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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER: 001-12223
UNIVISION COMMUNICATIONS INC.
INCORPORATED IN DELAWARE
I.R.S. EMPLOYER IDENTIFICATION NUMBER: 95-4398884
1999 AVENUE OF THE STARS, SUITE 3050
LOS ANGELES, CALIFORNIA 90067
TEL: (310) 556-7676
SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT:
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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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CLASS A COMMON STOCK, PAR VALUE
$.01 NEW YORK STOCK EXCHANGE
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
There were 11,771,861 shares of Class A Common Stock, $.01 par value,
outstanding as of January 14, 1997. The aggregate market value of the Class A
Common Stock of the Company held by non-affiliates on January 14, 1997 was
approximately $396,956,092. This calculation does not include the value of any
of the outstanding shares of Class P, Class T or Class V Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held June 4, 1997 are incorporated by reference into Part
III hereof.
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TABLE OF CONTENTS
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PAGE
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GLOSSARY .............................................................................................................. 2
PART I
Item 1. Business...................................................................................................... 4
The Hispanic Audience in the United States.................................................................... 5
Hispanic Audience Research.................................................................................... 6
Ratings....................................................................................................... 8
The Network................................................................................................... 10
Galavision Network............................................................................................ 12
Programming................................................................................................... 12
Program License Agreements.................................................................................... 13
The O&Os...................................................................................................... 15
Advertising................................................................................................... 18
Marketing..................................................................................................... 19
Competition................................................................................................... 19
Material Patents, Trademarks, Licenses, Franchises and Concessions............................................ 19
Employees..................................................................................................... 20
Federal Regulation and New Technologies....................................................................... 20
Item 2. Properties.................................................................................................... 25
Item 3. Legal Proceedings............................................................................................. 25
Item 4. Submission of Matters to a Vote of Security Holders........................................................... 25
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters......................................... 27
Item 6. Selected Financial Data....................................................................................... 28
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations......................... 29
Item 8. Financial Statements and Supplementary Data................................................................... 35
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures......................... 36
PART III
Item 10. Directors and Executive Officers of the Registrant............................................................ 36
Item 11. Executive Compensation........................................................................................ 36
Item 12. Security Ownership of Certain Beneficial Owners and Management................................................ 36
Item 13. Certain Relationships and Related Transactions................................................................ 36
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............................................... 37
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UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS REPORT REGARDING THE
OPERATIONS OF THE UNIVISION AFFILIATES IS PRESENTED AS OF DECEMBER 31, 1996.
GLOSSARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS REPORT AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION
AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS REPORT.
The following terms are used in this report to refer to the companies and
operations indicated.
"Acquisition" means the December 1992 acquisition of the Network and UTG
(excluding the Chicago and Houston O&Os) by Perenchio, Televisa and Venevision.
"Affiliated Stations" means the nine full-power and 14 low-power television
stations with which the Company has Affiliation Agreements. The Sacramento
full-power Affiliated Station was acquired by the Company on March 20, 1997.
"Affiliation Agreements" means the affiliation agreements between the
Company and each Affiliated Station and Cable Affiliate.
"Agreement Concerning Production and Acquisition of Programs" means the cost
sharing agreement among the Network, Televisa and Venevision (which was
terminated as part of the Reorganization).
"Broadcast Affiliates" means the O&Os and the Affiliated Stations.
"Broadcast Cash Flow" means earnings before corporate charges, interest,
taxes, depreciation and amortization.
"Cable Affiliates" means the approximately 790 cable television systems with
which Univision has Affiliation Agreements. These cable television systems
retransmit the Network satellite signal and are not located in DMAs where the
Company has full-power Broadcast Affiliates.
"Combined Net Time Sales" means time sales of both UTG and the Network from
broadcasting, including barter and trade and television subscription revenues,
less advertising commissions, certain special event revenues, music license
fees, outside affiliate compensation and taxes other than withholding taxes.
"DMA" means a designated market area.
"EBITDA" means earnings before interest, taxes, depreciation and
amortization.
"Entravision" means Entravision Communications Company, LLC, which owns
eight of the Company's Affiliated Stations.
"Galavision" means the Galavision Spanish-language general entertainment
basic cable network, a wholly-owned subsidiary of the Company.
"Hispanic" means all persons in the U.S. of Hispanic descent or origin.
"Hispanic Households" means all U.S. households with a head of household who
is of Hispanic descent or origin, regardless of the language spoken in the
household.
"Network" or "UNLP" means the Univision Spanish-language television network
owned by the Company and one of the Company's subsidiaries; the Network is a
partnership that prior to the Reorganization was controlled by the Principal
Stockholders.
"New Bank Facility" means the Company's new credit agreement dated September
26, 1996, which provides for aggregate commitments of up to $600 million and
imposes financial and other restrictions on the Company.
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"Old Bank Facility" means UTG's old bank credit agreement that was
terminated as part of the Reorganization.
"O&Os" means the 11 full-power and seven low-power television stations owned
and operated by the Company. On March 20, 1997, the Company acquired its
Sacramento full-power Affiliated Station.
"Offering" means the sale of 9,395,500 shares of Class A Common Stock by the
Company in its initial public offering closed on October 2, 1996.
"PCI" means Perenchio Communications, Inc. which changed its name to
Univision Communications Inc. in June 1996.
"Perenchio" means A. Jerrold Perenchio and his affiliates.
"Principal Stockholders" means Perenchio, Televisa and Venevision.
"Program License Agreements" means the amended and restated program license
agreements between the Company and Televisa and the Company and Venevision
(which became effective as part of the Reorganization).
"PTIH" means PTI Holdings, Inc., a subsidiary of the Company.
"Reorganization" means the reorganization of the Company immediately prior
to the closing of the Offering.
"Sponsor Loans" means the loans made to the Company by Televisa and
Venevision each quarter from the Acquisition through the Reorganization.
"Televisa" means Grupo Televisa, S.A. de C.V. and its affiliates.
"Univision" or the "Company" means Univision Communications Inc. ("UCI") and
its wholly-owned subsidiaries, after giving effect to the Reorganization.
"Univision Affiliates" means the Broadcast Affiliates and the Cable
Affiliates.
"UTG" means Univision Television Group, Inc., the Company's subsidiary that
owns and operates the O&Os.
"UNHP" means The Univision Network Holding Limited Partnership, the entity
that owned substantially all of the partnership interests in the Network prior
to the Reorganization and that was liquidated as part of the Reorganization.
"Venevision" means Corporacion Venezolana de Television, C.A. and its
affiliates.
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PART I
ITEM 1. BUSINESS
Univision is the leading Spanish-language television broadcaster in the
U.S., reaching more than 92% of all Hispanic Households and having an
approximate 79% share of the U.S. Spanish-language network television audience
in 1996. The Company's Network, which is the most watched television network
(English- or Spanish-language) among Hispanic Households, provides the Univision
Affiliates with 24 hours per day of Spanish-language programming with a prime
time schedule of substantially all first run programming (I.E., no reruns)
throughout the year. As a leading, vertically-integrated television broadcaster,
Univision owned and operated 11 full-power and seven low-power UHF stations as
of December 31, 1996, representing approximately 79% of its Network broadcast
distribution. These full-power O&Os are located in 11 of the top 14 DMAs in
terms of numbers of Hispanic Households -- Los Angeles, New York, Chicago,
Miami, Houston, San Francisco, San Antonio, Dallas, Fresno, Albuquerque and
Phoenix. As of December 31, 1996, the Company had Affiliation Agreements with an
additional nine full-power and 14 low-power Affiliated Stations and
approximately 790 Cable Affiliates. Each of the Company's full-power O&Os and
Affiliated Stations ranks first in Spanish-language television viewership in its
DMA. The Company also owns Galavision, a Spanish-language cable network that has
approximately 2.4 million Hispanic subscribers, representing approximately 57%
of all Hispanic Households that subscribe to cable television. In March 1997,
the Company purchased its Sacramento Affiliated Station.
The Company believes that the breadth and diversity of its programming
provides it with a competitive advantage over both Spanish-language broadcasters
and English-language broadcasters in appealing to Hispanic viewers. The
Company's programming is similar to that of major English-language networks and
includes NOVELAS (long-term mini-series), national and local newscasts, variety
shows, children's programming, mini-series, musical specials, movies, sporting
events and public affairs programs. The Program License Agreements provide the
Company with long-term access to first rate programming produced by Televisa and
Venevision. Televisa-produced novelas are popular throughout the world and are
among the Company's highest rated programs. Univision also produces a variety of
programs specifically tailored to meet the tastes, preferences and information
needs of the Hispanic audience, including national and local news and the highly
successful programs SABADO GIGANTE, CRISTINA and PRIMER IMPACTO. The Company has
also televised World Cup Soccer since 1978, including the widely watched 1994
World Cup, and in 1996 began televising the Sunday "Game of the Week" for Major
League Soccer. In early 1997, the Company reached an agreement to broadcast all
64 games of the next World Cup, to be played in France in the summer of 1998.
The Company's newest program, a two-hour morning show, DESPIERTA AMERICA --
"Wake Up America" -- which will broadcast news, talk and current events
nationally, Monday through Friday from 7:00 to 9:00 a.m., is expected to begin
in April 1997.
In 1992, Perenchio, Televisa and Venevision formed the Company and UNHP,
which acquired UTG and the Network, respectively, in the Acquisition. Mr.
Perenchio has over 25 years of experience in the U.S. media and communications
industry and has been the chief executive officer or owner of a number of
successful entities, including Chartwell Artists, Tandem Productions, Inc.,
Embassy Communications and Loews Theaters. Mr. Perenchio also owned and operated
Spanish-language television stations in Los Angeles and New York from 1975 to
1986. Televisa, which is the world's largest producer of Spanish-language
television programs, is the leading media and entertainment company in Mexico
with an approximate 74% share of Mexico's viewing audience. Venevision is
Venezuela's leading television network with an approximate 61% share of its
viewing audience.
Since the Acquisition, the Company's operating performance has improved
significantly with combined net revenues and pro forma EBITDA increasing to $370
million and $140 million, respectively, as of December 31, 1996, representing
compound annual growth rates of 16% and 33%, respectively, from the 1992
operating results of the Company and its predecessor. In addition, from November
1992 to November 1996 the Company increased its audience share of
Spanish-language network television viewing
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from 57% to 79% and increased its share of the 20 most widely watched programs
among Hispanic Households from 30% to 90%.
Univision attributes its success to several factors, including increased
emphasis on popular, high quality programming produced by Televisa and
Univision, contracting with Nielsen to develop more accurate, credible rating
systems to measure Hispanic audience viewership, increasing acceptance by
advertisers of Spanish-language television, continued growth of the Hispanic
audience and the strengthening of its management team with executives and sales
managers with extensive English-language television and advertising experience.
Since the Acquisition, the Company has acquired full-power stations in two
important markets, Chicago and Houston, and used its management expertise,
programming and brand identity to substantially improve the Company's
performance in those DMAs. In March 1997, the Company also acquired its
Sacramento Affiliated Station for approximately $40 million paid in cash and
preferred stock. In addition, the Company has purchased a $10.0 million
convertible promissory note from Entravision that is convertible into an
approximate 25% equity interest in Entravision. Entravision owns eight of the
Affiliated Stations, and has an agreement to acquire another. The nine stations
would represent approximately 13% of the Network's distribution. To complement
and capitalize on the Company's existing business and management strengths, the
Company expects to explore both Spanish-language television and other media
acquisition opportunities.
THE HISPANIC AUDIENCE IN THE UNITED STATES
Management believes that Spanish-language television, in general, and the
Company, in particular, have benefited and will continue to benefit from a
number of factors, including projected Hispanic population growth, high
Spanish-language retention among Hispanics, increasing Hispanic buying power and
greater advertiser spending on Spanish-language media.
HISPANIC POPULATION GROWTH AND CONCENTRATION. The Company's audience
consists almost exclusively of Hispanics, one of the most rapidly growing
segments of the U.S. population. The 1997 Hispanic population is estimated to be
29.3 million (10.9% of the total U.S. population), an increase of 23.6% from
23.7 million (9.5% of the total U.S. population) in 1990. The overall Hispanic
population is growing at approximately five times the rate of the non-Hispanic
U.S. population and is expected to grow to 32.0 million and 41.5 million (11.6%
and 13.9% of the total U.S. population) in 2000 and 2010, respectively.
Approximately 50% of all Hispanics are located in the seven U.S. cities with the
largest Hispanic populations, and Univision owns a station in each of these
cities.
