaction Agreements")
----------------------------
shall have been satisfied or waived by the applicable party, and the parties to
such Other Transaction Agreements shall have consummated such Other Transactions
simultaneously with or prior to the sale of the Class B Stock to the Purchaser
as contemplated hereby.
6.9 Hart-Scott-Rodino Notification. The waiting period (and any
------------------------------
extension thereof) under the HSR Act applicable to (i) the purchase of the Class
B Stock pursuant to this Agreement and the consummation of the Other
Transactions, (ii) the conversion by the Purchaser of the Class C Stock and the
Convertible Notes acquired pursuant to the Contribution Agreement into shares of
Class B Stock of the Company, and (iii) the Merger shall have expired or have
been terminated.
6.10 Opinion of Counsel. The Purchaser shall have received an
------------------
opinion of counsel to the Seller in a form reasonably acceptable to Purchaser
covering the matters referred to in Section 4.1 hereof.
6.11 Acquisition Agreements. Immediately following the consummation
----------------------
of this transaction and the Other Transactions (and after giving effect to the
conversion of the Class C Stock and the Convertible Notes into Class B Stock),
the Purchaser and its Affiliates will own a majority of the voting common stock
of the Company then entitled to vote in the election of the Company's directors.
7. Conditions to Obligations of Seller. Unless waived, in whole or
in part, in writing by the Seller, the obligations of the Seller to sell the
Class B Stock as contemplated by this Agreement shall be subject to the
fulfillment prior to or on the Closing Date of each of the following conditions:
7.1 Accuracy of Representations and Warranties. All representations
------------------------------------------
and warranties of the Purchaser contained herein shall be true and correct in
all material respects on and as of the Closing Date, with the same effect as
though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
7.2 Performance of Agreements. The Purchaser shall have performed in
-------------------------
all material respects all obligations and agreements contained in this Agreement
to be performed or complied with by the Purchaser on or prior to or at the
Closing Date.
7.3 No Adverse Enactments. There shall not have been any statute,
---------------------
rule,
9
<PAGE>
regulation or order promulgated, enacted or issued by any Government Entity or
court of competent jurisdiction which would make the consummation of the sale of
the Class B Stock hereunder or the Merger illegal.
7.4 No Injunctions. Neither of the parties hereto shall be subject
--------------
to any order or injunction of a court of competent jurisdiction which prohibits
the consummation of the sale of the Class B Stock to the Purchaser contemplated
by this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable efforts to have any such
injunction lifted.
7.5 Hart-Scott-Rodino Notification. The waiting period (and any
------------------------------
extension thereof), under the HSR Act applicable to the consummation of the
purchase of the Class B Stock pursuant to this Agreement shall have expired or
have been terminated.
7.6 Purchase Price. The Purchaser shall be prepared to deliver the
--------------
aggregate Purchase Price for all the Class B Stock to the Seller in the amounts
and manner contemplated hereby upon the Closing.
7.7 Consummation of Other Transactions. Prior to or simultaneously
----------------------------------
with the sale of the Class B Stock to the Purchaser provided for by this
Agreement, all conditions to the consummation of the Other Transactions to be
effected pursuant to the Other Transaction Agreements shall have been satisfied
or waived by the applicable party, and the parties to such Other Transaction
Agreements shall have consummated such Other Transactions simultaneously with or
prior to the sale of the Class B Stock to the Purchaser as contemplated hereby.
8. Covenants of the Purchaser. The Purchaser hereby covenants and
agrees as follows:
8.1 Filings and Other Actions. As promptly as practicable after the
-------------------------
execution of this Agreement, but in any event within 5 business days, the
Purchaser shall file notification reports under the HSR Act and shall request
early termination of the waiting period under the HSR Act and use their
commercially reasonable efforts to obtain clearance or authorization under the
HSR Act of the Merger and the purchase of the Class B Stock contemplated by this
Agreement and the Other Transactions at the earliest practicable time. The
Purchaser agrees to cooperate fully with the Seller to promptly effectuate the
filing of any notification required under the HSR Act.
8.2 Reasonable Efforts. Subject to the terms and conditions of this
------------------
Agreement, the Other Transaction Agreements and the Merger Agreement, the
Purchaser agrees to use all reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, the Other Transaction Agreements and the Merger Agreement. The
Purchaser hereby agrees, while this Agreement is in effect, and except as
contemplated
10
<PAGE>
hereby, not to intentionally and knowingly take any action with the intention
and knowledge that such action would make any of its representations or
warranties contained herein untrue or incorrect or have the effect of preventing
or disabling it from performing its obligations under this Agreement.
9. Covenants of the Seller. The Seller hereby covenants and agrees as
follows:
9.1 Cooperation in Filing Notification under Hart-Scott-Rodino. The
----------------------------------------------------------
Seller agrees to cooperate fully with the Purchaser to promptly effectuate the
filing of any notification required under the HSR Act.
9.2 Additional Shares. The Seller agrees that it will not purchase
-----------------
additional shares of Common Stock of the Company whether in open market
purchases or privately negotiated purchases between the date of this Agreement
and the Closing Date. If ownership of any additional shares of Common Stock of
the Company is acquired or transferred to the Seller, the Seller hereby agrees,
while this Agreement is in effect, to promptly notify the Purchaser of the
number of additional shares of Common Stock of the Company acquired by it, if
any, after the date hereof, and hereby agrees to sell any such additional shares
of Common Stock of the Company acquired by it after the date hereof through the
Closing Date to the Purchaser pursuant to the terms of this Agreement, with a
provision for additional payment for such shares by the Purchaser to the Seller
at the Purchase Price.
9.3 Written Consent. Concurrently with the execution hereof, the
---------------
Seller has delivered to the Company its irrevocable written consent approving
the Merger Agreement and the Merger.
9.4 Reasonable Efforts. Subject to the terms and conditions of this
------------------
Agreement, the Seller agrees to use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions provided
for by this Agreement. The Seller hereby agrees, while this Agreement is in
effect, and except as contemplated hereby, not to intentionally and knowingly
take any action with the intention and knowledge that such action would make any
of its representations or warranties contained herein untrue or incorrect in any
material respect or have the effect of preventing or disabling it from
performing its obligations under this Agreement.
10. Post-Closing Covenants; Termination. The Seller and the
Purchaser agree to execute such further documents or instruments and to take
such other actions as are necessary to transfer the Class B Stock to the
Purchaser and to otherwise carry out the transactions provided for by this
Agreement. If the Closing Date shall not have occurred on or prior to November
30, 1997, other than as a result of a material breach of this Agreement by
either party hereto, either party may terminate this Agreement without
liability. If the Closing Date shall not have occurred on or prior to such date
as a result of material breach of any representation, warranty, covenant or
obligation by either party, the non-breaching party shall have the right to
terminate this
11
<PAGE>
Agreement without liability. In addition, this Agreement may be terminated by
the Seller, if after the date hereof and before the Closing Date, the Guarantor
attempts or purports to revoke or withdraw the Guaranty or a court of competent
jurisdiction finally determines that the Guaranty is unenforceable or invalid.
11. Survival of Representations and Warranties; Indemnity. Only the
representations and warranties of the Seller hereto contained in Section 4.4
hereto (with respect to title) shall survive the Closing and the consummation of
the transactions contemplated hereby. No party hereto shall have any monetary or
other liability or obligation to any other party hereto for breach of any of
such first party's representations or warranties contained herein or in any
certificate or other document delivered pursuant hereto and the sole consequence
of any such breach shall be limited to the failure to satisfy a condition to the
Closing pursuant to Article 6 or 7 and the termination right provided in Section
10, in each case to the extent applicable according to such Section's express
terms. With respect to a breach of its representations and warranties contained
in Section 4.4 hereto, the Seller hereby covenants and agrees with the Purchaser
that it shall indemnify the Purchaser and its directors, officers, shareholders
and Affiliates, and each of their successors and assigns and hold them harmless
from, against and in respect of any and all costs, losses, claims, liabilities,
fines, penalties (including interest which may be imposed in connection
therewith and court costs and reasonable fees and disbursements of counsel)
incurred by any of them arising out of any material breach of, or any material
inaccuracy in, such representations and warranties.
12. Miscellaneous.
12.1 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns. Other than as set forth in the immediately succeeding sentence, no
party may assign any of its rights, or delegate any of its duties or obligation
hereunder, under this Agreement without the prior written consent of the other
party, and any such purported assignment or delegation shall be void ab initio.
Notwithstanding the foregoing, the Purchaser, its Affiliates, and its successors
and assigns, may assign its rights and delegate its duties (i) to any successor
entity resulting from any liquidation, merger, consolidation, reorganization, or
transfer of all or substantially all of the assets or stock of the Purchaser, or
(ii) to any Affiliate of the Purchaser; provided, that in either case, any such
--------
assignee shall expressly assume all of the obligations the Purchaser hereunder.
12.2 Notices. All notices, demands and other communications
-------
(collectively, "Notices") given or made pursuant to this Agreement shall be in
-------
writing and shall be deemed to have been duly given if sent by registered or
certified mail, return receipt requested, postage and fees prepaid, by overnight
service with a nationally recognized "next day" delivery company such as Federal
Express or United Parcel Service, by facsimile transmission, or otherwise
actually delivered to the following addresses:
(a) If to the Purchaser:
---------
12
<PAGE>
Fox Kids Worldwide, Inc.
10960 Wilshire Boulevard
Los Angeles, California 90024
Attn: Mel Woods
Fax: 310-235-5552
with a copy to:
--------------
Fox, Inc.
10201 West Pico Boulevard
Los Angeles, California 90035
Attn: President
Fax: 310-369-1203
and a copy to:
-------------
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Attn: Arthur Siskind
Fax: 212-768-2029
and a copy to:
-------------
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attn: C.N. Franklin Reddick, III, Esq.
Fax: 310-443-8512
and a copy to:
-------------
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attn: Jeffrey W. Rubin, Esq.
Fax: 212-697-6686
(b) if to the Seller:
----------------
The Christian Broadcasting Network, Inc.
977 Centerville Turnpike
Virginia Beach, Virginia 23463
13
<PAGE>
Attn: Mr. Michael D. Little, President
Fax: 757-579-2169
with a copy to:
--------------
Office of the General Counsel
977 Centerville Turnpike
Virginia Beach, Virginia 23463
Attn: Jon Kubiak, Esq.
Fax: 757-579-5770
Any Notice shall be deemed duly given when received by the addressee thereof.
Any of the parties to this Agreement may from time to time change its address
for receiving notices by giving written notice thereof in the manner set forth
above.
12.3 Amendment; Waiver. No provision of this Agreement may be waived
-----------------
unless in writing signed by all of the parties to this Agreement, and the waiver
of any one provision of this Agreement shall not be deemed to be a waiver of any
other provision. This Agreement may be amended, supplemented or otherwise
modified only by a written agreement executed by all of the parties to this
Agreement.
12.4 Limitation on Liability. The liability of the Seller for any
-----------------------
breach by the Seller of this Agreement shall be limited to the actual damages
suffered by the Purchaser or any of its Affiliates under this Agreement and the
Seller shall not be liable for any consequential or other damages of the
Purchaser or any of its Affiliates, including any damages arising in connection
with any Other Transaction Agreement or the Merger Agreement.
12.5 Jurisdiction. The parties hereto irrevocably submit to the non-
------------
exclusive jurisdiction of the state and federal courts located in Delaware for
the purposes of any suit, action or other proceeding arising out of this
Agreement (and agree not to commence any action, suit or proceeding relating
hereto except in such courts). Each party hereto hereby irrevocably designates
CT Corporation System as its designee, appointee and agent to receive, for and
on behalf of it, service of process in such respective jurisdictions in any
legal action or proceeding with respect to this Agreement or any document
related thereto. It is understood that a copy of such process serviced on such
agent will be promptly forwarded by mail to it at its address set forth in
Section 12.2 hereof, but the failure to receive such copy shall not affect in
any way the service of such process. Each of the parties hereto further
irrevocably consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its said address, such
service to become effective upon confirmed delivery. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the state or federal courts located in Delaware, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such action, suit or proceeding brought in any such court that such
action, suit or proceeding has been brought in an inconvenient forum.
14
<PAGE>
12.6 Dispute Resolution. Any dispute or claim arising hereunder
------------------
shall be settled by arbitration. Any party may commence arbitration by sending
a written notice of arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be commenced thirty
(30) days following the date of delivery of notice of arbitration by one party
to the other, by the American Arbitration Association ("AAA") as arbitrator.
The arbitration shall be conducted in New York City, New York in accordance with
the commercial arbitration rules promulgated by AAA, and the Seller, on the one
hand, and the Purchaser, on the other, shall retain the right to cross-examine
the opposing party's witnesses, either through legal counsel, expert witnesses
or both. The decision of the arbitrator shall be final, binding and conclusive
on all parties (without any right of appeal therefrom) and shall not be subject
to judicial review. As part of his decision, the arbitrator may allocate the
cost of arbitration, including fees of attorneys and experts, as he or she deems
fair and equitable in light of all relevant circumstances. Judgment on the
award rendered by the arbitrator may be entered in any court of competent
jurisdiction.
12.7 Governing Law. This Agreement shall be governed by and
-------------
construed both as to validity and performance and enforced in accordance with
the laws of the State of Delaware without giving effect to the choice of law
principles thereof.
12.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.9 Remedies Cumulative. Each of the various rights, powers and
-------------------
remedies shall be deemed to be cumulative with, and in addition to, all the
rights, powers and remedies which either party may have hereunder or under
applicable law relating hereto or to the subject matter hereof, and the exercise
or partial exercise of any such right, power or remedy shall constitute neither
an exclusive election thereof nor a waiver of any other such right, power or
remedy.
12.10 Headings. The section and subsection headings contained in
--------
this Agreement are included for convenience only and form no part of the
agreement between the parties.
12.11 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
12.12 Expenses. Each party shall pay its own costs, expenses,
--------
including without limitation, the fees and expenses of their respective counsel
and financial advisors.
12.13 Entire Agreement. This Agreement constitutes and embodies the
----------------
entire understanding and agreement of the parties hereto relating to the subject
matter hereof and there
15
<PAGE>
are no other agreements or understandings, written or oral, in effect between
the parties relating to such subject matter except as expressly referred to
herein.
12.14 Publicity. The initial press release relating to this
---------
Agreement shall be a joint press release in the form attached hereto as Exhibit
-------
"A", and the Purchaser and the Seller shall use reasonable efforts to agree upon
- ---
the text of any other press release before issuing any such press release or
otherwise making public statements with respect to the transactions contemplated
hereby.
12.15 Specific Performance. Both of the parties hereto recognize and
--------------------
acknowledge that a breach by it of any covenants or agreements contained in this
Agreement will cause the other party to sustain damages for which it would not
have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief, without the posting of
bond or other security, in addition to any other remedy to which it may be
entitled, at law or in equity.
12.16 No Third Party Beneficiaries. This Agreement is not intended
----------------------------
to benefit, and shall not run to the benefit of or be enforceable by, any other
person or entity other than the parties hereto and their permitted successors
and assigns.
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
--------------------------------------
Its: President
--------------------------------------
THE CHRISTIAN BROADCASTING
NETWORK, INC.
By: /s/ Michael D. Little
--------------------------------------
Its: President
--------------------------------------
<PAGE>
Exhibit 2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of June 11,
---------
1997, is entered into by and between Fox Kids Worldwide, Inc., a Delaware
corporation (the "Purchaser"), and Regent University, a Virginia corporation
---------
(the "Seller"), on the following terms and conditions:
------
R E C I T A L S
---------------
WHEREAS, as of the date hereof, the Seller beneficially owns 4,214,325
shares of Class B Common Stock, par value $0.01 per share, of International
Family Entertainment, Inc. (the "Company") (the "Class B Stock");
------- -------------
WHEREAS, the Purchaser desires to purchase the Class B Stock from the
Seller, and the Seller desires to sell the Class B Stock to the Purchaser, all
on the terms and subject to the conditions contained herein;
WHEREAS, concurrently herewith, the Purchaser, Fox Kids Merger Corporation,
a Delaware corporation ("FKW Sub"), and the Company are entering into that
-------
certain Agreement and Plan of Merger (as the same may be amended from time to
time in accordance with its terms, the "Merger Agreement"), providing for the
----------------
merger of FKW Sub into the Company (the "Merger"), which shall be the surviving
------
corporation, pursuant to which each share of Company Stock and Non Voting Class
C Common Stock, par value $0.01 per share, of the Company (the "Class C Stock")
-------------
which is issued and outstanding immediately prior to the effective time (the
"Effective Time") of the Merger (other than shares held by the Company, the
Purchaser or FKW Sub, or any direct or indirect subsidiary of the Company, the
Purchaser or FKW Sub) shall be canceled and extinguished and be converted into
and become a right to receive a cash payment equal to $35.00 per share (subject
to adjustment), without interest (except that any Dissenting Shares (as defined
in the Merger Agreement) shall be converted into and become a right to receive
the payment provided for under the Delaware General Corporation Law);
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser has requested that the Seller enter into this Agreement
and as a condition to its willingness to enter into this Agreement, the Seller
has required that the Purchaser and FKW Sub enter into the Merger Agreement;
WHEREAS, the Purchaser, Liberty Media Corporation, a Delaware corporation
("Liberty"), and Liberty IFE, Inc., a Colorado corporation ("LIFE"), have
------- ----
entered into that certain Contribution and Exchange Agreement, dated as of the
date hereof (as the same may be amended from time to time in accordance with its
terms, the "Contribution Agreement"), pursuant to which LIFE has agreed, on the
----------------------
terms and subject to the conditions therein, to contribute its shares of Class C
Stock and its $23 million principal amount of 6% Convertible Secured Notes
<PAGE>
due 2004 of the Company (the "Convertible Notes"), to the Purchaser in exchange
-----------------
for shares of a newly issued class of preferred stock of the Purchaser;
WHEREAS, in connection with the Contribution Agreement, Satellite Services,
Inc., a Delaware corporation and an affiliate of Liberty, has entered into an
amendment to its Affiliation Agreement with the Company (the "Amended
-------
Affiliation Agreement");
- ---------------------
WHEREAS, in connection with sale of the Class B Stock to the Purchaser
hereunder, the Company, M.G. "Pat" Robertson ("Pat Robertson"), individually and
-------------
as trustee of the Robertson Charitable Remainder Unitrust, u/t/a dated January
22, 1990 (the "PR Charitable Trust"), Timothy B. Robertson ("Tim Robertson"),
------------------- -------------
individually and as trustee of the Timothy and Lisa Robertson Children's Trust,
u/t/a dated September 18, 1995 (the "TR Family Trust"), LIFE and The Christian
---------------
Broadcasting Network, Inc., a Virginia corporation ("CBN") have entered into
---
that certain Termination to Amended and Restated Shareholder Agreement, dated as
of even date herewith (the "Termination Agreement"), terminating the Shareholder
---------------------
Agreement dated September 1, 1995, by and among the Company, Pat Robertson, the
PR Charitable Trust, Tim Robertson, the TR Family Trust, LIFE and CBN;
WHEREAS, in connection with the sale of the Class B Stock to the Purchaser
hereunder, CBN and Regent have entered into that certain Termination to
Assignment and Assumption Agreement, dated as of even date herewith (the
"Assignment Termination Agreement") terminating the Assignment and Assumption
- ---------------------------------
Agreement, dated June 30, 1992, by and between CBN and Regent (the "Assignment
----------
and Assumption Agreement");
- ------------------------
WHEREAS, concurrently herewith, the Purchaser and CBN are entering into
that certain Stock Purchase Agreement with respect to the purchase by the
Purchaser of the shares of Class B Stock owned by CBN (as the same may be
amended from time to time in accordance with its terms, the "CBN Purchase
------------
Agreement");
- ---------
WHEREAS, concurrently herewith, the Purchaser has entered into a Stock
Purchase Agreement with Pat Robertson, individually and as trustee of each of
the PR Charitable Trust, the Gordon P. Robertson Irrevocable Trust, u/t/a dated
December 18, 1996, the Elizabeth F. Robinson Irrevocable Trust, u/t/a dated
December 18, 1996, and the Ann R. Lablanc Irrevocable Trust, u/t/a dated
December 18, 1996 (the Gordon P. Robertson Irrevocable Trust, the Elizabeth F.
Robinson Irrevocable Trust and the Ann R. Lablanc Irrevocable Trust, together,
the "Irrevocable Trusts"), Lisa N. Robertson and Tim Robertson as joint tenants,
------------------
and Tim Robertson, individually, as trustee of each of the TR Family Trust and
the Timothy B. Robertson Charitable Trust, u/t/a dated December 30, 1996 (the
"TR Charitable Trust"), and custodian to and for each of Abigail H. Robertson,
- --------------------
Laura N. Robertson, Elizabeth C. Robertson, Willis H. Robertson and Caroline S.
Robertson under the Virginia Uniform Transfers to Minors Act (Pat Robertson, the
PR Charitable Trust, the Irrevocable Trusts, Lisa N. Robertson, Tim Robertson,
the TR Family Trust and the TR Charitable Trust, collectively, the
"Robertsons"), as of even date herewith,
2
<PAGE>
which provides, inter alia, for the purchase of all of the shares of Class A
----- ----
Common Stock, par value $0.01 per share, of the Company (the "Class A Stock",
-------------
and together with all of the Class B Stock, the Class C Stock and any other
shares of any other class of common stock of the Company, the "Common Stock") in
------------
the form of Class B Stock issuable upon the conversion thereof, by the Purchaser
from the Pat Charitable Trust, Tim Robertson and the Tim Family Trust, and the
purchase by the Purchaser of all of the shares of Class B Stock of the Company
owned by the Robertsons (as the same may be amended from time to time in
accordance with its terms, the "Robertson Purchase Agreement"); and
----------------------------
WHEREAS, as a condition to its willingness to enter into this Agreement,
the Seller has required that, in connection with the transactions to be effected
pursuant to this Agreement, The News Corporation Limited, a corporation
organized and existing under the laws of South Australia, Australia (the
"Guarantor") guarantee the obligations of the Purchaser to the Seller hereunder
- ----------
and the Guarantor has given a guaranty (the "Guaranty") in accordance with such
--------
determination.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows.
1. Purchase and Sale of Class B Stock. On the terms and subject to the
conditions set forth in this Agreement, the Seller agrees to sell and deliver
the Class B Stock to the Purchaser, free and clear of any mortgage, pledge,
lien, security interest or other encumbrance (each, a "Lien") or Restriction
----
created by or binding upon the Seller or the Class B Stock, and the Purchaser
agrees to purchase and acquire the Class B Stock from the Seller. For purposes
of this Agreement, "Restriction" means, when used with respect to any specified
security, any stockholders or other trust agreement, option, warrant, escrow,
proxy, buy-sell agreement, power of attorney or other contract, agreement or
arrangement which (i) grants to any Person the right to sell or otherwise
dispose of, such specified security or any interest therein, or (ii) restricts
the transfer of, or the exercise of any rights or the enjoyment of any benefits
arising by reason of the ownership of such specified security. For purposes of
this Agreement, "Person" means any individual, corporation, general or limited
partnership, limited liability company, trust, joint venture, association or
unincorporated entity of any kind.
2. Purchase Price. The Class B Stock shall be purchased by the Purchaser
from the Seller thereof for a purchase price (the "Purchase Price") equal to
--------------
$35.00 per share. Notwithstanding the foregoing, the Purchase Price shall be
increased to an amount which equals (if greater than the Purchase Price provided
for herein) the per share amount actually paid, directly or indirectly, by FKWW
or any of its Affiliates, with respect to the purchase of, or agreement to
purchase, Company Stock, or securities convertible into Company Stock, which
purchase is effected or agreement is entered into after the date hereof and
through the earlier to
3
<PAGE>
occur of (a) the Effective Time (as defined in the Merger Agreement) or (b) the
termination of the Merger Agreement, (x) in the Merger, (y) from (i) LIFE, (ii)
the Robertsons, (iii) CBN, (iv) any holder or "group" (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) that owns, or has the right to dispose
of, or to direct the disposition of, 2-1/2% or more of any class of common stock
of the Company, or (v) any of the Affiliates of the entities referred to in
clauses (i), (ii), (iii) or (iv) above, or (z) in any transaction, or series of
related or unrelated transactions (excluding for purposes of this clause (z),
any transaction referred to in clauses (y)(i), (ii), (iii) or (v)), after the
date hereof and through the Effective Time, involving, in the aggregate, 5% or
more of the outstanding shares of any class of common stock of the Company. For
these purposes, it is acknowledged and agreed that (x) the $3.5 million to be
paid to LIFE under the Contribution Agreement with respect to forfeited interest
income on the Convertible Notes, and (y) amounts to be paid with respect to any
"tax gross up" with respect to the Exchange Rights under the Contribution
Agreement, shall not constitute an amount paid, directly or indirectly, with
respect to the purchase of Company Stock. Further, the Purchase Price shall not
be adjusted as a result of the provisions of the preceding sentence with respect
to any purchase effected under any of the Contribution Agreement, the Merger
Agreement, the Robertson Agreement or the CBN Agreement unless the applicable
agreement has been amended after the date hereof so as to increase the
consideration to be paid by the Purchaser or any of its Affiliates, directly or
indirectly, with respect to the Company Stock or securities convertible into
Company Stock. The Purchaser shall promptly provide notice to the Seller of any
agreement or amendment to an existing agreement entered into by the Purchaser or
any of its Affiliates with the Company, the Robertsons or CBN, or any amendment
to an Other Transaction Agreement (as defined herein) to which LIFE or any of
its Affiliates is a party, from and after the date hereof and through the
Closing Date. If the Purchase Price is adjusted pursuant to the foregoing,
following the closing under such other agreement (or the Effective Time, if
applicable), the Purchaser shall promptly pay to the Seller the amount of any
increase in the Purchase Price resulting from such agreement. For purposes of
this Agreement, "Affiliate" means, when used with reference to a specified
---------
Person, any Person that directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with,
such specified Person and, in the case of an individual, such Person's spouse,
parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-
in-law, and brothers- and sisters-in-law. For the purposes of this definition,
"control" (including the terms controlled by and under common control with), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. For the purposes of this Agreement, the Purchaser shall
be deemed to be an Affiliate of Fox, Inc., a Delaware corporation, and of Saban
Entertainment, Inc., a Delaware corporation, but shall not be deemed to be an
Affiliate of any of the Seller, the Company, LIFE, CBN, the the Robertsons nor
any of their respective Affiliates.
3. The Closing. The closing (the "Closing") of the purchase and sale of
-------
the Class B Stock shall take place on the third business day following
satisfaction or waiver of each and every one of the conditions set forth in
Sections 6 and 7 hereof, or such other date and time as the
4
<PAGE>
parties shall otherwise agree to. The date of the Closing is referred to herein
as the "Closing Date". At the Closing, the Seller shall deliver to the Purchaser
certificates representing the Class B Stock (accompanied by signature guarantees
in customary form) against delivery by the Purchaser of payment of the Purchase
Price therefor, by wire transfer or by immediately available funds, to such
accounts as Seller may specify.
4. Representations and Warranties. The Seller hereby makes the following
representations and warranties. The representations and warranties contain
exceptions set forth in a written disclosure letter (the "Seller Disclosure
-----------------
Letter") delivered to the Purchaser concurrently with the execution hereof,
- ------
which is numbered to correspond to the various Sections of this Agreement and
which also sets forth certain other information called for by this Agreement.
4.1 Organization, Standing and Corporate Power. The Seller is a
------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, with adequate corporate power and authority
to own its properties and carry on its business as presently conducted. The
Seller has the corporate power to enter into, execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
4.2 Execution, Delivery and Performance. The execution, delivery and
-----------------------------------
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by its Board of Trustees, and the
Seller has taken all other actions required by law, its charter and its bylaws
in order to consummate the transactions contemplated by this Agreement. This
Agreement constitutes the valid and binding obligations of the Seller and is
enforceable in accordance with its terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally.
4.3 No Consents. Other than filings required under the Hart-Scott-
-----------
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
-------
filing of Forms 4 and Schedules 13D under the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (the "Exchange Act"), no
------------
consent, authorization, order or approval of, or filing with or registration
with, any governmental authority, commission, board or other regulatory body of
the United States or any state or political subdivision thereof (each, a
"Governmental Entity"), is required to be made or obtained by the Seller for or
-------------------
in connection with the sale by the Seller of the Class B Stock to the Purchaser
as contemplated hereby.
4.4 Title. The Seller has, and at the Closing will have, good and
-----
valid title to the Class B Stock it is selling pursuant to this Agreement, free
and clear of any Liens or Restrictions (other than those Restrictions set forth
in the Assignment and Assumption Agreement) and (subject to such Restriction) it
has the full legal right, power and authority to sell, assign, transfer and
deliver the Class B Stock to the Purchaser and to make the representations,
5
<PAGE>
warranties, covenants and agreements made by it herein; upon the delivery of and
payment for such Class B Stock as contemplated hereby the Purchaser will acquire
good and valid title thereto, free and clear of all Liens or Restrictions
created by or binding upon the Seller. The Seller has sole voting power, and
sole power of disposition, with respect to all of its Class B Stock, with no
Restrictions (other than those Restrictions set forth in the Assignment and
Assumption Agreement), subject to applicable federal and state securities laws,
on the Seller's rights of disposition pertaining thereto. The Class B Stock
constitutes all equity or debt securities issued by the Company held by the
Seller and the Seller has no right, title or interest in or to any other equity
or debt securities of the Company or any option or right to acquire any such
equity or debt securities.
4.5 No Conflicts. The execution, delivery and performance by the
------------
Seller of this Agreement will not violate any other agreement to which the
Seller is a party, including, without limitation, any voting agreement,
stockholders agreement or voting trust, or otherwise contravene, conflict with
or result in a violation of, any federal, state, local, municipal, foreign,
international, multi-national or other administrative order, constitution, law,
ordinance, regulation, statute or treaty, or give any individual, corporation,
partnership, governmental authority or regulatory body or any other person the
right to prevent the consummation of the sale of the Class B Stock contemplated
hereby.
4.6 No Broker. The Seller has not employed any investment banker,
---------
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
5. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Seller as follows:
5.1 Organization, Standing and Corporate Power of the Purchaser. The
-----------------------------------------------------------
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with adequate corporate power and
authority to own its properties and carry on its business as presently
conducted. The Purchaser has the corporate power and authority to enter into,
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
5.2 Organization, Standing and Corporate Power of the Guarantor. The
-----------------------------------------------------------
Guarantor is a corporation organized and existing under the laws of South
Australia, Australia, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. The Guarantor has
the corporate power and authority to enter into, execute and deliver the
Guaranty and to guarantee the obligations of the Purchaser hereunder pursuant to
such Guaranty.
6
<PAGE>
5.3 Execution, Delivery and Performance by the Purchaser. The
----------------------------------------------------
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser, and the Purchaser has taken all other actions
required by law, its Amended and Restated Certificate of Incorporation and its
Bylaws in order to consummate the transactions contemplated by this Agreement.
This Agreement constitutes the valid and binding obligations of the Purchaser
and is enforceable in accordance with its terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally.
5.4 Execution, Delivery and Performance by the Guarantor. The
----------------------------------------------------
execution, delivery and performance of the Guaranty and the consummation of the
transactions thereby have been duly authorized by the Board of Directors of the
Guarantor, and the Guarantor has taken all other actions required by law and its
organizational documents in order to consummate the transactions contemplated by
the Guaranty. The Guaranty constitutes the valid and binding obligations of the
Guarantor and is enforceable in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
5.5 Consents. Other than filings required under the HSR Act and the
--------
filing of a Form 4 and Schedule 13D under the Exchange Act, no consent,
authorization, order or approval of, or filing with or registration with, any
Governmental Entity is required to be made or obtained by the Purchaser for the
purchase of the Class B Stock from the Seller as contemplated hereby or by the
Guarantor for the execution, delivery and performance of the Guaranty.
5.6 No Conflicts. The execution, delivery and performance by the
------------
Purchaser of this Agreement or by the Guarantor of the Guaranty will not violate
any other agreement to which the Purchaser or the Guarantor is a party, or
otherwise contravene, conflict with or result in a violation of, any federal,
state, local, municipal, foreign, international, multi-national or other
administrative order, constitution, law, ordinance, regulation, statute or
treaty, or give any individual, corporation, partnership, governmental authority
or regulatory body or any other person the right to prevent the consummation of
the sale of the Class B Stock contemplated hereby or the enforcement by the
Seller of the Guaranty.
5.7 Purchase For Investment. The Purchaser is acquiring the Class B
-----------------------
Stock for its own account, for investment purposes only, and not with a view to
or for the resale or distribution thereof, in whole or in part. The Purchaser
acknowledges and represents (i) that it is aware that the Class B Stock is not
registered under the Securities Act of 1933, as amended, and are subject to the
restrictions thereof, including pursuant to Rule 144 promulgated thereunder;
(ii) that no federal or state agency has passed upon the Class B Stock or made
any finding or determination as to the fairness of the Purchaser's investment in
the Class B Stock; (iii) that there are risks of loss associated with the
Purchaser's purchase of the Class B Stock; (iv) that the
7
<PAGE>
investment in the Class B Stock is an illiquid investment and the Purchaser may
bear the risk of its investment for an indefinite period of time; and (v) that
it is a sophisticated investor, able to evaluate the risks and merits of its
investment and to bear such financial risk.
5.8 No Broker. The Purchaser has not employed any investment banker,
---------
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
5.9 Transaction Agreements. This Agreement, the Merger Agreement, the
----------------------
Other Transaction Agreements (as defined herein), and the other agreements
listed in the recitals above, are the only agreements existing as of the date
hereof between the Purchaser, on the one hand, and the respective counterparties
to such agreements and any Affiliates of such parties, on the other hand, with
respect to the acquisition of Class A Stock, Class B Stock, Class C Stock or
Convertible Notes of the Company.
6. Conditions to Obligations of Purchaser. Unless waived, in whole or in
part, in writing by the Purchaser, the obligations of the Purchaser to purchase
the Class B Stock and to perform any and all of its post-closing obligations
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions:
6.1 Accuracy of Representations and Warranties. All representations
------------------------------------------
and warranties of the Seller contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
6.2 Performance of Agreements. The Seller shall have performed in all
-------------------------
material respects all obligations and agreements contained in this Agreement to
be performed or complied with by the Seller on or prior to or at the Closing
Date.
6.3 Certificates. The Sellers shall be prepared to deliver
------------
certificates for all the Class B Stock to the Purchaser upon the Closing.
6.4 Purchase of Control Stock. The Purchaser has acquired the Control
-------------------------
Stock (as defined in the Robertson Purchase Agreement) from the Robertsons
pursuant to the Robertson Purchase Agreement.
6.5 No Injunctions. Neither of the parties hereto shall be subject to
--------------
any order or injunction of a court of competent jurisdiction which prohibits the
consummation of the sale of the Class B Stock to the Purchaser contemplated by
this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable efforts to have any such
injunction lifted.
8
<PAGE>
6.6 No Adverse Enactments. There shall not have been any statute,
---------------------
rule, regulation or order promulgated, enacted or issued by any Government
Entity or court of competent jurisdiction, which would make the consummation of
the sale of the Class B Stock hereunder or the Merger illegal.
6.7 Banking Moratorium. There shall not have occurred and be
------------------
continuing any declaration of any banking moratorium or suspension of payments
by banks in the United States or any general limitation on the extension of
credit by lending institutions in the United States.
6.8 Consummation of Other Transactions. All conditions to the
----------------------------------
consummation of the transactions (the "Other Transactions") to be effected
------------------
pursuant to the Contribution Agreement, the CBN Purchase Agreement and the
Robertson Purchase Agreement (collectively, the "Other Transaction Agreements")
----------------------------
shall have been satisfied or waived by the applicable party, and the parties to
such Other Transaction Agreements shall have consummated such Other Transactions
simultaneously with or prior to the sale of the Class B Stock to the Purchaser
as contemplated hereby.
6.9 Hart-Scott-Rodino Notification. The waiting period (and any
------------------------------
extension thereof) under the HSR Act applicable to (i) the purchase of the Class
B Stock pursuant to this Agreement and the consummation of the Other
Transactions, (ii) the conversion by the Purchaser of the Class C Stock and the
Convertible Notes acquired pursuant to the Contribution Agreement into shares of
Class B Stock of the Company, and (iii) the Merger shall have expired or have
been terminated.
