-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bhy0xN2WnEEQB5cVI5ZtPCADDzE2BbLRx0JpNZgrC5wmKEJR1hcE/IiyaZCG+u2D wkZWUWN4hN66kbDs50iMmg== 0000950144-94-001836.txt : 19941026 0000950144-94-001836.hdr.sgml : 19941026 ACCESSION NUMBER: 0000950144-94-001836 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19941011 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19941021 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACTAVA GROUP INC CENTRAL INDEX KEY: 0000039547 STANDARD INDUSTRIAL CLASSIFICATION: 7384 IRS NUMBER: 580971455 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05706 FILM NUMBER: 94554368 BUSINESS ADDRESS: STREET 1: 4900 GEORGIA PACIFIC CTR CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 4046589000 MAIL ADDRESS: STREET 1: 4900 GEORGIA PACIFIC CTR CITY: ATLANTIA STATE: GA ZIP: 30303 FORMER COMPANY: FORMER CONFORMED NAME: FUQUA INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 ACTAVA FORM 8-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 11, 1994 THE ACTAVA GROUP INC. (Exact name of registrant as specified in its charter)
DELAWARE 1-5706 58-0971455 - - -------------------------------- ------------------------ ------------------ (State or other jurisdiction of) (Commission File Number) (I.R.S. Employer incorporation or organization) Identification No.)
4900 GEORGIA-PACIFIC CENTER, ATLANTA, GEORGIA 30303 (Address of principal executive offices)(Zip Code) Registrant's telephone number, including area code: 404/658-9000 ================================================================================ 2 Item 5. Other Events The Actava Group Inc. ("Actava") and Metromedia Company ("Metromedia") have entered into a Credit Agreement dated as of October 11, 1994 (the "Credit Agreement") under which Actava will make loans to Metromedia in an amount not to exceed $55 million. Under the terms of the Credit Agreement, Metromedia will use the proceeds of the loans to make advances to or pay obligations on behalf of Orion Pictures Corporation ("Orion"), MCEG Sterling Incorporated ("MCEG Sterling"), and Metromedia International Telecommunications Inc. ("MITI"). All loans made by Actava to Metromedia under the Credit Agreement will be secured by the shares of stock of Orion and MITI owned by Metromedia and its affiliates. In addition, John W. Kluge, a general partner of Metromedia, has personally guaranteed the loans. On August 31, 1994, Actava, Orion, MCEG Sterling and MITI entered into letters of intent providing for a combination of the foregoing companies into one new company to be named Metromedia International Group Inc. (the "Proposed Transaction"). The Credit Agreement was contemplated by the letters of intent. The Credit Agreement, however, is a separate transaction from the Proposed Transaction, which remains subject to a number of conditions, including due diligence, the negotiation and execution of definitive agreements, the successful refinancing of the currently outstanding Orion debt, approvals by the Boards of Directors and stockholders of the parties involved in the transaction, and other customary approvals and conditions. The Credit Agreement provides that interest will be due on the principal amount of all loans made under the Credit Agreement at an annual rate equal to the prime rate announced from time to time by Chemical Bank. Interest will be increased to prime plus three percent per annum if a party other than Actava terminates discussions relating to the Proposed Transaction. All loans will be due and payable on the earlier of April 30, 1995 or six months from the date on which the first loan is made. The first loan was made on October 12, 1994 in the amount of $2 million. If Actava elects to terminate discussions relating to the Proposed Transaction, then all loans will be due and payable three months from the date on which such discussions are terminated. 2 3 Item 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description - - ----------- ----------- 10(a) Credit Agreement dated as of October 11, 1994 by and between The Actava Group Inc. and Metromedia Company with respect to a revolving credit facility of up to $55 million. The following exhibits are omitted: Exhibit A - Form of Note; Exhibit B - Form of Pledge Agreement; Exhibit C - Form of Guaranty; and Exhibit D - Form of Opinion of Paul, Weiss, Rifkind, Wharton and Garrison. Registrant agrees to furnish copies of such exhibits upon request. 10(b) Revolving Credit Note dated as of October 11, 1994 with respect to a revolving credit facility of up to $55 million between The Actava Group Inc. and Metromedia Company. 10(c) Pledge Agreement dated as of October 11, 1994 by and between Metromedia Company; Met Telcell, Inc.; Met International, Inc.; John W. Kluge; Anita H. Subotnick and Stuart Subotnick, as joint tenants, and The Actava Group Inc. with respect to a revolving credit facility of up to $55 million. 10(d) Guaranty dated as of October 11, 1994 by John W. Kluge in favor of The Actava Group Inc. with respect to a revolving credit facility of up to $55 million. 3 4 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE ACTAVA GROUP INC. -------------------------- Registrant /s/ Frederick B. Beilstein, III ---------------------------------- Frederick B. Beilstein, III Senior Vice President and Chief Financial Officer Dated: October 20, 1994 4 5 Exhibit Index Exhibit No. Description - - ----------- ----------- 10(a) Credit Agreement dated as of October 11, 1994 by and between The Actava Group Inc. and Metromedia Company with respect to a revolving credit facility of up to $55 million. The following exhibits are omitted: Exhibit A - Form of Note; Exhibit B - Form of Pledge Agreement; Exhibit C - Form of Guaranty; and Exhibit D - Form of Opinion of Paul, Weiss, Rifkind, Wharton and Garrison. Registrant agrees to furnish copies of such exhibits upon request. 10(b) Revolving Credit Note dated as of October 11, 1994 with respect to a revolving credit facility of up to $55 million between The Actava Group Inc. and Metromedia Company. 10(c) Pledge Agreement dated as of October 11, 1994 by and between Metromedia Company; Met Telcell, Inc.; Met International, Inc.; John W. Kluge; Anita H. Subotnick and Stuart Subotnick, as joint tenants, and The Actava Group Inc. with respect to a revolving credit facility of up to $55 million. 10(d) Guaranty dated as of October 11, 1994 by John W. Kluge in favor of The Actava Group Inc. with respect to a revolving credit facility of up to $55 million. 5 EX-10.(A) 2 CREDIT AGREEMENT BETWEEN METRO AND ACTAVA 1 Exhibit 10(a) ================================================================================ CREDIT AGREEMENT BETWEEN METROMEDIA COMPANY AND THE ACTAVA GROUP INC., AS LENDER DATED AS OF OCTOBER 11, 1994 ================================================================================ 2 TABLE OF CONTENTS
Page SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 SECTION 2. AMOUNT AND TERMS OF COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.1 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.2 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.5 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.6 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.8 Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.1 Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.2 Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . 11 3.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.4 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.5 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.7 No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.9 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.10 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.2 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.1 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.2 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.3 Compliance of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.4 Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 17 5.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 6. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 7.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 7.2 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.3 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.4 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.6 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 7.7 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . 25 7.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