SPANISH LANGUAGE USE. Approximately 68% of all Hispanics, regardless of
income or educational level, speak Spanish at home. This percentage is expected
to remain relatively constant through 2010. Consequently the number of Hispanics
speaking Spanish in the home is expected to increase significantly in the
foreseeable future. As shown in the chart below, the number of Hispanics who
speak Spanish in the home is expected to grow from 16.2 million in 1990 to 21.9
million in 2000 and 28.5 million in 2010. The Company believes that the strong
Spanish-language retention among Hispanics indicates that the Spanish-language
media has been and will continue to be an important source of news, sports and
entertainment for Hispanics.
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SPANISH LANGUAGE USE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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HISPANIC POPULATION IN
MILLIONS
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Population Speak Spanish at Home
1980 15.6 10.6
1985 19.3 13.2
1990 23.7 16.2
1995 27.5 18.8
2000 31.0 21.9
2005 36.6 25.1
2010 41.5 28.5
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GREATER HISPANIC BUYING POWER. The Hispanic population represents estimated
total consumer expenditures of $356 billion in 1997 (6.5% of the total U.S.
consumer expenditures), an increase of 67.1% since 1990. Hispanics are expected
to account for $458 billion (7.1% of the U.S. total consumer expenditures) by
2000, and $965 billion (8.8% of the U.S. total consumer expenditures) by 2010,
far outpacing the expected growth in total U.S. consumer expenditures.
In addition to the anticipated growth of the Hispanic population, the
Hispanic audience has several other characteristics that the Company believes
make it attractive to advertisers. The Company believes the larger size
(averaging 3.4 persons per household compared to the general public's average of
2.5 persons per household) and younger age of Hispanic Households leads
Hispanics to spend more per household on many categories of goods. The average
Hispanic Household spends 20.6% more per year on food at home, 42% more on
children's clothing, 20.2% more on footwear, 11.3% more on phone services, and
27.8% more on laundry and household cleaning products than the average
non-Hispanic household. Hispanics are expected to continue to account for a
disproportionate share of growth in spending nationwide in many important
consumer categories as the Hispanic population and its disposable income
continue to grow. These factors make Hispanics an attractive target audience for
many major U.S. advertisers.
INCREASED SPANISH-LANGUAGE ADVERTISING. According to published sources,
$953 million (an increase of 32% over 1993) of total advertising expenditures
were directed towards Spanish-language media in 1994, and an estimated $1.1
billion (an increase of 15% over 1994) of total advertising expenditures were
directed towards Spanish-language media in 1995. Of these amounts, nearly half
was targeted towards Spanish-language television advertising. The Company
believes that major advertisers have found that Spanish-language television
advertising is a more cost-effective means to target the growing Hispanic
audience than English-language broadcast media. See "-- Advertising."
HISPANIC AUDIENCE RESEARCH
Univision, like all television stations and networks, derives its revenues
primarily from selling advertising time. See "-- Advertising." The relative
advertising rates charged by competing stations within a DMA depend primarily on
four factors: (i) the station's ratings (households and/or people viewing its
programs as a percentage of total television households and/or people in the
viewing area); (ii) audience share (households and/or people viewing its
programs as a percentage of households and/or people actually watching
television at a specific time); (iii) the time of day the advertising will run;
and (iv) the demographic qualities of a program's viewers (primarily age and
gender).
Prior to November 1992, there were no Hispanic audience television rating
services comparable to those measuring television viewership in the general U.S.
population. Beginning in 1992, the Company
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contracted with Nielsen to develop Nielsen ratings measuring Hispanic viewership
both at the Network and local DMA levels. Because these Nielsen ratings provide
advertisers with a more accurate and reliable measure of Hispanic audience
television viewership, they have been important in allowing the Company to
demonstrate to advertisers its ability to reach the Hispanic audience. The
Company believes that continued use of accurate, reliable ratings will allow it
to further increase its advertising rates and narrow the gap which has
historically existed between its audience share and its share of advertising
revenues. In addition, the Company has made significant investments in
experienced sales managers and account executives and has provided its sales
professionals with state-of-the-art research tools to continue to attract major
advertisers.
The various rating services purchased from Nielsen are described below:
NIELSEN HISPANIC TELEVISION INDEX (NHTI). The NHTI service, which began in
November 1992, measures national network viewing in Hispanic Households. NHTI is
the Network's primary sales tool since it demonstrates Univision's significant
success in attracting Hispanic viewership against both English-and
Spanish-language competition. NHTI is stratified by language usage so that
Spanish-dominant, bilingual, and English-dominant Hispanic Households are
represented in the sample in the same proportion that exists among Hispanic
Households generally.
NIELSEN HISPANIC STATION INDEX (NHSI). The NHSI service is similar to the
NHTI, except that NHSI measures Hispanic Household viewing at the local market
level. Like NHTI, each NHSI sample also reflects the varying levels of language
usage by Hispanics in each DMA in order to more accurately reflect the Hispanic
Household population in the relevant DMA. The NHSI service was implemented
beginning with Los Angeles in November 1992 and was phased in at the Company's
other full-power O&Os by November 1994. Because the Company believes there is a
time lag between the availability of new rating services and advertisers'
reliance thereon, the NHSI rating service is expected to continue to have an
increasing beneficial impact on its future results.
NHSI and NHTI only measure the audience viewing of Hispanic Households, that
is, households where the head of the household is of Hispanic descent or origin.
Although the NHSI and NHTI reflect improvements over previous measurement
indices, the Company believes they still under-report the number of viewers
watching Univision programs because the Company has viewers who do not live in
Hispanic Households.
NIELSEN STATION INDEX (NSI). The NSI service measures local station viewing
of all households in a specific DMA. The Company buys NSI in all of the DMAs in
which its full-power O&Os are located in order to effectively position its
viewing against both English- and Spanish-language competitors. While Hispanic
Households are present in proportion to their percentage of total households
within a DMA in NSI, this rating service is not language stratified and
generally under-represents Spanish-speaking households. As a result, the Company
believes that NSI typically under-reports viewing of Spanish-language
television. Despite this limitation, NSI demonstrates that many full-power
Broadcast Affiliates achieve total market ratings that are fully comparable with
their English-language counterparts, with three of the fullpower O&Os ranking
among the top two stations in their respective DMAs. See "-- The O&Os."
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RATINGS
Since the beginning of the NHTI service in November 1992, Univision has
consistently ranked first in prime time among all Hispanic adults. In addition,
Univision has successfully increased its audience ratings compared to both
Telemundo and the English-language broadcast networks. Spanish-language
television prime time is from 7 p.m. to 11 p.m., Eastern and Pacific Standard
Times, Sunday through Saturday. English-language television prime time is from 8
p.m. to 11 p.m., Eastern and Pacific Standard Times, Monday through Saturday and
7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday. The following
table shows that Univision prime time audience ratings, Sunday through Saturday,
among Hispanic adults aged 18 to 49, the age segment most targeted by
advertisers, have increased compared to the other networks:
NHTI PRIME TIME RATINGS AMONG HISPANIC ADULTS AGED 18 TO 49
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NETWORK 1993 1994 1995 1996
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Univision................... 6.6 8.6 9.6 9.0
ABC......................... 3.8 3.3 3.1 2.7
CBS......................... 2.9 2.2 1.8 1.7
FOX......................... 4.0 3.6 3.4 3.2
NBC......................... 3.3 2.7 2.9 3.2
Telemundo................... 4.1 3.1 2.6 2.1
Univision share............. 26.7% 36.6% 41.0% 41.1%
</TABLE>
A further indication of Univision's growing strength against Telemundo and
its English-language competitors is its improved performance among bilingual
Hispanics. As the table below indicates, since 1993 the Network advanced from
fifth place to first place in prime time audience ratings, Sunday through
Saturday, among bilingual Hispanic adults aged 18 to 49:
NHTI PRIME TIME RATINGS AMONG BILINGUAL HISPANIC ADULTS AGED 18 TO 49
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NETWORK 1993 1994 1995 1996
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Univision................... 3.7 6.4 7.5 6.7
ABC......................... 5.0 4.6 3.7 3.1
CBS......................... 4.0 2.9 2.1 1.9
FOX......................... 5.0 4.4 3.8 3.7
NBC......................... 4.9 3.6 3.2 4.0
Telemundo................... 2.6 1.9 1.3 1.1
Univision share............. 14.7% 26.9% 34.7% 32.7%
</TABLE>
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In addition, as shown in the following table, the Company has increased its
share of the 20 most widely watched programs among all Hispanic Households from
30% in November 1992 to 90% in November 1996:
THE 20 MOST WIDELY WATCHED PROGRAMS
AMONG HISPANIC HOUSEHOLDS BY NETWORK
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NOVEMBER
PROGRAM RANK NOVEMBER 1992 NOVEMBER 1993 NOVEMBER 1994 NOVEMBER 1995 1996
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1 ABC FOX UVN(1) UVN UVN
2 UVN UVN UVN UVN UVN
3 FOX FOX UVN UVN UVN
4 UVN UVN UVN UVN UVN
5 FOX FOX UVN UVN UVN
6 FOX UVN UVN UVN UVN
7 FOX UVN UVN UVN UVN
8 ABC FOX UVN UVN UVN
9 FOX FOX UVN UVN UVN
10 UVN FOX UVN UVN UVN
11 ABC FOX FOX UVN UVN
12 FOX UVN FOX UVN UVN
13 UVN NBC UVN UVN UVN
14 UVN FOX UVN UVN UVN
15 UVN NBC UVN NBC UVN
16 NBC FOX UVN UVN UVN
17 FOX FOX UVN UVN UVN
18 ABC ABC FOX UVN ABC
19 TEL(2) FOX FOX UVN UVN
20 FOX FOX FOX FOX FOX
</TABLE>
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Source: NHTI
(1) Univision
(2) Telemundo
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THE NETWORK
The Network is the leading Spanish-language television network in the U.S.
From its operations center in Miami, the Network provides the Univision
Affiliates via satellite with 24 hours of Spanish-language programming per
broadcast day with a prime time schedule of substantially all first-run
programming (I.E., no re-runs) throughout the year. The operations center also
provides extensive production facilities for the Network's news and
entertainment programming.
The Network produces and acquires programs, makes those programs available
to the Univision Affiliates, sells network advertising and represents the
Broadcast Affiliates in the sale of national spot advertising. Each Broadcast
Affiliate has a right of first refusal in its DMA to use the Network's
programming. The full-power Broadcast Affiliates together reach approximately
5.5 million, or approximately 74%, of Hispanic Households. The low-power
Broadcast Affiliates (including translators) together reach approximately
525,000, or approximately 7%, of Hispanic Households. The Cable Affiliates reach
approximately 860,000, or approximately 11%, of Hispanic Households. Through the
Company's ownership of the O&Os, it controls approximately 78% of the Network's
broadcast distribution.
AFFILIATION AGREEMENTS. Each Univision Affiliate has the right to preempt
(I.E., to decline to broadcast at all or at the time scheduled by the Network),
without prior Network permission, any and all Network programming that it deems
unsatisfactory, unsuitable or contrary to the public interest or to substitute
programming it believes is of greater local interest, provided that the Network
must consent to any rescheduling of preempted programming. If a Univision
Affiliate preempts a Network program and no suitable substitute broadcast time
is mutually agreed upon, the Network is permitted to offer the program to any
other television station or cable service in the DMA served by such Univision
Affiliate.
Each Affiliation Agreement grants the Univision Affiliate the right of first
refusal to the Network's entire program schedule. The Affiliation Agreements
generally provide that 50% of all advertising time be retained by the Network
for Network advertising and the other 50% of the time be allocated to the
Univision Affiliate for local and national spot advertising. However, this
allocation may be modified at the Company's discretion.
The Affiliated Stations retain 100% of all local advertising revenues, and
the Network retains 100% of Network advertising revenues. The Network acts as
the representative of the Univision Affiliates for national spot sales and
receives a commission of 15% of net revenues after agency commission in return
for such services from its Affiliated Stations.
The Network from time to time may enter into Affiliation Agreements with
additional stations in new DMAs based upon its perception of the market for
Spanish-language television and the Hispanic market in the station's DMA.
CABLE AFFILIATES. The Network has historically used Cable Affiliates to
reach communities which could not support a Broadcast Affiliate because of the
relatively small number of Hispanic Households. Cable Affiliation Agreements may
cover an individual system operator or a multiple system operator. Cable
Affiliation Agreements are for the most part non-exclusive, thereby giving the
Network the right to license all forms of distribution in cable markets. Cable
Affiliates generally receive the Network's programming for a fee based on the
number of subscribers. The Network retains 100% of the allocation of Network
advertising revenues attributable to Cable Affiliates and provides certain Cable
Affiliates with two minutes of local advertising time per hour. Cable Affiliates
retain 100% of local and national advertising revenues. However, the Company
represents certain cable affiliates in national spot sales for varying fees. See
"-- Federal Regulation and New Technologies."
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UNIVISION AFFILIATE COVERAGE AND RANK. The table below sets forth certain
information with respect to the Univision Affiliates' coverage and rank.