6.10 Opinion of Counsel. The Purchaser shall have received an opinion
------------------
of counsel to the Seller in a form reasonably acceptable to Purchaser covering
the matters referred to in Section 4.1 hereof.
6.11 Acquisition Agreements. Immediately following the consummation of
----------------------
this transaction and the Other Transactions (and after giving effect to the
conversion of the Class C Stock and the Convertible Notes into Class B Stock),
the Purchaser and its Affiliates will own a majority of the voting common stock
of the Company then entitled to vote in the election of the Company's directors.
7. Conditions to Obligations of Seller. Unless waived, in whole or in
part, in writing by the Seller, the obligations of the Seller to sell the Class
B Stock as contemplated by this Agreement shall be subject to the fulfillment
prior to or on the Closing Date of each of the following conditions:
7.1 Accuracy of Representations and Warranties. All representations
------------------------------------------
and warranties of the Purchaser contained herein shall be true and correct in
all material respects on
9
<PAGE>
and as of the Closing Date, with the same effect as though made on and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
7.2 Performance of Agreements. The Purchaser shall have performed in
-------------------------
all material respects all obligations and agreements contained in this Agreement
to be performed or complied with by the Purchaser on or prior to or at the
Closing Date.
7.3 No Adverse Enactments. There shall not have been any statute,
---------------------
rule, regulation or order promulgated, enacted or issued by any Government
Entity or court of competent jurisdiction which would make the consummation of
the sale of the Class B Stock hereunder or the Merger illegal.
7.4 No Injunctions. Neither of the parties hereto shall be subject to
--------------
any order or injunction of a court of competent jurisdiction which prohibits the
consummation of the sale of the Class B Stock to the Purchaser contemplated by
this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable efforts to have any such
injunction lifted.
7.5 Hart-Scott-Rodino Notification. The waiting period (and any
------------------------------
extension thereof), under the HSR Act applicable to the consummation of the
purchase of the Class B Stock pursuant to this Agreement shall have expired or
have been terminated.
7.6 Purchase Price. The Purchaser shall be prepared to deliver the
--------------
aggregate Purchase Price for all the Class B Stock to the Seller in the amounts
and manner contemplated hereby upon the Closing.
7.7 Consummation of Other Transactions. All conditions to the
----------------------------------
consummation of the Other Transactions to be effected pursuant to the Other
Transaction Agreements shall have been satisfied or waived by the applicable
party, and the parties to such Other Transaction Agreements shall have
consummated such Other Transactions simultaneously with or prior to the sale of
the Class B Stock to the Purchaser as contemplated hereby.
8. Covenants of the Purchaser. The Purchaser hereby covenants and agrees
as follows:
8.1 Filings and Other Actions. As promptly as practicable after the
-------------------------
execution of this Agreement, but in any event within 5 business days, the
Purchaser shall file notification reports under the HSR Act and shall request
early termination of the waiting period under the HSR Act and use its
commercially reasonable efforts to obtain clearance or authorization under the
HSR Act of the Merger and the purchase of the Class B Stock contemplated by this
Agreement and the Other Transactions at the earliest practicable time. The
Purchaser agrees to cooperate
10
<PAGE>
fully with the Seller to promptly effectuate the filing of any notification
required under the HSR Act.
8.2 Reasonable Efforts. Subject to the terms and conditions of this
------------------
Agreement, the Other Transaction Agreements and the Merger Agreement, the
Purchaser agrees to use all reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, the Other Transaction Agreements and the Merger Agreement. The
Purchaser hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to intentionally and knowingly take any action with the
intention and knowledge that such action would make any of its representations
or warranties contained herein untrue or incorrect or have the effect of
preventing or disabling it from performing its obligations under this Agreement.
9. Covenants of the Seller. The Seller hereby covenants and agrees as
follows:
9.1 Cooperation in Filing Notification under Hart-Scott-Rodino. The
----------------------------------------------------------
Seller agrees to cooperate fully with the Purchaser to promptly effectuate the
filing of any notification required under the HSR Act.
9.2 Additional Shares. The Seller agrees that it will not purchase
-----------------
additional shares of Common Stock of the Company whether in open market
purchases or privately negotiated purchases between the date of this Agreement
and the Closing Date. If ownership of any additional shares of Common Stock of
the Company is acquired or transferred to the Seller, the Seller hereby agrees,
while this Agreement is in effect, to promptly notify the Purchaser of the
number of additional shares of Common Stock of the Company acquired by it, if
any, after the date hereof, and hereby agrees to sell any such additional shares
of Common Stock of the Company acquired by it after the date hereof through the
Closing Date to the Purchaser pursuant to the terms of this Agreement, with a
provision for additional payment for such shares by the Purchaser to the Seller
at the Purchase Price.
9.3 Written Consent. Concurrently with the execution hereof, the
---------------
Seller has delivered to the Company its irrevocable written consent approving
the Merger Agreement and the Merger.
9.4 Reasonable Efforts. Subject to the terms and conditions of this
------------------
Agreement, the Seller agrees to use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions provided
for by this Agreement. The Seller hereby agrees, while this Agreement is in
effect, and except as contemplated hereby, not to intentionally and knowingly
take any action with the intention and knowledge that such action would make any
of its representations or
11
<PAGE>
warranties contained herein untrue or incorrect in any material respect or have
the effect of preventing or disabling it from performing its obligations under
this Agreement.
10. Post-Closing Covenants; Termination. The Seller and the Purchaser
agree to execute such further documents or instruments and to take such other
actions as are necessary to transfer the Class B Stock to the Purchaser and to
otherwise carry out the transactions provided for by this Agreement. If the
Closing Date shall not have occurred on or prior to November 30, 1997, other
than as a result of a material breach of this Agreement by either party hereto,
either party may terminate this Agreement without liability. If the Closing
Date shall not have occurred on or prior to such date as a result of material
breach of any representation, warranty, covenant or obligation by either party,
the non-breaching party shall have the right to terminate this Agreement without
liability. In addition, this Agreement may be terminated by the Seller, if
after the date hereof and before the Closing Date, the Guarantor attempts or
purports to revoke or withdraw the Guaranty or a court of competent jurisdiction
finally determines that the Guaranty is unenforceable or invalid.
11. Survival of Representations and Warranties; Indemnity. Only the
representations and warranties of the Seller hereto contained in Section 4.4
hereto (with respect to title) shall survive the Closing and the consummation of
the transactions contemplated hereby. No party hereto shall have any monetary or
other liability or obligation to any other party hereto for breach of any of
such first party's representations or warranties contained herein or in any
certificate or other document delivered pursuant hereto, and the sole
consequence of any such breach shall be limited to the failure to satisfy a
condition to the Closing pursuant to Article 6 or 7 and the termination right
provided in Section 10, in each case to the extent applicable according to such
Section's express terms. With respect to a breach of its representations and
warranties contained in Section 4.4 hereto, the Seller hereby covenants and
agrees with the Purchaser that it shall indemnify the Purchaser and its
directors, officers, shareholders and Affiliates, and each of their successors
and assigns and hold them harmless from, against and in respect of any and all
costs, losses, claims, liabilities, fines, penalties (including interest which
may be imposed in connection therewith and court costs and reasonable fees and
disbursements of counsel) incurred by any of them arising out of any material
breach of, or any material inaccuracy in, such representations and warranties.
12. Miscellaneous.
12.1 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns. Other than as set forth in the immediately succeeding sentence, no
party may assign any of its rights, or delegate any of its duties or obligation
hereunder, under this Agreement without the prior written consent of the other
party, and any such purported assignment or delegation shall be void ab initio.
Notwithstanding the foregoing, the Purchaser, its Affiliates, and its successors
and assigns, may assign its rights and delegate its duties (i) to any successor
entity resulting from any liquidation,
12
<PAGE>
merger, consolidation, reorganization, or transfer of all or substantially all
of the assets or stock of the Purchaser, or (ii) to any Affiliate of the
Purchaser; provided, that in either case, any such assignee shall expressly
--------
assume all of the obligations the Purchaser hereunder.
12.2 Notices. All notices, demands and other communications
-------
(collectively, "Notices") given or made pursuant to this Agreement shall be in
-------
writing and shall be deemed to have been duly given if sent by registered or
certified mail, return receipt requested, postage and fees prepaid, by overnight
service with a nationally recognized "next day" delivery company such as Federal
Express or United Parcel Service, by facsimile transmission, or otherwise
actually delivered to the following addresses:
(a) If to the Purchaser:
-------------------
Fox Kids Worldwide, Inc.
10960 Wilshire Boulevard
Los Angeles, California 90024
Attn: Mel Woods
Fax: 310-235-5552
with a copy to:
--------------
Fox, Inc.
10201 West Pico Boulevard
Los Angeles, California 90035
Attn: President
Fax: 310-369-1203
and a copy to:
-------------
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Attn: Arthur Siskind
Fax: 212-768-2029
and a copy to:
-------------
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attn: C.N. Franklin Reddick, III, Esq.
Fax: 310-443-8512
13
<PAGE>
and a copy to:
-------------
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attn: Jeffrey W. Rubin, Esq.
Fax: 212-697-6686
(b) if to the Seller:
----------------
Regent University
1000 Regent University Drive
Virginia Beach, Virginia 23463
Attn: John Mulford
Fax: 757-579-4349
with a copy to:
--------------
Office of the General Counsel
Regent University
1000 Regent University Drive
Virginia Beach, Virginia 23463
Attn: _________________
Fax: __________________
Any Notice shall be deemed duly given when received by the addressee thereof.
Any of the parties to this Agreement may from time to time change its address
for receiving notices by giving written notice thereof in the manner set forth
above.
12.3 Amendment; Waiver. No provision of this Agreement may be waived
-----------------
unless in writing signed by all of the parties to this Agreement, and the waiver
of any one provision of this Agreement shall not be deemed to be a waiver of any
other provision. This Agreement may be amended, supplemented or otherwise
modified only by a written agreement executed by all of the parties to this
Agreement.
12.4 Limitation on Liability. The liability of the Seller for any
-----------------------
breach by the Seller of this Agreement shall be limited to the actual damages
suffered by the Purchaser or any of its Affiliates under this Agreement and the
Seller shall not be liable for any consequential or other damages of the
Purchaser or any of its Affiliates, including any damages arising in connection
with any Other Transaction Agreement or the Merger Agreement.
14
<PAGE>
12.5 Jurisdiction. The parties hereto irrevocably submit to the non-
------------
exclusive jurisdiction of the state and federal courts located in Delaware for
the purposes of any suit, action or other proceeding arising out of this
Agreement (and agree not to commence any action, suit or proceeding relating
hereto except in such courts). Each party hereto hereby irrevocably designates
CT Corporation System as its designee, appointee and agent to receive, for and
on behalf of it, service of process in such respective jurisdictions in any
legal action or proceeding with respect to this Agreement or any document
related thereto. It is understood that a copy of such process serviced on such
agent will be promptly forwarded by mail to it at its address set forth in
Section 12.2 hereof, but the failure to receive such copy shall not affect in
any way the service of such process. Each of the parties hereto further
irrevocably consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its said address, such
service to become effective upon confirmed delivery. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the state or federal courts located in Delaware, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such action, suit or proceeding brought in any such court that such
action, suit or proceeding has been brought in an inconvenient forum.
12.6 Dispute Resolution. Any dispute or claim arising hereunder shall
------------------
be settled by arbitration. Any party may commence arbitration by sending a
written notice of arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be commenced thirty
(30) days following the date of delivery of notice of arbitration by one party
to the other, by the American Arbitration Association ("AAA") as arbitrator. The
arbitration shall be conducted in New York City, New York in accordance with the
commercial arbitration rules promulgated by AAA, and the Seller, on the one
hand, and the Purchaser, on the other, shall retain the right to cross-examine
the opposing party's witnesses, either through legal counsel, expert witnesses
or both. The decision of the arbitrator shall be final, binding and conclusive
on all parties (without any right of appeal therefrom) and shall not be subject
to judicial review. As part of his decision, the arbitrator may allocate the
cost of arbitration, including fees of attorneys and experts, as he or she deems
fair and equitable in light of all relevant circumstances. Judgment on the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction.
12.7 Governing Law. This Agreement shall be governed by and construed
-------------
both as to validity and performance and enforced in accordance with the laws of
the State of Delaware without giving effect to the choice of law principles
thereof.
12.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.9 Remedies Cumulative. Each of the various rights, powers and
-------------------
remedies shall be deemed to be cumulative with, and in addition to, all the
rights, powers and remedies which either party may have hereunder or under
applicable law relating hereto or to the subject
15
<PAGE>
matter hereof, and the exercise or partial exercise of any such right, power or
remedy shall constitute neither an exclusive election thereof nor a waiver of
any other such right, power or remedy.
12.10 Headings. The section and subsection headings contained in this
--------
Agreement are included for convenience only and form no part of the agreement
between the parties.
12.11 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
12.12 Expenses. Each party shall pay its own costs, expenses,
--------
including without limitation, the fees and expenses of their respective counsel
and financial advisors.
12.13 Entire Agreement. This Agreement constitutes and embodies the
----------------
entire understanding and agreement of the parties hereto relating to the subject
matter hereof and there are no other agreements or understandings, written or
oral, in effect between the parties relating to such subject matter except as
expressly referred to herein.
12.14 Publicity. The initial press release relating to this Agreement
---------
shall be a joint press release in the form attached hereto as Exhibit "A", and
-----------
the Purchaser and the Seller shall use reasonable efforts to agree upon the text
of any other press release before issuing any such press release or otherwise
making public statements with respect to the transactions contemplated hereby.
12.15 Specific Performance. Both of the parties hereto recognize and
--------------------
acknowledge that a breach by it of any covenants or agreements contained in this
Agreement will cause the other party to sustain damages for which it would not
have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief, without the posting of
bond or other security, in addition to any other remedy to which it may be
entitled, at law or in equity.
12.16 No Third Party Beneficiaries. This Agreement is not intended to
----------------------------
benefit, and shall not run to the benefit of or be enforceable by, any other
person or entity other than the parties hereto and their permitted successors
and assigns.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
------------------------
Its: President
------------------------
REGENT UNIVERSITY
By:
------------------------
Its: President
------------------------
<PAGE>
EXHIBIT 3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of June 11,
---------
1997, is entered into by and between Fox Kids Worldwide, Inc., a Delaware
corporation (the "Purchaser"), on the one hand, and M.G. "Pat" Robertson,
---------
individually and as trustee of each of the Robertson Charitable Remainder
Unitrust, u/t/a dated January 22, 1990 (the "PR Charitable Trust"), the Gordon
-------------------
P. Robertson Irrevocable Trust, u/t/a dated December 18, 1996, the Elizabeth F.
Robinson Irrevocable Trust, u/t/a dated December 18, 1996, and the Ann R.
Lablanc Irrevocable Trust, u/t/a dated December 18, 1996 (the Gordon P.
Robertson Irrevocable Trust, the Elizabeth F. Robinson Irrevocable Trust and the
Ann R. Lablanc Irrevocable Trust, together, the "Irrevocable Trusts"), Lisa N.
------------------
Robertson and Timothy B. Robertson ("Tim Robertson"), as joint tenants, and Tim
-------------
Robertson, individually, as trustee of each of the Timothy and Lisa Robertson
Children's Trust, u/t/a dated September 18, 1995 (the "TR Family Trust") and the
---------------
Timothy B. Robertson Charitable Trust, u/t/a dated December 30, 1996 (the "TR
--
Charitable Trust"), and as custodian to and for each of Abigail H. Robertson,
- ----------------
Laura N. Robertson, Elizabeth C. Robertson, Willis H. Robertson and Caroline S.
Robertson under the Virginia Uniform Transfers to Minors Act (Pat Robertson, the
PR Charitable Trust, the Irrevocable Trusts, Lisa N. Robertson, Tim Robertson,
the TR Family Trust and the TR Charitable Trust, collectively, the "Sellers",
-------
and each individually, a "Seller") on the following terms and conditions:
------
R E C I T A L S
---------------
WHEREAS, as of the date hereof, the PR Charitable Trust beneficially owns
3,125,000 shares of Class A Common Stock, par value $0.01 per share, of
International Family Entertainment, Inc. (the "Company") (the "Class A Stock")
------- -------------
(as used herein, the term "Control Stock" shall refer to the shares of Class A
-------------
Stock of the Company or the shares of Class B Common Stock, par value $0.01 per
share, of the Company (the "Class B Stock") into which the Class A Stock shall
-------------
have converted, if the conversion of the Class A Stock into shares of Class B
Stock shall have occurred prior to or upon the Closing, it being understood that
pursuant to the Company's Amended and Restated Certificate of Incorporation (the
"Charter") the Class A Stock will so convert upon the Closing, and as used
-------
herein, the term "Company Stock" shall refer to the total shares of Class A
-------------
Stock and Class B Stock combined);
WHEREAS, as of the date hereof, Tim Robertson beneficially owns 1,837,500
shares of Control Stock and the TR Family Trust beneficially owns 37,500 shares
of Control Stock;
WHEREAS, as of the date hereof, the Sellers beneficially own an aggregate
of 1,231,981 shares of Class B Stock (excluding options to acquire shares of
Class B Stock and excluding shares ("401(k) Shares") held under the Company's
-------------
401(k) plan) (the Control Stock and the
<PAGE>
Class B Stock owned by the Sellers (other than the 401(k) Shares, which shall
not be subject to this Agreement), together, the "Shares");
------
WHEREAS, the Purchaser desires to purchase the Shares from the Sellers and
the Sellers desire to sell the Shares to the Purchaser, all on the terms and
subject to the conditions contained herein;
WHEREAS, concurrently herewith, the Purchaser, Fox Kids Merger Corporation,
a Delaware corporation ("FKW Sub"), and the Company are entering into that
-------
certain Agreement and Plan of Merger (as the same may be amended from time to
time in accordance with its terms, the "Merger Agreement"), providing for the
----------------
merger of FKW Sub into the Company (the "Merger"), which shall be the surviving
------
corporation, pursuant to which each share of Company Stock and Non Voting Class
C Common Stock, par value $0.01 per share, of the Company (the "Class C Stock",
-------------
and together with all of the Class B Stock, the Class C Stock and any other
shares of any other class of common stock of the Company, the "Common Stock")
------------
which is issued and outstanding immediately prior to the effective time (the
"Effective Time") of the Merger (other than shares held by the Company, the
Purchaser or FKW Sub, or any direct or indirect subsidiary of the Company, the
Purchaser or FKW Sub) shall be canceled and extinguished and be converted into
and become a right to receive a cash payment equal to $35.00 per share (subject
to adjustment), without interest (except that any Dissenting Shares (as defined
in the Merger Agreement) shall be converted into and become a right to receive
the payment provided for under the Delaware General Corporation Law);
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser has required that the Sellers enter into this Agreement
and as a condition to their willingness to enter into this Agreement, the
Sellers have required that the Purchaser and FKW Sub enter into the Merger
Agreement;
WHEREAS, the Purchaser, Liberty Media Corporation, a Delaware corporation
("Liberty"), and Liberty IFE, Inc., a Colorado corporation ("LIFE"), have
------- ----
entered into that certain Contribution and Exchange Agreement, dated as of the
date hereof (as the same may be amended from time to time in accordance with its
terms, the "Contribution Agreement"), pursuant to which LIFE has agreed, on the
----------------------
terms and subject to the conditions therein, to contribute its shares of Class C
Stock and its $23 million principal amount of 6% Convertible Secured Notes due
2004 of the Company (the "Convertible Notes"), to the Purchaser in exchange for
-----------------
shares of a newly issued class of preferred stock of the Purchaser;
WHEREAS, in connection with the execution of the Contribution Agreement,
LIFE has waived all rights of first refusal, co-sale and other rights which it
has with respect to the sale of Shares contemplated hereby under that certain
Amended and Restated Shareholder Agreement, dated as of September 1, 1995, by
and among the Company, Pat Robertson, the PR Charitable
2
<PAGE>
Trust, Tim Robertson, the TR Family Trust, LIFE and The Christian Broadcasting
Network, Inc., a Virginia corporation ("CBN") (the "Shareholder Agreement");
--- ---------------------
WHEREAS, in connection with sale of the Shares to the Purchaser hereunder,
the Company, Pat Robertson, the PR Charitable Trust, Tim Robertson, the TR
Family Trust, LIFE and CBN have entered into that certain Termination Agreement,
dated as of even date herewith (the "Termination Agreement"), terminating the
---------------------
Shareholder Agreement, on the terms and conditions set forth therein;
WHEREAS, in connection with the Contribution Agreement, Satellite Services,
Inc., a Delaware corporation and an affiliate of Liberty, has entered into an
amendment to its Affiliation Agreement with the Company (the "Amended
-------
Affiliation Agreement");
- ---------------------
WHEREAS, concurrently herewith, the Purchaser and CBN are entering into
that certain Stock Purchase Agreement with respect to the purchase by the
Purchaser of the shares of Class B Stock owned by CBN (as the same may be
amended from time to time in accordance with its terms, the "CBN Stock Purchase
------------------
Agreement");
- ---------
WHEREAS, in connection with the execution of the CBN Purchase Agreement,
CBN is waiving all rights of co-sale and other rights which it has with respect
to the sale of Shares contemplated hereby under the Shareholder Agreement;
WHEREAS, concurrently herewith, the Purchaser and Regent University, a
Virginia corporation ("Regent") are entering into that certain Stock Purchase
------
Agreement with respect to the purchase by the Purchaser of the shares of Class B
Stock owned by Regent (as the same may be amended from time to time in
accordance with its terms, the "Regent Stock Purchase Agreement");
-------------------------------
WHEREAS, concurrently herewith, the Purchaser and Pat Robertson have
entered into a letter agreement providing for certain services to be rendered by
Pat Robertson to the Company (the "PR Agreement"); and
------------
WHEREAS, as a condition to their willingness to enter into this Agreement,
the Sellers have required that, in connection with the transactions to be
effected pursuant to this Agreement, The News Corporation Limited, a corporation
organized and existing under the laws of South Australia, Australia (the
"Guarantor") guarantee the obligations of the Purchaser to the Sellers hereunder
- ----------
and the Guarantor has given a guaranty (the "Guaranty") in accordance with such
--------
determination.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows.
3
<PAGE>
1. Purchase and Sale of the Shares. On the terms and subject to the
conditions set forth in this Agreement, the Sellers agree to sell and deliver
the Shares to the Purchaser, free and clear of any mortgage, pledge, lien,
security interest or other encumbrance (each, a "Lien") or Restriction created
----
by or binding upon the Sellers or the Shares, and the Purchaser agrees to
purchase and acquire the Shares from the Sellers. For purposes of this
Agreement, "Restriction" means, when used with respect to any specified
security, any stockholders or other trust agreement, option, warrant, escrow,
proxy, buy-sell agreement, power of attorney or other contract, agreement or
arrangement which (i) grants to any Person the right to sell or otherwise
dispose of such specified security or any interest therein, or (ii) restricts
the transfer of, or the exercise of any rights or the enjoyment of any benefits
arising by reason of, the ownership of such specified security. For purposes of
this Agreement, "Person" means any individual, corporation, general or limited
partnership, limited liability company, trust, joint venture, association or
unincorporated entity of any kind.
2. Purchase Price. The Shares shall be purchased by the Purchaser from
the Sellers thereof for a purchase price (the "Purchase Price") equal to $35.00
--------------
per share. Notwithstanding the foregoing, the Purchase Price shall be increased
to an amount which equals (if greater than the Purchase Price provided for
herein) the per share amount actually paid, directly or indirectly, by the
Purchaser or any of its Affiliates, with respect to the purchase of, or
agreement to purchase, Company Stock, or securities convertible into Company
Stock, which purchase is effected or agreement is entered into after the date
hereof and through the earlier to occur of (a) the Effective Time (as defined in
the Merger Agreement) or (b) the termination of the Merger Agreement, (x) in the
Merger, (y) from (i) LIFE, (ii) CBN, (iii) Regent, (iv) any holder or "group"
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) that owns, or
has the right to dispose of, or to direct the disposition of, 2-1/2% or more of
any class of common stock of the Company, or (v) any of the Affiliates of the
entities referred to in clauses (i), (ii), (iii), or (iv) above, or (z) in any
transaction, or series of related or unrelated transactions (excluding for
purposes of this clause (z), any transaction referred to in clauses (y)(i),
(ii), (iii) or (v)), after the date hereof and through the Effective Time,
involving, in the aggregate, 5% or more of the outstanding shares of any class
of common stock of the Company. For these purposes, it is acknowledged and
agreed that (x) the $3.5 million to be paid to LIFE under the Contribution
Agreement with respect to forfeited interest income on the Convertible Notes,
and (y) amounts to be paid with respect to any "tax gross up" with respect to
the Exchange Rights under the Contribution Agreement, shall not constitute an
amount paid, directly or indirectly, with respect to the purchase of Company
Stock. Further, the Purchase Price shall not be adjusted as a result of the
provisions of the preceding sentence with respect to any purchase effected under
any of the Contribution Agreement, the Merger Agreement, the CBN Agreement or
the Regent Agreement unless the applicable agreement has been amended after the
date hereof so as to increase the consideration to be paid by the Purchaser or
any of its Affiliates, directly or indirectly, with respect to the Company Stock
or securities convertible into Company Stock. The Purchaser shall promptly
provide notice to the Sellers of any agreement or amendment to an existing
agreement entered into by the Purchaser or any of its Affiliates with the
Company, CBN or Regent, or any
4
<PAGE>
amendment to an Other Transaction Agreement (as defined herein) to which LIFE or
any of its Affiliates is a party, from and after the date hereof and through the
Closing Date. If the Purchase Price is adjusted pursuant to the foregoing,
following the closing under such other agreement (or the Effective Time, if
applicable), the Purchaser shall promptly pay to the Sellers the amount of any
increase in the Purchase Price resulting from such agreement. For purposes of
this Agreement, "Affiliate" means, when used with reference to a specified
---------
Person, any Person that directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with,
such specified Person and, in the case of an individual, such Person's spouse,
parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-
in-law, and brothers- and sisters-in-law. For the purposes of this definition,
"control" (including the terms controlled by and under common control with), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. For the purposes of this Agreement, the Purchaser shall
be deemed to be an Affiliate of Fox, Inc., a Delaware corporation, and of Saban
Entertainment, Inc., a Delaware corporation, but shall not be deemed to be an
Affiliate of any of the Sellers, the Company, LIFE, CBN, Regent nor any of their
respective Affiliates.
3. The Closing. The closing (the "Closing") of the purchase and sale of
-------
the Shares shall take place on the third business day following satisfaction or
waiver of each and every one of the conditions set forth in Section 6 and 7
hereof, or such other date and time as the parties shall otherwise agree to.
The date of the Closing is referred to herein as the "Closing Date." At the
Closing, each Seller shall deliver to the Purchaser certificates representing
the Shares (accompanied by signature guarantees in customary form) against
delivery by the Purchaser of payment of the Purchase Price therefor, allocated
among the Sellers based on their respective percentage ownerships of the Shares,
by wire transfer or by immediately available funds, to such accounts as Seller
may specify.
4. Representations and Warranties. Each Seller, severally with respect
to itself and the Shares which it has agreed to sell pursuant to this Agreement,
makes the following representations and warranties as of the date hereof. The
representations and warranties contain exceptions set forth in a written
disclosure letter (the "Sellers Disclosure Letter") delivered to the Purchaser
-------------------------
concurrently with the execution hereof, which is numbered to correspond to the
various Sections of this Agreement and which also sets forth certain other
information called for by this Agreement.
4.1 Formation, Validity, Powers and Actions of Trusts. If a trust,
-------------------------------------------------
(i) such Seller is a trust duly and validly formed and validly existing under
the laws of the Commonw
5
<PAGE>
4.3 No Consents. Other than filings required under the
-----------
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the filing of Forms 4 and Schedules 13D under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), no consent, authorization, order or approval of, or filing with or
registration with, any governmental authority, commission, board or other
regulatory body of the United States or any state or political subdivision
thereof (each, a "Governmental Entity"), is required to be made or obtained by
the Sellers for or in connection with the sale by the Sellers of the Shares to
the Purchaser as contemplated hereby.
4.4 Title. Each Seller has, and at the Closing will have, good
-----
and valid title to the Shares it is selling pursuant to this Agreement, free and
clear of any Liens or Restrictions (other than those restrictions set forth in
the Shareholder Agreement or in the Charter) and (subject to such restrictions)
it has the full legal right, power and authority to sell, assign, transfer and
deliver such Shares to the Purchaser and to make the representations,
warranties, covenants and agreements made by such Seller herein; upon the
delivery of and payment for such Shares as contemplated hereby the Purchaser
will acquire good and valid title thereto, free and clear of all Liens or
Restrictions created by or binding upon such Seller. Each Seller has sole voting
power, and sole power of disposition, with respect to all of its respective
Shares (other than those Restrictions set forth in the Shareholder Agreement or
in the Charter) subject to applicable federal and state securities laws, on such
Seller's rights of disposition pertaining thereto. The Shares, in the amounts
set forth in the recitals to this Agreement, constitute all equity or debt
securities issued by the Company held by the Sellers (other than the 401(k)
Shares) and none of the Sellers has any right, title or interest in or to any
other equity or debt securities of the Company or any option or right to acquire
such equity or debt securities (other than the 401(k) Shares), other than those
options (the "Subject Options") to acquire shares of Class B Stock under the
---------------
International Family Entertainment, Inc. Stock Incentive Plan which are
described in the Sellers Disclosure Letter and other than under the Shareholder
Agreement.
4.5 No Conflicts. The execution, delivery and performance by
------------
the Sellers of this Agreement will not violate any other agreement to which any
of the Sellers is a party, including, without limitation, any voting agreement,
stockholders agreement or voting trust, or otherwise contravene, conflict with
or result in a violation of, any federal, state, local, municipal, foreign,
international, multi-national or other administrative order, constitution, law,
ordinance, regulation, statute or treaty, or give any individual, corporation,
partnership, governmental authority or regulatory body or any other person the
right to prevent the consummation of the sale of the Shares contemplated hereby.
4.6 No Broker. The Sellers have not employed any investment
---------
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Sellers as follows:
6
<PAGE>
5.1 Organization, Standing and Corporate Power of the
-------------------------------------------------
Purchaser. The Purchaser is a corporation duly organized, validly existing and
- ---------
in good standing under the laws of the State of Delaware, with adequate
corporate power and authority to own its properties and carry on its business as
presently conducted. The Purchaser has the corporate power and authority to
enter into, execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
5.2 Organization, Standing and Corporate Power of the
-------------------------------------------------
Guarantor. The Guarantor is a corporation organized and existing under the laws
- ---------
of South Australia, Australia, with adequate corporate power and authority to
own its properties and carry on its business as presently conducted. The
Guarantor has the corporate power and authority to enter into, execute and
deliver the Guaranty and to guarantee the obligations of the Purchaser hereunder
pursuant to such Guaranty.
5.3 Execution, Delivery and Performance by the Purchaser. The
----------------------------------------------------
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser, and the Purchaser has taken all other actions
required by law, its Certificate of Incorporation and its Bylaws in order to
consummate the transactions contemplated by this Agreement. This Agreement
constitutes the valid and binding obligations of the Purchaser and is
enforceable in accordance with its terms, except as enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally.
5.4 Execution, Delivery and Performance by the Guarantor. The
----------------------------------------------------
execution, delivery and performance of the Guaranty and the consummation of the
transactions thereby have been duly authorized by the Board of Directors of the
Guarantor, and the Guarantor has taken all other actions required by law and its
organizational documents in order to consummate the transactions contemplated by
the Guaranty. The Guaranty constitutes the valid and binding obligations of the
Guarantor and is enforceable in accordance with its terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
5.5 Consents. Other than filings required under the HSR Act
--------
and the filing of a Form 4 and Schedule 13D under the Exchange Act, no consent,
authorization, order or approval of, or filing with or registration with, any
Governmental Entity is required to be made or obtained by the Purchaser for the
purchase by the Purchaser of the Shares from the Sellers as contemplated hereby
or by the Guarantor for the execution, delivery and performance of the
Guaranty.
5.6 No Conflicts. The execution, delivery and performance by
------------
the Purchaser of this Agreement or by the Guarantor of the Guaranty will not
violate any other agreement to which the Purchaser or the Guarantor is a party,
or otherwise contravene, conflict with or result in a violation of, any federal,
state, local, municipal, foreign, international, multi-national or other
administrative order, constitution, law, ordinance, regulation, statute or
treaty, or give any individual, corporation, partnership, governmental authority
or regulatory body or any other person the right to
7
<PAGE>
prevent the consummation of the sale of the Shares contemplated hereby or the
enforcement by any of the Sellers of the Guaranty.
5.7 Purchase For Investment. The Purchaser is acquiring the
-----------------------
Shares for its own account, for investment purposes only, and not with a view to
or for the resale or distribution thereof, in whole or in part. The Purchaser
acknowledges and represents: (i) that it is aware that the Shares are not
registered under the Securities Act and are subject to the restrictions thereof,
including pursuant to Rule 144 promulgated thereunder; (ii) that no federal or
state agency has passed upon the Shares or made any finding or determination as
to the fairness of the Purchaser's investment in the Shares; (iii) that there
are risks of loss associated with the Purchaser's purchase of the Shares; (iv)
that the investment in the Shares is an illiquid investment and the Purchaser
may bear the risk of its investment for an indefinite period of time; and (v)
that it is a sophisticated investor, able to evaluate the risks and merits of
its investment and to bear such financial risk.
5.8 Nature of Control Stock. The Purchaser understands that,
-----------------------
at the time of transfer of the Control Stock to the Purchaser as contemplated
hereby, such Control Stock will consist (or, by operation of the Charter, be
automatically converted into and deemed to consist) solely of Class B Stock of
the Company.
5.9 No Broker. The Purchaser has not employed any investment
---------
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
5.10 Transaction Agreements. This Agreement, the Merger
----------------------
Agreement, the Other Transaction Agreements (as defined herein), and the other
agreements listed in the recitals above, are the only agreements existing as of
the date hereof between the Purchaser, on the one hand, and the respective
counterparties to such agreements and any Affiliates of such parties, on the
other hand, with respect to the acquisition of Class A Stock, Class B Stock,
Class C Stock or Convertible Notes of the Company.
6. CONDITIONS TO OBLIGATIONS OF THE PURCHASER. Unless waived (it being
agreed that no such waiver shall be given or effective prior to the tender by
the Purchaser of the Purchase Price and the consummation of the Closing), in
whole or in part, in writing by the Purchaser, the obligations of the Purchaser
to purchase the Shares and to perform any and all of its post-closing
obligations shall be subject to the satisfaction at or prior to the Closing Date
of each of the following conditions:
6.1 Accuracy of Representations and Warranties. All
------------------------------------------
representations and warranties of the Sellers contained herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
8
<PAGE>
6.2 Performance of Agreements. The Sellers shall have
-------------------------
performed in all material respects all obligations and agreements contained in
this Agreement to be performed or complied with by them prior to or at the
Closing Date.
6.3 The Shares. The Sellers shall be prepared to deliver
----------
certificates for all the Shares to the Purchaser upon the Closing.
6.4 Merger Agreement Conditions. All conditions set forth in
---------------------------
Sections 7.1, 7.2 and 7.3 of the Merger Agreement to the consummation of the
Merger (other than the preparation and mailing of the Information Statement (as
defined in the Merger Agreement) and the expiration of the 20 calendar day
waiting period with respect thereto) not waived by the applicable party shall
have been satisfied as of the Closing Date.
6.5 Company Certificate. The Purchaser shall have received a
-------------------
certificate executed by the Company in the form of Exhibit A attached to the
Merger Agreement.
6.6 No Injunctions. None of the parties hereto shall be
--------------
subject to any order or injunction of a court of competent jurisdiction which
prohibits the consummation of the sale of the Shares to the Purchaser
contemplated by this Agreement. In the event any such order or injunction shall
have been issued, each party agrees to use its reasonable efforts to have any
such injunction lifted.
6.7 No Adverse Enactments. There shall not have been any
---------------------
statute, rule, regulation or order promulgated, enacted or issued by any
Government Entity or court of competent jurisdiction which would make the
consummation of the sale of the Shares hereunder or the Merger illegal.