i 3
Page ---- 7.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 7.11 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 7.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 7.13 Interest Rate Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ii 4 CREDIT AGREEMENT, dated as of October 11, 1994, between METROMEDIA COMPANY, a Delaware general partnership (the "Borrower"), and THE ACTAVA GROUP INC., a Delaware corporation (the "Lender"). The parties hereto hereby agree as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Actava Termination Event": the abandonment or termination of the Business Combination as a result of (i) the failure (or the withdrawal of approval) by Lender's Board of Directors or stockholders to approve the Business Combination or (ii) a determination by the Lender not to proceed with the Business Combination. "Affiliate": as defined in the Pledge Agreement. "Agreement": this Credit Agreement, as amended, supplemented or otherwise modified from time to time. "Available Commitment": at any time, an amount equal to the excess, if any, of (a) the amount of the Lender's Commitment over (b) the aggregate principal amount of all Loans made by the Lender during the Commitment Period. "Borrowing Date": any Business Day specified in a notice pursuant to subsection 2.3 as a date on which the Borrower requests the Lender to make Loans hereunder. 5 2 "Business Combination": the proposed business combination among the Lender, MITI, Orion and Sterling as set forth in those certain Letters of Intent among the Lender, MITI, Orion and Sterling, each dated as of August 31, 1994. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "Closing Date": the date on which the conditions precedent set forth in subsection 4.1 shall be satisfied. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Collateral": as defined in the Pledge Agreement. "Commitment": the obligation of the Lender to make Loans to the Borrower hereunder in an aggregate principal amount at any one time outstanding not to exceed $55,000,000, as such amount is reduced by the amount of any Loans made hereunder. "Commitment Period": the period from and including the Closing Date to but not including the Termination Date or such earlier date on which the Commitment shall terminate as provided herein. "Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. 6 3 "Default": any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Dollars" and "$": dollars in lawful currency of the United States of America. "Equity Interest": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, all partnership interests in any Person, and any and all warrants or options to purchase any of the foregoing. "Event of Default": any of the events specified in Section 6, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "GAAP": generally accepted accounting principles in the United States of America in effect from time to time. "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guaranty": the Guaranty to be executed and delivered by John W. Kluge, substantially in the form of 7 4 Exhibit C, as the same may be amended, supplemented or otherwise modified from time to time. "Interest Payment Date": (i) the date which is three months from the date of the first borrowing hereunder and (ii) the Termination Date. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement of any kind or nature whatsoever. "Loan": as defined in subsection 2.1. "Loan Documents": this Agreement, the Note, the Pledge Agreement and the Guarantee. "Material Adverse Effect": a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or (b) the validity or enforceability of this Agreement, the Note or any of the other Loan Documents or the rights or remedies of the Lender hereunder or thereunder. "MITI": Metromedia International Telecommunications, Inc., a Delaware corporation. "Note": as defined in subsection 2.2. "Orion": Orion Pictures Corporation, a Delaware corporation. "Orion/MITI Termination Event": the abandonment or termination of the Business Combination as a result of 8 5 (i) the failure (or the withdrawal of approval) by the Board or Directors or stockholders of either of Orion or MITI to approve the Business Combination or (ii) a determination by either Orion or MITI not to proceed with the Business Combination. "Partners' Capital": as determined in accordance with GAAP. "Pledge Agreement": the Pledge Agreement to be executed and delivered by the Borrower, John W. Kluge, Stuart Subotnick and Anita Subotnick, as joint tenants, Met Tellcell, Inc. and Met International, Inc., substantially in the form of Exhibit B, as the same may be amended, supplemented or otherwise modified from time to time. "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Prime Rate": shall mean the rate of interest per annum publicly announced from time to time by Chemical Bank as its prime rate in effect at its principal office in New York City. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. "Requirement of Law": as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, 9 6 treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer": the chief executive officer and the president or executive vice president of the Borrower or, with respect to financial matters, the chief financial officer or senior vice president-finance of the Borrower. "Sterling": MCEG Sterling Incorporated, a Delaware corporation. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Termination Date": the date of which is six months following the Closing Date; provided, that, upon the 10 7 occurrence of an Actava Termination Event, the Termination Date shall be the date which is three months following the date of such Actava Termination Event; provided, further, that in no event shall the Termination Date be later than April 30, 1995. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Exhibit references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF COMMITMENT 2.1 Commitment. Subject to the terms and conditions hereof, the Lender agrees to make loans ("Loans") to the Borrower from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of the Lender's Commitment. The Lender's Commitment shall be reduced permanently by the amount of any Loans advanced by the Lender pursuant to this Section 2 regardless of whether such Loans are prepaid prior to the Termination Date. 11 8 2.2 Note. The Loans made by the Lender shall be evidenced by a promissory note of the Borrower, substantially in the form of Exhibit A (the "Note"), payable to the order of the Lender and in a principal amount equal to the lesser of (a) the amount of the initial Commitment of the Lender and (b) the aggregate unpaid principal amount of all Loans made by the Lender. 2.3 Procedure for Borrowing. The Borrower may borrow under the Commitment during the Commitment Period on any Business Day, provided that the Borrower shall give the Lender irrevocable notice (which notice must be received by the Lender prior to 1:00 P.M., New York City time, one Business Day prior to the requested Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date. Each borrowing under the Commitment shall be in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then Available Commitment is less than $100,000, such lesser amount). The Lender will make the amount of each borrowing available to the Borrower by 11:00 A.M. New York City time by wire transfer of immediately available funds to an account maintained by the Borrower and specified in writing to the Lender. 2.4 Optional Prepayments. The Borrower may at any time and from time to time upon three (3) days advance notice to the Lender, prepay the Loans, in whole or in part, 12 9 without premium or penalty. Such prepayment shall be applied first to interest and then to principal. 2.5 Interest Rates and Payment Dates. (a) Each Loan shall bear interest at a rate per annum equal to the Prime Rate;provided, however, upon the occurrence of an Orion/MITI Termination Event, each Loan shall bear interest at a rate per annum equal to the Prime Rate plus 3%. (b) If all or a portion of (i) the principal amount of any Loan or (ii) any interest payable thereon shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of overdue interest, the Prime Rate plus 2%, in each case from the date of such non-payment until such amount is paid in full. (c) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (b) of this subsection shall be payable from time to time on demand. 