UNIVISION AFFILIATES' COVERAGE AND RANK AMONG HISPANIC HOUSEHOLDS
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HISPANIC
HOUSEHOLDS HISPANIC
COVERED(B) (IN HOUSEHOLDS SPANISH- LANGUAGE
DMA(A) STATION THOUSANDS) COVERED(B) TELEVISION RANK(C)
- ------------------------------------- ---------- --------------- -------------- ------------------
<S> <C> <C> <C> <C>
FULL-POWER O&OS
Los Angeles (1).................... KMEX 1,362 18.1% 1
New York (2)....................... WXTV 936 12.5 1
Miami (3).......................... WLTV 454 6.0 1
Houston (4)........................ KXLN 292 3.9 1
San Francisco (5).................. KDTV 283 3.8 1
Chicago (6)........................ WGBO 282 3.8 1
San Antonio (7).................... KWEX 281 3.7 1
Dallas/Ft. Worth (8)............... KUVN 199 2.7 1
Albuquerque (10)................... KLUZ 187 2.5 1
Phoenix (12)....................... KTVW 159 2.1 1
Fresno (14)........................ KFTV 155 2.1 1
----- ---
Total full-power O&Os............ 4,590 61.2
FULL-POWER AFFILIATED STATIONS
McAllen/Brownsville (9)(f)......... KNVO 194 2.6 1
El Paso (11)(d).................... KINT 174 2.3 1
Sacramento (15)(e)................. KCSO 142 1.9 1
Denver (16)(f)..................... KCEC 124 1.7 1
Corpus Christi (18)................ KORO 93 1.2 1
Boston (19)........................ WUNI 86 1.1 1
Salinas/Monterey (26)(f)........... KSMS 48 0.6 1
Las Vegas (29)(f).................. KINC 44 0.6 1
Yuma/El Centro (30)(f)............. KVYE 42 0.6 1
----- ---
Total full-power Affiliated
Stations....................... 947 12.6
CABLE AFFILIATES(G).................. 860 11.5
LOW-POWER BROADCAST AFFILIATES(H).... 525 7.0
----- ---
TOTAL UNIVISION AFFILIATES....... 6,922 92.3%
----- ---
----- ---
</TABLE>
- ------------------------
(a) Numbers in parentheses represent Hispanic DMA rank by number of Hispanic
Households.
(b) Source: Nielsen Media Research, Black & Hispanic DMA Market and Demographic
Rank, January 1997.
(c) Rank within the DMA by number of viewing Hispanic Households. Sources: NHSI
and NSI, November 1996.
(d) Entravision has an agreement to acquire.
(e) The Company acquired this Affiliated Station in March 1997. See "-- The
O&Os."
(f) Owned by Entravision.
(g) Source: Company estimate derived from Nielsen Cable On-Line Data Exchange.
(h) Source: Company estimate derived from Nielsen Media Research, Black and
Hispanic DMA Market and Demographic Rank, January 1997.
11
<PAGE>
GALAVISION NETWORK
Galavision is the leading U.S. Spanish-language general entertainment basic
cable television network, reaching approximately 8.1 million subscribers, of
whom 2.4 million are Hispanic. According to Nielsen, Galavision reaches over 57%
of all Hispanic Households that subscribe to cable. The Company programs
Galavision so that Galavision and the Network generally do not run the same type
of show simultaneously. For example, while the Network is running a NOVELA,
Galavision may run sports or news. As a result of this counter-programming, many
Spanish-language television viewers have a choice of two Univision networks at
any one time. Additionally, Univision cross-promotes the Galavision service five
times daily.
From December 17, 1992 through June 30, 1996, the Company managed Galavision
(during such time, a Televisa affiliate) by generally selecting the programming
schedule, including programming supplied pursuant to the Program License
Agreements (subject to Galavision's obligation prior to January 1, 1996 to run
85 hours per week of programming of ECO, a 24-hour news, information and
entertainment service operated by Televisa), and providing sales, affiliate
relations and other services. The Company acquired Galavision as of July 1, 1996
and subsequently moved all Galavision operations from Mexico to the Network's
operations center in Miami.
Galavision is the only Spanish-language cable service subscribing to
Nielsen. Nielsen uses a subset of the NHTI sample to produce the Nielsen
Hispanic Home Video Index, which reports viewing of Galavision in Hispanic
Households with cable. The Company believes that its use of Nielsen to measure
Galavision's ratings assists the Company in obtaining advertisers for the cable
network and in selecting programs that meet its audience's taste. Nineteen of
the top 25 Univision advertisers advertise on Galavision.
PROGRAMMING
The Company directs its programming toward its young, family-oriented
audience. It begins daily with talk and information shows, Monday through
Friday, followed by situation comedies and NOVELAS. In the late afternoon and
early evening, the Network offers a talk show, a news-magazine and national
news, in addition to local news provided by the O&Os. Weekend daytime
programming begins with children's programming, followed by sports, variety,
teen lifestyle shows and movies. During prime time, Univision airs NOVELAS,
variety shows, a talk show, comedies, lifestyle shows, as well as specials and
movies. Prime time is followed by late news and a late night talk show.
Overnight programming consists of NOVELAS and repeats of programming aired
earlier in the day.
Eight hours of programming per weekday, including a substantial portion of
weekday prime time, are currently programmed with NOVELAS supplied primarily by
Televisa. Although NOVELAS have been compared to daytime soap operas on ABC, NBC
or CBS, the differences are significant. NOVELAS, originally developed as
serialized books, have a beginning, middle and end, generally run five days per
week, and conclude four to eight months after they begin. NOVELAS also have a
much broader audience appeal than soap operas, delivering audiences that contain
large numbers of men, children and teens in addition to women.
The Hispanic population is primarily young and family-oriented. Univision's
programming has changed dramatically over the past three years in order to
attract and retain this audience. The Company's success in attracting a young
audience is demonstrated by a 57% increase in NHTI ratings among Hispanic adults
aged 18 to 34, Sunday through Saturday 9 a.m. to midnight, from November 1992
through January 1997.
Last year, Univision began to air the Spanish-language version of SESAME
STREET, co-produced by Televisa in cooperation with Children's Television
Workshop. PLAZA SESAMO now airs two hours per week. The Company's broadcasting
of educational children's programming, including PLAZA SESAMO, meets the Federal
Communications Commission (the "FCC") requirement of airing three hours of
weekly educational programming.
In 1996 the Company derived approximately 40% and 8% of its gross
advertising sales from programs produced by Televisa and Venevision,
respectively, under the Program License Agreements. Programming
12
<PAGE>
supplied by Televisa and Venevision under the Program License Agreements and
programs produced by the Company currently represent in the aggregate
approximately 90% of the Network's non-repeat broadcast hours. The remainder
primarily consists of movies acquired from independent third-party suppliers.
Three of the Company's own productions, SABADO GIGANTE, a variety show hosted by
Don Francisco, PRIMER IMPACTO, a news magazine program, and CRISTINA, a talk
show hosted by Cristina Saralegui, are among its most successful programs in
terms of advertising revenues generated. Approximately 45% of the Company's
gross advertising sales in each of 1995 and 1996 was generated by programs it
produced.
Univision news programming is generally produced either at the Network
facility in Miami or the local stations. The Network produces an early evening
network newscast seven days per week and a late network newscast, Monday through
Friday. All full-power O&Os produce local newscasts that reflect the communities
they serve. A national public affairs program, TEMAS Y DEBATES, is also produced
weekly by the Network in Washington, D.C.
The Company produces a Sunday afternoon sports anthology show and a Sunday
night sports wrap-up show. Live sports programming primarily consists of boxing
and soccer. The 1994 World Cup soccer coverage broadcast by Univision garnered
the Company's highest sports ratings. The Company's coverage of the Sunday
afternoon nationally televised Major League Soccer "Game of the Week" in 1996
also delivered strong ratings and revenues.
PROGRAM LICENSE AGREEMENTS
Through the Program License Agreements, Univision has the first right until
December 2017 to air in the U.S. all Spanish-language programming produced by or
for Televisa and Venevision (with certain exceptions). The Program License
Agreements provide the Network and Galavision with access to programming to fill
up to 100% of their program schedules. Televisa and Venevision programming
represented approximately 51% and 12%, respectively, of the Network's non-repeat
broadcast hours in 1996.
The Program License Agreements allow the Company long-term access to
Televisa and Venevision programs and the ability to terminate unsuccessful
programs and replace them with other Televisa and Venevision programs without
paying for the episodes that are not broadcast. Accordingly, the Company has
more programs available to it and greater programming flexibility than any of
its competitors. This program availability and flexibility have permitted the
Company to adjust programming to best meet the tastes of its viewers.
Univision's quarterly option on Televisa's programming has two components.
The Company has an initial option on all Televisa produced programs which, when
aggregated with programs obtained from Venevision, is sufficient to fill 18
hours of programming per day for the Network and Galavision combined. Univision
has the right to allocate these 18 hours of programming between the Network and
Galavision. In addition, this option covers all Televisa news programs without
limitation as to the number of hours of such programming. After Univision has
exercised its rights under the initial Televisa option, Televisa is
contractually obligated until December 1997 to make available to the owners and
operators of KWHY-TV Channel 22 in Los Angeles ("KWHY"), a station that, prior
to December 1992, had been a Galavision Network affiliate to which Televisa
supplied programming, all Televisa programming that is not acquired by Univision
pursuant to its initial option (other than news programs) to enable KWHY to fill
one 85-hour per week time schedule. The Company then has an additional option on
all Televisa programs not licensed by KWHY for use on the Network and
Galavision. Thus, under the Program License Agreements, Univision may license
programming from Televisa and Venevision that, when added to (i) local programs
produced by the O&Os and used on the Network, (ii) any programs produced by
Univision and (iii) any programs purchased by Univision other than from Televisa
and Venevision, will be sufficient to fill a twenty-four hour per day, seven day
per week time schedule for each of the Network and Galavision.
13
<PAGE>
The Company's initial and additional Televisa options and its Venevision
option are prior to all third parties' rights to obtain Televisa and Venevision
produced programming for broadcast in the U.S., except with respect to
programming licensed by Televisa to KWHY. Generally, Univision also has a right
of first refusal to acquire any program for which Univision did not exercise its
option before Televisa or Venevision can license such program to any third party
(except with respect to programming licensed to KWHY as described above). To the
extent that Televisa or Venevision uses, or licenses a third party to use, its
programming in the United States in accordance with the terms of the Program
License Agreements, the Company would compete against such entity.
Televisa and Venevision programs available to Univision are defined under
the Program License Agreements as all programs produced by or for each of them
in the Spanish language or with Spanish subtitles other than programs for which
they do not own U.S. broadcast rights or as to which third parties have a right
to a portion of the revenues from U.S. broadcasts ("Co-produced Programs").
Televisa and Venevision have also agreed through their affiliates to use their
best efforts to coordinate with Univision to permit Univision to acquire U.S.
Spanish-language rights to certain Co-produced Programs and to special events
produced by others, sporting events, political conventions, election coverage,
parades, pageants and variety shows.
In consideration of access to the programming of Televisa and Venevision,
the Company pays Televisa and Venevision aggregate royalties based upon Combined
Net Time Sales. The royalties (net of certain cost sharing reimbursements which
ceased upon completion of the Reorganization) were 9.9%, 9.4% and 8.5% of
Combined Net Time Sales in 1996, 1995 and 1994, respectively. Aggregate
royalties to Televisa and Venevision are 13.5% of Combined Net Time Sales in
1997, and will be 15.0% of Combined Net Time Sales in all years thereafter. The
Network is obligated to pay such aggregate royalties to Televisa and Venevision
each year throughout the term regardless of the amount of Televisa and
Venevision programming used by the Company.
The Program License Agreements are between affiliates of the Company,
Televisa and Venevision and the performance of their affiliates has been
unconditionally guaranteed by the Company, Televisa and Venevision,
respectively. Pursuant to their respective guarantees, Televisa has agreed to
use commercially reasonable efforts to continue to produce programs available to
the Network at least to the same extent in terms of quality and quantity as in
calendar years 1989, 1990 and 1991 and Venevision has agreed to use commercially
reasonable efforts to produce or acquire programming sufficient to provide at
least nine hours per day of programs to the Network.
In 1996, the Venevision affiliate did not make available to Univision at
least nine hours per day of programming, and the Company does not believe that
Venevision had used commercially reasonable efforts to enable the affiliate to
do so. To date, the Company has continued to pay the Venevision affiliate the
full amount of aggregate royalties. The Company has commenced discussions with
Venevision; Venevision has stated that it believes that Venevision and its
affiliate have complied with their obligations to the Company. The Company is
studying the actions it may take if the Company and Venevision are unable to
resolve this disagreement through negotiations.