6.8 Banking Moratorium. There shall not have occurred and be
------------------
continuing any declaration of any banking moratorium or suspension of payments
by banks in the United States or any general limitation on the extension of
credit by lending institutions in the United States.
6.9 Consummation of Other Transactions. All conditions to the
----------------------------------
consummation of the transactions (the "Other Transactions") to be effected
pursuant to the Contribution Agreement, the CBN Stock Purchase Agreement and the
Regent Stock Purchase Agreement (collectively, the "Other Transaction
Agreements") shall have been satisfied or waived by the applicable party, and
the parties to such Other Transaction Agreements shall have consummated such
Other Transactions simultaneously with or prior to the sale of the Shares to the
Purchaser as contemplated hereby.
6.10 Amended Affiliation Agreement. The Amended Affiliation
-----------------------------
Agreement, in the form of Exhibit "A" hereto, shall be in full force and effect.
6.11 Hart-Scott-Rodino Notification. The waiting period (and
------------------------------
any extension thereof) under the HSR Act applicable to (i) the purchase of the
Shares pursuant to this Agreement
9
<PAGE>
and the consummation of the Other Transactions, (ii) the conversion by the
Purchaser of the Class C Stock and the Convertible Notes acquired pursuant to
the Contribution Agreement into shares of Class B Stock of the Company, and
(iii) the Merger shall have expired or have been terminated.
6.12 Opinion of Counsel. The Purchaser shall have received an
------------------
opinion of counsel to the Sellers from a counsel reasonably acceptable to
Purchaser covering the matters referred to in Section 4.1 hereof.
6.13 Acquisition Agreements. Immediately following the
----------------------
consummation of this transaction and the Other Transactions (and after giving
effect to the conversion of the Class C Stock and the Convertible Notes into
Class B Stock), the Purchaser and its Subsidiaries will own a majority of the
voting common stock of the Company then entitled to vote in the election of the
Company's directors.
7. CONDITIONS TO OBLIGATIONS OF SELLERS. Unless waived, in whole or in
part, in writing by the Sellers, the obligations of the Sellers to sell the
Shares as contemplated by this Agreement shall be subject to the fulfillment
prior to or on the Closing Date of each of the following conditions:
7.1 Accuracy of Representations and Warranties. All
------------------------------------------
representations and warranties of the Purchaser contained herein shall be true
and correct in all material respects on and as of the Closing Date, with the
same effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
7.2 Performance of Agreements. The Purchaser shall have
-------------------------
performed in all material respects all obligations and agreements contained in
this Agreement to be performed or complied with by it prior to or at the Closing
Date.
7.3 No Adverse Enactments. There shall not have been any
---------------------
statute, rule, regulation or order promulgated, enacted or issued by any
Government Entity or court of competent jurisdiction which would make the
consummation of the sale of the Shares hereunder or the Merger illegal.
7.4 No Injunctions. None of the parties hereto shall be
--------------
subject to any order or injunction of a court of competent jurisdiction which
prohibits the consummation of the sale of the Shares to the Purchaser
contemplated by this Agreement. In the event any such order or injunction shall
have been issued, each party agrees to use its reasonable efforts to have any
such injunction lifted.
7.5 Hart-Scott-Rodino Notification. The waiting period (and
------------------------------
any extension thereof) under the HSR Act applicable to the consummation of the
purchase of the Shares pursuant to this Agreement shall have expired or have
been terminated.
10
<PAGE>
7.6 Purchase Price. The Purchaser shall be prepared to deliver
--------------
the aggregate Purchase Price for all the Shares to the Sellers in the amounts
and manner contemplated hereby upon the Closing.
7.7 The PR Agreement. The Purchaser shall have executed the PR
----------------
Agreement and shall have delivered the PR Agreement to Pat Robertson.
7.8 Consummation of Other Transactions. All conditions to the
----------------------------------
consummation of the Other Transactions to be effected pursuant to the Other
Transaction Agreements shall have been satisfied or waived by the applicable
party, and the parties to such Other Transaction Agreements shall have
consummated such Other Transactions simultaneously with or prior to the sale of
the Shares to the Purchaser as contemplated hereby.
8. COVENANTS OF THE PURCHASER. The Purchaser hereby covenants and
agrees as follows:
8.1 Filings and Other Actions. As promptly as practicable
-------------------------
after the execution of this Agreement, but in any event within 5 business days,
the Purchaser shall file notification reports under the HSR Act and shall
request early termination of the waiting period under the HSR Act and use their
commercially reasonable efforts to obtain clearance or authorization under the
HSR Act of the Merger and the purchase of the Shares contemplated by this
Agreement and the Other Transactions at the earliest practicable time. The
Purchaser agrees to cooperate fully with the Sellers to promptly effectuate the
filing of any notification required under the HSR Act.
8.2 Reasonable Efforts. Subject to the terms and conditions of
------------------
this Agreement, the Other Transaction Agreements and the Merger Agreement, the
Purchaser agrees to use all reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, the Other Transaction Agreements and the Merger Agreement.
The Purchaser hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to intentionally and knowingly take any action with the
intention and knowledge that such action would make any of its representations
or warranties contained herein untrue or incorrect in any material respect or
have the effect of preventing or disabling it from performing its obligations
under this Agreement. The Purchaser shall not enter into, permit or give any
consent to any amendment, supplement or other modification of, or give any
consent or waiver or otherwise take any action (including agreeing to a delayed
closing date) under, any of the Other Transaction Agreements (or any of the
agreements related thereto) (collectively, a "Modification") which could
reasonably be expected to delay the Closing hereunder, or terminate any of the
Other Transaction Agreements (or any of the agreements related thereto), without
the prior written consent of the Sellers of the Control Stock. Notwithstanding
the foregoing, the Purchaser may (without the consent of the Sellers of the
Control Stock) effect any Modification to the Other Transaction Agreements (or
any of the agreements related thereto) which it determines in good faith to be
reasonably necessary to effect the transactions contemplated thereby, provided
it uses its reasonable good faith efforts to cause the
11
<PAGE>
closing thereunder to occur as soon as practicable and provided further that
such Modification will not delay the Closing hereunder beyond November 30, 1997.
9. COVENANTS OF THE SELLERS. The Sellers, jointly and severally, hereby
covenant and agree as follows:
9.1 Cooperation in Filing Notification under Hart-Scott-
----------------------------------------------------
Rodino. The Sellers agree to cooperate fully with the Purchaser to promptly
- ------
effectuate the filing of any notification required under the HSR Act.
9.2 Additional Shares. The Sellers agree that (other than
-----------------
purchases under the Company's 401(k) plan), they will not purchase additional
shares of Common Stock of the Company whether in open market purchases,
privately negotiated purchases or by the exercise or conversion of options or
convertible securities held by them between the date of this Agreement and the
Closing Date. If ownership of any additional shares of Common Stock of the
Company is acquired or transferred to any Seller (other than under the Company's
401(k) plan), such Seller hereby agrees, while this Agreement is in effect, to
promptly notify each other party to this Agreement of the number of additional
shares of Common Stock of the Company acquired by it, if any, after the date
hereof, and hereby agrees to sell any such additional shares of Common Stock of
the Company acquired by it after the date hereof through the Closing Date to the
Purchaser pursuant to the terms of this Agreement, with a provision for
additional payment for such shares by the Purchaser to such Seller at the
Purchase Price.
9.3 Reasonable Efforts. Subject to the terms and conditions
------------------
of this Agreement, the Sellers each agrees to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions provided for by this Agreement. The Sellers each hereby agrees,
while this Agreement is in effect, and except as contemplated hereby, not to
intentionally and knowingly take any action with the intention and knowledge
that such action would make any of its representations or warranties contained
herein untrue or incorrect in any material respect or have the effect of
preventing or disabling it from performing its obligations under this Agreement.
Notwithstanding anything to the contrary contained herein, this Section 9.3
shall not obligate, and shall not be interpreted to obligate, any of the holders
of the Control Stock to take any action to the extent such obligation would
result in a change in beneficial ownership of any of the Control Stock prior to
the Closing.
10. POST-CLOSING COVENANTS; TERMINATION.
10.1 Further Instruments, Termination. The Sellers and the
--------------------------------
Purchaser agree to execute such further documents or instruments and to take
such other actions as are necessary to transfer the Shares to the Purchaser and
to otherwise carry out the transactions provided for by this Agreement. If the
Closing Date shall not have occurred on or prior to November 30, 1997, other
12
<PAGE>
than as a result of a material breach of this Agreement by any party hereto, any
party may terminate this Agreement without liability. If the Closing Date shall
not have occurred on or prior to such date as a result of material breach of any
representation, warranty, covenant or obligation by the Sellers (or any of
them), on the one hand, or the Purchaser on the other, the non-breaching party
shall have the right to terminate this Agreement without liability. In addition,
this Agreement may be terminated by the Sellers if, after the date hereof and
before the Closing Date, the Guarantor attempts or purports to revoke or
withdraw the Guaranty or a court of competent jurisdiction finally determines
that the Guaranty is unenforceable or invalid.
10.2 Subject Options. Immediately following the Closing, and
---------------
from time to time thereafter, the Purchaser will lend to each of Pat Robertson
and Tim Robertson sufficient funds to permit each of them to exercise all
Subject Options which are then vested and exercisable or subsequently vest and
become exercisable. Upon receiving such funds, each of Pat Robertson and Tim
Robertson will immediately exercise such Subject Options, and concurrent with
his receipt of the shares of Class B Stock receivable thereunder will sell and
deliver such shares to the Purchaser for a cash purchase price per share equal
to the Purchase Price, less the amount of the loan referred to in the
immediately preceding sentence, which shall be deemed repaid in full.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY. Only the
representations and warranties of the Sellers contained in Section 4.4 hereto
(with respect to title) shall survive the Closing and the consummation of the
transactions contemplated hereby. No party hereto shall have any monetary or
other liability or obligation to any other party hereto for breach of any of
such first party's representations or warranties contained herein or in any
certificate or other document delivered pursuant hereto, and the sole
consequence of any such breach shall be limited to the failure to satisfy a
condition to the Closing pursuant to Article 6 or 7 and the termination right
provided in Section 10, in each case to the extent applicable according to such
Section's express terms. With respect to a breach of its representations and
warranties contained in Section 4.4 hereto, each Seller hereby covenants and
agrees with the Purchaser that it shall indemnify the Purchaser and its
directors, officers, shareholders and Affiliates, and each of their successors
and assigns and hold them harmless from, against and in respect of any and all
costs, losses, claims, liabilities, fines, penalties (including interest which
may be imposed in connection therewith and court costs and reasonable fees and
disbursements of counsel) incurred by any of them arising out of any material
breach of, or any material inaccuracy in, such representations and warranties;
provided, however, that the liability of each Seller to all such indemnified
persons shall in no event exceed the proceeds received by such Seller for the
sale of its Shares hereunder.
12. MISCELLANEOUS.
12.1 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Other than as set forth in the immediately succeeding
sentence, no party may assign any of its rights, or delegate any of its duties
or obligations, hereunder without the prior written consent of the other party,
and any such purported assignment or delegation shall be void ab initio.
Notwithstanding the foregoing, the
13
<PAGE>
Purchaser, its Affiliates, and its successors and assigns, may assign their
rights and delegate their duties (i) to any successor entity resulting from any
liquidation, merger, consolidation, reorganization, or transfer of all or
substantially all of the assets or stock of the Purchaser, or (ii) to any
Affiliate of the Purchaser; provided, that in either case, any such assignee
shall expressly assume all of the obligations the Purchaser hereunder.
12.2 Notices. All notices, demands and other communications
-------
(collectively, "Notices") given or made pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered or
certified mail, return receipt requested, postage and fees prepaid, by overnight
service with a nationally recognized "next day" delivery company such as Federal
Express or United Parcel Service, by facsimile transmission, or otherwise
actually delivered to the following addresses:
(a) If to the Purchaser:
-------------------
Fox Kids Worldwide, Inc.
10960 Wilshire Boulevard
Los Angeles, California 90024
Attn: Mel Woods
Fax: 310-235-5552
with a copy to:
--------------
Fox, Inc.
10201 West Pico Boulevard
Los Angeles, California 90035
Attn: President
Fax: 310-369-1203
and a copy to:
-------------
The News Corporation Limited
c/o News America Publishing Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attn: Arthur M. Siskind, Esq.
Fax: 212-768-2029
14
<PAGE>
and a copy to:
-------------
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attn: C.N. Franklin Reddick, III, Esq.
Fax: 310-443-8512
and a copy to:
-------------
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attn: Jeffrey W. Rubin, Esq.
Fax: 212-697-6686
(b) If to the Sellers:
-----------------
c/o International Family Entertainment, Inc.
2877 Guardian Lane
Virginia Beach, Virginia 23450
Attn: Tim Robertson
Fax: 757-459-6422
with a copy to:
--------------
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Robert E. Spatt, Esq.
Fax: 212-455-2502
Any Notice shall be deemed duly given when received by the addressee thereof.
Any of the parties to this Agreement may from time to time change its address
for receiving notices by giving written notice thereof in the manner set forth
above.
12.3 Amendment; Waiver. No provision of this Agreement may be
-----------------
waived unless in writing signed by all of the parties to this Agreement, and the
waiver of any one provision of this Agreement shall not be deemed to be a waiver
of any other provision. This Agreement may be amended, supplemented or otherwise
modified only by a written agreement executed by all of the parties to this
Agreement.
15
<PAGE>
12.4 Limitation on Liability. The liability of the Sellers for
-----------------------
any breach by the Sellers of this Agreement shall be limited to the actual
damages suffered by the Purchaser or any of its Affiliates under this Agreement
and the Sellers shall not be liable for any consequential or other damages of
the Purchaser or any of its Affiliates, including any damages arising in
connection with any Other Transaction Agreement or the Merger Agreement.
12.5 Jurisdiction. The parties hereto irrevocably submit to
------------
the non-exclusive jurisdiction of the state and federal courts located in
Delaware for the purposes of any suit, action or other proceeding arising out of
this Agreement (and agree not to commence any action, suit or proceeding
relating hereto except in such courts). Each party hereto hereby irrevocably
designates CT Corporation System (or, in the case of the Sellers, Young,
Conaway, Stargatt & Taylor, at 1100 North Market Street, 11th Floor, Wilmington,
Delaware 19801, Attention: David McBride and Bruce Silverstein) as its designee,
appointee and agent to receive, for and on behalf of it, service of process in
such respective jurisdictions in any legal action or proceeding with respect to
this Agreement or any document related thereto. It is understood that a copy of
such process serviced on such agent will be promptly forwarded by mail to it at
its address set forth in Section 12.2 hereof, but the failure to receive such
copy shall not affect in any way the service of such process. Each of the
parties hereto further irrevocably consents to the service of process of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at its
said address, such service to become effective upon confirmed delivery. The
parties irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the state or federal courts located in
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such action, suit or proceeding brought in any such
court that such action, suit or proceeding has been brought in an inconvenient
forum.
12.6 Dispute Resolution. Any dispute or claim arising
------------------
hereunder shall be settled by arbitration. Any party may commence arbitration by
sending a written notice of arbitration to the other party. The notice will
state the dispute with particularity. The arbitration hearing shall be commenced
thirty (30) days following the date of delivery of notice of arbitration by one
party to the other, by the American Arbitration Association ("AAA") as
arbitrator. The arbitration shall be conducted in New York City, New York in
accordance with the commercial arbitration rules promulgated by AAA, and the
Sellers, on the one hand, and the Purchaser, on the other, shall retain the
right to cross-examine the opposing party's witnesses, either through legal
counsel, expert witnesses or both. The decision of the arbitrator shall be
final, binding and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part of his decision,
the arbitrator may allocate the cost of arbitration, including fees of attorneys
and experts, as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator may be entered
in any court of competent jurisdiction.
12.7 Governing Law. This Agreement shall be governed by and
-------------
construed both as to validity and performance and enforced in accordance with
the laws of the State of Delaware without giving effect to the choice of law
principles thereof.
16
<PAGE>
12.8 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
12.9 Remedies Cumulative. Each of the various rights, powers
-------------------
and remedies shall be deemed to be cumulative with, and in addition to, all the
rights, powers and remedies which either party may have hereunder or under
applicable law relating hereto or to the subject matter hereof, and the exercise
or partial exercise of any such right, power or remedy shall constitute neither
an exclusive election thereof nor a waiver of any other such right, power or
remedy.
12.10 Headings. The section and subsection headings contained
--------
in this Agreement are included for convenience only and form no part of the
agreement between the parties.
12.11 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
12.12 Expenses. Each party shall pay its own costs, expenses,
--------
including without limitation, the fees and expenses of their respective counsel
and financial advisors.
12.13 Entire Agreement. This Agreement constitutes and
----------------
embodies the entire understanding and agreement of the parties hereto relating
to the subject matter hereof and there are no other agreements or
understandings, written or oral, in effect between the parties relating to such
subject matter except as expressly referred to herein .
12.14 Publicity. The initial press release relating to this
---------
Agreement shall be a joint press release in the form attached hereto as
Exhibit "B", and the Purchaser and the Sellers shall use reasonable efforts to
- -----------
agree upon the text of any other press release before issuing any such press
release or otherwise making public statements with respect to the transactions
contemplated hereby.
12.15 Specific Performance. Each of the parties hereto
--------------------
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other parties to sustain damages for
which they would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the aggrieved party or parties shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief, without the posting of bond or other security, in addition to any other
remedy to which it or they may be entitled, at law or in equity.
12.16 No Third Party Beneficiaries. This Agreement is not
----------------------------
intended to benefit, and shall not run to the benefit of or be enforceable by,
any other person or entity other than the parties hereto and their permitted
successors and assigns.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
17
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
-------------
Its: President
---------
M.G. "PAT" ROBERTSON
ROBERTSON CHARITABLE REMAINDER UNITRUST
GORDON P. ROBERTSON IRREVOCABLE TRUST
ELIZABETH F. ROBINSON IRREVOCABLE TRUST
ANN R. LABLANC IRREVOCABLE TRUST
By: /s/ M.G. "Pat" Robertson
------------------------
M.G. "Pat" Robertson, individually and as trustee
TIMOTHY B. ROBERTSON
THE TIMOTHY AND LISA ROBERTSON CHILDREN'S
TRUST
THE TIMOTHY B. ROBERTSON CHARITABLE TRUST
ABIGAIL H. ROBERTSON UTMA
LAURA N. ROBERTSON UTMA
ELIZABETH C. ROBERTSON UTMA
WILLIS H. ROBERTSON UTMA
CAROLINE S. ROBERTSON UTMA
By: /s/ Timothy B. Robertson
------------------------
Timothy B. Robertson, individually, as joint tenant
with Lisa N. Robertson, trustee and custodian
/s/ Lisa N. Robertson
-------------------------
Lisa N. Robertson, as joint tenant with Timothy B. Robertson
<PAGE>
EXHIBIT 4
CONTRIBUTION AND EXCHANGE AGREEMENT
BY AND AMONG
LIBERTY MEDIA CORPORATION,
LIBERTY IFE, INC.
AND
FOX KIDS WORLDWIDE, INC.
JUNE 11, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Definitions................................................1
-----------
2. The Contribution...........................................5
----------------
2.1 The Contribution......................................5
2.2 Exchange of Stock Certificates........................6
2.3 Filing of Charter Amendments..........................6
3. Closing Date...............................................7
------------
4. Representations and Warranties of Liberty and LIFE.........7
--------------------------------------------------
4.1 Organization and Standing; Articles and By-Laws.......7
4.2 Authorization.........................................7
4.3 No Conflicts; Required Filings and Consents...........7
4.4 Litigation; Compliance with Laws......................8
4.5 Title to the IFE Notes................................8
4.6 Title to the IFE Stock................................8
4.7 No Other Agreements Relating to IFE Securities.......9
4.8 Investment Intent.....................................9
4.9 No Brokers............................................9
4.10 Full Disclosure.......................................9
5. Representations and Warranties of Fox Kids.................9
------------------------------------------
5.1 Organization and Standing; Articles and By-Laws.......9
5.2 Authorization........................................10
5.3 No Conflicts; Required Filings and Consents..........10
5.4 Capital Stock........................................11
5.5 The Fox Kids and NPAL Preferred Stocks...............11
5.6 Compliance with Applicable Laws......................12
5.7 Newly Formed Corporation.............................12
5.8 NPAL Financial Statements; Primary US Holding Company12
5.9 TNCL SEC Filings; TNCL Financial Statements..........13
5.10 Investment Intent....................................13
5.11 No Brokers...........................................14
5.12 Full Disclosure......................................14
6. Pre-Closing Covenants of Fox Kids, LIFE and Liberty.......14
---------------------------------------------------
(i)
<PAGE>
TABLE OF CONTENTS
PAGE
----
6.1 Filings and other Actions............................14
6.2 Public Announcements.................................14
6.3 Substitution of Consideration in Certain
Circumstances........................................14
6.4 Notification of Certain Matters......................15
6.5 H-S-R Filings; Best Efforts to Close.................16
7. Conditions to Each Party's Obligation to Effect
-----------------------------------------------
the Contribution..........................................16
----------------
7.1 No Stop Order........................................17
7.2 Consummation of Share Exchange.......................17
7.3 H-S-R Act............................................17
8. Additional Conditions to Obligations of Fox Kids..........17
------------------------------------------------
8.1 Accuracy of Representations and Warranties...........17
8.2 Performance of Agreements............................17
8.3 Officer's Certificates...............................17
8.4 Opinion of Counsel for Liberty and LIFE..............18
8.5 Amended Affiliation Agreement........................18
8.6 IFE Shareholders Agreement...........................18
9. Additional Conditions to the Obligations of Liberty
---------------------------------------------------
and LIFE..................................................18
--------
9.1 Accuracy of Representations and Warranties...........18
9.3 Officer's Certificate................................18
9.4 Tax Matters..........................................18
9.5 Funding Agreement and Exchange Agreement.............19
9.6 Assets of NPAL.......................................19
9.7 Opinion of Counsel for Fox Kids......................19
9.8 Registration Rights Agreement........................19
10. Termination...............................................19
-----------
10.1 Termination..........................................19
10.2 Effect of Termination................................20
11. Indemnification...........................................21
---------------
11.1 Survival.............................................21
11.2 Certain Actions......................................21
11.3 Indemnification by Liberty and LIFE..................21
11.4 Indemnification by Fox Kids..........................21
11.5 Claims...............................................22
(ii)
<PAGE>
TABLE OF CONTENTS
PAGE
----
12. Miscellaneous Provisions..................................23
------------------------
12.1 Notices..............................................23
12.2 Severability.........................................24
12.3 Governing Law........................................24
12.4 No Adverse Construction..............................24
12.5 Counterparts.........................................24
12.6 Fees and Expenses....................................24
12.7 Successors and Assigns...............................25
12.8 Amendment............................................25
12.9 Waiver...............................................25
12.10Entire Agreement.....................................25
EXHIBITS AND SCHEDULES
Exhibit A Share Exchange Agreement
Exhibit B Amended Affiliation Agreement
Exhibit C Exchange Agreement
Exhibit D Funding Agreement
Exhibit E NPAL Certificate of Amendment
Exhibit F Fox Kids Certificate of Designations
Exhibit G Press Release
Exhibit H Opinion by Counsel for Liberty and LIFE
Exhibit I Opinion by Counsel for Fox Kids
Exhibit J Certificates regarding Tax Matters
Schedule 5.8 NPAL Subsidiaries
Schedule 9.8 Terms of Registration Rights Agreement
(iii)
<PAGE>
CONTRIBUTION AND EXCHANGE AGREEMENT
Contribution and Exchange Agreement (this "Agreement"), dated as of June
11, 1997, by and among Liberty Media Corporation, a Delaware corporation
("Liberty"), Liberty IFE, Inc., a Colorado corporation and a wholly owned
subsidiary of Liberty ("LIFE"), and Fox Kids Worldwide, Inc., a Delaware
corporation ("Fox Kids").
RECITALS
A. LIFE owns of record 7,088,732 shares of Class C non-voting Common
Stock, par value $.01 per share (the "IFE Stock"), of International Family
Entertainment, Inc., a Delaware corporation ("IFE"), and 6% Convertible Secured
Notes due 2004 of IFE in the principal amount of $23,000,000 which, as of the
date hereof, are convertible into 2,587,500 shares of IFE Stock (the "IFE Notes"
and, together with the IFE Stock, the "IFE Securities").
B. LIFE wishes to contribute the IFE Securities to Fox Kids in exchange
for the Consideration (as hereinafter defined) (collectively, the
"Contribution").
C. The Contribution is to be made concurrently with the exchange of shares
of capital stock (the "Share Exchange") contemplated by that certain Agreement,
dated as of the date hereof, among Fox Kids, Saban Entertainment, Inc., Fox
Broadcasting Company, Fox Broadcasting Sub, Inc., Allen & Company Incorporated,
Haim Saban and the other entities parties thereto, a copy of which is attached
to this Agreement as Exhibit A (the "Share Exchange Agreement").
D. The Contribution and the Share Exchange are intended to qualify as a
tax-free exchange pursuant to Section 351 of the Internal Revenue Code of 1986,
as amended (the "Code"), except to the extent that the Exchange Right (as
hereinafter defined) constitutes taxable "boot" under the Code.
AGREEMENT
In consideration of the premises and of the mutual representations,
warranties, covenants and agreements contained herein, and in order to set forth
the terms and conditions of the Contribution, the parties to this Agreement
hereby agree as follows:
1. DEFINITIONS: As used in this Agreement, terms defined in the preamble
-----------
and recitals shall have the respective meanings specified therein and the terms
set forth below shall have the meanings indicated:
"AFFILIATE" means, when used with reference to a specified Person, any
Person that directly or indirectly through one or more intermediaries controls
or is controlled by, or is under
1
<PAGE>
common control with, such specified Person. For the purposes of this
definition, control (including the terms controlled by and under common control
with), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise. For purposes of this Agreement, (i) neither IFE nor
any of its Subsidiaries shall be deemed an Affiliate of Liberty, LIFE, Fox Kids
or any of their respective Affiliates and (ii) each of NPAL and Saban
Entertainment, Inc., a Delaware corporation, and their respective Affiliates
shall be deemed an Affiliate of Fox Kids.
"AMENDED AFFILIATION AGREEMENT" means that certain affiliation agreement
between Satellite Services, Inc. and IFE in the form of Exhibit B hereto.
"CLOSING" has the meaning set forth in Section 3.
"CLOSING DATE" has the meaning set forth in Section 3.
"CONSIDERATION ADJUSTMENT PERIOD" means the period commencing immediately
following the Closing and ending on the date the transactions contemplated by
the Merger Agreement are consummated; provided, however, that if the Merger
Agreement is terminated, the "Consideration Adjustment Period" shall mean the
last to occur of (i) such termination, (ii) November 30, 1997 and (iii) the
consummation or termination of the sale of the IFE Class A Stock pursuant to the
Robertsons Class A Purchase Agreement.
"$" means the United States dollar.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGREEMENT" means that certain Exchange Agreement, dated as of the
Closing Date, among Liberty, LIFE and NPAL, in the form of Exhibit C hereto.
"EXCHANGE RIGHT" means the exchange right granted to Liberty and LIFE under
the Exchange Agreement.
"FOX KIDS CERTIFICATE OF DESIGNATIONS" has the meaning set forth in Section
2.3.
"FOX KIDS DISCLOSURE LETTER" has the meaning set forth in Section 5.
"FOX KIDS PREFERRED STOCK" means the Series A Preferred Stock, par value
$.001 per share, of Fox Kids.
"FULLY DILUTED SHARE NUMBER" means the sum of (i) the number of shares of
IFE Stock owned by LIFE plus (ii) the number of shares of IFE Stock into which
the IFE Notes owned by LIFE are convertible, in each case as of the Closing
Date.
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"FUNDING AGREEMENT" means that certain Funding Agreement, dated as of the
date hereof, among Fox Kids, NPAL and TNCL, in the form of Exhibit D hereto.
"GOVERNMENTAL AUTHORITY" has the meaning set forth in Section 4.3.
"HIGHEST PER SHARE AMOUNT" means the highest amount paid, or agreed to be
paid, by Fox Kids, or any Affiliate of Fox Kids, for a share of capital stock of
IFE (including without limitation for any shares of any class of common stock of
IFE) (i) from M.G. "Pat" Robertson, the Robertson Charitable Remainder Unitrust,
the Gordon P. Robertson Irrevocable Trust, the Elizabeth F. Robinson Irrevocable
Trust, the Ann R. Lablanc Irrevocable Trust, Lisa N. Robertson, Timothy B.
Robertson (individually and as custodian to and for each of Abigail H.
Robertson, Laura N. Robertson, Elizabeth C. Robertson, Willis H. Robertson and
Caroline S. Robertson), the Timothy and Lisa Robertson Children's Trust, the
Timothy B. Robertson Charitable Trust, any other charitable, revocable or
irrevocable trust created by or for the benefit of the Robertsons, their
children or their respective heirs, The Christian Broadcasting Network, Inc. or
Regent University (and, in each case, from any of their respective Affiliates),
(ii) pursuant to a tender offer made to the public shareholders of IFE, (iii)
pursuant to a merger, binding share exchange or similar agreement involving IFE
(including without limitation the Merger Agreement) (other than an amount paid
in respect of a share of capital stock of IFE to any IFE stockholder pursuant to
Section 262 of the Delaware General Corporation Law), (iv) in any transaction
involving any holder or "group" (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) that owns, or has the right to dispose of, or to direct the
disposition of, 2 1/2 % or more of the outstanding shares of any class of
common stock of IFE or (v) in any transaction, or series of related or unrelated
transactions (excluding for purposes of this clause (v) any transaction referred
to in clauses (i) through (iii) above), involving, in the aggregate (between
January 1, 1997 and the end of the Consideration Adjustment Period), 5% or more
of the outstanding shares of any class of common stock of IFE, in each case
appropriately adjusted to take into account any stock dividend, subdivision,
split, or combination involving the capital stock of IFE during any relevant
period.
"IFE CLASS A STOCK" means the Class A Voting Common Stock, par value $.01
per share, of IFE.
"IFE CLASS B STOCK" means the Class B Common Stock, par value $.01 per
share, of IFE.
"IFE SHAREHOLDERS AGREEMENT" means that certain Amended and Restated
Shareholder Agreement, dated as of September 1, 1995, by and among M.G. "Pat"
Robertson, Timothy B. Robertson, the Robertson Charitable Remainder Unitrust,
the Timothy and Lisa Robertson Children's Trust, the Christian Broadcasting
Network, LIFE and IFE.
"LIEN" means any mortgage, pledge, lien, security interest or other
encumbrance.
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"MATERIAL NPAL SUBSIDIARY" means each direct or indirect Subsidiary of NPAL
that constitutes a "Significant Subsidiary" of NPAL within the meaning of Rule
1-02 of Regulation S-X of the SEC.
"MATERIAL TNCL SUBSIDIARY" means each direct or indirect Subsidiary of TNCL
that constitutes a "Significant Subsidiary" of TNCL within the meaning of Rule
1-02 of Regulation S-X of the SEC.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger, dated
as of the date hereof, among Fox Kids, Fox Kids Merger Corporation and IFE, as
the same may be amended, supplemented or otherwise modified; provided, however,
that if the Merger Agreement is terminated and the Purchaser or any of its
Affiliates subsequently enters into, prior to the end of the Consideration
Adjustment Period, another merger agreement, binding share agreement, asset
purchase agreement or other agreement with IFE that requires the approval of
shareholders of IFE in order to consummate the transactions contemplated
thereby, then the term "Merger Agreement" shall be deemed to refer to such
agreement, as the same may be amended, supplemented or otherwise modified.
"NPAL" means News Publishing Australia Limited, a Delaware corporation.
"NPAL CERTIFICATE OF AMENDMENT" means the Certificate of Amendment to the
Certificate of Incorporation of NPAL that creates the NPAL Preferred Stock, in
the form of Exhibit E hereto.
"NPAL FINANCIAL STATEMENTS" means the unaudited consolidated balance sheets
of NPAL as of June 30, 1996 and December 31, 1996, and the related unaudited
operating statement and profit and loss for the six-month period ended December
31, 1996 and the one-year period ended June 30, 1996 (without footnotes).
"NPAL PREFERRED STOCK" means the Preferred Stock, par value $.001 per
share, of NPAL.
"OUTSIDE DATE" means July 30, 1997; provided, however, that if a request
for additional information is made of Fox Kids (or any of its Affiliates) in
connection with the filings to be made under the H-S-R Act contemplated by
Section 6.5(a) hereof, then "Outside Date" shall mean the earlier of (i)
November 30, 1997 and (ii) the later of (x) July 30, 1997 and (y) the second
business day after receipt by Fox Kids (or the Affiliate of Fox Kids that makes
the filings) of clearance or authorization to effect the transactions referred
to in the first sentence of Section 6.5(a).
"PERSON" means any individual, corporation, general or limited partnership,
limited liability company, trust, joint venture, association or unincorporated
entity of any kind.
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"RESTRICTION" means, when used with respect to any specified security, any
shareholders or other trust agreement, option, warrant, escrow, proxy, buy-sell
agreement, power of attorney or other contract, agreement or arrangement which
(i) grants to any Person the right to purchase or otherwise acquire, or
obligates any Person to sell or otherwise dispose of, such specified security or
any interest therein, or (ii) restricts the transfer of, or the exercise of any
rights or the enjoyment of any benefits arising by reason of, the ownership of
such specified security.
"ROBERTSONS CLASS A PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement, dated as of the date hereof, by and among Fox Kids, M.G. "Pat"
Robertson, the Robertson Charitable Remainder Unitrust, the Gordon P. Robertson
Irrevocable Trust, the Elizabeth F. Robinson Irrevocable Trust, the Ann R.
Lablanc Irrevocable Trust, Lisa N. Robertson, Timothy B. Robertson (individually
and as custodian to and for each of Abigail H. Robertson, Laura N. Robertson,
Elizabeth C. Robertson, Willis H. Robertson and Caroline S. Robertson), the
Timothy and Lisa Robertson Children's Trust and the Timothy B. Robertson
Charitable Trust.
"SEC" means the United States Securities and Exchange Commission.
"SUBSIDIARY" of a specified Person means (i) any corporation of which
equity securities possessing a majority of the ordinary voting power in electing
the board of directors are, at the time as of which such determination is being
made, owned or controlled by such specified Person either directly or indirectly
through or in combination with one or more Subsidiaries of such specified
Person, or (ii) any Person (other than a corporation) in which such specified
Person either directly or indirectly through or in combination with one or more
Subsidiaries, at the time as of which such determination is being made, (x) is a
general partner or (y) owns or controls more than a 50% ownership interest and
has the right to elect a majority of the members of the governing authority of
such Specified Person.
"SUBSTITUTE SECURITY" has the meaning set forth in Section 6.3(a).
"TCI" means Tele-Communications, Inc., a Delaware corporation.
"TNCL" means The News Corporation Limited, a corporation organized and
existing under the laws of South Australia, Australia.
2. THE CONTRIBUTION.
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2.1 THE CONTRIBUTION. (a) At the Closing, and subject to the terms and
conditions hereinafter set forth, LIFE shall contribute the IFE Securities to
Fox Kids in exchange for shares of Fox Kids Preferred Stock (or, if applicable,
the Substitute Security) with an aggregate initial liquidation preference (the
"Initial Liquidation Preference") equal to the greater of (i) $345 million or
(ii) the sum of (x) $6.33 million plus (y) the amount determined by multiplying
(x) the Highest Per Share Amount paid during the period commencing on January 1,
1997 and ending at the time of the Closing by (y) the Fully Diluted Share Number
(the "Consideration"). The Consideration shall be
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adjusted in accordance with the provisions of subsection (b) below. It is the
intention of the parties that the Consideration equal the amount (rounded to the
nearest thousand to avoid the issuance of fractional shares) derived by
multiplying the Highest Per Share Amount (which as of the date of this Agreement
is understood by Liberty and LIFE to be $35) by the Fully Diluted Share Number,
and then adding thereto $6.33 million, which represents (A) $3.5 million of
interest income forfeited by LIFE as a result of its contribution of the IFE
Notes to Fox Kids as provided herein and (B) $2.83 million to partially
compensate Liberty and LIFE for the fact that the Exchange Right constitutes
"boot" for Federal income taxes purposes.