2.6 Computation of Interest. Interest shall be calculated on the basis of a 360-day year for the actual days elapsed. Any change in the interest rate on a Loan resulting from a change in the Prime Rate shall become effective as of the opening of business on the day on which 13 10 such change becomes effective. The Lender shall as soon as practicable notify the Borrower of the effective date and the amount of each such change in interest rate. 2.7 Payments. All payments (including prepayments) to be made by the Borrower hereunder and under the Note, whether on account of principal, interest, or otherwise, shall be made without set off or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Lender in immediately available funds. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. 2.8 Payment Date. All principal and any unpaid interest outstanding hereunder shall be due and payable in full on the Termination Date. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Lender to enter into this Agreement and to make the Loans, the Borrower hereby represents and warrants to the Lender that: 3.1 Existence; Compliance with Law. The Borrower (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the partnership power and authority, and the legal right, to own and operate its property, to lease the prop- 14 11 erty it operates as lessee and to conduct the business in which it is currently engaged, and (c) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 3.2 Power; Authorization; Enforceable Obligations. The Borrower has the partnership power and authority, and the legal right, to make, deliver and perform the Loan Documents and to borrow hereunder and has taken all necessary partnership action to authorize the borrowings on the terms and conditions of this Agreement and the Note and to authorize the execution, delivery and performance of the Loan Documents. Except as set forth on Schedule 3.2, no consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Loan Documents. This Agreement and each other Loan Document have been duly executed and delivered on behalf of the Borrower and the Affiliates, as the case may be. This Agreement and each other Loan Document constitutes a legal, valid and binding obligation of the Borrower and/or the Affiliates, as the case may be, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of 15 12 creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.3 No Legal Bar. The execution, delivery and performance of the Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or Contractual Obligation of the Borrower or any Affiliate and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues pursuant to any such Requirement of Law or Contractual Obligation, except to the extent such violations could not, in the aggregate, be reasonably expected to have a Material Adverse Effect. 3.4 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened by or against the Borrower or against any of its properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) which could reasonably be expected to have a Material Adverse Effect. 3.5 No Default. The Borrower is not in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 16 13 3.6 Taxes. The Borrower has filed or caused to be filed all tax returns or applied for extensions which, to the knowledge of the Borrower, are required to be filed and has paid all taxes that are due and payable, and has paid any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any taxes, assessments, fees or other charges the amount of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Borrower). 3.7 No Untrue Statement. No statement contained in this Agreement, nor in any certificate or other document delivered to the Lender by the Borrower (or its representatives) in connection with this Agreement or the transactions contemplated hereby, contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements contained therein or herein not misleading. 3.8 Partner's Capital. The Borrower has Partners' Capital in excess of $[CONFIDENTIAL -- REDACTED]. 3.9 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation G or Regulation U of the Board of Governors of the Federal Reserve System as now and from 17 14 time to time hereafter in effect or for any purpose which violates the provisions of the Regulations of such Board of Governors. 3.10 Investment Company Act. The Borrower is not an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. SECTION 4. CONDITIONS PRECEDENT 4.1 Conditions to Initial Loans. The agreement of the Lender to make the initial Loan requested to be made by it is subject to the satisfaction, immediately prior to or concurrently with the making of such Loan on the Closing Date, of the following conditions precedent: (a) Loan Documents. The Lender shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Borrower, (ii) the Note, executed and delivered by a duly authorized officer of the Borrower, (iii) the Pledge Agreement, executed and delivered by a duly authorized officer of the Borrower and each of the Affiliates and (iv) the Guaranty, executed and delivered by John W. Kluge. (b) Partnership Proceedings of the Borrower. The Lender shall have received a copy of the resolutions, in form and substance satisfactory to the Lender, of the Borrower authorizing (i) the execution, delivery and performance of this Agreement, the Note and the other Loan Docu- 18 15 ments, (ii) the borrowings contemplated hereunder and (iii) the granting by it of the Liens created pursuant to the Pledge Agreement, certified by the Secretary or an Assistant Secretary of the Borrower as of the Closing Date, which certificate shall be in form and substance satisfactory to the Lender and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (c) Borrower Incumbency Certificate. The Lender shall have received a Certificate of the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of the Borrower executing any Loan Document satisfactory in form and substance to the Lender, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (d) Pledged Stock; Stock Power. The Lender shall have received the certificates representing the shares pledged pursuant to the Pledge Agreement, together with an undated stock power for each such certificate executed in blank. (e) Opinions. The Lender shall have received the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Borrower, in the form of Exhibit D of this Agreement. 4.2 Conditions to Each Loan. The agreement of the Lender to make any Loan requested to be made by it on any date (including, without limitation, its initial Loan) 19 16 is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by the Borrower in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date. Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such Loan that the conditions contained in this subsection 4.2 have been satisfied. SECTION 5. COVENANTS The Borrower hereby agrees that, so long as the Commitment remains in effect, the Note remains outstanding and unpaid or any other amount is owing to the Lender hereunder, the Borrower shall: 5.1 Use of Proceeds. The proceeds of the Loans shall be used by the Borrower to fund (i) advances or loans to be made or reimburse the Borrower for loans made by the Borrower to, or (ii) obligations paid by the Borrower on behalf of, any of Orion, MITI or Sterling or any subsidiary or affiliate of the foregoing. 20 17 5.2 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be. 5.3 Compliance of Laws. Comply with all applicable laws regulations, orders of Governmental Authorities and obtain and comply in all material respects with, and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable laws, regulations or orders, except in each such case to the extent that failure to do so could not be reasonably expected to have a Material Adverse Effect. 5.4 Maintenance of Existence. Preserve, renew and keep in full force and effect its existence and take all reasonable action to maintain all its rights, privileges and franchises as necessary and desirable in the normal conduct of its business; provided, that the Borrower may merge or consolidate with or transfer or assign all or substantially all of its property, business or assets to another Person as long as such Person assumes all of the Borrower's obligations under this Agreement. 