In addition, Televisa has agreed with several partners, each of whom has
substantial assets, to develop and operate a direct broadcast satellite ("DBS")
venture, which will have a variety of program services, including program
services supplied by Televisa. Televisa is required to offer the Company the
opportunity to acquire a 50% economic interest in Televisa's interest in the
joint venture to the extent it relates to United States Spanish-language
broadcasting. While the Company believes that the Company will be offered such
an interest, the Company has not received any indication as to what the business
terms relating to such interest would be. Accordingly, the Company is not in a
position to state whether it would accept such an offer. If the venture secures
a significant viewership among Hispanic Households, it could have a material
adverse effect on Univision's financial condition and results of operations,
even if Univision decides to acquire this 50% economic interest.
Televisa asserts that the terms and conditions of its Program License
Agreement with Univision allow it, under certain circumstances, to provide any
DBS venture uplinking in Mexico for distribution in the
14
<PAGE>
United States with Televisa program services which contain programs to which
Univision believes it has an exclusive first option in the United States.
Univision disagrees with Televisa's assertion and has notified Televisa of its
intention to enforce its rights by all appropriate means including, if
necessary, legal action, if Televisa provides such programs to any such DBS
venture. There can be no assurance that Televisa will desist from providing such
programming to its or other DBS ventures, or, if Televisa were not to desist,
that Univision would prevail in court.
Finally, Televisa has initiated the production and limited broadcast of
NOVELAS originally produced in English, using the same storylines and production
facilities in Mexico which are used for NOVELAS to which Univision has an option
for Spanish-language rights. Televisa has announced its intention to secure
broader distribution of this product throughout the United States. There can be
no assurance that Univision's bilingual viewers will not be attracted by
Televisa's English-language NOVELAS, resulting in viewership declines for
Univision.
THE O&OS
The Company owned and operated 11 full-power O&Os as of December 31, 1996,
each of which broadcasts Network programming, produces local news and other
programming of local importance, covers special events and may acquire programs
from other suppliers. The Company acquired its Sacramento Affiliated Station in
March 1997. Each of the full-power O&Os is the leading Spanish-language
television station in its DMA.
A full-power O&O's ability to compete in terms of NSI ratings with the
English-language stations in a particular market is a function of the level of
Spanish-language use in the DMA which is affected in part by Hispanic Household
density. In DMAs where households that speak Spanish at least 50% of the time
exceed 15% of all households in the DMA, the full-power O&Os, in general, have
audience delivery comparable with the leading English-language network
affiliated stations in that DMA. In a DMA where the households that speak
Spanish at least 50% of the time is between 10% and 15% of all households in
that DMA, the full-power O&Os, in general, have audience delivery comparable
with the leading independent stations in the DMA. In a DMA where households that
speak Spanish at least 50% of the time is between 5% and 10% of all households
in that DMA, the full-power O&Os, in general, have audience delivery comparable
with the lower rated independent stations in the DMA. As shown on the following
table, three of the full-power O&Os owned by the Company as of December 31, 1996
rank among the top two stations in their respective DMAs.
FULL-POWER O&OS' COVERAGE AND RANK AMONG HISPANICS
<TABLE>
<CAPTION>
UNIVISION
1996 HISPANIC SHARE
DMA RANK 1996 HISPANIC HOUSEHOLDS HISPANIC SPANISH- OF SPANISH- ADULTS 18 TO 49
(BY NUMBER OF POPULATION (IN HOUSEHOLD LANGUAGE LANGUAGE TOTAL AUDIENCE
DMA HISPANICS)(A)(B) (IN THOUSANDS)(B) THOUSANDS)(B) DENSITY(C) USE(D) VIEWING(E) MARKET RANK(F)
- -------------------- ---------------- ----------------- -------------- --------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Los Angeles......... 1 5,520 1,362 27.6% 19.5% 67%(g) 1(h)
New York............ 2 2,961 936 13.9 10.5 81 6(h)
Miami............... 3 1,303 454 33.3 28.8 88 1(h)
Chicago............. 4 1,040 282 9.0 7.0 79 7
Houston............. 5 1,030 292 18.3 12.3 85 6(h)
San Francisco....... 6 1,021 283 12.4 7.2 78 5(h)
San Antonio......... 7 924 281 43.7 23.3 83 5(h)
Dallas/Ft. Worth.... 9 714 199 10.8 6.9 82 7
Fresno.............. 12 596 155 31.6 21.1 83 1
Albuquerque......... 13 559 187 33.7 15.4 100 5(h)
Phoenix............. 14 555 159 13.1 7.6 97 6(h)
</TABLE>
- ------------------------
(a) The other DMAs ranked among the top fifteen by number of Hispanics are
McAllen/Brownsville (8th), El Paso (10th), San Diego (11th) and Sacramento
(15th).
15
<PAGE>
(b) Source: Nielsen Media Research, Black & Hispanic DMA Market and Demographic
Rank, January 1997. In deriving its figures, Nielsen only counts persons
present in Hispanic Households.
(c) Percentage of total households that are Hispanic Households. Source: Nielsen
Media Research, Black & Hispanic DMA Market and Demographic Rank, January
1997.
(d) Represents the percentage of all households in a DMA where the Spanish
language is spoken at least 50% of the time by adults. Source: Nielsen
Enumeration Study 1995, which sets forth demographic attributes of Hispanic
population.
(e) Source: NHSI, adults 18 to 49, November 1996, Sunday to Saturday, 9 a.m. to
12 midnight.
(f) Source: NSI, adults 18 to 49, November 1996, Sunday to Saturday, 9 a.m. to
12 midnight.
(g) The Los Angeles market has three full-power Spanish-language television
stations.
(h) Tied.
The following table shows the total audience share and the percentage of
total market revenues garnered by each of the O&Os owned by the Company as of
December 31, 1996. As reflected in the table, none of the O&Os currently
receives its proportionate share of advertising revenues commensurate with its
audience share. The Company believes that the continued utilization of reliable
rating services and the addition of salespeople with English-language television
and advertising expertise will further enable the Company to demonstrate to
advertisers its ability to reach the Hispanic audience, thereby allowing the
Company to narrow the gap between its share of advertising revenues and its
audience share.
O&OS' SHARE OF TOTAL MARKET REVENUES AND AUDIENCE
<TABLE>
<CAPTION>
TOTAL TELEVISION O&O SHARE O&O SHARE OF
MARKET REVENUE(1) OF TOTAL SUN-SAT/9 A.M.-MIDNIGHT
DMA (IN THOUSANDS) MARKET REVENUE(1) TOTAL AUDIENCE(2)
- ---------------------------------- ----------------- ----------------------- ---------------------------
<S> <C> <C> <C>
Los Angeles....................... $ 1,340,000 6% 10%
New York.......................... 1,264,000 2 5
Chicago........................... 766,000 2 6
San Francisco..................... 501,100 2 3
Dallas............................ 435,600 2 5
Miami............................. 406,100 10 15
Houston........................... 386,500 4 10
Phoenix........................... 273,600 3 6
San Antonio....................... 118,000 7 8
Fresno............................ 83,700 8 18
Albuquerque....................... 77,800 3 2
</TABLE>
- ------------------------
(1) Company estimates.
(2) Source: NSI, adults 18 to 49, November 1996.
Set forth below is information, including ratings and performance
information based on most recently available data, for the Company's top five
O&Os.
LOS ANGELES. The Los Angeles DMA has the largest Hispanic population in the
U.S., estimated by Nielsen to be 5.5 million people as of the beginning of 1997,
and is the second largest U.S. television market overall. Between 1980 and 1990,
the Hispanic population of Los Angeles grew approximately seven times faster
than its non-Hispanic population. According to the U.S. Census Bureau, 78% of
Hispanics in Los Angeles are of Mexican origin. The Hispanic population in Los
Angeles represents 37% of that DMA's total population and 21% of the total U.S.
Hispanic population.
The Los Angeles DMA has three Spanish-language, full-power UHF television
stations. In November 1996, the Company's Los Angeles O&O, Univision-KMEX,
posted a 67% share of the homes tuned to Spanish-language television from 9 a.m.
to midnight Sunday through Saturday, while Telemundo-KVEA
16
<PAGE>
posted a 19% share and KWHY (which only broadcasts in Spanish from 3 p.m. to 11
p.m. and is provided certain programming from Televisa) posted a 14% share.
Compared to all general market television stations in the November 1996 NSI
Report, KMEX was tied for first in adults aged 18 to 49 ratings and adults aged
18 to 34 ratings and was tied for sixth in households in the Los Angeles DMA
Sunday through Saturday 9 a.m. to midnight.
A total of 20 television stations currently operate in the Los Angeles DMA.
Some of these stations simulcast their news programs and certain entertainment
programs in both English and Spanish. In addition, Nielsen estimates that cable
penetration among Hispanic Households in the Los Angeles DMA is 45%.
NEW YORK. The New York DMA has the second largest Hispanic population in
the U.S., estimated by Nielsen to be 3.0 million people at the beginning of
1997, and is the largest U.S. television market overall. The New York Hispanic
community tends to be more fragmented into groups from many different Latin
American countries, including Puerto Rico, Cuba, the Dominican Republic and
Mexico, who have settled in different neighborhoods in the DMA. This
fragmentation distinguishes the New York market from Los Angeles and Miami where
the Hispanic population is predominantly Mexican and Cuban, respectively. The
Hispanic population in New York represents 16% of that DMA's total population
and 12% of the total U.S Hispanic population.
In November 1996, Univision-WXTV was the leading station with a 81% share of
the audience watching Spanish-language television (9 a.m. to midnight, Sunday
through Saturday). While Univision-WXTV broadcasts full time in Spanish,
Telemundo-WNJU broadcasts only 15 hours per day in Spanish Monday through
Friday, and less on the weekend. The remainder of time on Telemundo-WNJU is used
for paid programming and programs in a variety of other languages. Compared to
general market television stations in the November 1996 NSI Report, WXTV ranked
seventh in the New York market in adults aged 18 to 49, Sunday through Saturday,
9 a.m. to midnight.
A total of 16 television stations service the New York DMA. In addition to
Univision-WXTV and Telemundo-WNJU, one other television station shows some
originally-produced Spanish-language programming. According to Nielsen, cable
penetration among Hispanic Households in the New York DMA is approximately 56%.
MIAMI. The Miami DMA has the third largest Hispanic population in the U.S.,
estimated by Nielsen to be 1.3 million people as of the beginning of 1997, and
is the sixteenth largest U.S. television market overall. According to the Census
Bureau, 56% of Hispanics in Miami are of Cuban origin. The Hispanic population
in Miami represents 37% of that DMA's total population and 5% of the total U.S.
Hispanic population.
In November 1996, the Company's Miami O&O, Univision-WLTV, had an 88% share
of the audience watching Spanish-language television from 9 a.m. to midnight,
Sunday through Saturday. Compared to all general market television stations in
the May 1996 NSI Report, WLTV was in a four-way tie for first place in adults
aged 18 to 49 and adults aged 18 to 34 ratings, while placing second in
household share in the Miami market Sunday through Saturday, 9 a.m. to midnight.
WLTV is fully competitive with all English-language stations in the Miami DMA in
all major dayparts.
A total of 13 television stations service the Miami DMA. In addition to
Univision-WLTV and Telemundo-WSCV, three other television stations show some
Spanish-language programming. According to Nielsen, cable penetration among
Hispanic Households in Miami is approximately 58%.
CHICAGO. The Chicago DMA has the fourth-largest Hispanic population in the
U.S., estimated by Nielsen to be 1.0 million people at the beginning of 1997,
and is the third largest U.S. television market overall. The Hispanic population
in Chicago represents 12% of that DMA's population and 4% of the total U.S.
Hispanic population.
In 1994, the Company acquired an English-language independent television
station, WGBO, which it converted to a Spanish-language format on January 1,
1995. In November 1996, Univision-WGBO posted
17
<PAGE>
a 79% share of the audience watching Spanish-language television 9 a.m. to
midnight, Sunday through Saturday. WGBO has one Spanish-language competitor,
Telemundo-WSNS. Compared to all general market television stations in the
Chicago DMA in the November 1996 NSI report, WGBO ranked seventh. WGBO is fully
competitive with certain English-language stations in the delivery of young
demographics in the Chicago DMA, particularly adults aged 18 to 34.
A total of 13 television stations service the Chicago DMA. According to
Nielsen, cable penetration among Hispanic Households in Chicago is approximately
44%.
HOUSTON. Houston has the fifth largest Hispanic population in the U.S.,
estimated by Nielsen to be 1.0 million people, and is the eleventh largest U.S.
television market overall. The Hispanic population in Houston represents 23% of
that DMA's total population and 4% of the total U.S. Hispanic population.