(b) If (i) during the Consideration Adjustment Period a Highest Per Share
Amount is paid (a "Post-Closing Highest Per Share Amount") which is greater
than the Highest Per Share Amount paid prior to or at the time of the Closing,
and (ii) the Initial Liquidation Preference would have been higher had such
Post-Closing Highest Per Share Amount been paid immediately prior to the
Closing, then LIFE (or its nominee) shall receive, within 5 business days of
such Post-Closing Highest Per Share Amount having been paid, additional shares
of Fox Kids Preferred Stock (rounded up to the nearest whole number) with an
aggregate initial liquidation preference equal to the difference between (x) the
aggregate Initial Liquidation Preference that the Fox Kids Preferred Stock would
have had if the Post-Closing Highest Per Share Amount had been paid immediately
prior to the Closing and (y) the aggregate Initial Liquidation Preference of
the Fox Kids Preferred Stock received by LIFE (or its nominee) at the Closing.
This Section 2.1(b) shall apply with respect to each Post-Closing Highest Per
Share Amount paid subsequent to the time of the Closing; provided, however, that
if any adjustment is made pursuant to this Section 2.1(b), then any subsequent
calculation pursuant to this subsection (b) due to a higher Post-Closing Highest
Per Share Amount being paid shall be based on the aggregate Initial Liquidation
Preference of all shares of Fox Kids Preferred Stock received by LIFE (or its
nominee) under this Section 2.1 and the aggregate Initial Liquidation Preference
for the Fox Kids Preferred Stock that LIFE would have received had such higher
Post-Closing Highest Per Share Amount been paid immediately prior to the
Closing.
2.2 EXCHANGE OF STOCK CERTIFICATES. At the Closing, Fox Kids shall
deliver, or cause to be delivered, to LIFE, against delivery to Fox Kids of the
IFE Notes and the certificate or certificates evidencing the IFE Stock (together
with duly executed stock powers in blank and with all requisite stock and bond
transfer tax stamps duly affixed thereto), a certificate, registered in the name
of LIFE or its nominee, representing the shares of Fox Kids Preferred Stock to
which LIFE is entitled pursuant to Section 2.1 hereof.
2.3 FILING OF CHARTER AMENDMENTS. The Fox Kids Preferred Stock delivered
to LIFE or its nominee at the Closing shall have the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the form of Certificate of Designations attached
hereto as Exhibit F (the "Fox Kids Certificate of Designations"). Fox Kids shall
cause the Fox Kids Certificate of Designations and the NPAL Certificate of
Amendment to be filed with the Delaware Secretary of State prior to or at the
time of the Closing.
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3. CLOSING DATE. The closing of the Contribution (the "Closing") shall
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(unless the parties hereto agree otherwise) take place at the offices of Baker &
Botts, L.L.P., 599 Lexington Avenue, New York, New York, at 11:00 a.m., local
time, on the day on which the last of the conditions set forth in Sections 7, 8
and 9 hereof is fulfilled or waived (subject to applicable law) (the "Closing
Date"). The parties covenant and agree, subject to Section 6.3(b), that they
will in any event effect the Closing on the second business day after the
satisfaction of the condition set forth in Section 7.3 hereof, if the other
conditions to the obligations of the parties under Sections 7, 8 and 9 hereof
are capable of being satisfied at that time.
4. REPRESENTATIONS AND WARRANTIES OF LIBERTY AND LIFE. Liberty and
--------------------------------------------------
LIFE, jointly and severally, represent and warrant to Fox Kids as follows:
4.1 ORGANIZATION AND STANDING; ARTICLES AND BY-LAWS. Each of Liberty and
LIFE is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation. LIFE has all requisite power
and authority and all necessary governmental approvals, permits and other
authorizations necessary to own the IFE Securities (which constitute its only
assets, other than cash paid from time to time on the IFE Securities) and to
carry on its business in the manner and in the locations it is now being
conducted.
4.2 AUTHORIZATION. Each of Liberty and LIFE has the requisite corporate
power and authority to enter into and carry out the terms and conditions of this
Agreement. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of Liberty and LIFE. Liberty, in its capacity as the sole stockholder
of LIFE, has approved this Agreement, and no other corporate action on the part
of Liberty or LIFE is necessary to authorize the execution, delivery or
performance by either Liberty or LIFE of this Agreement. This Agreement has
been duly executed and delivered by Liberty and LIFE and constitutes the valid
and binding obligation of each of Liberty and LIFE, enforceable against Liberty
and LIFE in accordance with its terms.
4.3 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by each of Liberty and LIFE do not, and the
performance of this Agreement by each of Liberty and LIFE will not, (i) conflict
with or violate the certificate or articles of incorporation or bylaws of
Liberty or LIFE, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to either Liberty or LIFE or by which any property
or asset of either is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit under,
or give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on the IFE Securities pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument to which Liberty, LIFE or any other Subsidiary of Liberty is a party.
The execution and delivery of this Agreement by each of Liberty and LIFE do not,
and the performance of this Agreement by each of Liberty and LIFE will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority,
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domestic or foreign (each, a "Governmental Authority"), except for such filings
as may be required under Section 13(d) of the Exchange Act.
4.4 LITIGATION; COMPLIANCE WITH LAWS. There are no actions, suits or
proceedings of any nature pending, or, to the knowledge of Liberty or LIFE,
threatened, against Liberty or LIFE arising out of (i) LIFE's ownership of the
IFE Securities or (ii), as of the date hereof, this Agreement, or any action
taken or to be taken by Liberty or LIFE in connection with this Agreement.
Neither Liberty nor LIFE is subject to any order, judgment, ruling, or decree of
any competent authority relating to Liberty or LIFE's ownership of the IFE
Securities. Neither Liberty nor LIFE has received notice of any violation of
any applicable statute, regulation, code, ordinance, rule, order, judgment,
decree or requirement relating to LIFE's ownership of the IFE Securities and, to
Liberty's and LIFE's knowledge, no such violation exists. Each of Liberty and
LIFE is in compliance with all applicable laws, rules and regulations relating
to LIFE's ownership of the IFE Securities.
4.5 TITLE TO THE IFE NOTES. LIFE owns good and valid title to the IFE
Notes, free and clear of any Lien or Restriction. At the Closing, subject to
the terms and conditions of this Agreement, Fox Kids will acquire good and valid
title to the IFE Notes, free and clear of any Liens or Restrictions other than
those (i) arising under the Securities Act of 1933, as amended (the "Securities
Act") and "blue sky" laws of applicable jurisdictions or (ii) created by or with
the consent of Fox Kids or any of its Affiliates. As of the date hereof, the IFE
Notes are convertible into an aggregate of 2,587,500 shares of IFE Stock which,
if issued on the date hereof upon conversion of the IFE Notes, would be
convertible into shares of IFE Class B Stock on a one-for-one basis. Neither
Liberty nor LIFE has entered into any agreements, understandings or undertakings
(other than this Agreement) with respect to the IFE Notes under which Liberty or
LIFE is or may become obligated, directly or indirectly, to transfer, dispose
of, convert or assign the IFE Notes, or which would result in a Lien or
Restriction upon the IFE Notes. The IFE Notes are the only debt securities of
IFE legally or beneficially owned by Liberty.
4.6 TITLE TO THE IFE STOCK. LIFE has good and valid title to the
7,088,732 shares of IFE Stock owned by it on the date hereof, free and clear of
any Lien or Restriction. At the Closing, subject to the terms and conditions of
this Agreement, Fox Kids will acquire good and valid title to the shares of IFE
Stock owned by LIFE, free and clear of all Liens or Restrictions other than
those (i) arising under the Securities Act and "blue sky" laws of applicable
jurisdictions or (ii) created by or with the consent of Fox Kids or any of its
Affiliates. As of the date hereof, the shares of IFE Stock owned by LIFE are
convertible into shares of IFE Class B Stock on a one-for-one basis. Neither
Liberty nor LIFE has entered into any agreements, understandings or undertakings
(other than this Agreement) with respect to the IFE Stock owned by LIFE under
which Liberty or LIFE is or may become obligated, directly or indirectly, to
transfer, dispose of, convert or assign such IFE Stock, or which would result in
a Lien or Restriction upon such IFE Stock. The IFE Stock owned of record by
LIFE are the only equity securities of IFE legally or beneficially owned by
Liberty.
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4.7 NO OTHER AGREEMENTS RELATING TO IFE SECURITIES. There are (i) no
options, warrants, calls, subscriptions, convertible securities or other rights
(including preemptive rights), agreements or commitments of any character (other
than this Agreement) obligating Liberty or LIFE now or at any time in the future
to sell, transfer or otherwise dispose of any of the IFE Securities and (ii)
there are no voting trusts, proxies or other agreements to which Liberty or LIFE
is a party with respect to the IFE Securities other than this Agreement, the IFE
Shareholders Agreement and the purchase agreements pursuant to which LIFE
acquired the IFE Stock and the IFE Notes from IFE.
4.8 INVESTMENT INTENT. The shares of Fox Kids Preferred Stock to be
acquired by LIFE pursuant to this Agreement are being acquired by LIFE for its
own account for investment and with no present intention of distributing or
reselling such shares or any part thereof in any transaction which would
constitute a "distribution" within the meaning of the Securities Act. Liberty
and LIFE understand and acknowledge that the offer and sale of the Fox Kids
Preferred Stock have not been, and as of the Closing will not have been,
registered under the Securities Act or any state securities laws.
4.9 NO BROKERS. No broker or finder is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Liberty or LIFE.
4.10 FULL DISCLOSURE. No statement herein or in the Exchange Agreement or
in any certificate delivered pursuant to the requirements of this Agreement by
or on behalf of Liberty or LIFE contains or will contain any untrue statement of
a material fact concerning Liberty or LIFE or omits or will omit to state a
material fact concerning Liberty or LIFE necessary in order to make the
statements made herein or therein, in light of the circumstances under which
they were made, not misleading.
5. REPRESENTATIONS AND WARRANTIES OF FOX KIDS. Except as set forth in
------------------------------------------
the disclosure letter delivered at or prior to the execution of this Agreement
by Fox Kids, which refers to the relevant Sections of this Agreement (the "Fox
Kids Disclosure Letter"), Fox Kids represents and warrants to Liberty and LIFE
as follows:
5.1 ORGANIZATION AND STANDING; ARTICLES AND BY-LAWS. Each of Fox Kids,
NPAL, each Material NPAL Subsidiary, TNCL and each Material TNCL Subsidiary is a
corporation, partnership or other legal entity duly organized, validly existing
and, if applicable, in good standing under the laws of the jurisdiction of its
incorporation or organization. Fox Kids, NPAL and each Material NPAL Subsidiary
is qualified, licensed or domesticated as a foreign corporation, partnership or
other legal entity and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified, licensed or domesticated would not have a material adverse effect on
the business, assets, results of operations or financial position of (i), in the
case of Fox Kids, of Fox Kids, and (ii) in the case of NPAL, NPAL and its
Subsidiaries taken as a whole. Each of Fox Kids, NPAL, each Material NPAL
Subsidiary, TNCL and each Material TNCL Subsidiary has all
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requisite power and authority and all necessary governmental approvals, permits
and other authorizations necessary to own, lease and operate its properties and
assets and to carry on its business in the manner and in the locations it is now
being conducted, except where the failure to have such power, authority and
governmental approvals, permits and authorizations would not have a material
adverse effect on the business, assets, results of operations or financial
position (x), in the case of Fox Kids, of Fox Kids, (y), in the case of NPAL and
any Material NPAL Subsidiary, of NPAL and its Subsidiaries taken as a whole, and
(z), in the case of TNCL and any Material TNCL Subsidiary, of TNCL and its
Subsidiaries taken as a whole. True and correct copies of the Certificate of
Incorporation and Bylaws of each of Fox Kids and NPAL, as amended to the date
hereof, have been delivered to Liberty.
5.2 AUTHORIZATION. Fox Kids has the requisite corporate power and
authority to enter into and carry out the terms and conditions of this
Agreement. Each of Fox Kids, NPAL and TNCL has the requisite corporate power
and authority to enter into and carry out the terms and conditions of the
Funding Agreement. NPAL has the requisite corporate power and authority to
enter into and carry out the terms of the Exchange Agreement. The execution and
delivery of this Agreement and the Funding Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Fox Kids and by any required shareholder or other
action required under the charter documents of, or any shareholder agreement
relating to, Fox Kids. All necessary corporate action on the part of each of
NPAL and TNCL to authorize and approve the due execution, delivery and
performance of the Funding Agreement by NPAL and TNCL, respectively, has been
taken. All necessary corporate action on the part of NPAL to authorize and
approve the due execution, delivery and performance of the Exchange Agreement by
NPAL has been taken. This Agreement has been duly executed and delivered by Fox
Kids and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms. Upon the execution and delivery of the Funding
Agreement by Fox Kids, NPAL and TNCL at the Closing, the Funding Agreement will
constitute the legal, valid and binding obligation of each of Fox Kids, NPAL and
TNCL, enforceable against each in accordance with its terms, and will not be
void or voidable by TNCL under Australian law. Upon the execution and delivery
of the Exchange Agreement by NPAL at the Closing, the Exchange Agreement will
constitute the legal, valid and binding obligation of NPAL, enforceable against
NPAL in accordance with its terms.
5.3 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by Fox Kids does not, and the performance of this
Agreement by Fox Kids, the execution, delivery and performance of the Funding
Agreement by each of Fox Kids, NPAL and TNCL, and the execution, delivery and
performance of the Exchange Agreement by NPAL will not, (i) conflict with or
violate the certificate of incorporation, by-laws or other organizational
documents of, or, to the knowledge of Fox Kids, any shareholder agreement
relating to, Fox Kids, NPAL or TNCL, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to any of Fox Kids, NPAL,
any Material NPAL Subsidiary, TNCL or any Material TNCL Subsidiary or by which
any property or asset of any thereof is bound or affected, or (iii) result in
any breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of termination,
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amendment, acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any material property or asset of Fox
Kids, NPAL, any Material NPAL Subsidiary, TNCL or any Material TNCL Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument to which Fox Kids, NPAL, any
Material NPAL Subsidiary, TNCL or any Material TNCL Subsidiary is a party,
except, in the cases of clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent or
delay the consummation of the transactions contemplated by this Agreement or
otherwise prevent (x) Fox Kids from timely performing its obligations under this
Agreement or, following the Closing, exercising its rights, or timely performing
its obligations, under the terms of the Fox Kids Preferred Stock, (y), following
the Closing, any of Fox Kids, NPAL or TNCL from exercising its rights, or timely
performing its respective obligations, under the terms of the Funding Agreement
or (z), following the Closing, NPAL from timely performing its obligations under
the terms of the Exchange Agreement. The execution and delivery of this
Agreement by Fox Kids does not, and the performance of this Agreement by Fox
Kids, the execution, delivery and performance of the Funding Agreement by each
of Fox Kids, NPAL and TNCL, and the execution, delivery and performance of the
Exchange Agreement by NPAL will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (i) the filing of the Fox Kids Certificate of Designations
and the NPAL Certificate of Amendment with the Delaware Secretary of State prior
to or at the time of the Closing and (ii) such filings as may be required under
Section 13(d) of the Exchange Act. All required filings under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "H-S-R Act") have
been made, and the waiting period thereunder has expired or terminated, with
respect to the transactions contemplated by the Share Exchange Agreement.
5.4 CAPITAL STOCK. As of the date hereof, the authorized capital
stock of Fox Kids consists of 10,000,000 shares of Class A Common Stock, par
value $.001 per share, 10,000,000 shares of Class B Common Stock, par value
$.001 per share, and 20,000,000 shares of "blank check" preferred stock, par
value $.001 per share. Immediately prior to the Closing, there will be a number
of shares of Fox Kids Preferred Stock duly authorized as shall be sufficient for
Fox Kids to deliver to LIFE (or its nominee) at the Closing the number of
validly issued, fully paid and nonassessable shares of Fox Kids Preferred Stock
to which LIFE is entitled pursuant to Section 2.1 hereof. As of the Closing
Date, no shares of capital stock of Fox Kids will rank senior to the Fox Kids
Preferred Stock as to dividend rights, rights of redemption, or rights on any
liquidation, dissolution or winding up of Fox Kids. All of the shares of capital
stock of Fox Kids to be issued pursuant to the terms of the Share Exchange
Agreement will be, upon such issuance in accordance with the terms of the Share
Exchange Agreement, duly authorized, validly issued, fully paid and
nonassessable.
5.5 THE FOX KIDS AND NPAL PREFERRED STOCKS. The resolution set forth in
the Fox Kids Certificate of Designations has been approved by the Board of
Directors of Fox Kids and, upon the filing of the Fox Kids Certificate of
Designations with the Delaware Secretary of State, the Fox Kids Preferred Stock
will have all of the preferences and relative participating, optional and other
special rights, qualifications, limitations and restrictions set forth in the
Fox Kids Certificate of Designations. The shares of Fox Kids Preferred Stock to
be received by LIFE or its nominee at the
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Closing will be, upon such receipt at the Closing in accordance with the terms
and conditions of this Agreement, duly authorized, validly issued, fully paid
and non-assessable and LIFE or such nominee will have all of the rights of a
registered holder thereof under Delaware law. LIFE or such nominee will receive
good and valid title to the Fox Kids Preferred Stock at the Closing, free and
clear of all Liens and Restrictions other than those (i) arising under the
Securities Act and "blue sky" laws of applicable jurisdictions or (ii) created
by or with the consent of LIFE, Liberty or any of their respective Affiliates.
Liberty will not be liable for any stamp duty or other issuance or transfer
taxes or duties in connection with the issuance and delivery of the Fox Kids
Preferred Stock at the Closing. The NPAL Certificate of Amendment has been
approved by the Board of Directors and the stockholders of NPAL and, upon the
filing of the NPAL Certificate of Amendment with the Delaware Secretary of
State, the NPAL Preferred Stock will have all of the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the NPAL Certificate of Amendment. The shares of
NPAL Preferred Stock that may be received by a holder of shares of Fox Kids
Preferred Stock upon the valid exercise of the Exchange Right included in the
Exchange Agreement will be, upon surrender of the certificates representing such
shares of Fox Kids Preferred Stock to NPAL or its agent, duly authorized,
validly issued, fully paid and non-assessable. No authorization, approval or
consent of any Australian Governmental Authority is currently required in order
for (i) Fox Kids to declare or pay dividends on or to redeem the Fox Kids
Preferred Stock, (ii) NPAL to perform its obligations under the Exchange
Agreement, (iii) NPAL to declare or pay dividends on or to redeem the shares of
NPAL Preferred Stock exchanged for shares of Fox Kids Preferred Stock, or (iv)
Fox Kids, NPAL or TNCL to exercise or perform their respective rights or
obligations under the Funding Agreement.
5.6 COMPLIANCE WITH APPLICABLE LAWS. Each of Fox Kids, NPAL, each
Material NPAL Subsidiary, TNCL and each Material TNCL Subsidiary is in
compliance with all applicable laws, ordinances, regulations, decrees and orders
of any Governmental Authority, the breach or violation of which, individually or
in the aggregate, could reasonably be expected to have a material adverse effect
on the business, assets, results of operations or financial condition (i), in
the case of Fox Kids, of Fox Kids and its Subsidiaries taken as a whole, (ii),
in the case of NPAL and any Material NPAL Subsidiary, of NPAL and its
Subsidiaries taken as a whole, and (iii), in the case of TNCL and any Material
TNCL Subsidiary, of TNCL and its Subsidiaries taken as a whole.
5.7 NEWLY FORMED CORPORATION. Fox Kids is a recently organized
corporation and, as of the date hereof, has engaged in no operating activities.
As of the date hereof, Fox Kids has no material assets or liabilities (other
than agreements relating to its acquisition of securities of IFE).
5.8 NPAL FINANCIAL STATEMENTS; PRIMARY US HOLDING COMPANY. (a) The NPAL
Financial Statements delivered to Liberty prior to the date hereof were prepared
in accordance with Australian generally accepted accounting principles (except
that there are no footnotes) applied on a consistent basis throughout the
periods indicated and fairly present the consolidated financial position and
results of operations of NPAL and its consolidated subsidiaries as at the
respective dates thereof and for the respective periods indicated therein.
Since December 31, 1996, there has been no change in any of the significant
accounting (including tax accounting) policies, practices or
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procedures of NPAL. Since December 31, 1996, there has not been any material
adverse change in the financial condition, results of operations or businesses
of NPAL and its Subsidiaries taken as a whole.
(b) NPAL is the primary United States holding company for TNCL and owns not
less than 75 % (in value) of the total assets of TNCL and its Subsidiaries
located in the United States. NPAL owns, directly or indirectly, not less than
75% (in value and voting power) of the equity securities of the Subsidiaries
listed on Schedule 5.8 hereto, except to the extent otherwise specified in such
schedule.
5.9 TNCL SEC FILINGS; TNCL FINANCIAL STATEMENTS. (a) TNCL has filed all
forms, reports and documents required to be filed by it with the SEC since
December 31, 1995, and has heretofore made available to Liberty, in the form
filed with the SEC (excluding any exhibits thereto), its Annual Report on Form
20-F for the fiscal year ended December 31, 1996 (the "TNCL Annual Report").
The TNCL Annual Report, and any other forms, reports and other documents filed
by TNCL with the SEC since December 31, 1995, (x) were or will be prepared in
accordance with the requirements of the Securities Act, and the Exchange Act,
and the rules and regulations thereunder and (y) did not at the time they were
filed, or will not at the time they are filed, contain any untrue statements of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) The consolidated financial statements (including the notes thereto)
contained in the TNCL Annual Report were prepared in accordance with Australian
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position, results of
operations and cash flows of TNCL and its consolidated subsidiaries as at the
respective dates thereof and for the respective periods indicated therein, and
such financial statements and the reconciliations to U.S. generally accepted
accounting principles comply as to form in all material respects with applicable
accounting requirements and the rules and regulations of the SEC. Since
December 31, 1996, there has been no change in any of the significant accounting
(including tax accounting) policies, practices or procedures of TNCL. Since
December 31, 1996, there has not been any material adverse change in the
financial condition, results of operations or businesses of TNCL and its
Subsidiaries taken as a whole.
5.10 INVESTMENT INTENT. The IFE Securities, and any shares of IFE common
stock acquired upon exercise of the conversion privileges set forth in such
securities, are and will be acquired by Fox Kids for its own account for
investment and with no present intention of distributing or reselling such
shares or any part thereof in any transaction which would constitute a
"distribution" within the meaning of the Securities Act. Fox Kids understands
and acknowledges that the offer and sale of the IFE Securities have not been,
and as of the Closing will not have been, registered under the Securities Act or
any state securities laws.
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5.11 NO BROKERS. No broker or finder is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Fox Kids.
5.12 FULL DISCLOSURE. No statement herein or in the Fox Kids Disclosure
Letter, the Funding Agreement or the Exchange Agreement or in any certificate
delivered pursuant to the requirements of this Agreement by or on behalf of Fox
Kids, NPAL or TNCL contains or will contain any untrue statement of a material
fact concerning Fox Kids, NPAL or TNCL or omits or will omit to state a material
fact necessary in order to make the statements made herein or therein concerning
Fox Kids, NPAL or TNCL, in light of the circumstances under which they were
made, not misleading.
6. PRE-CLOSING COVENANTS OF FOX KIDS, LIFE AND LIBERTY. During the
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period commencing on the date hereof and ending at the time of the Closing:
6.1 FILINGS AND OTHER ACTIONS. (a) Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto agrees to use its
reasonable commercial efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations or otherwise to consummate and
make effective the transactions contemplated by this Agreement.
(b) Each party shall use its commercially reasonable efforts not to take
any action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant or agreement made by such party in this Agreement.
6.2 PUBLIC ANNOUNCEMENTS. Liberty and Fox Kids shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement or any transaction contemplated hereby and shall
not, and shall not permit any Affiliate to, issue any such press release or make
any such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may be required by law or any listing agreement or
arrangement to which TNCL or TCI is a party with a national securities exchange
or The Nasdaq Stock Market if it has used all reasonable efforts to consult with
the other party and to obtain such party's consent but has been unable to obtain
such consent in a timely manner. The parties hereto have agreed to the issuance
on the date hereof of the press release attached hereto as Exhibit G.
6.3 SUBSTITUTION OF CONSIDERATION IN CERTAIN CIRCUMSTANCES. (a) If
Liberty determines, on the advice of counsel, that the condition to its
obligation to consummate the transactions contemplated by this Agreement set
forth in Section 9.4(b) will not be satisfied, then the parties shall negotiate
in good faith the terms of a substitute security (the "Substitute Security") for
the Fox Kids Preferred Stock to be received by LIFE pursuant to the
Contribution. The Substitute
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Security shall (i) have terms that are mutually acceptable to Fox Kids and
Liberty, (ii) at the election of Liberty, be exchangeable for a "mirror"
security of NPAL or another Affiliate of Fox Kids acceptable to Liberty, (iii)
have an economic value to Liberty not less, in any material respect, than, and
an economic cost to Fox Kids (and, in the case of an NPAL "mirror" security, an
economic cost to NPAL) not greater, in any material respect, than, the value and
cost, respectively, of the Fox Kids Preferred Stock (and the NPAL Preferred
Stock), (iv) not, in the sole judgment of Liberty based upon advice of counsel,
upon receipt by Liberty result in recognition by Liberty of taxable income or
gain for United States or Australian federal income tax purposes (except to the
extent any exchange right may constitute "boot"), and (v) not result in the
recognition by Fox Kids or NPAL, as the case may be, of taxable income or gain
for United States or Australian federal income tax purposes to a greater extent
than that which would be recognizable by Fox Kids or NPAL if the transactions
contemplated by this Agreement and the Exchange Agreement (including the
issuance of the NPAL Preferred Stock in exchange for shares of Fox Kids
Preferred Stock) were consummated on the date hereof. Any Substitute Security
shall have voting rights, or no voting rights, as may be determined by Fox Kids
in its sole discretion.
(b) If the terms of the Substitute Security require that filings be made
under the H-S-R Act, each of Fox Kids, Liberty and LIFE shall, or shall cause
its appropriate Affiliate(s) to, file an appropriate notification and report
form under the H-S-R Act within 5 business days of the date the terms of the
Substitute Security are determined. Each party shall cause, or shall cause such
appropriate Affiliate(s) to, supply promptly any additional information and
documentary material that may be requested pursuant to the H-S-R Act. If filings
are made under the H-S-R Act pursuant hereto, then (i) the obligations of each
of Liberty and LIFE, on the one hand, and Fox Kids, on the other hand, to
consummate the transactions contemplated by this Agreement (in addition to the
conditions set forth in Sections 7, 8 and 9 hereof) shall be subject to the
expiration (or earlier termination) of the waiting period under the H-S-R Act,
and (ii) the Outside Date shall be extended, if necessary, to the earlier of (x)
the second business day after the expiration (or earlier termination) of such
waiting period and (y) November 30, 1997.
6.4 NOTIFICATION OF CERTAIN MATTERS. Each of Liberty and LIFE, on the
one hand, and Fox Kids, on the other hand, shall give prompt notice in writing
to the other of: (i) any information that indicates that any of its
representations or warranties contained herein was not true and correct as of
the date hereof or will not be true and correct, in any material respect, as of
the Closing Date, (ii) the occurrence of any event which will result, or has a
reasonable prospect of resulting, in the failure to satisfy a condition
specified in Section 7, 8 or 9 hereof, or (iii) any notice of, or other
communication relating to, any claim, litigation, proceeding or investigation
that questions the validity or enforceability of this Agreement or any of the
transactions contemplated hereby.
6.5 H-S-R FILINGS; BEST EFFORTS TO CLOSE. (a) As promptly as
practicable after the execution of this Agreement, but in any event within 5
business days, Fox Kids shall, or shall cause its appropriate Affiliate(s) to,
file an appropriate notification and report form under the H-S-R Act with
respect to (i) the conversion of the IFE Stock and the IFE Notes into voting
securities of
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IFE, (ii) the acquisition of voting securities of IFE under the Robertsons Class
A Purchase Agreement and from The Christian Broadcasting Network, Inc. and
Regent University and (iii) the merger contemplated by the Merger Agreement;
provided, however, that such five-business day period shall be extended to the
extent necessary for Fox Kids to obtain from IFE all information reasonably
necessary to complete such notification and report form that is not in the
public domain or available from IFE's periodic reports filed under the Exchange
Act. Fox Kids shall, or shall cause such Affiliate(s) to, request early
termination of the waiting period under the H-S-R Act. Fox Kids shall, or shall
cause such Affiliate(s) to, supply promptly any additional information and
documentary material that may be requested of it pursuant to the H-S-R Act and
use, or cause such Affiliate(s) to use, its commercially reasonable efforts to
obtain clearance or authorization under the H-S-R Act to consummate the
transactions described in the immediately preceding sentence as promptly as
practicable. Fox Kids shall not, and shall not permit any Affiliate to, take
any action that will have the effect of delaying, impairing or impeding the
receipt of early termination or such clearance or authorization under the H-S-R
Act. Fox Kids shall use its commercially reasonable efforts to cause IFE, as
soon as reasonably practicable, (i) to provide Fox Kids, or its appropriate
Affiliate(s), with such information as may be reasonably necessary for Fox Kids,
or such Affiliate(s), to complete and submit its notification and report form
under the H-S-R Act, (ii) to file its own (or its appropriate Affiliate's)
notification and report form under the H-S-R Act in connection with the
transactions referred to in the first sentence of this Section 6.5(a) and (iii)
to supply promptly any additional information and documentary material that may
be requested of it (or such Affiliate) pursuant to the H-S-R Act.
(b) Fox Kids covenants and agrees with Liberty and LIFE to use its best
efforts to effect the Contribution prior to the consummation of the merger
contemplated by the Merger Agreement. Fox Kids acknowledges and agrees that a
failure to effect the Contribution prior to such merger would result in Liberty
and LIFE suffering significant damages, and agrees to indemnify and hold
harmless Liberty and LIFE from and against any and all monetary damages suffered
by either of them arising out of the failure of the Contribution to be effected
prior to such merger. Such monetary value shall be deemed to equal the
difference between the amount received by LIFE in the merger and the value of
the Consideration (assuming for this purpose no change in applicable tax laws or
regulations from those in effect on the date of this Agreement).
Notwithstanding the foregoing, Fox Kids shall not be liable to Liberty or LIFE
pursuant to this Section 6.5(b) if the failure of the Contribution to be
effected prior to such merger is due to a material breach by Liberty or LIFE of
any of its covenants, agreements, representations or warranties set forth in
this Agreement.
7. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE CONTRIBUTION. The
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respective obligations of each party to effect the Contribution and the other
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing of the following conditions, any or all of which may
be waived, in whole or in part, to the extent permitted by applicable law:
7.1 NO STOP ORDER. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by any court of
competent jurisdiction or by any Governmental Authority directing that the
transactions provided for herein, or any of them, not be
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consummated as herein provided; provided, however, that the parties shall use
their reasonable commercial efforts to prevent the entry of, or, if entered, to
cause to be vacated or lifted as promptly as practicable, any such injunction or
other order.
7.2 CONSUMMATION OF SHARE EXCHANGE. All of the conditions precedent to
the consummation of the transactions contemplated by the Share Exchange
Agreement shall have been satisfied or, to the extent permitted by applicable
law, waived by the parties thereto, and the Share Exchange shall be consummated
and become effective concurrently with the consummation and effectiveness of the
Contribution.
7.3 H-S-R ACT. The waiting period applicable to the filings made under
the H-S-R Act pursuant to Section 6.5(a) hereof shall have expired or been
terminated.
7.4 NO ADVERSE ENACTMENTS. There shall not have been any statute, rule,
regulation or order promulgated, enacted or issued or deemed applicable to the
Contribution by any Governmental Authority or court of competent jurisdiction
which would make the consummation of the Contribution illegal.
8. ADDITIONAL CONDITIONS TO OBLIGATIONS OF FOX KIDS. The obligation of
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Fox Kids to consummate the transactions contemplated by this Agreement is also
subject to the satisfaction, at or prior to the Closing Date, of each of the
following conditions, any or all of which may be waived by Fox Kids, in whole or
in part, to the extent permitted by applicable law:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Liberty and LIFE contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
8.2 PERFORMANCE OF AGREEMENTS. Each of Liberty and LIFE shall have
performed in all material respects all obligations and agreements, and complied
in all material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
8.3 OFFICER'S CERTIFICATES. Fox Kids shall have received certificates of
Liberty and LIFE, signed by officers of Liberty and LIFE, respectively,
evidencing compliance with the conditions set forth in Sections 8.1 and 8.2
above.
8.4 OPINION OF COUNSEL FOR LIBERTY AND LIFE. Fox Kids shall have received
from counsel to Liberty and LIFE an opinion, dated the Closing Date, to the
effect set forth on Exhibit H hereto. In rendering their opinions such counsel
may rely as to factual matters upon certificates or other documents furnished by
officers and directors of Liberty and LIFE and by government officials, and upon
such other documents and data as such counsel deem appropriate as a basis for
their opinions. Such counsel may specify the jurisdiction or jurisdictions in
which they are
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admitted to practice, that they are not admitted to practice in any other
jurisdiction or experts in the law of any other jurisdiction and that, to the
extent their opinions concern the laws of any other jurisdiction or pertain to
matters beyond the scope of such counsel's engagement, such counsel may rely
upon the opinion of counsel admitted to practice in such other jurisdiction. Any
opinion relied upon by such counsel shall be delivered together with the opinion
of such counsel, which shall state that such counsel believes that their
reliance thereon is justified.
8.5 AMENDED AFFILIATION AGREEMENT. The Amended Affiliation Agreement, in
the form of Exhibit B hereto, shall have been duly executed and delivered.
8.6 IFE SHAREHOLDERS AGREEMENT. The IFE Shareholders Agreement shall have
been terminated or LIFE shall have irrevocably waived all of its rights and
obligations thereunder such that LIFE has no further rights or obligations under
the IFE Shareholders Agreement.
9. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF LIBERTY AND LIFE. The
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obligation of each of Liberty and LIFE to consummate the transactions
contemplated by this Agreement is also subject to the satisfaction, at or prior
to the Closing Date, of each of the following conditions, any or all of which
may be waived by Liberty and LIFE, in whole or in part, to the extent permitted
by applicable law:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Fox Kids contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
9.2 PERFORMANCE OF AGREEMENTS. Fox Kids shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to or at the Closing Date.
9.3 OFFICER'S CERTIFICATE. Liberty and LIFE shall have received a
certificate of Fox Kids, signed by officers of Fox Kids, evidencing compliance
with the conditions set forth in Sections 9.1 and 9.2 above.
9.4 TAX MATTERS. (a) Liberty and LIFE shall have received duly executed
copies of the certificates attached hereto as Exhibit J.
(b) Liberty shall have received from Baker & Botts, L.L.P. an opinion of
counsel to the effect that since June 11, 1997, there has been no amendment to,
change (including any announced prospective change) in, or effective date set
for any proposed amendment or change in, the laws (or any regulations
thereunder) of the United States or Australia or any political subdivision or
taxing authority of either thereof or therein, or any amendment to, change in,
or effective date set for any proposed amendment or change in, an interpretation
or application of such laws or regulations
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by any legislative body, court, governmental agency or regulatory authority,
which would result in Liberty recognizing taxable income or gain for United
States or Australian federal income tax purposes by virtue of the Contribution
or the consummation of any of the transactions contemplated by this Agreement
(except to the extent the Exchange Right constitutes "boot" for federal income
tax purposes).
9.5 FUNDING AGREEMENT AND EXCHANGE AGREEMENT. The Funding Agreement, in
the form attached hereto as Exhibit D, shall have been duly executed and
delivered by Fox Kids, NPAL and TNCL and the Exchange Agreement, in the form
attached hereto as Exhibit C, shall have been duly executed and delivered by
NPAL.
9.6 ASSETS OF NPAL. Liberty shall have received evidence reasonably
satisfactory to it that NPAL owns, as of the Closing Date, directly or
indirectly through one or more Subsidiaries of NPAL, not less than 75% (in
value) of the assets of TNCL and its Subsidiaries located in the United States.