5.5 Maintenance of Property; Insurance. Keep all property necessary in its business in good working order and 21 18 condition; maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Lender, upon written request, full information as to the insurance carried. 5.6 Notices. Promptly give notice to the Lender of: (a) the occurrence of any Default or Event of Default; and (b) the occurrence of any event which causes any representation or warranty of the Borrower to be untrue or a breach of any covenant of the Borrower set forth in this Agreement; and (c) the assertion of any claim by any Person of any rights to or the imposition of any Lien on the Collateral; and (d) any material adverse change in the business, operations, property, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or any development or event which could reasonably be expected to have a Material Adverse Effect. 22 19 SECTION 6. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Borrower shall fail to pay any principal of the Note when due in accordance with the terms thereof or hereof; or the Borrower shall fail to pay any interest on the Note, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; or (b) Any representation or warranty made or deemed made by the Borrower herein or in any other Loan Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) The Borrower shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document, and such default shall continue unremedied for a period of 30 days; or (d) (i) The Borrower shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief 23 20 of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 90 days; or (iii) there shall be commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof; or (iv) the Borrower shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower shall generally not, or shall be unable to, or 24 21 shall admit in writing its inability to, pay its debts as they become due; or (e) One or more judgments or decrees shall be entered against the Borrower involving in the aggregate liability (not paid or fully covered by insurance) of $10,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or. (f) Any warrant of attachment, levy or execution involving an amount in excess of $10,000,000 shall be issued or levied against any of the Borrower and such warrant of attachment, levy or execution shall not be released, vacated, stayed or bonded within 60 days of its issue or levy; or (g) The Lien created by the Pledge Agreement shall crease to be enforceable and of the same effect and priority purported to be created thereby; or (h) A material adverse change in the business, operations, property, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole shall have occurred since the date of the first borrowing under this Agreement; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (d) above with respect to the Borrower, automatically the Commitment shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other 25 22 amounts owing under this Agreement and the Note shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken, in the Lender's discretion: the Lender may by notice to the Borrower declare the Commitment to be terminated forthwith, whereupon the Commitment shall immediately terminate; and the Lender may by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Note to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 7. MISCELLANEOUS 7.1 Amendments and Waivers. Neither this Agreement, the Note or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in an instrument executed by the Lender and the Borrower in accordance with the provisions of this subsection. The Lender may, from time to time, waive, on such terms and conditions as the Lender may specify in such instrument, any of the requirements of this Agreement, the Note or the other Loan Documents or any Default or Event of Default and its consequences. Any such wavier and any such amendment, supplement or modification shall be binding upon 26 23 the Borrower and the Lender. In the case of any waiver, the Borrower and the Lender shall be restored to their former position and rights hereunder and under the Note and any other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. 7.2 Costs and Expenses. The Borrower agrees to pay or reimburse the Lender for all of its reasonable, direct, actual out-of-pocket costs and expenses incurred in connection with (i) the negotiation, execution and delivery of this Agreement, the Note and the other Loan Documents, including, without limitation, the reasonable fees and disbursements of outside counsel to the Lender; provided that such expenses shall in no event exceed $5,000; and (ii) the enforcement of any rights under this Agreement, the Note or any other Loan Documents including, without limitation, the reasonable fees and disbursements of outside counsel to the Lender. 7.3 WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTE OR ANY OTHER LOAN DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN. 7.4 Further Assurances. From and after the date hereof, upon the reasonable request of any party to this 27 24 Agreement, the other party shall execute, acknowledge and deliver, all such further agreements, instruments and assurances as may be necessary and appropriate to carry out the transactions contemplated by this Agreement and the other Loan Documents. 7.5 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Note: The Borrower: Metromedia Company Metropolitan Executive Tower, One Meadowlands Plaza East Rutherford, New Jersey 07073 Attention: General Counsel Telecopy: (201) 531-2803 with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Attention: James M. Dubin, Esq. Telecopy: (212) 757-3990 The Lender: The Actava Group, Inc. 4900 Georgia-Pacific Center Atlanta, Georgia Attention: General Counsel Telecopy: (404) 525-3010 with a copy to: Long, Aldridge & Norman One Peachtree Center, Suite 5300 Atlanta, Georgia 30308 28 25 Attention: Clay C. Long, Esq. Telecopy: (404) 527-4198 7.6 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 7.7 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Note and the making of the Loans hereunder. 7.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that neither the Borrower nor the Lender may assign or transfer any of their rights or obligations under this Agreement, and the Lender may not pledge its rights hereunder, without the prior written consent of the other party, 29 26 which consent, in the case of the Borrower giving consent, shall not be unreasonably withheld or delayed. 7.9 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.11 Integration. This Agreement and the other Loan Documents represent the agreement of the Borrower and the Lender with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 7.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 30 27 7.13 Interest Rate Limitation. Notwithstanding anything herein or in the Note to the contrary, if at anytime the applicable interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the "Charges"), as provided for herein or any other Loan Document, or otherwise contracted for charged, received, taken or reserved by the Lender shall exceed the maximum lawful rate (the "Maximum Rate") that may be contracted for, charged, taken, received or reserved by the Lender in accordance with applicable law, the rate of interest payable under the Note, together with all Charges payable to the Lender shall be limited to the Maximum Rate. 31 28 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. METROMEDIA COMPANY By:/s/Stuart Subotnick ------------------- Name: Title: THE ACTAVA GROUP INC. By:/s/John D. Phillips ------------------- Name: John D. Phillips Title: President/CEO EX-10.