In 1994, the Company acquired its Affiliated Station, KXLN, in Houston. In
November 1996, Univision-KXLN posted an 85% share of the audience watching
Spanish-language television 9 a.m. to midnight, Sunday through Saturday. KXLN
has one Spanish-language competitor, the Telemundo affiliate KTMD. In November
1996, KXLN was ranked first in the delivery of adults aged 18 to 34 and sixth in
adults aged 18 to 49, Sunday through Saturday, 9 a.m. to midnight.
A total of 15 television stations service the Houston DMA. According to
Nielsen, cable penetration among Hispanic Households in Houston is approximately
40%.
The Company exercises its "must carry" rights in each DMA in which it
operates a full-power O&O.
In March 1997, Univision acquired its Sacramento Affiliated Station, KCSO.
The Company paid approximately $40 million, consisting of $28.2 million in cash,
12,000 shares of preferred stock having one vote per share, a liquidation
preference of $1,000 per share (plus accrued and unpaid dividends) and a
cumulative annual dividend preference (commencing on the closing of the
acquisition) of 6% per share per annum ($15.00 per quarter per share),
increasing to 9% per share per annum if accrued and unpaid dividends per share
equal or exceed $30.00. The preferred stock is convertible into Class A Common
Stock at the option of the holder until the fourth anniversary of the closing of
the acquisition at a conversion price of $32.6875. The preferred stock is
redeemable at the option of the holder at any time, and by the Company after the
fourth anniversary of the issuance of the preferred stock, in each case, for an
amount equal to the liquidation preference.
Univision's seven low-power O&Os are located in Philadelphia, Hartford,
Austin, Bakersfield, Tucson, Albuquerque and Fort Worth. A low-power station is
a low-power broadcast facility that may originate programming and commercial
matter but that often transmits programming received from elsewhere (including
via satellite). The low-power O&Os, in the aggregate, accounted for less than 1%
of the Company's net revenues in 1996 and contribute 2.9% of the Network
broadcast distribution.
ADVERTISING
The Company's top 10 advertisers in 1996, on a combined basis (UTG and the
Network), were Procter & Gamble, AT&T, MCI Communications, McDonald's, Ford,
Colgate-Palmolive, Sears, Toyota, Coca-Cola and Miller Brewing Co., most of
which have substantially increased advertising commitments to the Company since
the Acquisition. No single advertiser accounted for more than 10% of the
Company's gross advertising revenues. Approximately 98.5% of Univision's gross
revenues for each of 1995 and 1996 consisted of Network, national spot and local
advertising revenues.
NETWORK ADVERTISING. Network advertising revenues represented 50.6% of the
Company's gross revenues in 1995 and 1996. The Company attracts advertising
expenditures from diverse industries, with advertising for food and beverages,
personal care products, automobiles, other household goods and telephone
services representing the majority of Network advertising.
18
<PAGE>
SPOT ADVERTISING. National spot advertising represents time sold to
national and regional advertisers based outside a station's DMA. National spot
advertising revenues represented 14.8% and 15.6% of the Company's gross revenues
for 1995 and 1996, respectively. National spot advertising primarily comes from
new advertisers wishing to test a market and advertisers who are regional
retailers and manufacturers without national distribution. To a lesser degree,
national spot advertising comes from advertisers who have the need to enhance
network advertising in a given market. National spot advertising is the means by
which most new national and regional advertisers begin marketing to Hispanics.
LOCAL ADVERTISING. Local advertising revenues are generated by both local
merchants and service providers and regional and national businesses and
advertising agencies located in a particular DMA. Local advertising revenues
represented 33.1% and 32.3% of the Company's gross revenues for 1995 and 1996,
respectively.
MARKETING
The Company increased by 45% the number of its marketing professionals from
146 to 211 over the past two years, including approximately 30 employees hired
in connection with the acquisition of the Chicago and Houston O&Os and
Galavision. The Company's account executives are divided into three groups:
Network sales; national spot sales; and local sales. The account executives
responsible for Network sales target and negotiate with accounts that advertise
nationally. The national spot sales force represents Broadcast Affiliates for
all sales placed from outside their respective DMAs. The local sales force
represents an O&O for all sales placed from within its DMA.
In addition, the Company's sales department utilizes research, including
both ratings and demographic information analyzed by the Company's research
department, to negotiate sales contracts as well as target major national
advertisers that are not purchasing advertising time or who are under-purchasing
advertising time on Spanish-language television.
The Company maintains Network and national sales offices in Atlanta,
Chicago, Dallas, Detroit, Irvine (California), Los Angeles, Miami, New York, San
Antonio and San Francisco.
COMPETITION
The broadcasting business is highly competitive. The Company competes for
viewers and revenues with other television networks and stations and other video
media, suppliers of cable television programs, newspapers, magazines, radio and
other forms of entertainment and advertising. Competition for advertising
revenues is based on the size of the market that the particular medium can
reach, the cost of such advertising and the effectiveness of such medium. The
Company believes that it is competitive in the size of market it reaches and the
cost and effectiveness of advertising time it sells.
The rules and policies of the FCC also encourage increased competition among
different electronic communications media. As a result of rapidly developing
technology, the Company may experience increased competition from other free or
pay systems by which information and entertainment are delivered to consumers,
such as direct broadcast satellite and video dial tone services.
MATERIAL PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS
In the course of its business, the Company uses various trademarks, trade
names and service marks, including its logos in its advertising and promotions.
The Company believes the strength of its trademarks, trade names and service
marks are important to its business and intends to continue to protect and
promote its marks as appropriate. The Company does not hold or depend upon any
material patent, government license, franchise or concession, except the
licenses granted by the FCC to the O&Os.
19
<PAGE>
EMPLOYEES
As of December 31, 1996, the Company employed approximately 1,350 full-time
employees. At December 31, 1996, approximately 12% of the Company's employees,
located at Chicago, Los Angeles and New York were represented by unions. In
January 1997, certain employees of the San Francisco O&O elected union
representation, thereby increasing the number of Company employees represented
by unions to 14%. Collective bargaining agreement negotiations are scheduled in
April 1997.
The collective bargaining agreements covering the union employees of the
Chicago, Los Angeles and New York O&Os expire beginning in 1999. One of the
agreements for the New York O&O was recently renegotiated subject to the
approval of the national office of AFTRA.
Management believes that its relations with its non-union and union
employees, as well as with the union representatives, are good.
FEDERAL REGULATION AND NEW TECHNOLOGIES
The ownership, operation and sale of TV stations, including those licensed
to subsidiaries of the Company, are subject to the jurisdiction of the FCC under
authority granted it pursuant to the Communications Act of 1934, as amended (the
"Communications Act"). Matters subject to FCC oversight include, but are not
limited to, the assignment of frequency bands for broadcast television; the
approval of a TV station's frequency, location and operating power; the
issuance, renewal, revocation or modification of a TV station's FCC license; the
approval of changes in the ownership or control of a TV station's licensee; the
regulation of equipment used by TV stations; and the adoption and implementation
of regulations and policies concerning the ownership, operation and employment
practices of TV stations. The FCC has the power to impose penalties, including
fines or license revocations, upon a licensee of a TV station for violations of
the FCC's rules and regulations.
PROGRAMMING AND OPERATION. The Communications Act requires broadcasters to
serve the "public interest." Since the late 1970s, the FCC gradually has relaxed
or eliminated many of the more formalized procedures it had developed to promote
the broadcast of certain types of programming responsive to the needs of a
station's community of license. However, broadcast station licensees continue to
be required to present programming that is responsive to local community
problems, needs and interests and to maintain certain records demonstrating such
responsiveness. Complaints from viewers concerning a station's programming often
will be considered by the FCC when it evaluates license renewal applications of
a licensee, although such complaints may be filed at any time and generally may
be considered by the FCC at any time. Stations also must follow various rules
promulgated under the Communications Act that regulate, among other things,
political advertising, sponsorship identifications, the advertisement of
contests and lotteries, programming directed to children, obscene and indecent
broadcasts and technical operations, including limits on radio frequency
radiation. In addition, most broadcast licensees, including the Company's
licensees, must develop and implement affirmative action programs designed to
promote equal employment opportunities and must submit reports to the FCC with
respect to these matters on an annual basis and in connection with a license
renewal application.
While the following sets forth the material provisions of the Communications
Act and other statutes or rules, regulations and policies of the FCC and other
governmental agencies applicable to the Company and its operations, it does not
purport to be a complete summary of such provisions. In particular, for further
information, reference is made to the Communications Act, the Telecommunications
Act of 1996 (the "Telcom Act"), and the rules, regulations and written policies
of the FCC. Management is unable at this time to predict the outcome of any of
the pending FCC rulemaking proceedings referenced below, the outcome of any
reconsideration or appellate proceedings concerning any of the changes in FCC
rules or policies noted below, the possible outcome of any proposed or pending
Congressional legislation, or the impact of any of those changes on Univision's
television broadcast operations.
20
<PAGE>
LICENSE RENEWAL. Under new FCC rules adopted in January 1997 to implement
the Telcom Act, television station licenses generally will be issued for an
initial period of eight years, subject to renewal upon application therefor. The
FCC will ordinarily renew broadcast licenses for the maximum eight-year term
(subject to short-term renewals in certain circumstances, such as those
involving serious violations of FCC rules by the licensee). The changes apply to
all license renewals granted after the date the new rules were adopted
(regardless of when the renewal application was filed), as well as retroactively
to licenses for which the renewal application was filed on or after October 1,
1995 if the renewal was granted prior to the date the new rules were adopted.
With respect to broadcast renewal applications filed after May 1, 1995, the
FCC adopted new rules on April 12, 1996 to implement certain statutory changes
effected by the Telcom Act. Under these new rules, no person may submit a
competing application for the frequency licensed to the renewal applicant unless
and until the FCC has determined that the incumbent is not qualified to continue
to hold the license. However, during a certain period while the renewal
application is still pending, petitions to deny the renewal application may be
filed with the FCC. In recent years, representatives of various community groups
and others often have filed petitions to deny renewal applications of broadcast
stations. The FCC will grant the renewal application and dismiss the petitions
to deny if it determines that the licensee meets statutory renewal standards
based on a review of the preceding license term.
Set forth below are the license expiration dates of each O&O:
O&O LICENSE EXPIRATION DATES
<TABLE>
<CAPTION>
DMA STATION LICENSE EXPIRATION DATE
- ---------------------------------------------------------------- ------------------- ---------------
<S> <C> <C>
Albuquerque..................................................... KLUZ 10/01/98
Albuquerque..................................................... K48AM(1) 8/01/97
Austin.......................................................... K30CE(1) 10/01/98
Bakersfield..................................................... KABE-LP(1) 4/01/98
Chicago......................................................... WGBO 12/01/97
Dallas/Fort Worth............................................... KUVN 8/01/98
Fort Worth...................................................... KUVN-LP(1) 10/1/98
Fresno.......................................................... KFTV 12/01/98
Hartford........................................................ W47AD(1) 6/01/98
Houston......................................................... KXLN 8/01/98
Los Angeles..................................................... KMEX 12/01/98
Miami........................................................... WLTV 2/01/05
New York........................................................ WXTV 6/01/99
Philadelphia.................................................... WXTV-LP(1) 7/15/97(2)
Phoenix......................................................... KTVW 10/01/98
San Antonio..................................................... KWEX 8/01/98
San Francisco................................................... KDTV 12/01/98
Tucson.......................................................... K40AC(1) 4/18/97(3)
</TABLE>
- ------------------------
(1) Low-power O&O.
(2) The Philadelphia station (formerly W35AB) is currently operating pursuant to
a special temporary authorization.
(3) The Tucson station is currently operating pursuant to a special temporary
authorization as K52AO.
In each case, renewal applications must be filed with the FCC at least four
months before the expiration date of the license, and any petitions to deny must
be filed at least one month prior to the expiration date. The FCC usually does
not act on renewal applications until after the expiration date, and in the
interim, the licenses remain in effect.
21
<PAGE>
OWNERSHIP RESTRICTIONS. The Communications Act prohibits the assignment of
a broadcast license or the transfer of control of a broadcast license without
prior FCC approval. The Communications Act also generally prohibits a licensee
from having more than 20% of its capital stock owned or voted by foreign
nationals, foreign governments, or the representatives of either (each a
"Foreign Interest"). A Licensee may not be organized under the laws of a foreign
country. Absent a grant of special authority by the FCC,
any company that directly or indirectly controls a broadcast licensee may not be
organized under the laws of a foreign country, and may not have more than 25% of
its capital stock owned or voted by foreign nationals or foreign governments or
by representatives of foreign nationals or foreign governments. Under the
Communications Act, a broadcast license may not be granted to or held by a
Foreign Interest if the FCC finds that the public interest will be served by the
refusal or revocation of such license. The FCC has interpreted this provision to
require an affirmative public interest finding before a broadcast license may be
granted to or held by any such Foreign Interest. The FCC has rarely, if ever,
made such an affirmative finding. As presently organized, the Company complies
with these restrictions. In particular, the Company's Restated Certificate of
Incorporation contains provisions that permit the Company to redeem any shares
of capital stock other than Class T and Class V Common Stock owned by Foreign
Interests and to take other actions necessary to ensure its compliance with the
foreign ownership restrictions of the Communications Act and related FCC rules.