9.7 OPINION OF COUNSEL FOR FOX KIDS. Liberty and LIFE shall have received
an opinion of counsel to Fox Kids, dated the Closing Date, substantially to the
effect set forth on Exhibit I. In rendering their opinions such counsel may rely
as to factual matters upon certificates or other documents furnished by officers
and directors of Fox Kids and by government officials, and upon such other
documents and data as such counsel deem appropriate as a basis for their
opinions. Such counsel may specify the jurisdiction or jurisdictions in which
they are admitted to practice, that they are not admitted to practice in any
other jurisdiction or experts in the law of any other jurisdiction and that, to
the extent their opinions concern the laws of any other jurisdiction or pertain
to matters beyond the scope of such counsel's engagement, such counsel may rely
upon the opinion of counsel admitted to practice in such other jurisdiction. Any
opinion relied upon by such counsel shall be delivered together with the opinion
of such counsel, which shall state that such counsel believes that their
reliance thereon is justified.
9.8 REGISTRATION RIGHTS AGREEMENT. Liberty and LIFE shall have entered
into a registration rights agreement with Fox Kids having the terms set forth on
Schedule 9.8 hereto.
10. TERMINATION.
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10.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time:
10.1.1 by the mutual written consent of Liberty and Fox Kids;
10.1.2 by Fox Kids if there has been a breach of any covenant or agreement
on the part of Liberty or LIFE set forth in this Agreement, or if any
representation or warranty of Liberty or LIFE shall have become untrue in any
material respect, in either case such that such breach or untruth is incapable
of being cured by the Outside Date; provided, however, that Fox Kids shall
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not have the right to terminate this Agreement pursuant to this Section 10.1.2
if Fox Kids, at such time, is in material breach of any of its covenants,
agreements, representations or warranties set forth in this Agreement;
10.1.3 by Liberty if there has been a breach of any covenant or agreement
on the part of Fox Kids set forth in this Agreement, or if any representation or
warranty of Fox Kids shall have become untrue in any material respect, in either
case such that such breach or untruth is incapable of being cured by the Outside
Date; provided, however, that Liberty shall not have the right to terminate this
Agreement pursuant to this Section 10.1.3 if Liberty or LIFE, at such time, is
in material breach of any of its covenants, agreements, representations or
warranties set forth in this Agreement;
10.1.4 by either Fox Kids or Liberty if the Contribution shall not have
been consummated on or before the Outside Date, unless the absence of such
consummation shall be due to the failure of the party seeking termination to
perform each of its obligations under this Agreement required to be performed by
it at or prior to the Closing Date; or
10.1.5 by either Fox Kids or Liberty if a court of competent jurisdiction
or a Governmental Authority shall have issued a non-appealable final order,
decree or ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contribution or
any of the other transactions contemplated hereby.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 10.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto, or any of their respective officers
or directors, to the others and all rights and obligations of each party hereby
shall cease, except that (a) the agreements contained in Section 6.5(b), this
Section 10.2 and in Sections 11.2 and 12.6 shall survive the termination hereof
and (b) nothing herein shall relieve any party from liability for the willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement. If this Agreement is terminated, Fox Kids covenants and
agrees to cause the Robertsons Class A Purchase Agreement to be terminated,
unless (i) such termination is the result of a court of competent jurisdiction
or a Governmental Authority having issued a non-appealable final order, decree
or ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contribution or
(ii) such termination was due to a material breach by Liberty or LIFE of any of
its covenants, agreements, representations or warranties set forth in this
Agreement.
11. INDEMNIFICATION.
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11.1 SURVIVAL. All representations and warranties and covenants and
agreements contained herein shall survive until the first anniversary of the
date of this Agreement; provided, however, that such limitation shall not apply
to (i) the representations set forth in Sections 4.5, 4.6 and 5.5 and (ii) the
covenants and agreements set forth in Section 2.1, in this Section 11 and in
Sections 12.2, 12.6 and 12.7, each of which shall survive without limitation.
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11.2 CERTAIN ACTIONS. Fox Kids agrees to indemnify and hold harmless each
Liberty Party (as defined below) from and against any and all losses, claims,
damages, liabilities, judgments, costs, disbursements and expenses of any kind
or nature (including reasonable fees and disbursements of counsel) arising out
of any suit, action or proceeding instituted by any Person not a party to this
Agreement that in any manner results from, arises out of, is based upon or is
related or attributable to any action taken by TNCL, NPAL, Fox Kids or any of
their respective Affiliates (each, a "News Corp Party") with respect to any
transaction or proposed transaction involving any News Corp Party, on the one
hand, and any of M.G. "Pat" Robertson, the Robertson Charitable Remainder
Unitrust, the Gordon P. Robertson Irrevocable Trust, the Elizabeth F. Robertson
Irrevocable Trust, the Ann R. Lablanc Irrevocable Trust, Lisa N. Robertson,
Timothy B. Robertson (individually and as custodian to and for each of Abigail
H. Robertson, Laura N. Robertson, Elizabeth C. Robertson, Willis H. Robertson
and Caroline S. Robertson), the Timothy and Lisa Robertson Children's Trust, the
Timothy B. Robertson Charitable Trust, any other charitable, revocable or
irrevocable trust created by or for the benefit of the Robertsons, their
children or their respective heirs, The Christian Broadcasting Network, Inc. or
Regent University, on the other hand. All fees, costs and expenses of a Liberty
Party which are reimbursable pursuant to this Section 11.2 shall be reimbursed
as they are incurred. Fox Kids shall not be liable for any settlement of any
suit, action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such suit, action or proceeding, Fox Kids shall indemnify and hold harmless
each Liberty Party from and against any damage, loss or liability by reason of
such settlement or judgment. As used in this Section 11.2, the term "Liberty
Party" means (i) LIFE, Liberty and TCI, (ii) the respective directors, officers,
employees and agents of the Persons specified in clause (i) of this sentence,
and (iii) the respective successors, assigns, executors, heirs and legal
representatives of the foregoing.
11.3 INDEMNIFICATION BY LIBERTY AND LIFE. Subject to the other terms
and conditions of this Agreement, Liberty and LIFE shall, jointly and severally,
indemnify Fox Kids against and hold Fox Kids harmless from all demands, claims,
losses, costs, fines, liabilities, damages (excluding consequential damages) and
expenses, including reasonable fees and expenses incurred in the investigation
and defense of claims and actions (collectively, "Losses"), arising out of the
breach of any representation, warranty, covenant or agreement of Liberty or LIFE
contained herein.
11.4 INDEMNIFICATION BY FOX KIDS. Subject to the other terms and
conditions of this Agreement, Fox Kids shall indemnify each of Liberty and LIFE
against and hold each of Liberty and LIFE harmless from all Losses arising out
of (i) the breach of any representation, warranty, covenant or agreement of Fox
Kids contained herein or (ii) the invalidity or unenforceability, or alleged
invalidity or unenforceability, of any provision of the Fox Kids Certificate of
Designations, the NPAL Certificate of Amendment, the Exchange Agreement or the
Funding Agreement.
11.5 CLAIMS. If any claim or assertion of liability is made or asserted
against a party entitled to be indemnified pursuant to Section 11.3 or 11.4 (an
"Indemnified Party") by any Person who is not a party to this Agreement, the
Indemnified Party shall give to the other party (an "Indemnifying Party") prompt
written notice of such claim or assertion, or of any event or proceeding
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by or in respect of a third party of which it has knowledge, concerning any
liability or damage as to which it may request indemnification hereunder. The
failure by an Indemnified Party to give notice as provided in this Section 11.5
shall not relieve the Indemnifying Party of its obligations under this Section
11.5 except to the extent that the failure results in a failure of actual notice
to the Indemnifying Party and the Indemnifying Party is damaged solely as a
result of the failure to give notice. The Indemnifying Party shall have the
right to direct, through counsel chosen by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party, the defense or settlement of any such
claim or proceeding at its own expense. If the Indemnifying Party elects to
assume the defense of any such claim or proceeding, the Indemnified Party may
participate in such defense, but in such case the expenses of the Indemnified
Party shall be paid by the Indemnified Party; provided, however, that if the
Indemnified Party asserts that there exists a conflict of interest that would
make it inappropriate for the same counsel to represent the Indemnifying Party
and the Indemnified Party and the counsel for the Indemnifying Party concurs
with such assertion, then the Indemnifying Party shall reimburse the Indemnified
Party for the reasonable fees and expenses of separate counsel, to the extent
such fees and expenses are incurred solely in connection with the matters with
respect to which the counsel for the Indemnifying Party agrees there is a
conflict of interest. The Indemnified Party shall provide the Indemnifying Party
with access to its records and personnel relating to any such claim, assertion,
event or proceeding during normal business hours and shall otherwise cooperate
with the Indemnifying Party in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith, as such expenses are incurred.
If the Indemnifying Party elects to direct the defense of any such claim or
proceeding, the Indemnified Party shall not pay, or permit to be paid, any part
of any claim or demand arising from such asserted liability, unless the
Indemnifying Party, subject to the penultimate sentence of this Section 11.5,
withdraws from the defense of such asserted liability, or unless a final
judgment from which no appeal may be taken by or on behalf of the Indemnifying
Party is entered against the Indemnified Party for such liability. If the
Indemnifying Party fails to defend, or if, after commencing or undertaking any
such defense, the Indemnifying Party fails to prosecute or withdraws from such
defense, the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at the Indemnifying Party's expense. If the Indemnified
Party assumes the defense of any such claim or proceeding pursuant to this
Section 11.5 and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forego appeal with respect thereto, then the Indemnified
Party shall give the Indemnifying Party prompt written notice thereof and the
Indemnifying Party shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding. The Indemnifying
Party shall not settle any claim or assertion unless the Indemnified Party
consents in writing to such settlement, which consent shall not be unreasonably
withheld.
12. MISCELLANEOUS PROVISIONS.
------------------------
12.1 NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given or made if (i) delivered in
person, on the date actually delivered, (ii) by United States mail, certified or
registered, with return receipt requested, on the date which is two business
days after the date of mailing, or (iii) if sent by telex or facsimile
transmission,
22
<PAGE>
with a copy mailed on the same day in the manner provided in (ii) above, on the
date transmitted provided receipt is confirmed by telephone:
If to Fox Kids:
c/o News America Publishing Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind, Esq.
Telecopy No.: 212-768-2027
With copies to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Joel I. Papernik, Esq.
Telecopy No.: 212-697-6686
Saban Entertainment
10960 Wilshire Boulevard
Los Angeles, California 90024
Attention: Haim Saban/Mel Woods
Telecopy No.: 310-235-5108
Troop Meisinger Steuben & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attention: Dick Troop, Esq.
Telecopy No.: 310-443-8503
If to Liberty or LIFE:
Liberty Media Corporation
8101 East Prentice Avenue
Englewood, Colorado 80111
Attention: President
Telecopy No.: 303-721-5415
23
<PAGE>
With a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Robert W. Murray Jr., Esq.
Telecopy No.: 212-705-5125
or at such other address as may have been furnished by a party in writing to the
other parties.
12.2 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement shall nonetheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon any such determination that a term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible to the fullest extent permitted by applicable
law in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
12.3 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
12.4 NO ADVERSE CONSTRUCTION. The rule that a contract is to be
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or any provision hereof.
12.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.6 FEES AND EXPENSES. All costs and expenses, including without
limitation fees and disbursements of counsel, incurred by the parties hereto
shall be borne solely and entirely by the party which has incurred such costs
and expenses; provided, however, that if pursuant to Section 6.3 the terms of a
Substitute Security are negotiated, and such terms require that filings be made
under the H-S-R Act, then Fox Kids shall pay all filing fees required to be paid
under the H-S-R Act in connection with such filings.
12.7 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns, but neither this Agreement nor any of the rights, interests or other
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
24
<PAGE>
12.8 AMENDMENT. This Agreement may be amended by the parties hereto at
any time prior to the Closing. This Agreement may be not be amended except by an
instrument in writing signed by each of the parties hereto.
12.9 WAIVER. Any party hereto may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance by the other parties with any of the agreements or conditions
contained herein; provided, however, that neither Liberty nor LIFE may waive the
condition to their respective obligations to effect the Contribution set forth
in Section 9.4. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party or parties to be bound thereby.
12.10 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto, the Fox Kids Disclosure Letter and other documents
referred to herein and which form a part hereof) constitutes the entire
agreement among the parties hereto and supersedes all prior agreements and
understandings, oral and written, among the parties with respect to the subject
matter hereof.
25
<PAGE>
The parties hereto have executed and delivered this Agreement as of the
date first above written.
LIBERTY MEDIA CORPORATION
By: /s/ David Koff
----------------------------
Name:
Title:
LIBERTY IFE, INC.
By: /s/ David Koff
---------------------------
Name:
Title:
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
----------------------------
Name:
Title: President
26
<PAGE>
Exhibit 5
AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of June 11,
---------
1997, is by and among FOX KIDS WORLDWIDE, INC., a Delaware corporation ("FKWW"),
----
FOX KIDS MERGER CORPORATION, a Delaware corporation and wholly-owned subsidiary
of FKWW ("FKW Sub"), and INTERNATIONAL FAMILY ENTERTAINMENT, INC., a Delaware
-------
corporation (the "Company").
-------
RECITALS
--------
WHEREAS, it is the intention of the parties that FKW Sub merge with and
into the Company, upon the terms and subject to the conditions set forth herein
(the "Merger"), with the Company surviving as a wholly owned subsidiary of FKWW;
------
WHEREAS,
(a) M.G. "Pat" Robertson, individually and as trustee of each of the
Robertson Charitable Remainder Unitrust, u/t/a dated January 22, 1990
(the "PR Charitable Trust"), the Gordon P. Robertson Irrevocable
-------------------
Trust, u/t/a dated December 18, 1996, the Elizabeth F. Robinson
Irrevocable Trust, u/t/a dated December 18, 1996, and the Ann R.
Lablanc Irrevocable Trust, u/t/a dated December 18, 1996 (the Gordon
P. Robertson Irrevocable Trust, the Elizabeth F. Robinson Irrevocable
Trust and the Ann R. Lablanc Irrevocable Trust, together, the
"Irrevocable Trusts"), Lisa N. Robertson and Timothy B. Robertson
------------------
("Tim Robertson") as joint tenants, and Tim Robertson, individually,
-------------
as trustee of each of the Timothy and Lisa Robertson Children's Trust,
u/t/a dated September 18, 1995 (the "TR Family Trust") and the Timothy
---------------
B. Robertson Charitable Trust, u/t/a dated December 30, 1996 (the "TR
--
Charitable Trust"), and as custodian to and for each of Abigail H.
----------------
Robertson, Laura N. Robertson, Elizabeth C. Robertson, Willis H.
Robertson and Caroline S. Robertson under the Virginia Uniform
Transfers to Minors Act (Pat Robertson, the PR Charitable Trust, the
Irrevocable Trusts, Lisa N. Robertson, Tim Robertson, the TR Family
Trust and the TR Charitable Trust being sometimes collectively
referred to herein as the "Robertson Sellers"), have agreed to sell to
-----------------
FKWW, all of the outstanding shares of Class A Common Stock, par value
$0.01 per share, of the Company (the "Class A Stock"), in the form of
-------------
Class B Common Stock, par value $0.01 per share, of the Company (the
"Class B Stock") issuable upon conversion thereof, and the shares of
-------------
Class B Stock owned by them or issuable to them upon exercise of
outstanding stock options, pursuant to that certain Stock Purchase
<PAGE>
Agreement, dated of even date herewith, by and among FKWW, on the one
hand, and each of the Robertson Sellers, on the other hand (as amended
from time to time in accordance with its terms, the "Robertson
---------
Purchase Agreement");
------------------
(b) The Christian Broadcasting Network, Inc., a Virginia corporation
("CBN"), has agreed to sell to FKWW, all of the Class B Stock owned by
---
it, pursuant to the terms of that certain Stock Purchase Agreement,
dated of even date herewith, by and between FKWW and CBN (as amended
from time to time in accordance with its terms, the "CBN Purchase
------------
Agreement");
---------
(c) Regent University, a Virginia corporation ("Regent"), has agreed to
------
sell to FKWW all of the Class B Stock owned by it, pursuant to the
terms of that certain Stock Purchase Agreement, dated of even date
herewith, by and between FKWW and Regent (as amended from time to time
in accordance with its terms, the "Regent Purchase Agreement," and,
collectively with the Robertson Purchase Agreement and the CBN
Purchase Agreement, the "Stock Purchase Agreements");
-------------------------
(d) Liberty IFE, Inc., a Colorado corporation ("LIFE"), has agreed to
----
contribute to FKWW all of the shares of Class C Common Stock, par
value $0.01 per share, of the Company (the "Class C Stock," and
-------------
together with the Class A Stock and the Class B Stock, the "Company
-------
Stock"), and $23 million principal amount of 6% Convertible Secured
-----
Notes due 2004 of the Company (the "Convertible Notes"), in exchange
-----------------
for shares of Series A Preferred Stock, par value $0.01 per share, of
FKWW pursuant to that certain Contribution and Exchange Agreement,
dated of even date herewith, by and among LIFE, Liberty Media
Corporation, a Delaware corporation, and FKWW (as amended from time to
time in accordance with its terms, the "Contribution Agreement," and
----------------------
together with the Stock Purchase Agreements, the "Other Transaction
-----------------
Agreements"); and
----------
WHEREAS, the respective Boards of Directors of FKWW, FKW Sub and the
Company have each unanimously approved the Merger, in accordance with the
General Corporation Law of the State of Delaware (the "DGCL"), and the Board of
----
Directors of the Company has recommended the Merger to the Company's
stockholders;
WHEREAS, this Agreement and the Merger shall be approved by the
stockholders of the Company for purposes of the DGCL at such time as the Company
is in receipt of written consents approving this Agreement and the Merger
executed by the holders of that number of shares of
2
<PAGE>
Class A Stock and Class B Stock (voting as a single class) representing the
right to cast a majority of the votes entitled to be cast at a meeting to
consider the Agreement and the Merger;
WHEREAS, immediately following execution of this Agreement by the Company
and concurrently with the execution of this Agreement by FKWW and FKW Sub, the
Robertson Sellers, CBN and Regent (which holders hold of record a number of
shares of Class A Stock and Class B Stock representing a majority of the votes
entitled to be cast at a meeting to consider the Agreement and the Merger) are
delivering their written consent (the "Consent") approving this Agreement and
---------
the Merger (a copy of which is being provided to FKWW and FKW Sub), which
consent constitutes the only action necessary by stockholders of the Company
required in order to authorize this Agreement and the Merger under the Company's
Amended and Restated Certificate of Incorporation and the DGCL; and
WHEREAS, The News Corporation Limited ("Guarantor") has guaranteed the
---------
obligations of FKWW and FKW Sub under each of this Agreement and the Stock
Purchase Agreements by separate Guaranty Agreements (the Guaranty Agreement
delivered in connection with this Agreement, being referred to herein as the
"Guaranty") delivered to the Company, the Robertson Sellers, CBN and Regent.
- ---------
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties and covenants herein contained, and for other good
and valuable consideration the receipt and adequacy of which is hereby
acknowledged, FKWW, FKW Sub and the Company hereby agree as set forth below. An
index of defined terms used throughout this Agreement appears at Section 9.16
hereof.
ARTICLE
-------
I
THE MERGER
----------
1.1 The Merger. Upon the terms and subject to the conditions of this
----------
Agreement, at the Effective Time (as defined in Section 1.3 hereof), in
accordance with this Agreement and the DGCL, FKW Sub shall be merged with and
into the Company, the separate existence of FKW Sub shall cease, and the Company
shall continue as the surviving corporation (the "Surviving Corporation"). The
---------------------
Company and FKW Sub are sometimes referred to herein as the "Constituent
-----------
Corporations."
- ------------
1.2 Effect of the Merger. The Merger shall have the effects set
--------------------
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all of the properties, rights, privileges,
powers and franchises of the Company and FKW Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and FKW Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
3
<PAGE>
1.3 Consummation of the Merger. On the later of (i) two business
--------------------------
days after the satisfaction or waiver of the conditions set forth in Article VII
hereof or (ii) the 20th calendar day after the Information Statement is first
sent or given to the Company's stockholders, the parties hereto shall cause the
Merger to be consummated by filing with the Secretary of State of the State of
Delaware a certificate of merger in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL and take all such further
actions as may be required by law to make the Merger effective (the "Merger
------
Filing"). The Merger shall become effective at the time of day on the date that
- ------
the certificate of merger is filed with the Secretary of State of the State of
Delaware or such later time as may be mutually agreed to by the parties hereto
and specified in the Merger Filing (the "Effective Time").
--------------
1.4 Certificate of Incorporation and Bylaws. The Amended and
---------------------------------------
Restated Certificate of Incorporation of the Company in effect immediately prior
to the Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation. The By-Laws of FKW Sub in effect immediately prior to the Effective
Time shall be the By-Laws of the Surviving Corporation.
1.5 Directors and Officers. The directors of the Company immediately
----------------------
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their successors are duly elected and qualified.
1.6 Conversion of Securities. At the Effective Time, by virtue of
------------------------
the Merger and without any action on the part of FKW Sub, the Company, the
Surviving Corporation or the holder of any outstanding share of the Class A
Stock, Class B Stock or Class C Stock (each, a "Share" and collectively, the
-----
"Shares"):
------
(a) Each Share which is issued and outstanding immediately prior
to the Effective Time (other than Shares held by FKWW, FKW Sub or the Company or
by any Subsidiary of FKWW, FKW Sub or the Company) shall be canceled and
extinguished and be converted into and become a right to receive (i) in the case
of all such Shares other than Dissenting Shares, a cash payment equal to $35.00
per Share (subject to adjustment as provided for in Section 1.6(d) below),
without interest (the "Merger Consideration"), and (ii) in the case of
--------------------
Dissenting Shares, the consideration set forth in Section 1.7 hereof;
(b) Each Share which is issued and outstanding immediately prior
to the Effective Time and held by FKWW, FKW Sub, or the Company or by any
Subsidiary of FKWW, FKW Sub, or the Company shall be canceled and extinguished
and no consideration shall be paid therefor;
(c) Each share of capital stock of FKW Sub, par value $0.001 per
share, outstanding immediately prior to the Effective Time shall be converted
into and become one share of Class B Common Stock, par value $0.001 per share,
of the Surviving Corporation; and
4
<PAGE>
(d) The Merger Consideration shall be increased to an amount
which equals (if greater than the Merger Consideration provided for herein) the
per share amount actually paid, directly or indirectly, by FKWW or any of its
Affiliates, with respect to the purchase of, or agreement to purchase, Company
Stock, or securities convertible into Company Stock, which purchase is effected
or agreement is entered into after the date hereof and through the Effective
Time (x) from (i) any of the Robertson Sellers, (ii) LIFE, (iii) CBN, (iv)
Regent, (v) any holder or "group" (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) that owns, or has the right to dispose of, or to direct the
disposition of, 2-1/2% or more of any class of common stock of the Company, (vi)
any of the Affiliates of the entities referred to in clauses (i), (ii), (iii),
(iv) or (v) above, or (y) in any transaction, or series of related or unrelated
transactions (excluding for purposes of this clause (y), any transaction
referred to in clauses (x)(i), (ii), (iii), (iv) and (vi)), after the date
hereof and through the Effective Time, involving, in the aggregate, 5% or more
of the outstanding shares of any class of common stock of the Company. For these
purposes, it is acknowledged and agreed that (x) the $3.5 million to be paid to
LIFE under the Contribution Agreement with respect to forfeited interest income
on the Convertible Notes, and (y) amounts to be paid with respect to any "tax
gross up" with respect to the Exchange Rights under the Contribution Agreement,
shall not constitute an amount paid, directly or indirectly, with respect to the
purchase of Company Stock. Further, the Merger Consideration shall not be
adjusted as a result of the provisions of the preceding sentence with respect to
any purchase effected under any of the Contribution Agreement, the Robertson
Purchase Agreement, CBN Purchase Agreement or the Regent Purchase Agreement
unless the applicable agreement has been amended after the date hereof so as to
increase the consideration to be paid by FKWW or any of its Affiliates, directly
or indirectly, with respect to the Company Stock or securities convertible into
Company Stock. FKWW shall promptly provide notice to the Company of any
agreement or amendment to an existing agreement entered into by FKWW or any of
its Affiliates with a Robertson Seller, CBN or Regent, or any amendment to an
Other Transaction Agreement to which LIFE or any of its Affiliates is a party,
from and after the date hereof and through the Effective Time.
1.7 Dissenting Shares.
-----------------
(a) Notwithstanding anything in this Agreement to the contrary,
Shares which are issued and outstanding immediately prior to the Effective Time
and which are held by stockholders who have not voted such Shares in favor of
the Merger or consented thereto in writing, who shall have delivered a written
demand for appraisal of such Shares in the manner provided in the DGCL and who,
as of the Effective Time, shall not have effectively withdrawn or lost such
right to appraisal ("Dissenting Shares") shall not be converted into or
-----------------
represent a right to receive the Merger Consideration pursuant to Section 1.6
hereof, but the holders thereof shall be entitled only to such rights as are
granted by Section 262 of the DGCL. Each holder of Dissenting Shares who becomes
entitled to payment for such Shares pursuant to Section 262 of the DGCL shall
receive payment therefor from the Surviving Corporation in accordance with the
DGCL; provided, however, that (i) if any such holder of Dissenting Shares shall
-------- -------
have failed to establish his entitlement to appraisal rights as provided in
Section 262 of the DGCL, or (ii) if any such holder of Dissenting Shares shall
have effectively withdrawn his demand for appraisal of such Shares or lost his
right to appraisal and payment of his Shares under Section 262 of the
5
<PAGE>
DGCL, or (iii) if neither any holder of Dissenting Shares nor the Surviving
Corporation shall have filed a petition demanding a determination of the value
of all Dissenting Shares within the time provided in Section 262 of the DGCL,
such holder or holders (as the case may be) shall forfeit the right to appraisal
of such Shares, and each such Share shall thereupon be deemed to have been
converted, as of the Effective Time, into and represent the right to receive
payment from the Surviving Corporation of the Merger Consideration, without
interest thereon, as provided in Section 1.6 hereof.
(b) Prior to the Effective Time, the Company shall give FKW Sub
(i) prompt notice of any written demands for appraisal, withdrawals of demands
for appraisal and any petitions served pursuant to Section 262 of the DGCL
received by the Company, and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Section 262 of the DGCL.
The Company shall not, except with the prior written consent of FKW Sub,
voluntarily make any payment with respect to any demands for appraisal or offers
to settle or settle any such demands.
1.8 Stock Options and Other Plans.
-----------------------------
(a) Prior to the Effective Time, the Board of Directors of the
Company (or, if appropriate, any committee thereof) shall adopt appropriate
resolutions and use its reasonable good faith efforts to take all other actions
necessary to provide for the cancellation, effective at the Effective Time,
subject to the payment provided for in the next sentence being made, of all the
outstanding stock options, warrants or rights to purchase Shares heretofore
granted (collectively, the "Options") under any outstanding stock option plan or
-------
pursuant to any outstanding warrant agreement or any other outstanding plan,
program or arrangement of the Company providing for the issuance or grant of any
other interest in respect of the capital stock of the Company or any Subsidiary
of the Company (collectively, the "Stock Plans") such that, immediately prior to
-----------
the Effective Time, (i) each Option, whether or not then vested or exercisable,
shall no longer be exercisable for the purchase of Shares, but shall entitle
each holder thereof, in cancellation and settlement therefor, to payments in
cash (subject to any applicable withholding taxes, the "Cash Payment"), at the
------------
Effective Time, equal to the product of (x) the total number of Shares subject
to such Option, whether or not then vested or exercisable, and (y) the excess of
the Merger Consideration over the exercise price per Share subject to such
Option, each such Cash Payment to be paid to each holder of an outstanding
Option at the Effective Time; provided, however, that with respect to any Person
-------- -------
subject to Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (the "Exchange Act"), any such amount shall
------------
be paid, without interest, as soon as practicable after the first date payment
can be made without liability to such Person under Section 16(b) of the Exchange
Act, and (ii) each Share previously issued in the form of grants of restricted
stock or grants of contingent shares shall fully vest in accordance with their
respective terms. Any then outstanding stock appreciation rights or limited
stock appreciation rights shall be canceled immediately prior to the Effective
Time without any payment therefor. The Company will use its reasonable good
faith efforts to ensure that, at the Effective Time, neither the Company nor any
of its Subsidiaries is or will be bound by any Options or Stock Plans which
would entitle any Person to acquire or hold any capital stock of the Surviving
Corporation or any of its Subsidiaries or to receive any
6
<PAGE>
payment in respect thereof other than as set forth in this Agreement or the MTM
Stock Plan, providing for the issuance to employees of MTM Entertainment, Inc.,
a Delaware corporation ("MTM"), a wholly owned Subsidiary of the Company, of
---
shares of common stock of MTM, all as, and other than as, disclosed in the
Company Disclosure Letter, including using its reasonable good faith efforts to
obtain all necessary consents and releases to ensure that after the Effective
Time, the only rights of the holders of Options will be to receive the Cash
Payment in cancellation and settlement thereof. Notwithstanding any other
provision of this Section 1.8 to the contrary, the Cash Payment may be withheld
with respect to any Option until necessary consents and releases are obtained.
(b) All provisions in any Stock Plan providing for the future
issuance or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall terminate or be amended as of the
Effective Time to provide no continuing rights to acquire or be issued or
granted any capital stock or any interest in any capital stock (including, but
not limited to Options) of the Company or the Surviving Corporation (other than
in respect of capital stock or interests in capital stock (including, but not
limited to, Options) granted prior to the Effective Time, which are governed by
the provisions of Section 1.8(a) above).
1.9 Exchange of Certificates.
------------------------
(a) From and after the Effective Time, a bank or trust company
to be designated by FKW Sub and reasonably acceptable to the Company (the
"Exchange Agent") shall act as exchange agent in effecting the exchange of the
--------------
Merger Consideration for certificates representing Shares entitled to payment
pursuant to Section 1.6 (the "Certificates"). At or prior to the Effective Time,
------------
FKW Sub shall deposit with the Exchange Agent the amount necessary to enable the
Exchange Agent to exchange the Merger Consideration for Certificates received by
the Exchange Agent.
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of Certificates a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) and instructions for use in surrendering Certificates and
receiving the Merger Consideration therefor. Upon the surrender of each
Certificate, together with such letter of transmittal duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor an amount equal to
the Merger Consideration multiplied by the number of Shares represented by such
Certificate, and such Certificate shall be canceled. Until so surrendered and
exchanged, each such Certificate shall represent solely the right to receive an
amount equal to the Merger Consideration multiplied by the number of Shares
represented by such Certificate. No interest shall be paid or accrue on the
Merger Consideration payable upon the surrender of the Certificates. If any
Merger Consideration is to be paid to a Person other than the Person in whose
name the Certificate surrendered in exchange therefor is registered, such
Certificate shall be accompanied by all documents required to evidence and
effect such transfer, and it shall be a condition to such exchange that the
Person requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of the payment of such Merger Consideration to a
Person other
7
<PAGE>
than the registered holder of the Certificate surrendered, or such
Person shall establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of Shares for
any Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws.
(c) Promptly following the date which is 180 days after the
Effective Time, the Exchange Agent's duties shall terminate, and any funds
deposited with the Exchange Agent that remain unclaimed by holders of
Certificates shall be paid to the Surviving Corporation upon demand. Thereafter,
each holder of a Certificate may surrender such Certificate to the Surviving
Corporation along with the applicable letter of transmittal and (subject to
applicable abandoned property, escheat and similar laws) receive in exchange
therefor an amount equal to the Merger Consideration multiplied by the number of
Shares represented by such Certificate, without any interest thereon, but shall
have no greater rights against the Surviving Corporation than may be accorded to
general creditors of the Surviving Corporation.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Shares. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Exchange Agent, they shall be canceled and exchanged for the applicable Merger
Consideration, as provided in this Article I, subject to applicable law in the
case of Dissenting Shares.
1.10 Taking of Necessary Action; Further Action. If, at any time
------------------------------------------
after the Effective Time, any reasonable and lawful further action is necessary
or desirable to carry out the purposes of this Agreement and to vest the
Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of either of the Constituent
Corporations, the officers and directors of such corporations are fully
authorized in the name of their corporation or otherwise to take, and shall
take, all such lawful and necessary action.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES OF FKWW
--------------------------------------
As an inducement to the Company to enter into this Agreement, FKWW
hereby makes the following representations and warranties:
2.1 Organization, Etc. of FKWW. FKWW is a corporation duly ,
--------------------------
organized validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own and operate
its properties and assets and to carry on its business as now conducted. FKWW is
duly qualified and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the businesses conducted by it
makes such qualification necessary and where the failure to be so qualified
would be reasonably expected to have a material adverse effect on the business,
results of operations or financial condition of FKWW and its Subsidiaries taken
as a whole. FKWW has obtained from appropriate
8
<PAGE>
governmental regulatory authorities, domestic or foreign (each a "Governmental
------------
Entity") all approvals, permits and licenses necessary for the conduct of its
- ------
business and operations as currently conducted, which approvals, permits and
licenses are valid and in full force and effect, except where the failure to
have obtained such approvals, permits or licenses or the failure of such
approvals, permits or licenses to be valid and in full force and effect would
not be reasonably expected to have a material adverse effect on the business,
results of operations or financial condition of FKWW and its Subsidiaries taken
as a whole. Other than FKW Sub, FKWW has no Subsidiaries. As used in this
Agreement, "Subsidiary" of a specified Person means (i) any corporation of which
----------
equity securities possessing a majority of the ordinary voting power in electing
the board of directors are, at the time as of which such determination is being
made, owned or controlled by such specified Person either directly or indirectly
or in combination with one or more Subsidiaries of such specified Person, or
(ii) any Person (other than a corporation) in which such specified Person either
directly or indirectly through or in combination with one or more Subsidiaries,
at the time as of which such determination is being made, (x) is a general
partner, or (y) owns or controls more than a 50% ownership interest and has the
right to elect a majority of the members of the governing authority of such
specified Person.
2.2 Organization, Etc. of the Guarantor. The Guarantor is a
-----------------------------------
corporation organized and existing under the laws of South Australia, Australia,
with adequate corporate power and authority to own its properties and carry on
its business as presently conducted. The Guarantor has the corporate power and
authority to enter into, execute and deliver the Guaranty and to guarantee the
obligations of FKWW hereunder pursuant to such Guaranty.
2.3 Authorization. This Agreement and the consummation of the
-------------
transactions contemplated hereby have been unanimously approved by the Board of
Directors of FKWW and have been duly authorized by all other necessary corporate
action on the part of FKWW. This Agreement has been duly executed and delivered
by a duly authorized officer of FKWW and (assuming the same to be valid and
binding obligations of the other parties hereto) constitutes the valid and
binding agreement of FKWW, enforceable against FKWW in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application which
may affect the enforcement of creditors' rights generally and by general
equitable principles. FKWW has delivered to the Company true and correct copies
of resolutions adopted by the Board of Directors of FKWW approving this
Agreement.
2.4 Execution, Delivery and Performance by the Guarantor. The
----------------------------------------------------
execution, delivery and performance of the Guaranty and the consummation of the
transactions contemplated thereby have been duly authorized by the Board of
Directors of the Guarantor, and the Guarantor has taken all other actions
required by law and its organizational documents in order to consummate the
transactions contemplated by the Guaranty. The Guaranty constitutes the valid
and binding obligations of the Guarantor and is enforceable in accordance with
its terms, except as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally.
9
<PAGE>
2.5 No Consents. The execution and delivery of this Agreement by
-----------
FKWW or by the Guarantor of the Guaranty, do not, and the performance of FKWW's
obligations under this Agreement and the Guarantor of its obligations under the
Guaranty, and the consummation of the transactions contemplated hereby or
thereby by FKWW and the Guarantor, respectively, will not require any consent,
approval, authorization or permit of, or filing with or notification to any
Governmental Entity, except (i) for (A) applicable requirements of the Exchange
Act, the Securities Act of 1933, as amended and the rules and regulations
thereunder (the "Securities Act"), and state securities or "blue sky" laws or
--------------
state anti-takeover laws ("Blue Sky Laws"), (B) the pre-merger notification
-------------
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended and the rules and regulations thereunder (the "HSR Act"), and (C) the
-------
Merger Filing, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, (x) would
not, individually or in the aggregate, reasonably be expected to prevent
consummation of the Merger, or otherwise prevent FKWW or the Guarantor from
performing their respective obligations under this Agreement or the Guaranty in
any material respect, and (y) would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
results of operations or financial condition of FKWW and its Subsidiaries taken
as a whole.