(B) 3 REVOLVING CREDIT NOTE 1 Exhibit 10(b) REVOLVING CREDIT NOTE $55,000,000 New York, New York October 11, 1994 FOR VALUE RECEIVED, the undersigned, METROMEDIA COMPANY, a Delaware general partnership (together with its successors and assigns, the "Borrower"), hereby unconditionally promises to pay to the order of THE ACTAVA GROUP INC., a Delaware corporation (the "Lender"), in lawful money of the United States of America and in immediately available funds, on the Termination Date, or such earlier date as payments shall be due, whether by acceleration or otherwise in accordance with the Credit Agreement (as defined below), at such office as the Lender may designate in writing, from time to time, the principal amount of (a) FIFTY FIVE MILLION DOLLARS ($55,000,000), or, if less, (b) the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement. The Borrower further agrees to pay interest in like money on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.5 of the Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date and amount of each Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof; provided, however, that the failure to so endorse the schedules annexed hereto shall not affect the validity of the Borrower's obligation to repay amounts due hereunder. This Note (a) is the Note referred to in the Credit Agreement dated as of October 11, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), between the Borrower and the Lender, (b) is entitled to the benefits of and is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security, the terms and conditions upon which the security interests were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this 2 2 Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. No delay or omission on the part of the Lender or any holder hereof in exercising its rights under this Note, or delay or omission on the part of the Lender in exercising its rights under the Credit Agreement or under any other Loan Document, or course of conduct relating thereto, shall operate as a waiver of such rights or any other right of the Lender or any holder hereof, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a bar to, or waiver of, the same right or rights on any future occasion. The Borrower agrees to pay or reimburse the Lender for all of its reasonable, direct, actual out-of-pocket costs and expenses incurred in connection with the collection of the principal amount of this Note, including reasonable outside attorneys' fees, if this Note is collected by or through an attorney-at-law or under advice therefrom. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. METROMEDIA COMPANY By: /s/Stuart Subotnick ------------------- Name: Stuart Subotnick Title: Executive Vice President EX-10.(C) 4 PLEDGE AGREEMENT 1 Exhibit 10(c) PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of October 11, 1994, made by METROMEDIA COMPANY (the "Borrower"), MET TELCELL, INC., a Delaware corporation, ("Met Telcell"), MET INTERNATIONAL, INC., a Delaware corporation, ("Met International"), JOHN W. KLUGE ("Kluge"), and ANITA H. SUBOTNICK and STUART SUBOTNICK, as joint tenants ("Subotnick", and together with Met Telcell, Met International and Kluge, the "Affiliates") on behalf of the Borrower, in favor of THE ACTAVA GROUP INC., as lender (in such capacity, the "Lender") under the Credit Agreement, dated as of October 11, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), between the Borrower and the Lender. W I T N E S S E T H: WHEREAS, pursuant to the Credit Agreement, the Lender has agreed to make Loans to the Borrower upon the terms and subject to the conditions set forth therein, to be evidenced by the Note issued by the Borrower under the Credit Agreement; WHEREAS, the Borrower and/or Affiliates, as the case may be, are the legal and beneficial owner of the shares of Pledged Stock (as hereinafter defined) issued by the Issuers (as hereinafter defined); and WHEREAS, it is a condition precedent to the obligation of the Lender to make its Loans to the Borrower under the Credit Agreement that the Borrower and the Affiliates, on behalf of the Borrower, shall have executed and delivered this Pledge Agreement to the Lender. NOW, THEREFORE, in consideration of the premises and to induce the Lender to enter into the Credit Agreement and to induce the Lender to make its Loans under the Credit Agreement, the Borrower and the Affiliates, on behalf of the Borrower, hereby agree with the Lender, as follows: 1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. (b) The following terms shall have the following meanings: 2 "Agreement": this Pledge Agreement, as the same may be amended, modified or otherwise supplemented from time to time. "Code": the Uniform Commercial Code from time to time in effect in the State of New York. "Collateral": the Pledged Stock and all Proceeds. "Collateral Account": any account established to hold money Proceeds, maintained under the sole dominion and control of the Lender, subject to withdrawal by the Lender for the account of the Lender only as provided in paragraph 7(a). "Issuers": shall mean collectively Orion Pictures Corporation, a Delaware corporation, and Metromedia International Telecommunications Inc., a Delaware corporation. "Obligations": the unpaid principal of and interest on the Note and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, the Note, this Agreement, the other Loan Documents or any other document made, delivered or given in connection therewith. "Pledged Stock": the shares of capital stock of the Issuers owned by the Borrower and the Affiliates all as listed on Schedule 1 hereto, together with all stock certificates, options or rights of any nature whatsoever that may be issued or granted by the Issuers to the Borrower and/or the Affiliates, as the case may be, in respect of the Pledged Stock while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions with respect thereto. "Securities Act": the Securities Act of 1933, as amended. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. 3 3 (d) The meanings given to the terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Pledge; Grant of Security Interest. The Borrower and the Affiliates, on behalf of the Borrower, hereby deliver to the Lender, all the Pledged Stock and hereby grant to the Lender, a first security interest in the Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. 3. Stock Powers. Concurrently with the delivery to the Lender of each certificate representing one or more shares of Pledged Stock to the Lender, the Borrower and the Affiliates, on behalf of the Borrower, shall deliver an undated stock power covering such certificate, duly executed in blank by the Borrower or the Affiliate who owns such Pledged Stock. 4. Representations and Warranties. The Borrower represents and warrants that: (a) To the best of Borrower's knowledge all the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (b) The Borrower and/or the Affiliates, as set forth on Schedule 1, are the record and beneficial owners of, and have good and marketable title to, the Pledged Stock, free of any and all Liens or option in favor of, or claims of, any other Person, except the security interest created by this Agreement. The Pledged Stock constitutes all of the shares of any class of stock of the Issuers that are owned by the Borrower and the Affiliates, respectively. (c) Except as set forth on Schedule 4(c) and except for this Agreement and restrictions and limitations imposed by securities laws generally, no portion of the Pledged Stock is or will be subject to any option, right of first refusal, shareholders agreement or other contractual restriction, which restricts in any manner the rights of any present or future holder of any of the Pledged Stock to transfer, assign or otherwise dispose of such Pledged Stock. (d) Except as set forth on Schedule 4(d), no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of this Agreement or necessary for the validity or enforceability hereof or for the perfection or enforcement of the security interest granted hereby. 