The FCC's "multiple ownership" rules generally provide that a license for a
television station will not be granted if the applicant (or a party with an
"attributable interest" in the applicant) owns, or has an "attributable
interest" in, another station of the same type which covers a similar service
area. As directed by the Telecom Act, the FCC is conducting various rulemaking
proceedings to determine whether to change its attribution rules and whether to
retain, modify, or eliminate its limitations on the number of television
stations that a person or entity may own, operate, or control, or have an
"attributable interest" in, within the same television market. Under its duopoly
regulations, the FCC prohibits ownership interests in television stations with
overlapping signals of specified strengths. In November 1996, the FCC proposed
to relax this prohibition to permit, under certain conditions, common ownership
of television stations with greater signal overlap. The FCC is implementing the
proposed standard on an interim, conditional basis pending the outcome of the
rulemaking proceedings. Among the options being considered are proposals to
increase the signal strength permitted before a prohibited overlap occurs, to
permit a single entity to own two UHF television stations in the same television
market, and to permit a single entity to own one UHF and one VHF television
station in the same market. Substantially all Univision Affiliates operate in
the UHF band. Whether, or when, the FCC will adopt such changes in its
regulations is unknown.
The FCC recently conformed its national television stations multiple
ownership rules with the Telcom Act. Specifically, a single entity may hold
"attributable interests" in an unlimited number of U.S. television stations
provided that those stations operate in markets containing cumulatively no more
than 35% of the television homes in the U.S. For this purpose, only 50% of the
television households in a market are counted towards the 35% national
restriction if the owned station is a UHF station (as are the O&Os). An FCC
rulemaking is under way to address how to measure audience reach, but further
analysis of the "UHF discount" is being deferred until 1998 as part of the FCC's
biennial review of the broadcast rules mandated by the Telecom Act. None of the
Principal Stockholders presently holds attributable interests in any other U.S.
television stations.
The FCC's rules provide that, with certain exceptions, the power to vote or
control the vote of 5% or more of the outstanding voting stock of a licensee is
the test for determining whether an entity has an "attributable interest" in a
licensee's stations for purposes of the multiple ownership rules. However, the
FCC's rules permit certain passive institutional investors (I.E., qualifying
investment companies, insurance companies or bank trust departments) to vote or
control the vote of up to 10% of the outstanding voting stock of a broadcast
company before they will be deemed to have an "attributable interest." In March
1992, the FCC initiated a proceeding to consider, INTER ALIA proposals (i) to
increase the general "attributable interest" threshold to 10% of the outstanding
voting stock of a broadcast licensee and (ii) to
22
<PAGE>
increase the threshold for certain passive institutional investors to 20%. The
FCC has taken no final action in that proceeding.
The FCC recently conformed its "dual network rule" with the Telcom Act.
Under these new rules, a broadcast licensee may affiliate with an entity that
maintains two or more networks of television broadcast stations UNLESS such
multiple networks are composed of (i) two or more network entities meeting a
specific definition of a network as of February 8, 1996, or (ii) a network
meeting such definition and certain other English-language program distribution
services. The Network does not fall into either category.
The Telcom Act also modified the general prohibitions on network-cable
cross-ownership so as to permit television networks to own cable systems.
NETWORK AFFILIATE ISSUES. Several FCC rules impose restrictions on network
affiliation agreements. Among other things, those rules prohibit a television
station from entering into any affiliation agreements that (i) require the
station to clear time for network programming that the station had previously
scheduled for other use, (ii) preclude the preemption of any network programs
that the station believes are unsuitable for its audience, or (iii) preclude the
station from substituting for network programming a program that it believes is
of greater local or national importance.
In addition, the FCC is currently reviewing several of its rules governing
the relationship between broadcast television networks and their affiliates.
Specifically, the FCC is reviewing four rules including (i) the "right to reject
rule," which provides that affiliation arrangements between a broadcast network
and a broadcast licensee generally must permit the licensee to reject
programming provided by the network, (ii) the "time option rule," which
prohibits arrangements whereby a network reserves an option to use specified
amounts of an affiliate's broadcast time, (iii) the "exclusive affiliation
rule," which prohibits arrangements that forbid an affiliate from broadcasting
the programming of another network, and (iv) the "network territorial
exclusivity rule," which proscribes arrangements whereby a network affiliate may
prevent other stations in its community from broadcasting programming the
affiliate rejects, and arrangements that inhibit the ability of stations outside
of the affiliate's community to broadcast network programming.
The FCC's so-called "spot sale rule" prohibits a network from representing
its affiliates in the sale of non-network advertising time unless such
affiliates are owned by or under common control with the network. In late 1990,
the FCC granted a permanent waiver to the Company's predecessor permitting non-
owned and operated affiliates of the Network to be represented by the Network in
the spot sales market. In 1992, as part of its approval of the Acquisition, the
FCC granted the Company's request to extend the permanent waiver of the spot
sale rule so as to permit the Network to continue to act as a national sales
representative for each Univision Affiliate.
ADVANCED TELEVISION TECHNOLOGY. At present, U.S. television stations
broadcast signals using the "NTSC" system, named for the National Television
Systems Committee, an industry group established in 1940 to develop the first
U.S. television technical broadcast standards. The FCC is presently conducting
several rulemaking proceedings in order to implement ATV, a broadcasting
technology that would constitute a significant improvement over the audio and
video quality provided by the NTSC system. In May 1996, the FCC issued its Fifth
Further Notice of Proposed Rulemaking in its ATV proceeding, wherein the FCC
proposed to adopt the ATSC DTV standard, a standard for providing ATV service
capable of offering broadcasting formats ranging from one channel with a picture
quality approaching that of 35mm film and audio quality equal to that of compact
discs to four to five channels with picture and sound quality similar to that
currently available. On December 27, 1996, the FCC released its Fourth Report
and Order by which it rejected the ATSC DTV "single standard" and instead
adopted a modified standard which excludes video format constraints and leaves
certain options up to industry members. The DTV standard is incompatible with
the existing NTSC standard (I.E., NTSC equipment will be unable to broadcast ATV
and existing television sets will be unable to receive it without modification).
Thus, ATV broadcasting will require broadcasters electing to engage in ATV
broadcasting to make significant new capital investments in ATV broadcasting
capacity.
23
<PAGE>
Under the FCC's current plans as set forth in the FCC's Fourth Further
Notice of Proposed Rulemaking and Third Notice of Inquiry in its ATV proceeding
released in August 1995, existing full-power commercial stations would be
guaranteed licenses to construct and operate ATV stations so long as they
continued to operate their NTSC operations as well. In August 1996, the FCC
released its Sixth Further Notice of Proposed Rulemaking with a draft DTV Table
of Allotments and a discussion of its underlying policies and technical
criteria. The FCC continues to believe it can accommodate all eligible existing
broadcasters with a DTV channel. Once ATV channel allocations are finally
determined, the FCC's current plan gives existing stations a three-year period
to apply for ATV licenses and a three-year period thereafter to complete
construction. Any existing broadcast station that fails to make the additional
investment in constructing and operating an ATV station would likely suffer
long-term adverse competitive effects, since other competing television stations
in the market (as well as other competing video delivery modes) would likely be
able to provide to consumers the more advanced ATV programming. All television
stations must convert to ATV within a defined transition period (presently
anticipated to be no longer than 15 years). During this transition period,
television stations will be required to broadcast both an NTSC and an ATV
signal. At the end of the transition period, the television station will be
required to return to the FCC its license for the NTSC signal.
However, certain members of Congress from time to time have offered and
continue to offer various proposals that would require incumbent broadcasters to
bid at a public auction for the spectrum necessary to effect the transition to
ATV. The Clinton Administration has not endorsed these proposals. Although the
broadcast industry has opposed such proposals, at this time the Company cannot
be assured that it will not have to bid for the spectrum required for ATV
broadcasting or, if required to bid, that it will have adequate financial
resources to make a successful bid. If such an auction plan were mandated by
Congress, it could have a material adverse effect on the Company. Under certain
circumstances, conversion to ATV operations may reduce a station's geographical
coverage area. In addition, the FCC's current implementation plan would maintain
the secondary status of low-power stations in connection with its allotment of
ATV channels. The FCC has acknowledged that ATV channel allotment may involve
displacement of existing low-power stations, particularly in major television
markets. Accordingly, the Company's low-power Broadcast Affiliates may be
materially adversely affected.
DIRECT BROADCAST SATELLITE SYSTEMS. There are currently in operation
several DBS systems that serve the United States, and it is anticipated that
additional systems will become operational over the next several years.
Furthermore, several Spanish-language DBS systems are underway to serve various
parts of Latin America and some of such systems are expected to have signals
which will spill over into the southern U.S. or in certain cases, cover most or
all of the continental United States. DBS systems provide programming on a
subscription basis to those who have purchased and installed a satellite signal
receiving dish and associated decoder equipment. DBS systems claim to provide
visual picture quality comparable to that found in movie theaters and aural
quality comparable to digital audio compact discs. DBS systems do not, except in
certain instances, provide the signals of traditional over-the-air broadcast
stations, and thus are generally restricted to providing the programming of
premium services such as HBO and other traditionally cable-oriented satellite
programming services. In the future, competition from DBS systems could have a
material adverse effect on the financial condition and results of operations of
the Company.
24
<PAGE>
ITEM 2. PROPERTIES
The principal buildings owned or leased by the Company are described below:
PRINCIPAL UNIVISION PROPERTIES (1)
<TABLE>
<CAPTION>
AGGREGATE
SIZE OF
PROPERTY LEASE
IN SQUARE FEET EXPIRATION
LOCATION (APPROXIMATE) OWNED OR LEASED DATE
- -------------------------------------------------- --------------- -------------------- -------------
<S> <C> <C> <C>
Miami, FL......................................... 134,100 Owned/Leased(2) 12/31/00(3)
Los Angeles, CA................................... 55,604 Leased 9/30/02(3)
New York, NY...................................... 35,814 Leased 6/30/10(3)
Secaucus, NJ...................................... 29,660 Leased 6/30/09
</TABLE>
- ------------------------
(1) For additional information see Note 6 to consolidated financial statements.
(2) Represents two separate properties, of which 112,000 square feet are owned.
(3) Option to renew available.
The Company owns or leases remote antenna space and microwave transmitter
space near each of the O&Os. Additionally, the Company leases space in public
warehouses and storage facilities, as needed, near some of the O&Os.
The Network began transmitting from its operations center in Miami, Florida
in January 1991, after acquiring approximately seven acres and an existing
50,000 square foot facility and building an additional 62,000 square feet. The
Miami facility houses Network administration, operations (including the
Network's uplink facility), sales, production, news, Galavision operations and
WLTV, the Miami station. The Company broadcasts its programs to the Univision
Affiliates on three separate satellites from four transponders, one of which is
owned and three of which are leased pursuant to two lease agreements that expire
in 2004.
In January 1997, the Company signed a lease for office and studio premises
for the Dallas, Texas station. The Company believes that its principal
properties, whether owned or leased, are suitable and adequate for the purposes
for which they are used and are suitably maintained for such purposes. Except
for the inability to renew any leases of property on which antenna towers stand
or under which the Company leases transponders, the inability to renew any lease
would not have a material adverse effect on the Company's financial condition or
results of operations since the Company believes alternative space on reasonable
terms is available in each city.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in certain litigation arising in the ordinary course
of business. Management has accrued amounts it believes are reasonable and any
amounts in excess of those accruals, either alone or in the aggregate, would not
be material to the Company. See Note 8 to Notes to Consolidated Financial
Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of its Board
of Directors subject to certain employment agreements. Messrs. Cisneros and
Blank have employment agreements with the Company.
25
<PAGE>
The executive officers of the Company as of December 31, 1996 are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- --- --------------------------------------------------------------
<S> <C> <C>
A. Jerrold Perenchio............. 66 Chairman of the Board and Chief Executive Officer
Henry Cisneros(1)................ 49 President and Chief Operating Officer
George W. Blank.................. 45 Executive Vice President and Chief Financial Officer
Robert V. Cahill................. 65 Vice President and Secretary
</TABLE>
- ------------------------
(1) Henry Cisneros joined the Company after December 31, 1996.
Mr. Perenchio has been the Chairman of the Board and Chief Executive Officer
of the Company since the Acquisition. From the consummation of the Acquisition
through January 27, 1997 he was also the Company's President. Mr. Perenchio has
owned and been active in Chartwell Partners since it was formed in 1983.