2.6 Brokers and Finders. FKWW has not employed any investment
-------------------
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission payable
after the date hereof in connection with this Agreement or the Merger.
2.7 Compliance with Other Instruments, Etc. As of the date hereof,
---------------------------------------
FKWW is not in violation of any term of (a) its charter, by-laws or other
organizational documents, (b) any material agreement or instrument including any
such related to Indebtedness, (c) any applicable law, ordinance, rule or
regulation of any Governmental Entity, or (d) any applicable order, judgement or
decree of any court, arbitrator or Governmental Entity, the consequences of
which violation, whether individually or in the aggregate, would be reasonably
expected to have a material adverse effect on (i) the business, results of
operations or financial condition of FKWW or (ii) the ability of FKWW to perform
its obligations under this Agreement. The execution, delivery and performance
of this Agreement by FKWW will not result in any violation of or conflict with,
constitute a default under, or require any consent under any term of the
charter, bylaws or other organizational document of FKWW or any such agreement,
instrument, law, ordinance, rule, regulation, order, judgement or decree or
result in the creation of (or impose any obligation on FKWW to create) any Lien
upon any of the properties or assets of FKWW pursuant to any such term, except
where such violation, conflict or default, or the failure to obtain such
consent, individually or in the aggregate, would not be reasonably expected to
have a material adverse effect on (i) the business, results of operations or
financial condition of FKWW and its Subsidiaries taken as a whole or (ii) the
ability of FKWW to perform its obligations under this Agreement. For purposes
of this Agreement, "Lien" means any mortgage. pledge, lien, security interest or
----
other encumbrance of any kind or nature.
2.8 Litigation. As of the date hereof, there are no actions, suits,
----------
investigations or proceedings (adjudicatory or rulemaking) pending or, to the
knowledge of FKWW, threatened
10
<PAGE>
against FKWW or any of its respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Entity, except actions,
suits, investigations or proceedings which, in the aggregate, would not be
reasonably expected to have a material adverse effect on the ability of FKWW to
perform its obligations under this Agreement.
2.9 Information True and Correct. None of the information supplied
----------------------------
or to be supplied by FKWW for inclusion in the Information Statement will, at
the date the definitive Information Statement is first sent or given to the
stockholders of the Company, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. No representation is made by FKWW with respect to
any information supplied by the Company or any of its Affiliates for inclusion
in the Information Statement.
2.10 Transaction Agreements. This Agreement, the Other Transaction
----------------------
Agreements and the other agreements listed in the recitals above, are the only
agreements existing as of the date hereof between FKWW, on the one hand, and the
respective counterparties to such agreements and any Affiliates of such parties,
on the other hand, with respect to the acquisition of Class A Stock, Class B
Stock, Class C Stock or Convertible Notes.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF FKW SUB
-----------------------------------------
As an inducement to the Company to enter into this Agreement, FKW Sub
hereby makes the following representations and warranties:
3.1 Organization, Etc. FKW Sub is a corporation duly organized,
-----------------
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own and operate its
properties and assets and to carry on its business as now conducted. FKW Sub is
duly qualified and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the businesses conducted by it
makes such qualification necessary and where the failure to be so qualified
would be reasonably expected to have a material adverse effect on the business,
results of operations or financial condition of FKW Sub and its Subsidiaries
taken as a whole. FKW Sub has obtained from the appropriate Government Entities
all approvals, permits and licenses necessary for the conduct of its business
and operations as currently conducted, which approvals, permits and licenses are
valid and in full force and effect, except where the failure to have obtained
such approvals, permits or licenses or the failure of such approvals, permits or
licenses to be valid and in full force and effect would not be reasonably
expected to have a material adverse effect on the business, results of
operations or financial condition of FKW Sub and its Subsidiaries taken as a
whole. At the date of this Agreement, FKW Sub has no Subsidiaries.
3.2 Authorization. This Agreement and the consummation of the
-------------
transactions contemplated hereby have been unanimously approved by the Board of
Directors of FKW Sub and
11
<PAGE>
have been duly authorized by all other necessary corporate action on the part of
FKW Sub. This Agreement has been duly executed and delivered by a duly
authorized officer of FKW Sub and (assuming the same to be valid and binding
obligations of the other parties hereto) constitutes the valid and binding
agreement of FKW Sub, enforceable against FKW Sub in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application which may affect the
enforcement of creditors' rights generally and by general equitable principles.
3.3 No Consents. The execution and delivery of this Agreement by
-----------
FKW Sub do not, and the performance of its obligations under this Agreement and
the consummation of the transactions contemplated hereby by FKW Sub will not,
require any consent, approval, authorization or permit of, or filing with or
notification to any Governmental Entity, except (i) for (A) applicable
requirements of the Exchange Act, the Securities Act, and the Blue Sky Laws, (B)
the pre-merger notification requirements of the HSR Act, and (C) the Merger
Filing, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, (x) would
not, individually or in the aggregate, be reasonably expected to prevent
consummation of the Merger, or otherwise prevent FKW Sub from performing its
obligations under this Agreement in any material respect, and (y) would not,
individually or in the aggregate, be reasonably expected to have a material
adverse effect on the business, results of operations or financial condition of
FKWW and its Subsidiaries taken as a whole.
3.4 Brokers and Finders. FKW Sub has not employed any investment
-------------------
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission payable
after the date hereof in connection with the Merger.
3.5 Compliance with Other Instruments, Etc. As of the date hereof,
---------------------------------------
FKW Sub is not in violation of any term of (a) its charter, by-laws or other
organizational documents, (b) any material agreement or instrument including any
such related to Indebtedness, (c) any applicable law, ordinance, rule or
regulation of any Governmental Entity, or (d) any applicable order, judgement or
decree of any court, arbitrator or Governmental Entity, the consequences of
which violation, whether individually or in the aggregate, would be reasonably
expected to have a material adverse effect on (i) the business, results of
operations or financial condition of FKWW and its Subsidiaries taken as a whole,
or (ii) the ability of FKW Sub to perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement by FKW Sub will not
result in any violation of or conflict with, constitute a default under, or
require any consent under any term of the charter, bylaws or other
organizational document of FKW Sub or any such agreement, instrument, law,
ordinance, rule, regulation, order, judgement or decree or result in the
creation of (or impose any obligation on FKW Sub to create) any Lien upon any of
the properties or assets of FKW Sub pursuant to any such term, except where such
violation, conflict or default, or the failure to obtain such consent,
individually or in the aggregate, would not be reasonably expected to have a
material adverse effect on (i) the business, results of operations or financial
condition of FKWW and its Subsidiaries taken as a whole, or (ii) the ability of
FKW Sub to perform its obligations under this Agreement.
12
<PAGE>
3.6 Litigation. As of the date hereof, there are no actions, suits,
----------
investigations or proceedings (adjudicatory or rulemaking) pending or, to the
knowledge of FKW Sub, threatened against FKW Sub or any of its respective
properties in any court or before any arbitrator of any kind or before or by any
Governmental Entity, except actions, suits, investigations or proceedings which,
in the aggregate, would not be reasonably expected to have a material adverse
effect on the ability of FKW Sub to perform its obligations under this
Agreement.
3.7 Information True and Correct. None of the information supplied
----------------------------
or to be supplied by FKW Sub for inclusion in the Information Statement will, at
the date the definitive Information Statement is first sent or given to the
stockholders of the Company, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. No representation is made by FKW Sub with respect
to any information supplied by the Company or any of its Affiliates for
inclusion in the Information Statement.
3.8 Fraudulent Transfer Laws. Assuming the Company is not Insolvent
------------------------
immediately prior to the Effective Time, and further assuming the
representations and warranties of the Company contained in this Agreement are
true and accurate in all material respects immediately prior to the Effective
Time, the Surviving Corporation will not be Insolvent immediately after the
Effective Time (taking into account changes in assets and liabilities of the
Surviving Corporation as a result of the Merger). For purposes hereof, an
entity will be deemed to be Insolvent if (i) such entity's financial condition
is such that either the sum of its debts is greater than the fair value of its
assets or the fair saleable value of its assets is less than the amount required
to pay its probable liability on existing debts as they mature, (ii) such entity
has unreasonably small capital with which to engage in its business or (iii)
such entity has incurred liabilities beyond its ability to pay as they become
due.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
As an inducement to FKWW and FKW Sub to enter into this Agreement, the
Company hereby makes the following representations and warranties. Whether or
not specifically referred to therein, such representations and warranties
contain exceptions set forth in a written disclosure letter (the "Company
-------
Disclosure Letter") delivered to FKWW and FKW Sub concurrently with the
- -----------------
execution hereof, which is numbered to correspond to the various sections of
this Agreement and which also sets forth certain other information called for by
this Agreement.
4.1 Organization, Etc., of the Company. The Company is a
----------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as now
conducted. The Company is duly qualified and in good standing in
13
<PAGE>
each jurisdiction in which the property owned, leased or operated by it or the
nature of the businesses conducted by it makes such qualification necessary and
where the failure to be so qualified would be reasonably expected to have a
material adverse effect on the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole. As of the date
hereof, the Company has obtained from the appropriate Government Entities all
approvals, permits and licenses necessary for the conduct of its business and
operations as currently conducted, which approvals, permits and licenses are, as
of the date hereof, valid and in full force and effect, except where the failure
to have obtained such approvals, permits or licenses or the failure of such
approvals, permits or licenses to be valid and in full force and effect would
not be reasonably expected to have a material adverse effect on the business,
results of operations or financial condition of the Company and its Subsidiaries
taken as a whole.
4.2 Operations of Subsidiaries. Each Subsidiary of the Company (a)
--------------------------
is a corporation or other legal entity duly organized, validly existing and (if
applicable) in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate or other organizational power and
authority to own its properties and assets and conduct its business and
operations as currently conducted, except where the failure to be duly
organized, validly existing and in good standing would not be reasonably
expected to have a material adverse effect on the business, results of
operations or financial condition of the Company and its Subsidiaries taken as a
whole, (b) is duly qualified and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or in good standing would not reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole, and (c) has, as
of the date hereof, obtained from the appropriate Government Entities all
approvals, permits and licenses necessary for the conduct of its business and
operations, as currently conducted, which approvals, permits and licenses are,
as of the date hereof, valid and remain in full force and effect, except where
the failure to have obtained such approvals, permits and licenses or the failure
of such approvals, permits or licenses to be valid and in full force and effect
would not be reasonably expected to have a material adverse effect on the
business, results of operations or financial condition of the Company and its
Subsidiaries taken as a whole. The Company Disclosure Letter sets forth a true
and correct list of each Subsidiary of the Company as of the date hereof. All
of the outstanding capital stock of each such Subsidiary is owned entirely by
the Company or by a Subsidiary of the Company, as the case may be, as of the
date hereof, free and clear of all Liens and Restrictions, except for such
restrictions on transfer as are imposed by state and federal securities laws and
except for Liens and Restriction as will not reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole. For purposes of
this Agreement, "Restriction," means, when used with respect to any specified
-----------
security, any shareholders or other trust agreement, option, warrant, escrow,
proxy, buy-sell agreement, power of attorney or other contract, agreement or
arrangement which (i) grants to any Person the right to purchase or otherwise
acquire, or obligates any Person to sell or otherwise dispose of, such specified
security or any interest therein, or (ii) restricts the transfer of, or the
exercise of any rights or the enjoyment of any benefits arising by reason of,
the ownership of such specified security. All such shares of capital stock have
been duly authorized and validly issued and are fully paid and
14
<PAGE>
nonassessable. There are no agreements, understandings or undertakings governing
the rights and duties of the Company or any Subsidiary of the Company as a
stockholder of any Subsidiary (other than a Subsidiary wholly owned by the
Company or by a direct or indirect wholly owned Subsidiary of the Company) under
which the Company or any Subsidiary is or may become obligated, directly or
indirectly, to acquire or dispose of any equity interest in, make any capital
contribution or extend credit to, or act as guarantor, surety or indemnitor for
any liability of any Subsidiary (other than a Subsidiary wholly owned by the
Company or by a direct or indirect wholly owned Subsidiary of the Company).
Other than Subsidiaries of the Company, the Company has no interest in any
corporation, joint venture, limited liability company, limited liability
partnership, or other business enterprise of any nature, other than investments
in marketable securities acquired in the ordinary course of business.
4.3 Authorization. This Agreement and the consummation of the
-------------
transactions contemplated hereby have been approved by the Board of Directors of
the Company and upon execution of the Consent, this Agreement and the Merger
shall have been duly authorized by all other necessary corporate action on the
part of the Company, including any required stockholder action. This Agreement,
upon execution and delivery thereof, will be duly executed and delivered by a
duly authorized officer of the Company and (assuming the same to be valid and
binding obligations of the other parties hereto) this Agreement constitutes the
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
application which may affect the enforcement of creditors' rights generally and
by general equitable principles. The Company has delivered to FKWW and FKW Sub
true and correct copies of resolutions adopted by the Board of Directors.
4.4 Fairness Opinion; Approval by Board of Directors. On or prior
------------------------------------------------
to the date hereof, the Board of Directors of the Company (i) approved the terms
of this Agreement and the Merger, (ii) determined that the Merger is fair to and
in the best interests of the holders of the Shares (other than FKWW, FKW Sub,
the Company, and their respective Affiliates), and (iii) has recommended this
Agreement and the Merger to the Company's stockholders. The Board of Directors
of the Company has received an oral opinion, as of the date hereof, of (x) Bear,
Stearns & Co. Inc. to the effect that the consideration to be received by the
holders of the Shares (other than FKWW, FKW Sub, the Company, and their
respective Affiliates) pursuant to this Agreement is fair to such holders from a
financial point of view, and (y) Goldman Sachs & Co. to the effect that the
consideration to be received by the holders of the Shares (other than FKWW, FKW
Sub, the Company and their respective Affiliates) pursuant to this Agreement is
fair to such holders. At the date hereof, such opinions (which, when confirmed
in writing, will be provided to FKWW and FKW Sub) have not been withdrawn,
revoked or modified. It is agreed and understood that such opinions are for the
use of the Board of Directors of the Company in considering this Agreement and
the Merger and may not be relied upon by FKWW or FKW Sub. Based on such
opinions, and such other factors as it deemed relevant, the Board of Directors
of the Company has taken all of the actions set forth in clauses (i) and (ii)
above and has directed that this Agreement be submitted to the stockholders of
the Company for their approval.
15
<PAGE>
4.5 Capital Stock.
-------------
(a) The authorized capital stock of the Company consists of (i)
10,000,000 shares of Class A Stock, of which 5,000,000 shares are outstanding as
of the date hereof, (ii) 100,000,000 shares of Class B Stock, of which
32,781,795 shares are outstanding as of the date hereof, (iii) 20,000,000 shares
of Class C Stock, of which 7,088,732 shares are outstanding as of the date
hereof, and (iv) 400,000 shares of 10% Convertible Cumulative Preferred Stock,
par value $0.001 per share, of which none are issued and outstanding as of the
date hereof. All outstanding Shares are duly authorized, validly issued, fully
paid and nonassessable.
(b) As of the date hereof, there are (i) no options, warrants,
calls, subscriptions, convertible securities or other rights (including
preemptive rights), agreements, understandings, arrangements or commitments of
any character obligating the Company now or at any time in the future to issue
or sell any of its capital stock or other equity interests in the Company or any
of its Subsidiaries, (ii) there are no obligations, contingent or otherwise, of
the Company or any of its Subsidiaries, to repurchase, redeem or otherwise
acquire any shares of capital stock or other equity interests of the Company or
any of its Subsidiaries, (iii) there are no outstanding bonds, debentures, notes
or other obligations of the Company or any of its Subsidiaries, the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the holders of the Class A Stock and
the Class B Stock on any matter, (iv) there are no obligations, contingent or
otherwise, guaranteeing the value of any of the Shares or the capital stock of
any of its Subsidiaries either now or at any time in the future, and (v) there
are no voting trusts, proxies or other agreements or understandings to which the
Company is a party or is bound with respect to the voting of any capital stock
or other equity interests of the Company or any of its Subsidiaries. None of the
Shares or any other equity interest of the Company or any other securities
convertible into or exchangeable for Shares or any other equity interests of the
Company, or options to acquire Shares or securities convertible into Shares or
equity interests of the Company are held by any of the Company's Subsidiaries.
4.6 Consents. The execution and delivery of this Agreement by the
--------
Company do not, and the performance of its obligations under this Agreement and
the consummation of the Merger by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to any
Governmental Entity, except (i) for (A) applicable requirements of the Exchange
Act, the Securities Act, and the Blue Sky Laws, (B) the pre-merger notification
requirements of the HSR Act, and (C) the Merger Filing, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, (x) would not, individually or in the
aggregate, be reasonably expected to prevent the consummation of the Merger, or
otherwise prevent the Company from performing its obligations under this
Agreement in any material respect, and (y) with respect to any such requirement
in effect on the date hereof, would not, individually or in the aggregate, be
reasonably expected to have a material adverse effect on the business, results
of operations or financial condition of the Company and its Subsidiaries taken
as a whole.
16
<PAGE>
4.7 SEC Reports and Financial Statements. Since January 1, 1994 up
------------------------------------
to and including the date hereof, the Company has filed with the SEC all forms,
reports, schedules, registration statements, proxy statements and other
documents (collectively, "Company SEC Reports") required to be filed by the
-------------------
Company with the Securities and Exchange Commission (the "SEC") under the
---
Securities Act, Exchange Act, and the rules and regulations thereunder. As of
their respective dates, or in the case of registration statements, as of their
respective effective dates, all of the Company SEC Reports, including all
exhibits and schedules thereto and all documents incorporated by reference
therein, (i) complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act applicable thereto, and
(ii) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except for such statements, if any, as have been modified or
superseded by subsequent filings prior to the date hereof. The consolidated
financial statements of the Company and its Subsidiaries included in such
reports complied as of the respective dates thereof as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, were prepared in accordance
with United States generally accepted accounting principles ("GAAP") as in
----
effect on their respective dates applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited interim financial statements, as permitted by Form 10-Q of
the SEC) and fairly presented (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit adjustments) the consolidated
financial position of the Company and its Subsidiaries as at the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended. Since December 31, 1996, and up to and including the date hereof,
neither the Company nor any of its Subsidiaries has incurred any liabilities or
obligations (whether absolute, accrued, fixed, contingent, liquidated,
unliquidated or otherwise and whether due or to become due) of any nature, which
would be required by GAAP, as of the date hereof, to be set forth on a
consolidated balance sheet of the Company and its Subsidiaries or in the notes
thereto except liabilities, obligations or contingencies (a) which are
disclosed, reflected or reserved for on the unaudited balance sheets of the
Company and its Subsidiaries as of March 31, 1997 (including the notes thereto)
or in this Agreement or the Company Disclosure Letter or (b) which (i) were
incurred in the ordinary course of business after December 31, 1996, and
consistent with past practices, or (ii) are disclosed or reflected or reserved
for in the Company SEC Reports filed after December 31, 1996, or (iii) would not
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on the business, results of operations or financial condition of
the Company and its Subsidiaries taken as a whole, or (c) which were incurred as
a result of actions taken or refrained from being taken (i) in furtherance of
the transactions contemplated by this Agreement, or (ii) at the request of FKWW
and FKW Sub. Since December 31, 1996, there has been no change in any of the
significant accounting (including tax accounting) policies, practices or
procedures of the Company or any of its Subsidiaries except as required by GAAP
or applicable law.
4.8 Absence of Certain Changes or Events. Since December 31, 1996
------------------------------------
and up to and including the date hereof, except as disclosed in the Company
Disclosure Letter or the Company SEC Reports, (A) the Company has not declared
or paid any dividend or made any distribution on or with respect to its capital
stock; redeemed, purchased or otherwise acquired any
17
<PAGE>
of its capital stock; granted any options, warrants or other rights to purchase
shares of, or any other securities which may be convertible into or exchangeable
for, its capital stock; or issued any shares of its capital stock; (B) there has
been no increase in the compensation or benefits (including but not limited to
any bonus, severance or option plan, program, arrangements or understanding)
payable or to become payable to any officer or director of the Company or any of
the 25 most highly compensated (based on cash compensation paid in or with
respect to services rendered in calendar 1996) employees of the Company and its
Subsidiaries (including officers and directors of the Company, as applicable)
(collectively, including officers and directors of the Company, "Highly
------
Compensated Persons"), other than increases in the ordinary course of business
- -------------------
and consistent with past practice; (C) there has been no pledge, disposition,
encumbrance, hypothecation, sale or other transfer of any material portion of
the properties or assets of the Company and its Subsidiaries taken as a whole
(whether tangible or intangible), except in the ordinary course of business and
consistent with past practice; and (D) there has been no agreement binding upon
the Company or any of its Subsidiaries to do any of the foregoing. Since
December 31, 1996 and up to and including the date of this Agreement, other than
as disclosed in the Company Disclosure Letter or the Company SEC Reports or as
contemplated by this Agreement, the Company and each of its Subsidiaries have
conducted their respective businesses in the ordinary course and there has been
no change in the condition (financial or otherwise), business, properties,
assets or liabilities of the Company and its Subsidiaries taken as a whole,
except such failures to so conduct their businesses and such changes, which,
when considered as a whole, have not had a material adverse effect on the
business, results of operations or financial condition of the Company and its
Subsidiaries taken as a whole.
4.9 Service Mark. The Company and its Subsidiaries own or have
------------
adequate rights, including the underlying intellectual property rights, with
respect to the mark, "The Family Channel," in the United States.
------------------
4.10 DGCL Section 203. The Company is not subject to the provisions
----------------
of Section 203 of the DGCL.
4.11 Material Contracts and Commitments. None of M.G. "Pat" Robertson,
----------------------------------
Timothy B. Robertson, Anthony D. Thomopoulos, Richard L. Sirvaitis, K.J. "Gus"
Lucas, Stephen D. Lentz, or Louis A. Isakoff (collectively, the "Responsible
-----------
Officers") has, as of the date hereof, Actual Knowledge that the Company or any
- --------
other party to any of the Company's contracts or agreements is in breach of any
of their respective obligations under such contracts or agreements other than
breaches which, individually or in the aggregate, would not reasonably be
expected to have a material adverse affect on the business, results of
operations or financial condition of the Company and its Subsidiaries taken as a
whole.
4.12 Agreements with Related Parties. Other than as set forth in the
-------------------------------
Company SEC Reports or the Company Disclosure Letter, as of the date hereof,
none of Pat Robertson, Tim Robertson, the officers and directors of the Company,
LIFE, CBN, Regent or their respective Affiliates (except Affiliates controlled
by the Company) (collectively, "Related Parties") is a party to any agreement
---------------
with the Company or any of its Subsidiaries providing for the payment of an
amount or amounts in excess of $250,000 in the aggregate, or has any interest in
any property
18
<PAGE>
(real, personal or mixed, tangible or intangible) used in or pertaining to the
business of the Company or any of its Subsidiaries which is material to the
Company and its Subsidiaries taken as a whole, except this Agreement (the
"Related Party Agreements"). No Person shall be deemed to have any agreement or
------------------------
interest referred to in this Section 4.12 solely because such Person holds an
equity interest in a Person (who is not an Affiliate of such Person) which is
party to such agreement or has such interest. None of the Related Party
Agreements, in the form previously delivered to FKWW, has been modified or
amended in any material respect through the date hereof except as contemplated
by this Agreement, the Stock Purchase Agreements or the Contribution Agreement.
4.13 Affiliation Agreements. The Company Disclosure Letter includes
----------------------
a true and complete list as of the date hereof of the contracts between the
Company and the top 25 cable carriers relating to carriage of The Family Channel
(determined by reference to subscriber count as of the most recent practicable
dates) (the "Affiliation Agreements"). At the date hereof, to the Actual
----------------------
Knowledge of the Responsible Officers, the Company has not received any notice
(written or oral) that any such cable carrier (a) has canceled or terminated, or
has a specific intention to cancel or terminate, any Affiliation Agreement,
which cancellations or terminations would involve, in the aggregate, the loss of
more than 1,000,000 subscribers, or (b) has a specific intention to effect a
planned reduction in the number of subscribers covered by such Affiliation
Agreement other than reductions which would not reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole.
4.14 Brokers and Finders. Except for the fees and expenses payable
-------------------
to Goldman, Sachs & Co. and Bear, Stearns & Co. Inc., which fees shall be paid
by the Surviving Corporation, the Company has not employed any investment
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission payable
after the date hereof in connection with this Agreement or the Merger
contemplated hereby.
4.15 Information Statement. None of the information supplied or to
---------------------
be supplied by the Company for inclusion in the definitive Information Statement
to be filed with the SEC relating to the Merger as required by the Exchange Act
(the "Information Statement"), will, at the date such Information Statement is
---------------------
first sent or given to stockholders of the Company, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Information
Statement will, when first sent or given to stockholders of the Company, comply
as to form in all material respects with the requirements of the Exchange Act.
No representation is made by Company with respect to any information supplied by
FKWW or FKW Sub expressly for inclusion in the Information Statement.
19
<PAGE>
ARTICLE V
---------
CONDUCT OF BUSINESS
-------------------
5.1 Conduct of Business of the Company. Prior to the earlier of the
----------------------------------
Effective Time of the Merger or the termination of this Agreement pursuant to
its terms, unless FKWW and FKW Sub shall otherwise consent in writing or unless
otherwise set forth in the Company Disclosure Letter:
(i) except as otherwise contemplated by this Agreement, the
Company shall, and shall cause its Subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(ii) except as required or permitted by this Agreement and
except as required by any existing agreement of the Company or any of its
Subsidiaries or in order to comply with the legal requirements of the
jurisdiction of incorporation of any Subsidiary, the Company shall not and
shall not propose to, nor shall it permit any of its Subsidiaries to or
propose to (A) sell or pledge or agree to sell or pledge any capital stock
owned by it (or any of its Subsidiaries) in any of its Subsidiaries, (B)
amend its Certificate of Incorporation or By-Laws, (C) split, combine,
reclassify or amend the terms of its outstanding capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of, or in substitution for, shares of capital stock of the Company, or
declare, set aside or make any dividend or other distribution payable in
cash, stock or property, or (D) directly or indirectly redeem, purchase or
otherwise acquire or agree to redeem, purchase or otherwise acquire any
shares of the capital stock of the Company or any options or rights to
purchase any shares of capital stock except as required by this Agreement;
(iii) except as required by any existing agreement of the Company
or any Subsidiary or in order to comply with the legal requirements of the
jurisdiction of incorporation of any Subsidiary, the Company shall not, nor
shall it permit any of its Subsidiaries to, except as required by this
Agreement, authorize, issue, deliver, pledge, encumber or sell or agree to
authorize, issue, deliver, pledge, encumber or sell any additional shares
of, or rights of any kind to acquire any shares of, its capital stock of
any class, or any option, rights or warrants to acquire, or securities
convertible into, shares of capital stock;
(iv) except as otherwise contemplated by this Agreement, the
Company shall not, and shall cause its Subsidiaries not to: (A) adopt any
material employee benefit plan or (B) amend any material employee benefit
plan in a manner that significantly increases the benefits thereunder or
(C) adopt, extend or amend any employment agreement (including any
severance agreement) for senior management employees of the Company or (D)
make any increase in the compensation of any Highly Compensated Person,
whether now or hereafter payable, other than in the ordinary course of
business consistent with past practice (except that no such increase shall
be effected pursuant to any
20
<PAGE>
option, stock purchase, or other plan, arrangement, contract or commitment
providing for the issuance of capital stock of the Company or any option or
other right to acquire capital stock of the Company), or (E) hire any new
employee of the Company or any Subsidiary at a cash compensation (including
salary and anticipated bonus) in excess of $100,000 per annum other than
any replacement for a departing employee pursuant to substantially
equivalent compensation arrangements, which replacements shall be made, if
at all, only after consulting with FKWW;
(v) the Company shall not and shall cause its Subsidiaries to
not, take or agree to take any action with the intent and knowledge that
such action would cause a breach of any of the representations or
warranties of the Company contained in this Agreement in any material
respect or prevent the Company from performing or cause the Company not to
perform any of its covenants hereunder in any material respect;
(vi) the Company shall not submit any matters to the
stockholders of the Company for a vote prior to the Effective Date other
than the Merger;
(vii) the Company shall not, and shall cause its Subsidiaries to
not, sell, pledge, dispose of, encumber or hypothecate any material portion
of the assets of the Company and its Subsidiaries taken as a whole, except
in the ordinary course of business and consistent with past practice;
(viii) the Company shall not, and shall cause its Subsidiaries to
not, acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or any other business organization or division
thereof, or any material interest therein other than marketable securities
purchased in the ordinary course of business consistent with past practice;
(ix) the Company shall not, and shall cause its Subsidiaries to
not, incur any liability in respect of (i) borrowed money, (ii) capitalized
lease obligations, (iii) the deferred purchase price of property or
services (other than trade payables in the ordinary course of business),
(iv) reimbursement obligations in respect of letters of credit and (v)
guarantees of any of the foregoing incurred by any Person other than the
Company and its direct or indirect wholly owned Subsidiaries (collectively,
"Indebtedness") except (x) to the extent of such liabilities as of the date
hereof, including any replacements, refinancings or renewals thereof on
terms not materially more onerous to the Company, or (y) under revolving
credit facilities existing on the date hereof or (z) other obligations
which do not exceed $1 million individually or in the aggregate;
(x) the Company shall not, and shall cause its Subsidiaries to
not, authorize any capital expenditures or the purchase of any fixed assets
other than (i) expenditures or purchases which are included in the capital
budget of the Company previously delivered by the Company to FKWW and FKW
Sub or, if not included in such capital budget, do not exceed $10 million
individually or in the aggregate, or (ii) expenditures necessary to
continue to operate the technical facility of the Company
21
<PAGE>
following the occurrence of any emergency in order to continue to telecast
the Family Channel (subject in the case of (ii) above, to the receipt of
approval of FKWW, which approval shall not be unreasonably withheld and
shall be deemed given, if not previously given or reasonably withheld, upon
the expiration of 24 hours following confirmed, actual delivery of notice,
however delivered, to any of Chase Carey, Jay Itzkowitz, Larry Jacobson,
Haim Saban, Margaret Loesch or Mel Woods, which notice identifies the
emergency, provides an estimate of the expenditures to be incurred and
expressly refers to the requirement that notice of approval or the
withholding of approval be delivered to the Company within 24 hours. The
provisions of Section 9.2 hereof expressly do not apply to this Section
5.1(x);
(xi) the Company shall not, and shall cause its Subsidiaries to
not, authorize any expenditure for television or motion picture productions
or programming other than expenditures or purchases which are included in
the programming budget of the Company previously delivered by the Company
to FKWW and FKW Sub or, if not included in such capital budget, do not
exceed $10 million individually or in the aggregate;
(xii) the Company shall not, and shall cause its Subsidiaries to
not, enter into any transaction or incur or make any payment to any Related
Party of the Company except for goods or services provided in the ordinary
course of business consistent with past practice and except for payments
incurred or made or other transactions effected pursuant to any agreements
existing on the date hereof;
(xiii) the Company shall not, and shall cause its Subsidiaries to
not, take any action to change any of the significant accounting (including
tax accounting) policies, practices or procedures of the Company or any of
its Subsidiaries other than as required in order to comply with GAAP or
applicable law;
(xiv) the Company shall not, and shall cause its Subsidiaries to
not, enter into any agreement with any Person other than FKWW or FKW Sub
granting such other Person the right to program any block of time on The
Family Channel other than arrangements which (i) terminate on or prior to
September 1, 1998, or (ii) which are terminable by the Company on not more
than 30 days notice without any payment with respect thereto other than
reimbursement of any advance payments;
(xv) the Company shall not, and shall cause its Subsidiaries to
not, to launch a new cable channel without first consulting with FKWW;
(xvi) the Company shall not and shall cause its Subsidiaries to
not, cancel, revoke or fail to renew any of the Affiliation Agreements or
take any action with the intent and knowledge that such action would cause
a material breach or violation of any Affiliation Agreement; and
22
<PAGE>
(xvii) the Company shall not, and shall cause its Subsidiaries to
not enter into any contract, agreement, commitment or arrangement with
respect to any of the foregoing subsections.
5.2 Conduct of Business of FKW Sub. Prior to the earlier of the
------------------------------
Effective Time of the Merger or the termination of this Agreement pursuant to
its terms, FKW Sub shall not engage in any activities of any nature except as
provided in or contemplated by this Agreement.
ARTICLE VI
----------
ADDITIONAL AGREEMENTS
---------------------
6.1 Preparation of Information Statement. The Company shall, as
------------------------------------
promptly as practicable, prepare and file a preliminary Information Statement
with the SEC and shall use its reasonable good faith efforts to respond to any
comments of the SEC and to cause the Information Statement to be mailed to the
Company's stockholders at the earliest practicable time. Each of the parties
hereto shall supply such information reasonably requested by the Company (or in
the case of the Company, as is necessary) in its possession for inclusion in the
Information Statement. The Company will notify FKWW and FKW Sub promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Information Statement or for
additional information and will supply FKWW and FKW Sub with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the
Information Statement or the Merger.
6.2 Filings and Other Actions. As promptly as practicable after the
-------------------------
execution of this Agreement, but in any event within 5 business days, FKWW, FKW
Sub and the Company shall file notification reports under the HSR Act and shall
request early termination of the waiting period under the HSR Act and use their
reasonable good faith efforts to obtain clearance or authorization under the HSR
Act of the Merger and the other transactions contemplated by this Agreement at
the earliest practicable time.
6.3 Fees and Expenses. Except as set forth in Section 9.11, whether
-----------------
or not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses.
6.4 Further Assurances.
------------------
(a) Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use all reasonable good faith efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, and to cooperate
with each other in connection with the foregoing, including, but not limited to,
using reasonable good faith efforts (a) to obtain all necessary waivers,
consents and approvals from other parties to material loan agreements, leases
and other contracts; (b) to obtain all
23
<PAGE>
necessary consents, approvals and authorizations as are required to be obtained
under any federal, state or foreign law or regulation; (c) to defend all
lawsuits or other legal proceedings challenging this Agreement or the
transactions contemplated hereby; (d) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby; (e) to effect all necessary
filings with respect to the transactions contemplated hereby, including, but not
limited to, filings under the HSR Act and submissions of information requested
by Government Entities; and (f) to fulfill all conditions to this Agreement.
Notwithstanding the foregoing, nothing contained herein shall require any party
to waive any of the conditions to the Merger or other transactions contemplated
by this Agreement.
(b) FKWW and FKW Sub hereby agree, while this Agreement is in
effect, and except as contemplated hereby, not to take any action with the
intention and knowledge that such action would make any of their representations
or warranties contained herein untrue or incorrect in any material respect or
have the effect of preventing or disabling them from performing their
obligations under this Agreement. FKWW and FKW Sub shall not enter into, permit
or give any consent to, any amendment, supplement or other modification of, or
give any consent or waiver or otherwise take any action (including agreeing to a
delayed closing date) under, any of the Other Transaction Agreements (or any of
the agreements related thereto) (collectively, a "Modification") which could
------------
reasonably be expected to delay the Effective Time, and shall not in any event
waive, amend, modify or terminate the condition set forth in Section 8.6 of the
Contribution Agreement, or terminate any of the Other Transaction Agreements (or
any of the agreements related thereto), without the prior written consent of the
Company (subject to Section 6.8, if applicable). Notwithstanding the foregoing,
FKWW and FKW Sub may effect any Modification to the Other Transaction Agreements
(or any of the agreements related thereto) which they determine in good faith to
be reasonably necessary to effect the transactions contemplated thereby,
provided they use their reasonable good faith efforts to cause the closing
thereunder to occur as soon as practicable and provided further that such
Modification will not delay the Effective Time beyond November 30, 1997.
6.5 Notification of Certain Matters. The Company shall use
-------------------------------
reasonable good faith efforts to promptly give written notice to FKWW and FKW
Sub, and FKWW and FKW Sub shall use reasonable good faith efforts to promptly
give written notice to the Company, upon becoming aware of the occurrence or, to
its knowledge, impending or threatened occurrence, of any event which would
cause or constitute a breach of any of its representations, warranties or
covenants contained or referenced in this Agreement and use its reasonable good
faith efforts to prevent or promptly remedy the same.