4 4 (e) Upon delivery to the Lender of the stock certificates evidencing the Pledged Stock, the security interest created by this Agreement will constitute a valid, perfected first priority security interest in the Collateral, enforceable in accordance with its terms against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 5. Covenants. The Borrower covenants and agrees with the Lender on its own behalf and on behalf of the Affiliates that, from and after the date of this Agreement until this Agreement is terminated and the security interests created hereby are released: (a) if the Borrower and/or the Affiliates, as the case may be, shall, as a result of their ownership of the Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of the Pledged Stock, or otherwise in respect thereof, the Borrower and/or the Affiliates, as the case may be, shall accept the same as the agent of the Lender, hold the same in trust for the Lender and deliver the same forthwith to the Lender in the exact form received, duly endorsed by the Borrower and/or the Affiliates, as the case may be, to the Lender, if required, together with an undated stock power covering such certificate duly executed in blank by the Borrower and/or the Affiliates, as the case may be, to be held by the Lender, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of either of the Issuers shall be paid over to the Lender to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of the Issuers or pursuant to the reorganization thereof, the property so distributed shall be delivered to the Lender to be held by it hereunder as additional collateral security for the Obligations. If any sums of money or property so 5 5 paid or distributed in respect of the Pledged Stock shall be received by the Borrower and/or the Affiliates, as the case may be, the Borrower and/or the Affiliates, as the case may be, shall, until such money or property is paid or delivered to the Lender, hold such money or property in trust for the Lender, segregated from other funds of the Borrower and/or the Affiliates, as the case may be, as additional collateral security for the Obligations. (b) Without the prior written consent of the Lender, the Borrower will not and will cause the Affiliates not to (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral or (ii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Agreement. (c) The Borrower shall maintain the security interest created by this Agreement as a first, perfected security interest and shall defend such security interest against claims and demands for all persons whomsoever. At any time and from time to time, upon the written request of the Lender, and at the sole expense of the Borrower, the Borrower will, or will cause the appropriate Affiliates to, promptly and duly execute and deliver such further instruments and documents and take such further actions as the Lender may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be immediately delivered to the Lender, duly endorsed in a manner satisfactory to the Lender, to be held as Collateral pursuant to this Agreement. (d) The Borrower shall pay, and save the Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which are payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 6. Cash Dividends; Voting Rights. Unless an Event of Default shall have occurred and be continuing, the Borrower and the Affiliates, as the case may be, shall be permitted to receive all cash dividends paid in the normal course of business of the Issuers in respect of the Pledged Stock and to exercise all voting and corporate rights with respect to the Pledged Stock. 6 6 7. Rights of the Lender. (a) All money Proceeds received by the Lender hereunder shall be held by the Lender in a Collateral Account. All Proceeds while held by the Lender in a Collateral Account (or by the Borrower or the Affiliates in trust for the Lender) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in paragraph 8(a). (b) If an Event of Default shall occur and be continuing (i) the Lender shall have the right to receive any and all cash dividends paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as the Lender may determine, (ii) all shares of the Pledged Stock may at Lender's election, be registered in the name of the Lender or its nominee, and (iii) the Lender or its nominee may exercise (A) all voting, corporate and other rights pertaining to such shares of the Pledged Stock at any meeting of shareholders of the Issuers or otherwise and (B) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such shares of the Pledged Stock as if it were the absolute owner thereof. In such event, the Lender shall account to the Borrower promptly for property actually received by it on account of the Pledged Shares. 8. Remedies. (a) If an Event of Default shall have occurred and be continuing, at any time at the Lender's election, the Lender may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as the Lender may elect. (b) If an Event of Default shall have occurred and be continuing, the Lender may exercise, in addition to all other rights and remedies granted in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the Code. Without limiting the generality of the foregoing, the Lender, may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker's board or office of the Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or 7 7 for future delivery without assumption of any credit risk. The Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrower and/or the Affiliates, as the case may be, which right or equity is hereby waived or released. The Lender shall apply any Proceeds from time to time held by it and the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, to the payment in whole or in part of the Obligations, in such order as the Lender may elect, and after such application and after the payment by the Lender of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the Code, the Lender shall account for the surplus, if any, to the Borrower and/or the Affiliates, as the case may be. The Borrower and/or the Affiliates, as the case may be, shall remain liable for any deficiency if the proceeds of any sale or other disposition of Collateral are insufficient to pay the Obligations and the reasonable fees and disbursements of any attorneys employed by the Lender to collect such deficiency. 9. Private Sales. (a) The Borrower recognizes that the Lender may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. The Lender shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the applicable Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (b) The Borrower further agrees to use its reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section valid and binding and in compliance with any and all other applicable Requirements of Law. 10. Irrevocable Authorization and Instruction to Issuers. The Borrower and the Affiliates, on behalf of the Borrower, hereby authorize and instruct each of the Issuers to comply with any instruction received by it from the Lender in writing that (a) states that an Event of Default 8 8 has occurred and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from the Borrower and/or the Affiliates, as the case may be, and the Borrower and the Affiliates, on behalf of the Borrower, agree that the Issuer shall be fully protected in so complying. 11. Lender's Appointment as Attorney-in-Fact. The Borrower and the Affiliates, on behalf of the Borrower, hereby irrevocably constitute and appoint the Lender and any officer or agent of the Lender, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and the Affiliates and in the name of the Borrower and/or the Affiliates, as the case may be, or in the Lender's own name, from time to time in the Lender's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 12. Duty of Lender. The Lender's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as the Lender deals with similar securities and property for its own account, except that the Lender shall have no obligation to invest funds held in any Collateral Account and may hold the same as demand deposits. Upon payment in full by the Borrower or Guarantor of the Obligations, the Lender shall promptly return the Collateral to the Borrower. 13. Execution of Financing Statements. Pursuant to Section 9-402 of the Code, the Borrower and the Affiliates, on behalf of the Borrower, authorize the Lender to file financing statements with respect to the Collateral without the signature of the Borrower and/or the Affiliates, as the case may be, in such form and in such filing offices and the Lender reasonably determines appropriate to perfect the security interests of the Lender under this Agreement. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction. Upon termination of the Commitment and repayment in full of all Obligations, the Lender shall, at the sole cost and expense of the Borrower 9 9 and the Affiliates, on behalf of the Borrower, take any actions requested to terminate any financing statements. 14. Notices. All notices, requests and demands to or upon the Lender or the Borrower and the Affiliates to be effective shall be in writing (or by telex, fax or similar electronic transfer confirmed in writing) and shall be deemed to have been duly given or made (1) when delivered by hand or (2) if given by mail, when deposited in the mails by certified mail, return receipt requested, or (3) if by telex, fax or similar electronic transfer, when sent and receipt has been confirmed, addressed to the Lender or the Borrower at its address or transmission number for notices provided in subsection 7.2 of the Credit Agreement. The Lender and the Borrower may change their addresses and transmission numbers for notices in the manner provided in this Section. The Borrower shall have the authority to receive all notices on behalf of the Affiliates. 15. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibitions or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 16. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms or provisions of this Agreement may be modified except by a written instrument executed by the Borrower, the Affiliates and the Lender, provided that any provision of this Agreement may be waived by the Lender in a letter or agreement executed by the Lender. (b) The Lender shall not by any act (except by a written instrument pursuant to paragraph 16(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Lender would otherwise have on any future occasion. 10 10 (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 17. Security Interest Absolute. The obligations of the Borrower and the Affiliates hereunder shall not be released, discharged or otherwise affected by: (i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Borrower under the Credit Agreement or any other Loan Document, by operation of law or otherwise; (ii) any renewal, extension, modification, amendment or restatement of or supplement to the Credit Agreement or any other Loan Document; (iii) any release, non-perfection or invalidity of any security for any obligation of the Borrower under the Credit Agreement or any other Loan Document; (iv) any change in the partnership existence, structure or ownership of the Borrower and/or the Affiliates or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower and/or the Affiliates, their assets or any resulting release or discharge of any obligation of the Borrower and/or the Affiliates contained in the Credit Agreement or any other Loan Document; (v) the existence of any claim, set-off or other rights which the Borrower and/or the Affiliates may have at any time against one another or against the Lender, whether in connection herewith or any unrelated transaction, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (vi) any invalidity or unenforceability relating to or against the Borrower for any reason of the Credit Agreement or any other Loan Document, or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of the principal of or interest on the Note or any other amount payable by the Borrower under the Credit Agreement; or (vii) any other act or omission to act or delay of any kind by the Borrower, the Affiliates or the Lender or any other Person or any other circumstance whatsoever which might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower's and/or the Affiliates' obligations hereunder (other than the indefeasible payment in full of the Obligations by the Borrower). 18. Section Headings. The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 19. Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Borrower and the Affiliates and shall inure to the benefit of the Lender and its successors and assigns. The Lender shall 11 11 have the right to assign or pledge its rights under this Agreement with the consent of the Borrower and the Affiliates, which consent shall not be unreasonably withheld or delayed. 20. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. METROMEDIA COMPANY By: /s/Stuart Subotnick ------------------- Name: Title: MET TELCELL, INC. By: /s/Stuart Subotnick ------------------- Name: Title: MET INTERNATIONAL, INC. By: /s/Stuart Subotnick ------------------- Name: Title: /s/John W. Kluge -------------------- John W. Kluge /s/Anita H. Subotnick and ------------------------- Stuart Subotnick ---------------- Anita H. Subotnick and Stuart Subotnick, as joint tenants THE ACTAVA GROUP INC. By: /s/John D. Phillips ------------------- Name: John D. Phillips Title: President/CEO EX-10.(D) 5 GUARANTY DATED AS OF 10/11/94 1 Exhibit 10(d) John W. Kluge c/o Metromedia Company 215 East 67th Street New York, New York 10021 October 11, 1994 The Actava Group Inc. 4900 Georgia-Pacific Center Atlanta, Georgia 30303 Ladies and Gentlemen: Reference is made to the Credit Agreement (the "Credit Agreement") dated as of October 11, 1994 by and among The Actava Group Inc., as lender (the "Lender"), and Metromedia Company, as borrower (the "Borrower"). As a condition precedent to the making of Loans by the Lender to the Borrower, the undersigned has undertaken, as guarantor (the "Guarantor"), irrevocably and unconditionally to guarantee the Borrower's obligations under the Credit Agreement in accordance with the terms set forth herein. The making of Loans under the Credit Agreement will be of direct interest and benefit to the Guarantor. For and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Guarantor, and for the purpose of inducing the Lender to extend credit to the Borrower, the Guarantor does hereby make the following guaranties to and agreements with the Lender. 1. Definitions. Capitalized terms not otherwise defined in this Guaranty shall have the meanings ascribed to them in the Credit Agreement. As used in this Guaranty, the following terms have the following meanings unless the context otherwise requires: "Guaranteed Obligations" has the meaning ascribed to such term in Section 2. 2 2 "Guaranty" means the Guaranty, as it may be amended, supplemented or otherwise modified from time to time. "Material Adverse Effect" means a material adverse effect on (a) the property, condition (financial or otherwise) or prospects of the Guarantor or (b) the validity or enforceability of this Guaranty or the rights or remedies of the Lender hereunder. 2. The Guaranty. 2.1 The Guarantor hereby irrevocably and unconditionally guarantees, subject to the limitations set forth in Section 3 of this Guaranty, the due and punctual payment in full of any and all sums, whether of principal or interest (including any default interest), payable by Borrower pursuant to the Loan Documents, including without limitation, the Credit Agreement and the Note, as and when the same may be or become due and payable, whether at maturity or upon acceleration or otherwise, and the Guarantor does hereby guarantee, subject to the limitations set forth in Section 3 of this Guaranty, the full and prompt performance of any and all obligations whatsoever of the Borrower under the Loan Documents, whether such obligations now exist or arise hereafter (the "Guaranteed Obligations"). This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations have been completely performed and paid in full. 2.2 The Guarantor does hereby agree that if the Note is not paid by the Borrower in accordance with its terms for any reason whatsoever, or if any and all sums which are now due or may hereafter become due from the Borrower to the Lender under the Loan Documents are not paid by the Borrower in accordance with their terms for any reason whatsoever, the Guarantor, subject to the limitations set forth in Section 3 of this Guaranty, will immediately make such payments. The Guarantor further agrees to pay or reimburse the Lender for all of its reasonable, direct, actual out-of-pocket costs incurred in connection with the enforcement of any rights under this Guaranty or to enforce any other obligations guaranteed hereby. The provisions of this Guaranty shall extend and be applicable to all renewals, replacements, amendments, extensions, consolidations and modifications of the Loan Documents, and any and all references herein to the Loan Documents or any of them shall be deemed to include any such renewals, replacements, amendments, extensions, consolidations or modifications thereof. 3 3 3. Exercise of Rights Under Guaranty. Notwithstanding anything to the contrary contained herein, the Guarantor shall have no obligation to make any payments to Lender hereunder, and Lender shall not have the right to exercise, to make any claim against or demand of the Guarantor under, or to enforce this Guaranty, until the occurrence and continuation of an Event of Default and an acceleration of the Loans (except that acceleration shall not be a condition precedent to the exercise of any such rights in the case of maturity of any Loans at the Termination Date) each as set forth in Section 6 of the Credit Agreement. 4. Liability of the Guarantor. 