Chartwell Partners is an investment firm that is active in the media and
communications industry. Mr. Perenchio has over 25 years of experience in the
U.S. media and communications industry. During his career, Mr. Perenchio has
been the chief executive officer of a number of successful entities involved in
the production and syndication of television programming and from 1975 to 1986
owned and operated Spanish-language television stations in Los Angeles and New
York. A. Jerrold Perenchio is John G. Perenchio's father.
Mr. Henry Cisneros joined the company on January 27, 1997 and serves as the
President and Chief Operating Officer. From January 1993 through January 1997,
Mr. Cisneros was the Secretary of the U.S. Department of Housing and Urban
Development. As a member of the President's Cabinet, Secretary Cisneros was
assigned America's housing and community development portfolio. Prior to joining
the cabinet, he was Chairman of Cisneros Asset Management Company, a fixed
income money management firm operating nationally. In 1981, Mr. Cisneros became
the first Hispanic mayor of a major U.S. city when he was elected Mayor of San
Antonio, the nation's 10th largest city, where he served four terms until 1989.
Mr. Cisneros has served as President of the National League of Cities, Chairman
of the National Civic League, Deputy Chair of the Federal Reserve Bank of
Dallas, and as a board member of the Rockefeller Foundation.
Since the Acquisition, Mr. Blank has been Executive Vice President and Chief
Financial Officer of UTG and, since 1995, Chief Financial Officer of the
Network. Mr. Blank joined Hallmark Cards Incorporated in March 1987 as a
consultant. In September 1987, he became Vice President, Finance and Chief
Financial Officer of Univision Holdings, Inc., the Company's predecessor
("UHI"). In addition, from May 1992 through the Acquisition, Mr. Blank held the
position of Chief Operating Officer of UTG.
Mr. Cahill has been the Secretary and a Vice President of the Company since
the Acquisition. Mr. Cahill has been Executive Vice President and General
Counsel of Chartwell Partners, an affiliate of Perenchio, since 1985. While at
Chartwell Partners, he has also been the Vice President of various other
corporations and partnerships affiliated with Perenchio that, among other
things, engage in businesses in the media and communications industry. Mr.
Cahill has been an associate of Mr. Perenchio for 25 years.
26
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Class A Common Stock is listed on the New York Stock Exchange
and is traded under the symbol "UVN". As of January 14, 1997, there were 35
stockholders of record. The Company began to trade its Class A Common Stock on
the New York Stock Exchange on September 27, 1996. Therefore, the 1996 to 1995
quarterly comparison of market price and dividend data required by this item is
only available for the two trading days of the third quarter of 1996 and the
fourth quarter of 1996. During the two trading days of the third quarter of
1996, the Class A Common Stock was traded at a high of $34.00 and a low of
$29.50 per share. During the fourth quarter of 1996, the Class A Common Stock
was traded at a high of $40.25 and a low of $32.625 per share.
No cash Common Stock dividends were distributed during 1996 by the Company.
The Company has never declared or paid cash dividends on its Common Stock. The
New Bank Facility restricts the payment of cash dividends on the Common Stock.
In addition to any other approval required by law, the approval of a majority of
the Class T Directors and a majority of the Class V Directors elected by
Televisa and Venevision, the holders of Class T and Class V Common Stock is
required for the Company to pay any dividends on the Common Stock. Since
dividends are not payable on the warrants held by each of Televisa and
Venevision, such approval is unlikely so long as such warrants are held by
Televisa and Venevision. The Company currently intends to retain any earnings
for use in its business and does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future. Future dividend policy will depend on
the Company's earnings, capital requirements, financial condition and other
factors considered relevant by the Board of Directors.
27
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
Presented below is the selected financial data of Univision Communications
Inc.:
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY
1996 1995 1994 1993 1992(A)
------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA (FOR THE YEARS ENDED DECEMBER
31):
Net revenues....................................... $ 244,858 $ 173,108 $ 139,007 $ 104,675 $ 105,855
Direct operating expenses.......................... 58,443 30,774 24,201 21,545 21,104
Selling, general and administrative expenses....... 79,818 64,973 49,223 40,174 42,000
Depreciation and amortization...................... 39,516 33,506 31,719 33,970 12,777
------------- ------------ ------------ ------------ ------------
Operating income................................... 67,081 43,855 33,864 8,986 29,974
Interest expense................................... 41,691 40,222 37,246 36,896 1,597
Amortization of deferred financing costs........... 2,934 3,925 5,419 4,580 130
Non-recurring expense of acquired station.......... -- 1,750 -- -- --
Minority interest in net (income) loss of
consolidated subsidiary.......................... (1,851) 7,346 (1,202) (5,309) (376)
------------- ------------ ------------ ------------ ------------
Income (loss) before taxes and extraordinary loss
on extinguishment of debt........................ 24,307 (9,388) (7,599) (27,181) 28,623
Provision for income taxes......................... 5,714 -- 140 -- --
------------- ------------ ------------ ------------ ------------
Income (loss) before extraordinary loss on
extinguishment of debt........................... 18,593 (9,388) (7,739) (27,181) 28,623
Extraordinary loss on extinguishment of debt (net
of tax benefit of $5,485 in 1996)................ (8,228) (801) (4,321) -- --
------------- ------------ ------------ ------------ ------------
Net income (loss).................................. $ 10,365 $ (10,189) $ (12,060) $ (27,181) $ 28,623
------------- ------------ ------------ ------------ ------------
------------- ------------ ------------ ------------ ------------
COMMON SHARE DATA:
Income (loss) per share before extraordinary
loss............................................. $ 0.32 $ (4.12) $ (3.39) $ (11.92) $ 12.55
Extraordinary loss per share....................... (0.14) (0.35) (1.90) -- --
------------- ------------ ------------ ------------ ------------
Net income (loss) per share........................ $ 0.18 $ (4.47) $ (5.29) $ (11.92) $ 12.55
------------- ------------ ------------ ------------ ------------
Weighted average common shares outstanding......... 57,713,519 2,280,105 2,280,105 2,280,105 2,280,105
------------- ------------ ------------ ------------ ------------
------------- ------------ ------------ ------------ ------------
OTHER DATA:
Broadcast cash flow................................ $ 114,495 $ 83,413 $ 69,274 $ 45,604 $ 43,452
EBITDA............................................. 106,597 77,361 65,583 42,956 42,751
BALANCE SHEET DATA (AT END OF YEAR):
Current assets..................................... $ 111,790 $ 55,023 $ 42,629 $ 30,280 $ 24,930
Total assets....................................... 884,367 545,902 565,856 510,741 540,261
Current liabilities................................ 120,350 131,264 127,550 119,446 71,077
Long-term debt..................................... 498,137 249,840 317,070 304,298 376,637
Related party debt................................. -- 112,381 70,722 60,685 52,464
Sponsor loans...................................... -- 108,361 60,482 23,421 --
Minority interest.................................. -- 19,059 11,713 12,915 18,224
Stockholders' equity (deficit)..................... 262,207 (77,057) (29,171) (11,468) 1,970
</TABLE>
- ------------------------
(a) Represents the addition of the results of operations of the predecessor
company (January 1 through December 16, 1992) and PCI for the period
December 17 through December 31, 1992.
28
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-K
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following management's discussion and analysis should be read in
conjunction with the Consolidated Financial Statements and the Notes to
Consolidated Financial Statements. In particular, Note 1 (ORGANIZATION AND
ACQUISITION) to the Consolidated Financial Statements explains the acquisition
of the Network on October 2, 1996 and presents the results of operations of the
Company on a pro forma basis, as if the 1996 acquisition of the Network and
related Reorganization had occurred as of January 1st of each year presented.
RESULTS OF OPERATIONS
Effective October 3, 1996, the Company consolidated the results of
operations of the Network, and as a result, revenues, expenses and other items
include the Network as of that date. Consequently, significant variances exist
when the results for year ended 1996 are compared to those for the year ended
1995. Accordingly, management's discussion and analysis of results of operations
for the year ended 1996, as compared to 1995, has been presented on an
historical basis and, in addition, on a basis that includes the results of
operations of the Network for the years ended 1996 and 1995. Furthermore, the
1996 and 1995 results of operations include the pro forma impact of adjustments
for interest expense on the Company's credit facility (the "New Bank Facility")
(see Note 5 to Consolidated Financial Statements), amortization of Network
goodwill and acquisition-related financing costs and related income tax
benefits. The 1996 and 1995 results of operations are not necessarily indicative
of what would have occurred if the Network acquisition had taken place on
January 1, 1996 and 1995, respectively. Management's discussion and analysis of
results of operations for the year ended 1995 as compared to 1994 has been
presented based on the historical results of operations of the Company, which
did not include the Network.
As a result of the Reorganization, the Company's major assets are its
investments in UTG and the Network, from which substantially all of its revenues
are derived. UTG's net revenues are derived from the owned and operated stations
(the "O&Os") and include gross advertising revenues generated from the sale of
national and local spot advertising time, net of agency commissions. The
Network's net revenues include gross advertising revenues generated from the
sale of Network advertising, net of agency commissions and station compensation
to the Affiliated Stations. Also included in net revenues are other
miscellaneous revenues.
Direct operating expenses consist of programming, news and general operating
costs.
29
<PAGE>
The following table sets forth selected data from the operating results of
the Company for the years ended December 31, 1996 and 1995 on an historical and
pro forma basis (in thousands):
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA %
---------------------- % ---------------------- INCREASE
1996 1995 INCREASE 1996 1995 (DECREASE)
---------- ---------- ----------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net revenues.............................. $ 244,858 $ 173,108 41.4% $ 370,289 $ 321,339 15.2%
Direct operating expenses................. 58,443 30,774 89.9% 122,510 110,402 11.0%
Selling, general and administrative
expenses................................ 79,818 64,973 22.8% 107,664 99,369 8.3%
Depreciation and amortization............. 39,516 33,506 17.9% 55,049 53,965 2.0%
---------- ---------- ----------- ---------- ---------- -----------
Operating income.......................... $ 67,081 $ 43,855 53.0% $ 85,066 $ 57,603 47.7%
---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ----------- ---------- ---------- -----------
Other Data:
Broadcast cash flow..................... $ 114,495 $ 83,413 37.3% $ 149,711 $ 121,268 23.5%
Corporate charges....................... 7,898 6,052 30.5% 9,596 9,700 (1.1%)
---------- ---------- ----------- ---------- ---------- -----------
EBITDA.................................. $ 106,597 $ 77,361 37.8% $ 140,115 $ 111,568 25.6%
---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ----------- ---------- ---------- -----------
</TABLE>
YEAR ENDED DECEMBER 31, 1996 ("1996") COMPARED TO THE YEAR ENDED DECEMBER 31,
1995 ("1995")
REVENUES. Net revenues increased to $244,858,000 in 1996 from $173,108,000
in 1995, an increase of $71,750,000 or 41.4%. The acquisition of the Network
accounted for $51,067,000 or 71.2% of the increase, and the O&Os accounted for
$20,683,000 or 28.8%. Had the Network been owned since January 1, 1995, net
revenues would have increased to $370,289,000 in 1996 from $321,339,000 in 1995,
an increase of $48,950,000 or 15.2%. The increase is due to higher net revenues
of the O&Os of $20,683,000 and of the Network of $28,267,000. The O&Os'
increase, which is predominantly driven by increased prices for advertising
spots, is primarily from Los Angeles, Miami, Houston and Chicago, with increases
at all other O&Os except for New York. The Network's increase is due primarily
to rate increases and increased volume on previously lower demand dayparts as
compared to 1995.
A major initiative has been implemented to improve the performance of the
New York station. The increased awareness among advertisers about the New York
Hispanic community and the advertisers' ability to reach that audience through
the New York station are expected to have a positive effect on the performance
of the station.
EXPENSES. Direct operating expenses, before the reduction of corporate
charges of $197,000 and $170,000 for the years ended December 31, 1996 and 1995,
respectively, increased to $58,443,000 in 1996 from $30,774,000 in 1995, an
increase of $27,669,000 or 89.9%. The acquisition of the Network accounted for
$25,043,000 or 90.5% of the increase, and the O&Os accounted for $2,626,000 or
9.5%. Had the Network been owned since January 1, 1995, direct operating
expenses, before the reduction of corporate charges, would have increased to
$122,510,000 in 1996 from $110,402,000 in 1995, an increase of $12,108,000 or
11.0%. The increase is primarily due to higher license fees paid or payable to
Televisa and Venevision under the Program License Agreements and the Agreement
Concerning Production and Acquisition of Programs, which was terminated as part
of the Reorganization, of $6,281,000, based on higher Combined Net Time Sales,
and increases in technical, programming and news costs. As a percentage of net
revenues, direct operating expenses would have decreased to 33.1% in 1996 from
34.4% in 1995.