6.6 Access and Information. From the date hereof to the Effective
----------------------
Time, the Company shall, and shall cause its Subsidiaries and its and their
respective officers, directors, employees and agents to, afford the officers,
employees and agents of FKWW and FKW Sub and their respective affiliates
reasonable access during normal business hours (or at such other times as FKWW
or FKW Sub and the Company may mutually agree) to its properties, books,
contracts, commitments and records and shall furnish FKWW and FKW Sub and their
respective affiliates all financial, operating and other data and information as
FKWW or FKW Sub or any of their respective affiliates, through their respective
officers, employees or agents, may reasonably
24
<PAGE>
request. All information disclosed pursuant to this Section 6.6, shall be
subject to those certain Confidentiality Agreements entered into by and between
FKWW and the Company as of May 2, 1996, December 17, 1996, and December 31, 1996
(the "Confidentiality Agreements").
--------------------------
6.7 Acquisition Proposals. Prior to the Effective Time, the
---------------------
Company agrees (a) that neither it nor any of its Subsidiaries shall authorize
or permit any of its officers, directors, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) to initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any proposal or offer to its
stockholders) with respect to a merger, acquisition, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets or any equity securities of, the Company or any of its Subsidiaries (any
such proposal or offer being hereinafter referred to as an "Acquisition
-----------
Proposal") or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; (b) that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and will take
the necessary steps to inform the individuals or entities referred to above of
the obligations undertaken in this Section 6.7; and (c) that it will notify FKWW
and FKW Sub immediately if any such inquiries or proposals are received by, any
such information is received from, or any such negotiations or discussions are
sought to be initiated or continued with, it; provided, however, that nothing
-------- -------
contained in this Section 6.7 shall prohibit the Board of Directors of the
Company from (i) furnishing information to or entering into discussions or
negotiations with, any Person or entity that makes an unsolicited bona fide
proposal to acquire the Company pursuant to a merger, consolidation, share
exchange, purchase of a substantial portion of the assets, business combination
or other similar transaction, if, and only to the extent that (A) the Board of
Directors determines in good faith, based as to legal matters on advice of
outside legal counsel, that the failure to take such action would involve a
substantial risk of breach of fiduciary duty to the Company's shareholders
imposed by applicable law, (B) prior to furnishing such information to, or
entering into discussions or negotiations with, such Person or entity, the
Company provides notice to FKWW and FKW Sub to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such Person
or entity, and (C) subject to any confidentiality agreement with such Person or
entity (which the Company executed after determining in good faith, based as to
legal matters on advice of outside counsel, that the failure to take such action
would involve a substantial risk of breach of the Board of Directors' fiduciary
duty to stockholders imposed by applicable law), the Company keeps FKWW and FKW
Sub informed of the status (not the terms) of any such discussions or
negotiations; and (ii) to the extent applicable, complying with Rule 14d-9 and
14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal.
Nothing in this Section 6.7 shall (x) permit any party to terminate this
Agreement (except as specifically provided in Section 8.1 hereof), (y) permit
any party to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed that during the term of this
Agreement, no party shall enter into any agreement with any Person that provides
for, or in any way facilitates, an Acquisition Proposal
25
<PAGE>
(other than a confidentiality agreement in customary form)), or (z) affect any
other obligation of any party under this Agreement.
6.8 Board of Directors. In the event FKWW and the other parties
------------------
thereto consummate the purchase of the Company Stock from the Robertson Sellers
pursuant to the Robertson Purchase Agreement prior to the Closing of the Merger,
FKWW shall, from and after such closing, be entitled to designate, at its
option, upon notice to the Company, up to that number of directors, rounded to
the nearest whole number, of the Company's Board of Directors, subject to
compliance with Section 14(f) of the Exchange Act, as will make the percentage
of the Company's directors designated by FKWW equal to the aggregate voting
power of the Shares of Company Stock held by FKWW or any of its Subsidiaries
(after giving effect to the conversion of the Class A Stock to Class B Stock and
the conversion of any Class C Stock and any Convertible Notes then held by FKWW
or its Subsidiaries into Class B Stock); provided, however, that the Company
-------- -------
shall not be obligated and need not appoint any designee or designees to the
Board of Directors of the Company who, in the Board's good faith judgment, are
not fit to be Directors of the Company; and provided, further, that in the event
-------- -------
that FKWW designees are elected to the Board of Directors of the Company, such
Board of Directors shall have, until the Effective Time, at least two directors
who are Class B Directors on the date of this Agreement (the "Continuing
----------
Directors"), and provided, further that, in such event, if the number of
- --------- -------- -------
Continuing Directors shall be reduced below two for any reason whatsoever, the
remaining Continuing Directors shall be permitted to designate an individual to
fill such vacancy who would be an "independent director" under the rules of the
New York Stock Exchange (such designee to be deemed to be a Continuing Director
for purposes of this Agreement) or, if no Continuing Directors then remain, the
other directors shall designate two individuals to fill such vacancies who shall
not be officers, directors, employees or Affiliates of FKWW or any of its
Affiliates and shall otherwise be "independent directors" under the rules of the
New York Stock Exchange (each designee to be deemed to be a Continuing Director
for purposes of this Agreement). To the fullest extent permitted by applicable
law, the Company shall take all actions requested by FKWW which are reasonably
necessary to effect the election of any such designee or designees, including
the inclusion in the Information Statement, or a separate mailing, of the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, and the making of such mailing as part of the
Information Statement or otherwise, as requested by FKWW (provided that FKWW
shall have provided to the Company on a timely basis all information required to
be included with respect to FKWW designees). In connection with the foregoing,
the Company will promptly either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current directors
as is necessary to enable FKWW designees to be elected or appointed to the
Company's Board of Directors as provided above. Following the election or
appointment of FKWW's designees pursuant to this Section 6.8 and prior to the
Effective Time, any amendment, or waiver of any term or condition, of this
Agreement or the Amended and Restated Certificate of Incorporation or Restated
By-Laws of the Company, any termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of FKWW or FKW Sub or waiver or assertion of any of
the Company's rights hereunder, or any other consents or actions by the Board of
Directors with respect to this Agreement or the Guaranty, will require, and will
require only, the concurrence of a majority of the Continuing Directors, except
to the extent that applicable law
26
<PAGE>
requires that such action be acted upon by the full Board of Directors, in which
case such action will require the concurrence of a majority of the Directors,
which majority shall include each of the Continuing Directors, and no other
action by the Company shall be required for purposes of this Agreement. After
the date of this Agreement, until the earlier of (i) the Effective Time, and
(ii) the termination of this Agreement, FKWW will not exercise any rights it may
have as a stockholder of the Company to effect a change in the composition of
the Board of Directors of the Company, except as provided for in this Section
6.8.
6.9 Indemnification and Insurance. FKWW shall cause all rights to
-----------------------------
indemnification or exculpation now existing in favor of the past and present
directors or officers of the Company as provided in the Company's Amended and
Restated Certificate of Incorporation or Restated By-Laws with respect to claims
arising from service as officers or directors prior to the Effective Time to
survive the merger and continue in full force and effect for a period of not
less than six years from the Effective Time (or with respect to claims arising
from service as officers or directors prior to the Effective Time which have not
been resolved prior to such sixth anniversary, until the time such matters are
finally resolved). FKWW shall cause the Surviving Corporation to maintain in
effect for not less than six years from the Effective Time the current policies
of the directors' and officers' liability insurance maintained by the Company as
of the date hereof (provided that the Surviving Corporation may substitute
therefor policies of at least the same amount of coverage (covering known or
unknown claims as of the Effective Time) containing terms and conditions which
are not less advantageous), copies of which has been previously made available
to FKWW, with respect to matters occurring prior to the Effective Time, to the
extent available; provided, however, that the Surviving Corporation shall not be
-------- -------
required to maintain such insurance to the extent the annual premium therefor
exceeds 200% of the annual premiums currently paid by the Company in respect of
the current policy or policies (the "Maximum Amount") but in such case shall
--------------
purchase as much comparable coverage as available for the Maximum Amount.
6.10 Officer's Certificate. The Company, at the request of FKWW,
---------------------
shall deliver a certificate to FKWW executed by an executive officer of the
Company in the form and with respect to the matters referred to in the attached
Exhibit A, dated as of the date of the closing of the purchase of the Control
- ---------
Stock (as defined in the Robertson Purchase Agreement) by FKWW pursuant to terms
of the Robertson Purchase Agreement, or, alternatively, inform FKWW that it is
unable to give such certificate because of the inaccuracy of any of the matters
referred to therein.
ARTICLE VII
-----------
CONDITIONS
----------
7.1 Conditions to Obligation of Each Party to Effect the Merger.
-----------------------------------------------------------
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment or waiver at or prior to the Effective Time of the following
conditions:
27
<PAGE>
(a) no temporary or permanent order, injunction or decree shall be
entered or enforced by or before any court, arbitrator or Governmental Entity
that would prohibit the consummation of the Merger;
(b) there shall not have occurred and be continuing any declaration
of any banking moratorium or suspension of payments by banks in the United
States or any general limitation on the extension of credit by lending
institutions in the United States;
(c) all required waiting periods under the HSR Act applicable to the
transactions contemplated hereunder shall have expired or terminated;
(d) the Company shall have obtained all consents and approvals of
Governmental Entities which are legally required to be obtained by the Company
prior to consummation of the Merger, which if not obtained would have a material
adverse effect on the business, results of operations or financial condition of
the Company and its Subsidiaries taken as a whole; and
(e) there shall not have been any statute, rule, regulation or order
promulgated, enacted, issued or deemed applicable to the Merger by any
Governmental Entity or court of competent jurisdiction which would make the
consummation of the Merger illegal;
provided, however, that upon the closing of the purchase of the Control Stock
- -------- -------
pursuant to the Robertson Purchase Agreement, the conditions in subparagraphs
(c) and (d) of this Section 7.1 above shall, to the extent then applicable, no
longer be applicable.
7.2 Additional Conditions to the Company's Obligation to Effect the
---------------------------------------------------------------
Merger. The obligation of the Company to effect the Merger is also subject to
- ------
the satisfaction or waiver at or prior to the Effective Time of the following
conditions: (a) the representations and warranties of FKWW and FKW Sub contained
in this Agreement shall be true and correct in all material respects on and as
of the Effective Time as though made on and as of such time (except for those
made as of a specified date (including "as of the date hereof") which shall be
true and correct as of such date), and (b) FKWW and FKW Sub shall have performed
in all material respects their respective obligations hereunder required to be
performed on or before the Effective Time; provided, however, upon the closing
-------- -------
of the purchase of the Control Stock pursuant to the terms of the Robertson
Purchase Agreement, the conditions set forth in clause (a) of this Section 7.2
shall no longer be applicable.
7.3 Additional Conditions to FKW Sub's Obligation to Effect the Merger.
------------------------------------------------------------------
The obligation of FKW Sub to effect the Merger is also subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions: (a) the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects on and as of
the Effective Time as though made on and as of such time (except for those made
as of a specified date (including "as of the date hereof"), which shall be true
and correct as of such date), except (i) for changes in circumstances expressly
permitted or contemplated by this Agreement or (ii) where the failure would not
be reasonably expected to have a material adverse effect on the
28
<PAGE>
business, results of operations or financial condition of the Company and its
Subsidiaries taken as a whole, (b) the Company shall have performed in all
material respects its obligations hereunder required to be performed on or
before the Effective Time, and (c) except as set forth in the Company Disclosure
Letter or as expressly provided for herein, (x) immediately prior to the
Effective Time, the representation and warranty contained in Section 4.5 (a)
hereof shall be true and correct (other than such changes resulting from the
exercise of Options or the conversions of convertible securities which are
outstanding as of the date hereof and disclosed in the Company Disclosure
Letter), and (y) immediately following the Effective Time, other than as
provided for in the Company Disclosure Letter, neither the Company nor any of
its Subsidiaries is or will be bound by any options, warrants, rights or
agreements which would entitle any Person, other than FKWW or its Subsidiaries,
to own any capital stock of the Surviving Corporation or to receive any payment
in respect thereof; provided, however, upon the closing of the purchase of the
-------- -------
Control Stock pursuant to the provisions of the Robertson Purchase Agreement,
the conditions set forth in clauses (a) and (b) of this Section 7.3 shall no
longer be applicable.
ARTICLE VIII
------------
TERMINATION, AMENDMENT, WAIVER AND LIABILITY
--------------------------------------------
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time, whether prior to or after approval of the Merger by the
stockholders of the Company:
(a) by mutual written consent of FKW Sub, FKWW and the Company, or
(b) by FKW Sub or FKWW, if the Effective Time shall not have
occurred on or prior to November 30, 1997, due to a failure of any of the
conditions to the obligations of FKW Sub to effect the Merger, to the extent
then applicable, set forth in Sections 7.1 or 7.3, or
(c) by the Company, if the Effective Time shall not have occurred on
or prior to November 30, 1997, due to a failure of any of the conditions to the
obligations of the Company to effect the Merger, to the extent then applicable,
set forth in Sections 7.1 or 7.2, or
(d) by the Company, if after the date hereof and before the
Effective Time, the Guarantor attempts or purports to revoke or withdraw the
Guaranty or a court of competent jurisdiction finally determines that the
Guaranty is unenforceable or invalid;
provided that any action by the Company shall be subject to Section 6.8 if then
applicable; and provided, further, that the November 30, 1997 date shall be
-------- -------
extended for (i) any period that a party is subject to a non-final order,
injunction or decree prohibiting consummation of the Merger and (ii) the
continuation of any event set forth in Section 7.1(b).
29
<PAGE>
8.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of the Company or FKW
Sub or FKWW or any of their Affiliates except as set forth in Sections 6.3 and
9.11 (with respect to fees and expenses) or Section 6.6 (with respect to
confidentiality). In the event of a termination of this Agreement as provided
in Section 8.1, the parties will not be excused for any liability owing the
others for a prior breach of this Agreement, subject to the provisions of
Sections 8.5 and 9.3.
8.3 Amendment. This Agreement may not be amended except by action of the
---------
Board of Directors of each of the parties hereto (and subject, in the case of
the Company, to Section 6.8), which Amendment is set forth in an instrument in
writing signed on behalf of each of the parties hereto. No amendment following
approval of the stockholders shall require the approval of the stockholders
unless specifically required by the DGCL.
8.4 Waiver. At any time prior to the Effective Time, whether before or
------
after the stockholder approval, any party hereto, by action taken by its Board
of Directors (and subject, in the case of the Company, to Section 6.8), may (i)
extend the time for the performance of any of the obligations or other acts of
any other party hereto or (ii) subject to the second sentence of Section 8.3,
waive compliance with any of the agreements of any other party or with any
conditions to its own obligations. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party by a duly authorized
officer.
8.5 Limitation on Liability. The liability of the Company for any breach
-----------------------
by the Company of this Agreement shall be limited to the actual damages suffered
by FKWW and FKW Sub under this Agreement and the Company shall not be liable for
any consequential or other damages of FKWW or FKW Sub, including any damages
arising in connection with any Other Transaction Agreement.
ARTICLE IX
----------
GENERAL PROVISIONS
------------------
9.1 Publicity. The initial press release relating to this Agreement
---------
shall be a joint press release in the form attached hereto as Exhibit B, and
---------
FKWW and the Company shall, subject to their respective legal obligations of
public companies, use reasonable good faith efforts to agree upon the text of
any other press release before issuing any such press release or otherwise
making public statements with respect to the transactions contemplated hereby
and in making any filings with any federal or state governmental or regulatory
agency or with any national securities exchange with respect thereto.
9.2 Notices. All notices and other communications required or
-------
permitted hereunder shall be in writing and shall be delivered personally,
mailed by certified or registered mail, return receipt requested and postage
prepaid, or transmitted by facsimile to the parties at the following addresses
or at such other addresses as shall be specified by the parties by like notice:
30
<PAGE>
(a) If to FKWW or FKW Sub:
---------------------
Fox Kids Worldwide, Inc. or
Fox Kids Merger Corporation
10960 Wilshire Boulevard
Los Angeles, California 90024
Attn: Mel Woods
Fax: 310-235-5552
with a copy to:
--------------
Fox, Inc.
10201 West Pico Boulevard
Los Angeles, California 90035
Attn: President
Fax: 310-369-1203
and a copy to:
-------------
The News Corporation Limited
c/o News America Publishing Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attn: Arthur M. Siskind, Esq.
Fax: 212-768-2029
and a copy to:
-------------
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attn: C.N. Franklin Reddick, III, Esq.
Fax: 310-443-8512
and a copy to:
-------------
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attn: Jeffrey W. Rubin, Esq.
Fax: 212-697-6686
(b) If to the Company:
-----------------
31
<PAGE>
International Family Entertainment, Inc.
2877 Guardian Lane
Virginia Beach, Virginia 23450
Attn: Tim Robertson
Fax: 757-459-6422
with a copy to:
--------------
International Family Entertainment, Inc.
2877 Guardian Lane
Virginia Beach, Virginia 23450
Attn: Louis A. Isakoff, Esq.
Fax: 757-459-6422
and a copy to:
-------------
Latham & Watkins
53rd at Third, Suite 1000
885 Third Avenue
New York, New York 10022-4802
Attn: Erica H. Steinberger, Esq.
Fax: 212-751-4864
and a copy to:
-------------
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: James M. Dubin, Esq.
Fax: 212-757-3990
and shall for all purposes of this Agreement be treated as being effective or
having been given when delivered if delivered personally, or, if sent by mail or
facsimile, upon receipt.
9.3 Representations and Warranties. The respective representations
------------------------------
and warranties of the Company, FKWW and FKW Sub contained herein shall expire
with, and be terminated and extinguished at the Effective Time. Neither the
Company, FKWW nor FKW Sub shall be under any monetary or other liability
whatsoever with respect to any breach of a representation or warranty contained
herein or in or with respect to any certificate or other document delivered
pursuant hereto, and the sole consequence of any such breach shall be limited to
the failure to satisfy a condition set forth in Section 7.2 or 7.3 hereof, as
applicable, and the termination right provided for in Section 8.1 hereof, in
each case to the extent applicable according to such Section's express terms.
32
<PAGE>
9.4 Titles and Gender. The titles of the Sections and subsections of
-----------------
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. Whenever used herein, the singular
member includes the plural, the plural includes the singular, and the use of
either gender shall include both genders.
9.5 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that no party hereto shall
-------- -------
assign any of its rights, interests or obligations hereunder without the prior
written consent of the other parties.
9.6 Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, is intended to confer on any Person other than the parties hereto or
their respective successors and permitted assigns, and other than as expressly
provided for in Section 6.8 and 6.9 hereof, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.7 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
9.8 Severability. Should any Section or any part of a Section of
------------
this Agreement be rendered void, invalid or unenforceable by any court of law
for any reason, such invalidity or unenforceability shall not void or render
invalid or unenforceable any other Section or part of a Section of this
Agreement.
9.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
BOTH AS TO VALIDITY AND PERFORMANCE AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES
THEREOF.
9.10 No Adverse Construction. The rule that a contract is to be
-----------------------
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or any provisions hereof.
9.11 Costs and Attorneys' Fees. In the event that any action, suit,
-------------------------
or other proceeding is brought or instituted, to enforce or to seek damages for
breach of this Agreement, the prevailing party shall recover all of such party's
costs, and reasonable attorneys' fees incurred in each and every such action,
suit, or other proceeding, including any and all appeals or petitions therefrom.
9.12 Entire Agreement. This Agreement, the attached Exhibits and
----------------
Company Disclosure Letter, the Confidentiality Agreements and the Guaranty
contain the entire understanding of the parties and there are no further or
other agreements or understandings, written or oral, in effect between the
parties relating to the subject matter hereof unless expressly referred to
herein.
33
<PAGE>
9.13 Jurisdiction; Consent to Service of Process; No Jury Trial.
----------------------------------------------------------
(a) Except as provided in the next paragraph, the parties hereto agree that any
dispute between or among them arising out of, connected with, related to, or
incidental to the relationship established among them pursuant to this
Agreement, and whether arising in contract, tort, equity, or otherwise, may be
resolved by state or federal courts located in Delaware. Each of the parties
hereto waives in any such dispute any objection that it may have to such
Delaware courts considering the dispute including, without limitation, any
objection to the laying of venue or based on the ground of forum non conveniens.
(b) Each of the parties hereto agrees that the other parties to this
Agreement shall have the right, to the extent permitted by applicable law, to
proceed against it or its property in a court in any location reasonably
selected in good faith to enable such other parties to realize on such property,
or to enforce a judgment or other court order entered in favor of any such other
party. Each of the parties hereto waives any objection that it may have to the
location of the court in which any other party to this Agreement has commenced a
proceeding described in this paragraph including, without limitation, any
objection to the laying of venue or based on the ground of forum non conveniens.
(c) The parties hereto each waives any right to have a jury
participate in resolving any dispute whether sounding in contract, tort, or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them pursuant to this Agreement. Instead, any
disputes resolved in court will be resolved in a bench trial without a jury.
(d) Each party hereto hereby irrevocably designates CT Corporation
System as its designee, appointee and agent to receive, for and on behalf of it,
service of process in such respective jurisdictions in any legal action or
proceeding with respect to this Agreement or any document related thereto. It
is understood that a copy of such process serviced on such agent will be
promptly forwarded by mail to it at its address set forth in Section 9.2 hereof,
but the failure to receive such copy shall not affect in any way the service of
such process. Each of the parties hereto further irrevocably consents to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at its said address, such service to become effective
upon confirmed delivery.
(e) Nothing herein shall affect the right of any party to this
Agreement to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction.
9.14 Affiliate; Control, Controlled By and Under Common Control With;
----------------------------------------------------------------
Person; Actual Knowledge. For purposes of this Agreement:
- ------------------------
(a) "Affiliate" shall mean, when used with reference to a specified
---------
Person, any Person that directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with,
such specified Person and, in the case of
34
<PAGE>
individuals, a Person's spouse, parents, children, siblings, mothers and fathers
in law, sons and daughters in law, and brothers and sisters in law. For purposes
of this definition, control (including controlled by and under common control
with), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise. For purposes of this Agreement, (i) neither the
Company nor any of its Subsidiaries shall be deemed to be an Affiliate of FKWW,
FKW Sub or any of their respective Affiliates, (ii) each of the holders of the
Class A Stock, Liberty, CBN, Regent and their respective Affiliates shall be
deemed to be an Affiliate of the Company, and (iii) the Guarantor, Fox, Inc. and
Saban Entertainment, Inc., and their respective Affiliates, shall each be deemed
to be an Affiliate of FKWW and FKW Sub.
(b) "Person" means any individual, corporation, general or limited
------
partnership, limited liability company, limited liability partnership, trust,
joint venture, association or unincorporated entity of any kind.
(c) "Actual Knowledge" of a specified Person means the actual
----------------
knowledge of such Person without independent investigation or inquiry.
9.15 Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other parties to sustain damages for which they
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereto agrees that in the event of any such breach the aggrieved
party or parties shall, without the posting of bond or other security, be
entitled to the remedy of specific performance of such covenants and agreements
and injunctive and other equitable relief, in addition to any other remedy to
which it or they may be entitled, at law or in equity.
9.16 Definitions. The following terms are defined on the page numbers
-----------
indicated below:
<TABLE>
<CAPTION>
Definition Section
- ---------- -------
<S> <C>
Acquisition Proposal...................................................... 6.7
Actual Knowledge..........................................................9.14
Affiliate.................................................................9.14
Affiliation Agreements....................................................4.13
Agreement............................................................ Preamble
Blue Sky Laws..............................................................2.3
Cash Payment...............................................................1.8
CBN.................................................................. Recitals
CBN Purchase Agreement............................................... Recitals
Certificates...............................................................1.9
Class A Stock........................................................ Recitals
Class B Stock........................................................ Recitals
</TABLE>
35
<PAGE>
<TABLE>
<S> <C>
Class C Stock........................................................ Recitals
Company.............................................................. Recitals
Company Disclosure Letter.......................................... Article IV
Company SEC Reports....................................................... 4.7
Company Stock........................................................ Recitals
Confidentiality Agreements................................................ 6.6
Consent.............................................................. Recitals
Constituent Corporations.................................................. 1.1
Continuing Directors...................................................... 6.8
Contribution Agreement............................................... Recitals
Convertible Notes.................................................... Recitals
DGCL................................................................. Recitals
Dissenting Shares......................................................... 1.7
Effective Time............................................................ 1.3
Exchange Act.............................................................. 1.8
Exchange Agent............................................................ 1.9
FKW Sub.............................................................. Recitals
FKWW................................................................. Recitals
GAAP...................................................................... 4.7
Governmental Entity....................................................... 2.1
Guarantor............................................................ Recitals
Guaranty............................................................. Recitals
Highly Compensated Persons................................................ 4.8
HSR ACT................................................................... 2.3
Information Statement.................................................... 4.15
Irrevocable Trusts................................................... Recitals
Lien...................................................................... 2.5
LIFE................................................................. Recitals
Maximum Amount............................................................ 6.9
Merger............................................................... Recitals
Merger Consideration...................................................... 1.6
Merger Filing............................................................. 1.3
Modification.............................................................. 6.4
MTM....................................................................... 1.8
Options................................................................... 1.8
Other Transaction Agreements......................................... Recitals
Person................................................................... 9.14
PR Charitable Trust.................................................. Recitals
Regent............................................................... Recitals
Regent Purchase Agreement............................................ Recitals
Related Parties.......................................................... 4.12
Related Party Agreements................................................. 4.12
Responsible Officers..................................................... 4.11
Restriction............................................................... 4.2
Robertson Purchase Agreement......................................... Recitals
</TABLE>
36
<PAGE>
<TABLE>
Definition Section
- ---------- -------
<S> <C>
The Robertson Sellers................................................ Recitals
SEC........................................................................4.7
Securities Act.............................................................2.3
Share......................................................................1.6
Stock Plans................................................................1.8
Stock Purchase Agreements............................................ Recitals
Subsidiary.................................................................2.1
Surviving Corporation.....................................................1.11
The Family Channel.........................................................4.9
Tim Robertson........................................................ Recitals
TR Charitable Trust.................................................. Recitals
TR Family Trust...................................................... Recitals
</TABLE>
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
37
<PAGE>
IN WITNESS WHEREOF, FKWW, FKW Sub and the Company have caused this
Agreement to be executed as of the date first written above by their duly
authorized respective officers.
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
-----------------------------------------
Name: Mel Woods
Title: President
FOX KIDS MERGER CORPORATION
By: /s/ Mel Woods
-----------------------------------------
Name: Mel Woods
Title: President
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: /s/ M.G. Robertson
-----------------------------------------
Name: M.G. Robertson
Title: Chairman of the Board
<PAGE>
EXHIBITS
Exhibit A --- Officer's Certificates
Exhibit B --- Press Release
<PAGE>
EXHIBIT 6
June 6, 1997
Fox Kids Worldwide, Inc.
c/o Saban Entertainment, Inc.
10960 Wilshire Boulevard
Los Angeles, California 90024
Attention: Mr. Mel Woods, Co-President
U.S. $900,000,000 Secured Reducing Revolving Credit Facilities
--------------------------------------------------------------
U.S. $350,000,000 Secured Term Loan Facility
--------------------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised us that you intend to organize a single purpose wholly owned
subsidiary ("Acquisition Corp.") that will acquire (the "Acquisition") shares of
common stock of International Family Entertainment, Inc. ("IFE") representing
more than a majority of the combined voting power of all of the outstanding
capital stock of IFE and, upon the acquisition of all of the remaining
outstanding shares of capital stock of IFE, will merge (the "Merger") with and
into IFE, with IFE being the surviving corporation (the "Surviving
Corporation"). In order to finance the Acquisition, you desire to establish a
$625,000,000 Secured Reducing Revolving Credit Facility (the "Tranche A
Revolving Credit") with Acquisition Corp. as the borrower. In order to finance
in part the Merger, to refinance the existing debt of IFE and to pay certain
fees and expenses incurred in connection with the Acquisition and the Merger,
you desire to establish a $275,000,000 Secured Reducing Revolving Credit
Facility (the "Tranche B Revolving Credit") and a $350,000,000 Secured Term Loan
Facility (the "Term Loan" and, together with the Tranche A Revolving Credit and
the Tranche B Revolving Credit, the "Facilities") with Acquisition Corp. as the
borrower. Upon consummation of the Merger, the Surviving Corporation will
succeed to and assume all of the obligations of Acquisition Corp. under or in
respect of the Facilities and the Surviving Corporation and certain of your
subsidiaries more specifically described in the attached Annex I will become
borrowers under the Tranche A Revolving Credit and the Tranche B Revolving
Credit, the proceeds of which will then be available for general corporate
purposes. You have asked Citibank, N.A. ("Citibank") to commit to provide you
with financing commitments for the entire Facilities.
On behalf of Citibank, Citicorp Securities, Inc. ("Citicorp Securities") is
pleased to inform you of Citibank's commitment to provide the entire amount of
the Facilities, subject to the terms and conditions described in this letter and
the attached Annex I (collectively, and together with the Fee Letter referred to
below, the "Commitment Letter").
Syndication
- -----------
Citibank reserves the right, prior to or after the execution of definitive
documentation with respect to the Facilities, to syndicate all or a portion of
its commitment to one or more other financial institutions reasonably acceptable
to you that will become parties to such definitive documentation pursuant to a
syndication to be managed by Citicorp Securities (the financial institutions
becoming parties to such definitive documentation being collectively referred to
herein as the "Lenders"). Citicorp Securities will act as the syndication agent
with respect to the Facilities and will manage all aspects of the syndication in
consultation with you, including the timing of all offers to potential Lenders,
the acceptance of commitments, and the determination of the amounts offered and
the compensation provided. You understand that Citicorp Securities intends to
commence syndication efforts promptly and that it may elect to appoint one or
more syndication agents to direct the syndication efforts on its behalf. Each
of the News Corporation Limited, Saban Entertainment, Inc. and you agree to take
all
<PAGE>
action as Citicorp Securities may reasonably request to assist it in forming a
syndicate acceptable to it and you.
To ensure an orderly and effective syndication of the Facilities, you agree that
until the earlier of (a) the termination of the syndication (as determined by
Citibank) and (b) one month after the date of the closing of the Facilities,
which shall be the date of the initial advances under the TrancheEA Revolving
Credit (such date being the "Closing Date"), you will not, and will not permit
any of your affiliates to, syndicate or issue, attempt to syndicate or issue,
announce or authorize the announcement of the syndication or issuance of, or
engage in discussions concerning the syndication or issuance of, any debt
facilities or debt security (including any renewals thereof) other than public
debt securities, without the prior written consent of Citibank (which consent
shall not be unreasonably withheld or delayed).
You agree that Citibank will act as the sole agent bank for the Facilities and
that no additional agents, co-agents or arrangers will be appointed, or other
titles conferred, without Citibank's consent. You agree that no Lender will
receive any compensation of any kind for its participation in the Facilities,
except as expressly provided for in the Fee Letter (as defined below) or in the
attached Annex I.
Conditions Precedent
- --------------------
The commitment of Citibank hereunder is subject to: (i) the preparation,
execution and delivery of mutually acceptable loan documentation, including a
credit agreement incorporating substantially the terms and conditions outlined
in this Commitment Letter; (ii) the absence of a material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of you and your subsidiaries (including IFE and its
subsidiaries, whether or not the Acquisition or the Merger has been effected),
taken as a whole, since December 31, 1996; (iii) the accuracy and completeness
in all material respects of all written representations that you make to us and
all written information (other than financial projections and pro forma
information) that you furnish to us, in each case in connection with the
Facilities, and your compliance with the terms of this Commitment Letter;
(iv)Ethe payment in full of all fees, expenses and other amounts payable under
this Commitment Letter and (v) the occurrence of the Closing Date on or prior
to September 30, 1997.
If (A) the Closing Date has not occurred on or prior to September 30, 1997, (B)
all of the conditions to Citibank's commitment under this Commitment Letter and
all of the conditions precedent to the initial advances under the Facilities set
forth in the loan documentation referred to in clause (i) of the immediately
preceding paragraph have been satisfied on or prior to such date and (C) you,
Acquisition Corp. and each of your and its affiliates have executed and
delivered the loan documentation to which you or they are intended to be a
party, then Citibank shall execute the loan documentation to which it is
intended to be a party no later than September 30, 1997, whether or not any
other Person has committed to become a Lender thereunder.
Commitment Termination
- ----------------------
Citibank's commitment set forth in this Commitment Letter will terminate on
September 30, 1997, unless the Closing Date occurs on or before such date.
Notwithstanding anything to the contrary stated in this Commitment Letter,
Citibank's commitments under this Commitment Letter may be terminated by you at
any time prior to such date, at your option, upon payment of all fees, expenses
and other amounts then payable under this Commitment Letter.
Fees
- ----
In addition to the fees described in the attached Annex I, you agree to pay the
fees set forth in that certain letter between you and us of even date herewith
(the "Fee Letter"). The terms of the Fee Letter are an integral part of
Citibank's commitment hereunder, and constitute part of this Commitment Letter
for all purposes hereof. Each of the fees described in the Fee Letter shall be
nonrefundable when paid.
Indemnification
- ---------------
<PAGE>
You agree to indemnify and hold harmless Citibank, Citicorp Securities, each
Lender and each of their affiliates and each of their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and reasonable
expenses, joint or several, that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with
or relating to any investigation, litigation or proceeding or the preparation of
any defense with respect thereto, arising out of or in connection with or
relating to this Commitment Letter, the Facilities or the loan documentation or
the transactions contemplated hereby or thereby or any use made or proposed to
be made with the proceeds of the Facilities (collectively, the "Indemnifiable
Matters"), whether or not such investigation, litigation or proceeding is
brought by you, Acquisition Corp., the Surviving Corporation, any of your or
their shareholders or creditors, an Indemnified Party or any other person, or an
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated; provided, however, that the
foregoing indemnity shall not, as to any Indemnified Party, apply to any such
claim, damage, loss, liability or expense to the extent it is found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
Notwithstanding the foregoing provisions of this paragraph, in the event of any
Indemnifiable Matter of any Lender solely against one or more other Lenders (and
not any Indemnifiable Matter by one or more Lenders against Citibank or Citicorp
Securities in their capacities as agents or arrangers), you shall not be
obligated to indemnify such Lender or any of its affiliates or any of its
officers, directors, employees, agents or advisors for any claim, damage, loss,
liability or expense resulting from such Indemnifiable Matter, except to the
extent such claim, damage, loss, liability or expense is found in the final
nonappealable judgment of a court of competent jurisdiction to have resulted
from the action, inaction, participation or contribution of you, Acquisition
Corp., the Surviving Corporation or any of your or their affiliates or any of
your of their (or any of your or their affiliate's) officers, directors,
employees, agents or advisors, and then only to the extent of your or their
action, inaction, participation or contribution.
You shall not be liable to any of the Indemnified Parties for the settlement by
such Indemnified Party of any pending or threatened action or proceeding for
which such Indemnified Party may seek indemnification under the provisions set
forth above without your prior written consent (which consent shall not be
unreasonably withheld and shall be deemed to have been given if you have not
objected to such settlement within 20 days of notice to you of such proposed
settlement). In turn, you shall not effect the settlement of any such pending
or threatened action or proceeding unless either (i) such settlement includes a
full and unconditional release and discharge of each of the Indemnified Parties
subject to such action or proceeding from all liability and potential liability
on claims that are the subject matter of such action or proceeding or (ii)
without the prior written consent of any Indemnified Party (which consent shall
not be unreasonably withheld).
Upon payment in full of any Indemnifiable Matter by you or on your behalf to or
on behalf of an Indemnified Party, you (or the party making payment on your
behalf) shall be subrogated to any claims that such Indemnified Party may have
to seek reimbursement from any other person relating to such Indemnifiable
Matter; provided, however, that you (or the party making payment on your behalf)
shall not exercise any rights of subrogation, reimbursement, contribution or
indemnification that you (or such party) may now or hereafter acquire against
Acquisition Corp., the Surviving Corporation or any of their affiliates or
against any Indemnified Party so long as this Commitment Letter shall be in
effect or you, Acquisition Corp., the Surviving Corporation or any of your or
their affiliates shall have any obligation to Citibank, Citicorp Securities or
any Lender hereunder or under any of the loan documentation or any other
document executed and delivered in connection herewith or therewith. Each of
the Indemnified Parties, if reasonably requested by you, shall cooperate with
you in any manner reasonably necessary to permit you to pursue such claims.
You agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to you, Acquisition Corp., the
Surviving Corporation or any of your or their shareholders or creditors arising
out of, related to or in connection with this Commitment Letter, the Facilities,
the loan documentation or the transactions contemplated hereby, except to the
extent such liability is found in a final nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct.
Costs and Expenses
- ------------------
In further consideration of the commitment of Citibank hereunder, and
recognizing that in connection herewith Citibank is
<PAGE>
incurring substantial costs and expenses (including, without limitation, fees
and disbursements of counsel and its syndication agent(s), filing and recording
fees and due diligence, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, messenger, appraisal, audit,
insurance and consultant costs and expenses), you hereby agree to pay, or to
reimburse Citibank on the earlier of the termination or expiration of its
commitment hereunder and the Closing Date for, all such costs and expenses
(whether incurred before or after the date hereof), regardless of whether any of
the transactions contemplated hereby are consummated; provided that such costs
and expenses are reasonable and properly documented. You also agree to pay all
reasonable costs and expenses of Citibank (including, without limitation,
reasonable fees and disbursements of one counsel) incurred in connection with
the enforcement of any of its rights and remedies hereunder. Such counsel of
Citibank shall, promptly after the execution and delivery hereof, provide an
estimate of legal fees expected to be incurred in connection with the
preparation and negotiation of the loan documentation for the Facilities.
Confidentiality
- ---------------
By accepting delivery of this Commitment Letter, you agree that this Commitment
Letter is for your confidential use only and that neither its existence nor the
terms hereof will be disclosed by you to any person other than your officers,
directors, employees, accountants, attorneys and other advisors, and then only
on a "need to know" basis in connection with the transactions contemplated
hereby and on a confidential basis. Notwithstanding the foregoing, following
your acceptance of the provisions hereof and your return of an executed
counterpart of this Commitment Letter to us as provided below, (i) you may make
public disclosure of the existence and amount of Citibank's commitment hereunder
and of Citibank's identity as agent bank, (ii) you may file a copy of this
Commitment Letter (other than the Fee Letter) in any public record in which it
is required by law to be filed and (iii) you may make such other public
disclosures of the terms and conditions hereof as you are required by law, in
the opinion of your counsel, to make.
Citibank shall, and shall cause Citicorp Securities to, execute a
Confidentiality Agreement in substantially the form previously agreed between
Citibank and you.
Representations and Warranties
- ------------------------------
You represent and warrant that (i) all written information (other than financial
projection and pro forma information) that has been or will hereafter be made
available to Citibank, Citicorp Securities, any Lender or any potential Lender
by you or any of your representatives in connection with the transactions
contemplated hereby, as such information may be supplemented from time to time
on or prior to the Closing Date, is and will be complete and correct in all
material respects and does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances under
which such statements were or are made and (ii) all financial projections and
pro forma information, if any, that have been or will be prepared by you and
made available to Citibank, Citicorp Securities, any Lender or any potential
Lender have been or will be prepared in good faith based upon assumptions
believed by you to be reasonable at the time made (it being understood that such
projections are subject to significant uncertainties and contingencies, many of
which are beyond your control, and that no assurance can be given that the
projections will be realized).
In issuing this commitment, Citibank is relying on the accuracy in all material
respects of the information furnished to it by you and your affiliates or on
behalf of you and your affiliates without independent verification thereof.
No Third Party Reliance, Etc.
- -----------------------------
The agreements of Citibank hereunder and of any Lender that issues a commitment
to provide financing under the Facilities are made solely for the benefit of you
and Acquisition Corp. and may not be relied upon or enforced by any other
person. Please note that those matters that are not covered or made clear
herein or in the attached Annex I or in the Fee Letter are subject to mutual
agreement of the parties. The terms and conditions of this commitment may be
modified only in writing.
You should be aware that Citibank or one or more of its affiliates may be
providing financing or other services to parties
<PAGE>
whose interests may conflict with yours. Be assured, however, that consistent
with Citibank's longstanding policy to hold in confidence the affairs of its
customers, neither Citibank nor any of its affiliates will furnish confidential
information obtained from you to any of its other customers. By the same token,
neither Citibank nor any of its affiliates will make available to you
confidential information that it obtained or may obtain from any other customer.
Governing Law, Etc.
- -------------------
This Commitment Letter shall be governed by, and construed in accordance with,
the laws of the State of New York, excluding (to the fullest extent a New York
court would permit) any rule of law that would cause application of the laws of
any jurisdiction other than the State of New York. This Commitment Letter sets
forth the entire agreement between the parties with respect to the matters
addressed herein and supersedes all prior communications, written or oral, with
respect hereto. This Commitment Letter may be executed in any number of
counterparts, each of which, when so executed, shall be deemed to be an original
and all of which, taken together, shall constitute one and the same Commitment
Letter. Delivery of an executed counterpart of a signature page to this
Commitment Letter by telecopier shall be as effective as delivery of a manually
executed counterpart of this Commitment Letter. Your obligations under the
paragraphs captioned "Fees", "Indemnification", "Costs and Expenses" and
"Confidentiality" shall survive the expiration or termination of this Commitment
Letter.
Waiver of Jury Trial
- --------------------
Each party hereto irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Commitment Letter or the transactions
contemplated hereby or the actions of Citibank or Citicorp Securities in the
negotiation, performance or enforcement hereof.
Please indicate your acceptance of the provisions hereof by signing the enclosed
copy of this Commitment Letter and the Fee Letter and returning them to Judith
Fishlow Minter, Managing Director, Citicorp Securities, Inc., 399 Park Avenue,
New York, New York 10043 (telecopier: 212-793-3963) at or before 5:00 p.m. (New
York City time) on June 13, 1997, the time at which the commitment of Citibank
set forth above (if not so accepted prior thereto) will expire. If you elect to
deliver this Commitment Letter by telecopier, please arrange for the executed
original to follow by next-day courier.
Very truly yours,
CITICORP SECURITIES, INC.,
as agent for Citibank, N.A.
By: /s/ Judith Fishlow Minter
--------------------------
Title: Managing Director
ACCEPTED AND AGREED
this ___ day of June, 1997:
FOX KIDS WORLDWIDE, INC.
By: /s/ Mel Woods
------------------------------------
Title: President
<PAGE>
ANNEX I
FOX KIDS WORLDWIDE, INC.
U.S. $900,000,000 SECURED REDUCING REVOLVING CREDIT FACILITIES
U.S. $350,000,000 SECURED TERM LOAN FACILITY
SUMMARY OF TERMS AND CONDITIONS
BORROWERS: A newly created, single purpose wholly owned subsidiary
- --------- ("Acquisition Corp.") of Fox Kids Worldwide, Inc. ("Fox
Kids") organized to acquire (the "Acquisition") all of the
outstanding common stock of International Family
Entertainment, Inc. ("IFE"). Upon the merger (the "Merger")
of Acquisition Corp. with and into IFE, IFE will be the
surviving corporation (the "Surviving Corporation") thereof.
The Surviving Corporation will succeed to and assume all of
the obligations of Acquisition Corp. under or in respect of
all of the Facilities (as hereinafter defined).
Upon consummation of the Merger, the Surviving Corporation
will be the sole Borrower under the Term Loan (as
hereinafter defined) and the Surviving Corporation, FCN
Holdings, Inc. ("FCN") and Saban Entertainment, Inc.
("Saban"), all of which will be wholly owned subsidiaries of
Fox Kids, will be the Borrowers under the Tranche A
Revolving Credit and the Tranche B Revolving Credit.
FACILITIES: A 7-Year Secured Reducing Revolving Credit Facility of
- ---------- $625,000,000 (the "Tranche A Revolving Credit"), a 7-Year
Secured Reducing Revolving Credit Facility of $275,000,000
(the "Tranche B Revolving Credit" and, together with the
Tranche A Revolving Credit, the "Revolving Credits"), and a
9-Year Secured Term Loan Facility of $350,000,000 (the "Term
Loan"). The Agent reserves the right to change the amounts
of each of the Tranche B Revolving Credit and the Term Loan
before the Closing Date (as hereinafter defined) with the
consent of Fox Kids (which consent shall not be unreasonably
withheld or delayed), provided that the total amount of such
Facilities remains $625,000,000.
GUARANTORS: Fox Kids and all of the present and future direct and
- ---------- indirect domestic wholly owned subsidiaries of Fox Kids;
provided that IFE and its present and future direct and
indirect domestic wholly owned subsidiaries shall not be
required to be Guarantors until such time as Acquisition
Corp. and/or one or more of its affiliates acquires all of
the outstanding shares of common stock of IFE. Each of the
Guarantors will unconditionally and irrevocably guarantee
all of the obligations of the Borrowers and the other
Guarantors
<PAGE>
under the loan documentation, which guarantees shall, in the
case of each of the subsidiaries of Fox Kids, be limited (if
necessary) for purposes of fraudulent transfer protection.
PURPOSE: Tranche A
- ------- ---------
Revolving Credit: To finance the Acquisition and, following
----------------
consummation of the Merger, for general
corporate purposes.
Tranche B
---------
Revolving Credit: To finance in part the Merger and to
----------------
refinance acquired debt of IFE and,
following consummation of the Merger, for
general corporate purposes.
Term Loan: To finance in part the Merger and to
--------- refinance acquired debt of IFE.
ARRANGER: Citicorp Securities, Inc.
- --------
AGENT: Citibank, N.A. ("Citibank").
- -----
LENDERS: Syndicate of financial institutions (including Citibank)
- ------- acceptable to the Arranger and Fox Kids.
CLOSING DATE: On or before September 30, 1997, or such other date as may
- ------------ be agreed upon by Fox Kids and the Agent.
COMMITMENT
- ----------
TERMINATION DATE: Seven years from the Closing Date for the
- ---------------- Revolving Credits.
FINAL MATURITY DATE: The Commitment Termination Date for
- -------------------
the Revolving Credits and the ninth anniversary of the
Closing Date for the Term Loan.
SCHEDULED
- ---------
AMORTIZATION: The Borrowers will be required to make quarterly
- ------------ amortization payments on the Term Loan occurring on the
first business day of January, April, July and October of
each year, commencing on January 1, 1998, such that annual
amortization is as follows:
<TABLE>
<CAPTION>
Annual Remaining
Year(s) Amount Balance
-------------------------------------
<S> <C> <C>
1-7 $ 3,500,000 $325,500,000
-------------------------------------
8 $162,750,000 $162,750,000
-------------------------------------
9 $162,750,000 $0
-------------------------------------
</TABLE>
REPAYMENT: Each outstanding advance under the Facilities shall be repaid in
---------
full on the Final Maturity Date.
<PAGE>
INTEREST RATES
- --------------
AND INTEREST PERIODS: At the applicable Borrower's option, advances under the
- --------------------
Facilities made to it will be available at the rates and for
the Interest Periods set forth below:
a) Base Rate Option: Alternate Base Rate plus the
----------------
Applicable Margin.
The Alternate Base Rate is a fluctuating rate
per annum equal at all times to the highest of (i)
Citibank's publicly announced "base rate"; (ii) 1% per
annum above the latest three-week moving average of
secondary market morning offering rates in the United
States for three-month certificates of deposit of major
U.S. money market banks, adjusted for reserve
requirements and FDIC assessment rates; and (iii) 1/2
of 1% per annum above the weighted average of the rates
on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds
brokers.
b) Eurodollar Rate Option: LIBOR plus the Applicable
----------------------
Margin.
The Eurodollar Rate is the average rate per annum
(rounded upward to the nearest 1/16 of 1%) at which
deposits in United States Dollars are offered by the
Reference Banks to prime banks in the London interbank
market at 11:00 A.M. (London time) two business days
before the first day of the Interest Period and in
amounts approximately equal to the Reference Banks'
Eurodollar Advances for a given Interest Period and
with a maturity equal to such Interest Period, adjusted
for reserve requirements. The Eurodollar Rate shall be
fixed for Interest Periods of 1, 2, 3 or 6 months or,
if readily available to all of the Lenders, 9 months.
The Applicable Margin and the Applicable Commitment Fee for
both of the Revolving Credits means the respective per annum
rates set forth below opposite the Leverage Ratio (as
hereinafter defined) then in effect for advances under the
Revolving Credits:
Leverage Applicable Applicable Applicable
Ratio Eurodollar Base Rate Commitment
Margin Margin Fee
- ---------------------------------------------------------------------------
_7.0x 2.25% 1.25% 0.50%
- ---------------------------------------------------------------------------
<PAGE>
_6.0x and less than 7.0x 1.50% 0.50% 0.375%
- ---------------------------------------------------------------------------
_5.5x and less than 6.0x 1.25% 0.25% 0.25%
- ---------------------------------------------------------------------------
_5.0x and less than 5.5x 1.125% 0.125% 0.25%
- ---------------------------------------------------------------------------
_4.5x and less than 5.0x 0.875% 0.00% 0.25%
- ---------------------------------------------------------------------------
_4.0x and less than 4.5x 0.75% 0.00% 0.25%
- ---------------------------------------------------------------------------
_3.0x and less than 4.0x 0.625% 0.00% 0.25%
- ---------------------------------------------------------------------------
less than3.0x 0.50% 0.00% 0.20%
- ---------------------------------------------------------------------------
The Applicable Margin for the Term Loan means the respective
per annum rates set forth below opposite the Leverage Ratio
then in effect for advances under the Term Loan:
Applicable Applicable
Leverage Eurodollar Base Rate Margin
Ratio Margin
- --------------------------------------------------------------
_7.0x 2.75% 1.75%
- --------------------------------------------------------------
_3.5x and less than 7.0x 2.00% 1.00%
- --------------------------------------------------------------
less than 3.5x 1.00% 0.00%
- --------------------------------------------------------------
During the continuance of any default under the loan
documentation, the Applicable Margin shall increase by 2% per
annum.
COMMITMENT FEE: Calculated as the Applicable Commitment Fee set forth above
- -------------- (360-day basis) on the unused portion of each Lender's share
of the Revolving Credits, commencing upon the date of the
Commitment Letter to which this Summary of Terms and
Conditions is attached (the "Commitment Letter"), payable on
(i) the Closing Date and quarterly in arrears thereafter and
(ii) the date (whether before or after the Closing Date) of
termination or expiration of the commitments.
REFERENCE BANKS: Citibank and certain other Lenders to be determined by the
- --------------- Agent and Fox Kids.
INTEREST PAYMENTS: Interest on Base Rate advances will be payable
- -----------------
<PAGE>
quarterly in arrears. Interest on Eurodollar Rate advances
will be payable at the earlier of the end of the Interest
Period and quarterly. Interest to be computed on a 365/366-
day basis for Base Rate advances and on a 360-day basis for
Eurodollar Rate advances.
BORROWINGS: Borrowings shall be in principal amounts of $10,000,000 or
- ---------- integral multiples of $1,000,000 in excess thereof. All
advances shall be made by the Lenders ratably in proportion
to their respective commitments. Borrowings will be
available on 1 business day's notice for Base Rate advances
and 3 business days' notice for Eurodollar Rate advances.
AVAILABILITY: The Tranche A Revolving Credit shall be available on and
- ------------ after the Closing Date and the Tranche B Revolving Credit
shall be available on and after the date on which the Merger
is consummated. The Term Loan shall be available in a single
draw on the date on which the Merger is consummated. The
Borrowers may, subject to the terms thereof, borrow, repay
and reborrow under the Revolving Credits; once repaid, the
Surviving Corporation may not reborrow under the Term Loan.
SCHEDULED COMMITMENT
- --------------------
REDUCTION: The aggregate commitments of the Lenders under the Revolving
- --------- Credits will reduce ratably by the following amounts on the
first business day of January, April, July and October of
each year, commencing on January 1, 1998, such that annual
reductions of the aggregate commitments under both Revolving
Credits are as follows.
Annual Remaining
Year(s) Amount Balance
-------------------------------------
1-3 $0 $900,000,000
-------------------------------------
4 $150,000,000 $750,000,000
-------------------------------------
5 $200,000,000 $550,000,000
-------------------------------------
6 $250,000,000 $300,000,000
-------------------------------------
7 $300,000,000 $0
-------------------------------------
The Borrowers will be required to repay any advances in excess of such amounts
on such dates.
OPTIONAL COMMITMENT
- -------------------
REDUCTION: The Borrowers will have the right, upon at least 3 business
- --------- days' notice, to terminate or cancel, in whole or in part,
the unused portion of either Revolving Credit, at any time
and from time to time prior to the consummation of the
Merger, and the unused portion of both Revolving Credits on
a pro rata basis, at any time
<PAGE>
and from time to time following the consummation of the
Merger; provided that each partial reduction shall be in an
amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof. Commitment reductions shall be applied
ratably to all Lenders' commitments. Once terminated, a
commitment cannot be reinstated.
MANDATORY
- ---------
PREPAYMENTS: The Borrowers shall prepay advances under the Term Loan and
- ----------- Revolving Credits with a mutually agreed upon percentage of
the proceeds from excess cash flow (to be defined in the
loan documentation), and, subject to certain exceptions to
be set forth in the loan documentation, from asset sales and
debt and equity issuances. The proceeds will be applied in a
manner to be mutually agreed. All or a percentage of the
proceeds from debt and equity issuances otherwise required
to prepay advances under the Term Loan and Revolving Credits
will not be required to be so applied upon the achievement
of certain financial covenant targets to be determined in
the loan documentation.
OPTIONAL
- --------
PREPAYMENTS: Advances may be prepaid without penalty in an amount of
- ----------- $5,000,000 or integral multiples of $1,000,000 in excess
thereof on 3 business days' notice. The Borrowers will bear
all costs related to the prepayment of any Eurodollar Rate
advance prior to the last day of the applicable Interest
Period. If any amount of the Term Loan is prepaid, no part
thereof may be reborrowed. The proceeds will be applied in a
manner to be mutually agreed in the loan documentation.
ANNUAL AGENCY FEE: As set forth in the Fee Letter between the Agent and Fox
- ----------------- Kids.
COLLATERAL: First priority (subject to exception for permitted purchase
- ---------- money liens and certain other exceptions to be agreed in the
loan documentation) lien and security interest in all of the
following property and assets (other than certain
insignificant property and assets to be agreed in the loan
documentation), whether now or hereafter existing or
acquired:
(a) From the Closing Date to the date on which all of the
shares of common stock of IFE are owned by Acquisition
Corp. and/or one or more of its affiliates, (i) all of
the shares of capital stock of Fox Kids other than (A)
up to 2% of the shares of common stock thereof owned or
otherwise held by Allen & Co. on the date of the
Commitment Letter until such time, if ever, as such
shares are acquired by Fox Kids or any of its
affiliates and (B) the preferred stock (the "Liberty
Preferred Stock") to be issued to Liberty Media
<PAGE>
Group or one or more of its affiliates as consideration
for the shares of common stock of IFE owned thereby;
(ii) all of the shares of capital stock of Acquisition
Corp., FCN and Saban; and (iii) all of the property and
assets of Fox Kids, FCN and Saban and their respective
domestic subsidiaries/1/ (except (A) for the property
and assets of IFE and its subsidiaries and (B) that
none of Fox Kids, FCN, Saban or any such domestic
subsidiary shall be required to pledge more than 66-
2/3% of the voting stock of any of their foreign
subsidiaries); and
(b) From and after the date on which all of the shares of
common stock of IFE are owned by Acquisition Corp.
and/or one or more of its affiliates, (i) all of the
shares of capital stock of Fox Kids other than (A) up
to 2% of the shares of common stock thereof owned or
otherwise held by Allen & Co. on the date of the
Commitment Letter until such time, if ever, as such
shares are acquired by Fox Kids or any of its
affiliates and (B) the Liberty Preferred Stock; (ii)
all of the shares of capital stock of the Borrowers;
and (iii) all of the other property and assets of Fox
Kids, the Borrowers and their domestic subsidiaries
(except (A) that none of Fox Kids, any Borrower or any
such domestic subsidiary shall be required to pledge
more than 66-2/3% of the voting stock of any of their
foreign subsidiaries and (B) for the property and
assets of certain non-wholly owned subsidiaries of IFE
so long as the Lenders are reasonably satisfied with
excluding such property and assets from the
Collateral).
Release of security upon the achievement of certain ratio
levels to be determined in the loan documentation.
LOAN
- ----
DOCUMENTATION: The commitments will be subject to preparation, execution
- ------------- and delivery of mutually acceptable loan documentation which
will contain conditions precedent, representations and
warranties, covenants, events of default and other
provisions (including, without limitation, qualifications
and exceptions thereto) customarily found in the Agent's
loan documentation for
- ----------
/1/ All references in this Summary of Terms and Conditions to subsidiaries of
Fox Kids shall, unless otherwise expressly stated, include IFE and its
subsidiaries, whether or not the Acquisition or the Merger has been effected
at the time.
<PAGE>
similar financings and others appropriate in the reasonable
judgment of Citibank for borrowers engaged in similar
businesses and similarly situated, including, but not
limited to, those noted below.
CONDITIONS PRECEDENT
- --------------------
TO INITIAL ADVANCE
- ------------------
UNDER THE TRANCHE A
- -------------------
REVOLVING CREDIT: Customary for financings of this nature and others
- ---------------- appropriate in the reasonable judgment of Citibank for
borrowers engaged in similar businesses and similarly
situated, including but not limited to:
- The absence of any material adverse change in the
business, condition (financial or otherwise),
operations, performance, properties, or prospects of
Fox Kids and its subsidiaries, taken as a whole, since
December 31, 1996.
- The absence of any pending or, to the knowledge of Fox
Kids or any Borrower, threatened litigation,
investigation or proceeding (i) that, either
individually or in the aggregate, could reasonably be
expected to have a material adverse effect on (A) the
business, condition (financial or otherwise),
operations, performance, properties, or prospects of
Fox Kids and its subsidiaries, taken as a whole, (B)
the rights and remedies of the Agent or any Lender
under any of the loan documentation or (C) the ability
of the Borrowers, the Guarantors or the pledgors of any
of the Collateral to perform their respective
obligations under the loan documentation to which they
are or are to be a party (collectively, a "Material
Adverse Effect") or (ii) in which there is a reasonable
likelihood of an adverse determination and which
purports to affect the legality, validity, binding
effect or enforceability of any of the loan
documentation or any of the transactions contemplated
hereby. The definition of Material Adverse Effect will
be modified in the loan documentation to exclude from
clauses (B) and (C) thereof events or circumstances
that could reasonably be expected to have a material
adverse effect on immaterial nonpayment obligations of
certain subsidiaries of the Borrowers to be agreed or
immaterial portions of the Collateral.
- Payment of accrued fees and expenses (including fees
and expenses of counsel for the Agent) required to be
paid by Fox Kids, the Borrowers or any of their
affiliates.
- The execution and delivery of the loan
<PAGE>
documentation, in form and substance reasonably
satisfactory to the Lenders, including: (i) notes
payable to each Lender; (ii) board resolutions or other
evidence of corporate authorization; (iii) certificates
with respect to incumbency, signatures, accuracy of
representations and warranties and absence of defaults;
(iv) favorable legal opinions from counsel for the
Borrowers, the Guarantors and the pledgors of
Collateral; and (v) favorable legal opinion from
counsel for the Agent.
- Reasonable satisfaction with the corporate structure
and capitalization of Fox Kids, the Borrowers and their
subsidiaries intended to be party to any of the loan
documentation.
- Reasonable satisfaction with the material terms and
conditions of the preferred stock to be issued as part
of the consideration for the Acquisition (as defined in
the Commitment Letter) and the Merger.
- Copies of the documentation to be entered into in
connection with the Acquisition (as defined in the
Commitment Letter) and the Merger shall have been
delivered to the Lenders and the Lenders shall not, in
their reasonable judgment, have objected to any of the
terms thereof; and all such documentation shall have
been executed and delivered by the parties thereto.
- All required approvals, authorizations and filings for
the Acquisition (as defined in the Commitment Letter)
and the financing thereof shall have been obtained
without the imposition of any adverse conditions.
- The Acquisition (as defined in the Commitment Letter)
shall be concurrently consummated in accordance with
all applicable laws.
CONDITIONS PRECEDENT
- --------------------
TO INITIAL ADVANCES
- -------------------
UNDER THE TERM LOAN
- -------------------
AND THE TRANCHE B
- -----------------
REVOLVING CREDIT: Customary for financings of this nature and others
- ---------------- appropriate in the reasonable judgment of Citibank for
borrowers engaged in similar businesses and similarly
situated, including but not limited to:
- The absence of any pending or, to the knowledge of Fox
Kids or any Borrower, threatened litigation,
investigation or proceeding (i) that, either individually
or in the aggregate, could
<PAGE>
reasonably be expected to have a Material Adverse Effect
or (ii) in which there is a reasonable likelihood of an
adverse determination and which purports to affect the
legality, validity, binding effect or enforceability of
any of the loan documentation or any of the transactions
contemplated hereby.
- The execution and delivery of the loan documentation not
entered into prior to such time, in form and substance
reasonably satisfactory to the Lenders, including: (i)
notes payable to each Lender; (ii) board resolutions or
other evidence of corporate authorization; (iii)
certificates with respect to incumbency, signatures,
accuracy of representations and warranties and absence of
defaults; (iv) favorable legal opinions from counsel for
the Borrowers, the Guarantors and the pledgors of
Collateral; and (v) favorable legal opinion from counsel
for the Agent.
- All required approvals, authorizations and filings for
the Merger and the financing thereof shall have been
obtained without the imposition of any adverse
conditions.
- Evidence of repayment and termination of scheduled
indebtedness and facilities refinanced as described under
"Purpose".
- The Merger shall be concurrently consummated in
accordance with all applicable laws.
CONDITIONS PRECEDENT
- --------------------
TO ALL ADVANCES: Customary for financings of this nature, including but not
- --------------- limited to the following:
- All representations and warranties are true in all
material respects on and as of the date of the Borrowing,
before and after giving effect to such Borrowing and to
the application of the proceeds therefrom, as though made
on and as of such date (except for any such
representations and warranties that, by their terms,
relate solely to a specified earlier date).
- No Event of Default, or event which with the giving of
notice or lapse of time or both would be an Event of
Default, has occurred and is continuing, or would result
from such Borrowing.
REPRESENTATIONS
- ---------------
AND WARRANTIES: Customary for financings of this nature and others
- -------------- appropriate in the reasonable judgment of Citibank for
<PAGE>
borrowers engaged in similar businesses and similarly
situated, including but not limited to the following:
- No material adverse change in the business, condition
(financial or otherwise), operations, performance or
properties of Fox Kids and its subsidiaries, taken as a
whole, since December 31, 1996.
- Corporate organization, existence, power and
authorization of Fox Kids and its subsidiaries.
- Execution, delivery and performance of loan
documentation does not violate law, any Borrower's
charter or bylaws or existing agreements and does not
result in the imposition of liens.
- No government or regulatory approvals, or other third-
party consents, required (other than those already
obtained).
- Legality, validity, binding effect and enforceability
of the loan documentation.
- No litigation that could reasonably be expected to have
a Material Adverse Effect.
- Fair presentation of financial statements and accuracy
in all material respects of other written information.
- No violations of Regulation G, T, U or X.
- No violation of law or agreements that, either
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
- ERISA.
COVENANTS: Customary for financings of this nature and others
- --------- appropriate in the reasonable judgment of Citibank for
borrowers engaged in similar businesses and similarly
situated, including but not limited to the following (it
being understood that none of the foreign subsidiaries of
Fox Kids or any Borrower will be party to any of the loan
documentation and that neither IFE nor any of its domestic
subsidiaries will be a party thereto until all of the shares
of common stock thereof are acquired by Acquisition Corp.
and/or one or more of its affiliates):
- Compliance with laws (including, without limitation,
ERISA) and performance of obligations.
<PAGE>
- Preservation of corporate existence; maintenance of books
and records; visitation.
- Maintenance of insurance, properties and all necessary
licenses, permits, tradenames, patents and other
intellectual property.
- Payment of taxes and other liabilities.
- Transactions with affiliates.
- Use of proceeds.
- Reporting requirements (including, without limitation,
quarterly and audited annual financial statements,
quarterly compliance certificates, notices of default,
notices of material litigation, SEC filings, notices of
certain ERISA-related events, and such other information
and such access to the Guarantors' and the Borrowers'
properties, books and records as the Lenders may
reasonably request).
- Limitation on liens.
- Limitation on indebtedness with certain exceptions to be
agreed in the loan documentation, including the right to
issue public indebtedness with a maturity date at least
one year after the Final Maturity Date and otherwise on
terms reasonably acceptable to the Lenders, provided that
the proceeds thereof are used concurrently to repay and
retire all or a portion of the Facilities equal to the
amount of such proceeds. The ability of the Borrowers and
their subsidiaries to incur indebtedness will be expanded
upon the achievement of certain financial targets, and on
terms, to be agreed in the loan documentation.
- Limitation on dividends and distributions on, and
redemptions and repurchases of, capital stock with
exceptions to be agreed in the loan documentation,
including (a) the payment of scheduled ordinary dividends
on the Liberty Preferred Stock (approximately $30,000,000
per annum) so long as after giving effect to each such
payment, no default or Event of Default shall have
occurred and be continuing, (b) the redemption or
repurchase of the Liberty Preferred Stock on the
scheduled put dates thereof solely from the proceeds of a
capital contribution by, or a sale of additional shares
of common stock to, affiliates of Fox Kids (other than
any subsidiary thereof, but including, without
<PAGE>
limitation, The News Corporation Limited ("News Corp."));
provided that (i) such capital contribution or such sale,
as the case may be, was made within five days of the date
of such redemption or repurchase and (ii) after giving
effect to such redemption or repurchase, no default or
Event of Default shall have occurred and be continuing
and (c) the payment of dividends on, and the redemption
or repurchase of, capital stock of Fox Kids or any
Borrower so long as (i) Fox Kids and its consolidated
subsidiaries have achieved certain financial covenant
targets, and on terms, to be agreed in the loan
documentation and (ii) after giving effect to each such
dividend, redemption or repurchase, no default or Event
of Default shall have occurred and be continuing.
- Limitation on mergers, consolidations, divestitures.
- Limitation on changes in conduct of business.
FINANCIAL COVENANTS: Customary for financings of this nature and others
- ------------------- appropriate in the reasonable judgment of Citibank for
borrowers engaged in similar businesses and similarly
situated, including but not limited to the following, in
each case tested at the end of four consecutive fiscal
quarters of Fox Kids and its consolidated subsidiaries:
- Maximum Total Debt to EBITDA (the "Leverage Ratio")
- Minimum EBITDA to Total Interest Expense
- Minimum EBITDA to Fixed Charges
- Minimum Net Worth
The Financial Covenants will be adjusted for the period of
time between the Closing Date and the acquisition of all of
the outstanding capital stock of IFE by Acquisition Corp.
and/or one or more of its affiliates.
EVENTS OF
- ---------
DEFAULT: Customary for financings of this nature and others
- ------- appropriate in the reasonable judgment of Citibank for
borrowers engaged in similar businesses and similarly
situated, including but not limited to the following:
- Failure to pay principal when due or interest or any
other amount payable under the loan documentation within
5 days of the date due.
<PAGE>
- Representations or warranties materially incorrect when
made or deemed made.
- Failure to comply with covenants (with cure periods where
appropriate).
- Reorganization, liquidation, or voluntary or involuntary
bankruptcy or insolvency proceedings.
- Material unsatisfied judgment or order.
- Cross default to other material debt of the Borrower or
any of its subsidiaries.
- ERISA defaults.
- Loan documentation unenforceable.
- Change in control (the definition of which shall include,
among other things, requirements that (i) News Corp.,
together with certain affiliates (the "News Corp.
Group"), either directly or indirectly, shall maintain a
30% fully diluted voting and economic interest in Fox
Kids, (ii) no other person or group shall hold a voting
or economic interest in Fox Kids equal to or greater than
that held by the News Corp. Group (directly or
indirectly), except that Haim Saban and/or any of his
affiliates may hold a voting and/or economic interest in
Fox Kids that is equal to (but not greater than) that
held by the News Corp. Group and (iii) the News Corp.
Group, directly or indirectly, shall at all times
maintain at least the management rights that it possesses
in Fox Kids on the Closing Date or the substantial
equivalent thereof (to be clarified in the loan
documentation). Certain of the clauses of this definition
of "change of control" will be modified to reflect
ownership changes permitted to occur as a result of an
initial public offering of the common stock of Fox Kids.
OTHER: Loan documentation will include:
- -----
- Indemnification of the Agent and the Lenders and their
respective affiliates, officers, directors, employees,
agents and advisors as set forth in the Commitment Letter
and as may be modified in the loan documentation.
- Customary agency language.
- Required Lenders will be defined as those holding in
excess of 50% of outstandings or, if none, the
commitments.
<PAGE>
ASSIGNMENTS AND
- ---------------
PARTICIPATIONS: Each Lender will have the right, with the consent of the Agent
- -------------- and Fox Kids, which shall not be unreasonably withheld or
delayed, to assign to one or more Eligible Assignees (such term
to be defined in the loan documentation) all or a portion of
its rights and obligations under the loan documentation with a
minimum of $10,000,000 (aggregated for both Facilities) for
each assignment. Upon such assignment, the assignee shall
become a Lender for all purposes of the loan documentation. The
parties to the assignment shall pay to the Agent an assignment
fee of $3,500. No consent will be required for assignments to
other Lenders or affiliates of a Lender.
Each Lender will also have the right, without notice to or
consent of Fox Kids or the Agent, to assign all or part of its
rights or obligations under the loan documentation to any of
its affiliates and/or all or part of its rights under the loan
documentation to any Federal Reserve Bank.
Each Lender will have the right to sell participations (in a
minimum amount of $5,000,000 for each participation (aggregated
for both Facilities)) in its rights and obligations under the
loan documentation. The voting rights of participants shall be
limited to those matters with respect to which a unanimous vote
of the Lenders would be required.
TAXES; YIELD
- ------------
PROTECTION: The loan documentation will contain mutually acceptable
- ---------- provisions regarding taxes, withholdings and other deductions
incurred by the Agent and the Lenders and standard yield
protection provisions protecting the Lenders in the event of
unavailability of funding, illegality, increased costs, capital
adequacy and funding losses, subject to the ability of the
Borrowers to replace the Lenders under certain circumstances.
GOVERNING LAW: New York, excluding (to the fullest extent a New York court
- ------------- would permit) any rule of law that would cause application of
the laws of any jurisdiction other than the State of New York.
COUNSEL FOR THE AGENT: Shearman & Sterling.
- ---------------------
EXPENSES: All reasonable and properly documented out-of-pocket expenses
- -------- incurred (i) by the Agent and/or the Arranger in connection
with the preparation, execution, delivery, modification,
amendment, syndication and administration of the loan
documentation (including reasonable fees and expenses of
counsel to the Agent) or (ii) by the Agent, the Arranger or any
Lender in
<PAGE>
connection with the enforcement of the loan documentation
(including reasonable fees and expenses of counsel), are for
the Borrowers' account.
<PAGE>
EXHIBIT 7
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934,
the undersigned hereby consent to the joint filing of a single Schedule 13D on
their behalf and to the joint filing of any single amended Schedule 13D
statements thereto. With respect to the ownership by each of the undersigned of
shares of Common Stock of International Family Entertainment, Inc. The
Undersigned hereby further agree that this statement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
Dated: as of June 20, 1997
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
-----------------------------------
Name: Arthur M. Siskind
Title: Director
/s/ K. Rupert Murdoch
-----------------------------------
K. Rupert Murdoch
TWENTIETH HOLDINGS CORPORATION
By: /s/ Jay Itzkowitz
-----------------------------------
Name: Jay Itzkowitz
Title: Senior Vice President and
Secretary
FOX TELEVISION STATIONS, INC.
By: /s/ Jay Itzkowitz
-----------------------------------
Name: Jay Itzkowitz
Title: Senior Vice President and
Secretary
/s/ Haim Saban
-----------------------------------
Haim Saban
FOX KIDS WORLDWIDE, INC.
By: /s/ Haim Saban
-----------------------------------
Name: Haim Saban
Title: Chief Executive Officer