4.1 The Guarantor agrees that its obligations hereunder are absolute and unconditional and shall not be affected by any circumstance whatsoever (other than the indefeasible payment in full and complete performance of the Guaranteed Obligations) which may constitute a legal or equitable discharge (whether in whole or in part) of a guarantor or surety. 4.2 This is a guaranty of payment and performance and not of collection. Subject to the limitations set forth in Section 3 of this Guaranty, the liability of the Guarantor under this Guaranty shall be direct and immediate and not conditional or contingent upon the pursuit of any remedies against the Borrower or any other person, nor against the Collateral. The Guarantor waives any right to require that an action be brought against the Borrower or any other Person or require that resort be had to any of the Collateral or to any balance of any deposit account or credit on the books of the Lender in favor of the Borrower or any other Person. In the event that, if on account of the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, the Borrower shall be relieved of or fail to incur any debt, obligation or liability as provided in the Loan Documents, the Guarantor shall nevertheless be fully liable therefor. In the event of an Event of Default under the Credit Agreement, the Lender shall have the right to enforce its rights, powers and remedies in any order, and all rights, powers and remedies available to the Lender in such event shall be nonexclusive and cumulative of all other rights, powers and remedies provided thereunder or by law or in equity. 4.3 The Guarantor agrees that Lender may, from time to time, without notice to the Guarantor, without the Guarantor's consent, and without affecting the Guarantor's liability under this Guaranty, (i) renew, 4 4 extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of, any of the Guaranteed Obligations, or any part thereof; (ii) take and hold security of Borrower for the payment of the Guaranteed Obligations, and exchange, surrender, compromise, release, enforce, waive, release or deal with such security in any manner Lender deems necessary; (iii) apply such security and direct the order or manner of sale as Lender in its discretion may determine; and (iv) exercise any other rights available to it under any of the Loan Documents. 5. Waivers by the Guarantor. The Guarantor hereby waives, for the benefit of Lender: (a) notices, demands, presentments, protests, notices of protests, notices of dishonor and notices of any action (including acceptance of this Guaranty) or inaction, notices of defaults or events of default under the Credit Agreement or any other Loan Document, notices of any amendment, renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto and notices of any extension of credit to Borrower; and (b) to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Guaranty. 6. Subrogation. The Guarantor shall not assert, enforce or otherwise exercise (i) any right of subrogation to any of the rights of Lender in respect of the Guaranteed Obligations or (ii) any right of recourse, reimbursement, contribution, indemnification or similar right against Borrower on all or any part of the Guaranteed Obligations, and the Guarantor hereby waives any and all of the foregoing rights. The Guarantor irrevocably waives the benefit of, and any right to participate in, any collateral or other security given to Lender to secure payment of the Guaranteed Obligations. 7. Representations and Warranties. The Guarantor hereby represents and warrants as follows: 7.1 No Legal Bar. The execution, delivery and performance of this Guaranty, will not violate any Requirement of Law or Contractual Obligation of the Guarantor and will not result in, or require, the creation or imposition of any Lien on any of his properties or 5 5 revenues pursuant to any such Requirement of Law or Contractual Obligation; except to the extent such violations would not, in the aggregate, be reasonably expected to have a Material Adverse Effect. 7.2 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Guarantor, threatened by or against the Borrower or against any of its properties or revenues (a) with respect to this Guaranty, or (b) which could reasonably be expected to have a Material Adverse Effect. 7.3 Net Worth. The Guarantor has a net worth in excess of $[CONFIDENTIAL -- REDACTED]. 7.4 Investigation. The Guarantor is fully aware of the financial condition of the Borrower and is executing and delivering this Guaranty based solely upon the Guarantor's own independent investigation of all matters pertinent hereto, and the Guarantor is not relying in any manner upon any representation or statement of the Lender. 8. Bankruptcy and Related Matters. The obligations of the Guarantor under this Guaranty shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding or action, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, marshalling of assets, assignments for the benefit of creditors or liquidation of Borrower or similar proceedings or actions or by any defense which Borrower may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding or action. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts and obligations that constitute the Guaranteed Obligations and would be owed by Borrower but for the fact that they are unenforceable or not allowable due to the existence of any such proceeding or action. 9. Reinstatement of Guaranty. Notwithstanding anything to the contrary contained herein, in the event that all or any portion of the Guaranteed Obligations are paid by Borrower, the obligations of the Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered, directly or indirectly, from Lender as a preference, fraudulent transfer or otherwise, and any such payments which are so 6 6 rescinded or recovered shall constitute Guaranteed Obligations for all purposes under this Guaranty. 10. Miscellaneous. 10.1 Rights Cumulative. The rights, powers and remedies given to Lender by this Guaranty are cumulative and shall be in addition to and independent of all rights, powers and remedies given to Lender by virtue of any statute or rule of law or in any of the Loan Documents, or any agreement between the Guarantor and Lender or between Borrower and Lender. Any forbearance or failure to exercise, any delay by Lender in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy. 10.2 Severability. In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 10.3 Amendments and Waivers. No amendment modification, termination or waiver of any provision of this Guaranty, or consent to any departure by the Guarantor therefrom, shall in any event be effective without the written consent of Lender. 10.4 Applicable Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE GUARANTOR AND LENDER HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. 10.5 Waiver of Jury Trial. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED UPON, OR ARISING OUT OF THIS GUARANTY. 10.6 Successors and Assigns. This Guaranty is a continuing guaranty and shall be binding upon the Guarantor and its successors and assigns. This Guaranty shall inure to the benefit of Lender and its respective successors and assigns. The Lender shall have the right to assign this Guaranty or pledge its rights hereunder with the prior written consent of the Guarantor, which consent may 7 7 not be unreasonably withheld or delayed. The Guarantor may not assign this Guaranty or any of the rights or obligations of the Guarantor hereunder without the prior written consent of Lender. 10.7 No Impairment, etc. This Guaranty shall in no event be impaired by any change which may arise by reason of the death of the Guarantor or by reason of dissolution of the Borrower. The Guarantor has executed this Guaranty individually and not as a partner of the Borrower. 10.8 Cancellation of Guaranty. Upon payment in full of the Guaranteed Obligations by the Borrower or Guarantor, the Lender shall mark this Guaranty cancelled and return such Guaranty to the Guarantor. If the foregoing accurately sets forth our understanding with respect to the subject matter hereof, please so indicate by acknowledging where indicated below. Very truly yours, /s/John W. Kluge ---------------- John W. Kluge ACKNOWLEDGED AND AGREED TO: THE ACTAVA GROUP INC. By:/s/John D. Phillips ------------------- Name: John D. Phillips Title: President/CEO -----END PRIVACY-ENHANCED MESSAGE-----