Selling, general and administrative expenses, before the reduction of
corporate charges of $9,399,000 and $9,530,000 for the years ended December 31,
1996 and 1995, respectively, increased to $79,818,000 in 1996 from $64,973,000
in 1995, an increase of $14,845,000 or 22.8%. The acquisition of the Network
accounted for $11,870,000 or 80.0% of the increase and the O&Os accounted for
$2,975,000 or 20.0%.
30
<PAGE>
Had the Network been owned since January 1, 1995, selling, general and
administrative expenses, before the reduction of corporate charges, would have
increased to $107,664,000 in 1996 from $99,369,000 in 1995, an increase of
$8,295,000 or 8.3%. The increase is primarily a result of increased selling and
research costs of $12,320,000 associated with increased sales and staff levels,
offset in part by the net favorable impact of certain legal matters. As a
percentage of net revenues, selling, general and administrative expenses would
have decreased to 29.1% in 1996 from 30.9% in 1995.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased to
$39,516,000 in 1996 from $33,506,000 in 1995, an increase of $6,010,000 or
17.9%. The acquisition of the Network accounted for $2,088,000 or 34.7% of the
increase, and the O&Os accounted for $3,922,000 or 65.3%. Had the Network been
owned since January 1, 1995, depreciation and amortization would have increased
to $55,049,000 in 1996 from $53,965,000 in 1995, an increase of $1,084,000 or
2.0%. The increase is due primarily to depreciation related to increased capital
expenditures, offset in part by a decrease in goodwill amortization.
OPERATING INCOME. As a result of the above factors, operating income
increased to $67,081,000 in 1996 from $43,855,000 in 1995, an increase of
$23,226,000 or 53.0%. The acquisition of the Network accounted for $12,066,000
or 52.0% of the increase, and the O&Os accounted for $11,160,000 or 48.0%. Had
the Network been owned since January 1, 1995, operating income would have
increased to $85,066,000 in 1996 from $57,603,000 in 1995, an increase of
$27,463,000 or 47.7%. As a percentage of net revenues, operating income would
have increased to 23.0% in 1996 from 17.9% in 1995.
INTEREST EXPENSE. Interest expense increased to $41,691,000 in 1996 from
$40,222,000 in 1995, an increase of $1,469,000 or 3.7%. On a pro forma basis,
interest expense increased to $39,548,000 in 1996 from $37,055,000 in 1995, an
increase of $2,493,000 or 6.7%. The increase is due primarily to higher
borrowings during 1996 as compared to 1995.
MINORITY INTEREST. In 1996, the Company reported minority interest income
of $1,851,000, associated with the net income of a consolidated subsidiary, as
compared to a minority interest loss of $7,346,000 in 1995. Minority interest of
$1,851,000 in 1996 consists of the minority interest in the net income of
subsidiary of $1,869,000 and the preferred stock dividends attributable to
minority stockholders of $18,000. On a pro forma basis, minority interest is
eliminated from the operating results of the Company.
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS. As a result of the above factors,
income before extraordinary items increased to $18,593,000 in 1996 from a loss
of $9,388,000 in 1995, an improvement of $27,981,000. On a pro forma basis,
income before extraordinary items increased to $36,331,000 in 1996 from
$10,410,000 in 1995, an increase of $25,921,000 or 249.0%. As a percentage of
net revenues, income before extraordinary items increased to 9.8% in 1996 from
3.2% in 1995.
EXTRAORDINARY LOSS. During the twelve months ended December 31, 1996, UTG
purchased and/or defeased at a premium $92,050,000 face amount of its 11 3/4%
Senior Subordinated Notes, resulting in a total extraordinary loss of
$13,713,000, including the write-off of the related financing costs of
$9,601,000. The related income tax benefits associated with these extraordinary
losses were $5,485,000, resulting in an extraordinary loss, net of tax, of
$8,228,000 for the year ended 1996. On a pro forma basis, the Senior
Subordinated Notes are assumed to be defeased at the beginning of each year for
1996 and 1995, thereby generating extraordinary losses, net of tax, of
$11,186,000 in 1996 and $16,345,000 in 1995. These pro forma extraordinary
losses are greater than the actual 1996 extraordinary loss of $8,228,000, since
the deferred financing costs' unamortized balances were higher at the beginning
of 1996 and 1995 than they were when the Senior Subordinated Notes were actually
purchased and/or defeased during 1996.
NET INCOME (LOSS). As a result of the above factors, net income increased
to $10,365,000 in 1996 from a net loss of $10,189,000 in 1995, an improvement of
$20,554,000. On a pro forma basis, net income increased to $25,145,000 in 1996
from a loss of $5,935,000 in 1995, an improvement of $31,080,000. As a
percentage of net revenues, net income increased to 6.8% in 1996 from a net loss
of 1.8% in 1995.
31
<PAGE>
BROADCAST CASH FLOW. Broadcast cash flow increased to $114,495,000 in 1996
from $83,413,000 in 1995, an increase of $31,082,000 or 37.3%. The acquisition
of the Network accounted for $14,754,000 or 47.5% of the increase, and the O&Os
accounted for $16,328,000 or 52.5%. Had the Network been owned since January 1,
1995, broadcast cash flow would have increased to $149,711,000 in 1996 from
$121,268,000 in 1995, an increase of $28,443,000 or 23.5%. As a percentage of
net revenues, broadcast cash flow would have increased to 40.4% in 1996 from
37.7% in 1995.
CORPORATE CHARGES. Corporate charges increased to $7,898,000 in 1996 from
$6,052,000 in 1995, an increase of $1,846,000 or 30.5%. The acquisition of the
Network accounted for $600,000 or 32.5% of the increase and the O&Os accounted
for $1,246,000 or 67.5%. Had the Network been owned since January 1, 1995,
corporate charges would have decreased to $9,596,000 in 1996 from $9,700,000 in
1995, a decrease of $104,000 or 1.1%. As a percentage of net revenues, corporate
charges would have decreased to 2.6% in 1996 from 3.0% in 1995.
EBITDA. EBITDA increased to $106,597,000 in 1996 from $77,361,000 in 1995,
an increase of $29,236,000 or 37.8%. The acquisition of the Network accounted
for $14,154,000 or 48.4% of the increase, and the O&Os accounted for $15,082,000
or 51.6%. Had the Network been owned since January 1, 1995, EBITDA would have
increased to $140,115,000 in 1996 from $111,568,000 in 1995, an increase of
$28,547,000 or 25.6%. As a percentage of net revenues, EBITDA would have
increased to 37.8% in 1996 from 34.7% in 1995.
YEAR ENDED DECEMBER 31, 1995 ("1995") COMPARED TO THE YEAR ENDED DECEMBER 31,
1994 ("1994")
REVENUES. Net revenues increased to $173,108,000 in 1995 from $139,007,000
in 1994, an increase of $34,101,000 or 24.5%. Of this increase, $16,124,000 or
47.3% is attributable to the acquisition of the Chicago and Houston stations,
which were acquired in the third quarter of 1994. This 47.3% increase is
attributable to higher local and national spot net revenues of $14,162,000 and
the stations' share of Network net revenues of $8,651,000, partially offset by
the Network's share of higher local and national net revenues of $6,689,000 from
Chicago and Houston.
The remaining nine O&Os reflected higher local and national spot net
revenues of $15,801,000, led principally by Los Angeles and Miami, and an
increase in the O&Os' allocated share of Network net revenues of $7,934,000.
These increases were partially offset by the Network's share of higher local and
national net revenues of $6,573,000 from the nine stations. Since net revenues
in 1994 included allocated Network compensation for the World Cup of $5,200,000,
the year-to-year comparable increase in the O&Os' share of Network net revenue
was $21,785,000. Excluding the increase in net revenues attributable to the
Chicago and Houston station acquisitions in late 1994, the increase in net
revenues would have been $17,977,000 or 13.3% for 1995.
The increase in gross advertising revenues during 1995 resulted from a
combination of increased prices for advertising spots of approximately 25%,
offset in part by the sale of approximately 10% fewer spots.
EXPENSES. Direct operating expenses, before the reduction of corporate
charges of $170,000 and $150,000 for the years ended December 31, 1995 and 1994,
respectively, increased to $30,774,000 in 1995 from $24,201,000 in 1994, an
increase of $6,573,000 or 27.2%. Of this increase, $3,877,000 or 59.0% is
attributable to the acquisition of the Chicago and Houston stations in 1994, and
the remaining increase is due to news coverage and technical costs. As a
percentage of net revenues, direct operating expenses increased to 17.8% in 1995
from 17.4% in 1994.
Selling, general and administrative expenses, before the reduction of
corporate charges of $5,882,000 and $3,541,000 for the years ended December 31,
1995 and 1994, respectively, increased to $64,973,000 in 1995 from $49,223,000
in 1994, an increase of $15,750,000 or 32.0%. Of this increase, $7,760,000 or
49.3% is attributable to the acquisition of the Chicago and Houston stations in
1994. The remaining increase is primarily a result of increased selling and
research costs of $3,700,000 associated with increased sales and
32
<PAGE>
staff levels, increased management bonuses of $1,800,000, and increased legal
costs of $3,000,000 (primarily resulting from the settlement of a lawsuit),
partially offset by severance associated with operational changes of $2,100,000.
As a percentage of net revenues, selling, general and administrative expenses
increased to 37.5% in 1995 from 35.4% in 1994.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased to
$33,506,000 in 1995 from $31,719,000 in 1994, an increase of $1,787,000 or 5.6%.
The increase is due primarily to goodwill amortization and depreciation
associated with the station acquisitions.
OPERATING INCOME. As a result of the factors described above, operating
income increased to $43,855,000 in 1995 from $33,864,000 in 1994, an increase of
$9,991,000 or 29.5%. As a percentage of net revenues, operating income increased
to 25.3% in 1995 from 24.4% in 1994.
INTEREST EXPENSE. Interest expense increased to $40,222,000 in 1995 from
$37,246,000 in 1994, an increase of $2,976,000 or 8.0%. The increase is
primarily a result of higher Sponsor Loan balances and higher interest rates
which were partially offset by lower borrowing balances on the Old Bank
Facility.
NONRECURRING EXPENSE OF ACQUIRED STATION. This expense represents a
provision for certain expenses associated with the acquisition of an Affiliated
Station in 1994 which arose subsequent to the 1992 acquisitions.
MINORITY INTEREST. Minority interest changed by $8,548,000 from a
$1,202,000 minority interest in net loss of consolidated subsidiary in 1994 to a
$7,346,000 minority interest in net income of consolidated subsidiary in 1995.
Minority interest of $1,202,000 in 1994 consists of the minority interest in the
net loss of subsidiary of $1,917,000 offset by preferred stock dividends
attributable to minority stockholders of $715,000. Minority interest of
$7,346,000 in 1995 consists of the minority interest in the net income of
subsidiary of $1,562,000 and the preferred stock dividends of $8,908,000
attributable to minority stockholders.
LOSS BEFORE EXTRAORDINARY ITEMS. As a result of the above factors, loss
before extraordinary items increased to $9,388,000 in 1995 from $7,739,000 in
1994, an increase of $1,649,000 or 21.3%. As a percentage of net revenues, loss
before extraordinary items decreased to 5.4% in 1995 from 5.6% in 1994.
EXTRAORDINARY LOSS. For the year 1995, during the quarters ended September
30 and December 31, UTG purchased, at a premium, $4,050,000 and $3,500,000 face
amount, respectively, of its Senior Subordinated Notes. The purchases resulted
in extraordinary losses of $433,000 and $368,000, respectively, including the
write-off of the related deferred financing costs. For the year 1994, during the
quarters ended June 30 and December 31, UTG purchased at a premium $37,200,000
and $3,200,000 face amount, respectively, of its Senior Subordinated Notes. The
purchases resulted in extraordinary losses of $4,081,000 and $240,000,
respectively, including the write-off of the related deferred financing costs.
NET LOSS. As a result of the above factors, the Company generated a net
loss of $10,189,000 in 1995 as compared to a net loss of $12,060,000 in 1994, an
improvement of $1,871,000 or 15.5%. As a percentage of net revenues, the net
loss decreased to 5.9% in 1995 from 8.7% in 1994.
BROADCAST CASH FLOW. Broadcast cash flow increased to $83,413,000 in 1995
from $69,274,000 in 1994, an increase of $14,139,000 or 20.4%. As a percentage
of net revenues, broadcast cash flow decreased to 48.2% in 1995 from 49.8% in
1994.
CORPORATE CHARGES. Corporate charges increased to $6,052,000 in 1995 from
$3,691,000 in 1994, an increase of $2,361,000 or 64.0%. This increase is
primarily attributable to additions of personnel in sales and marketing of
$1,000,000, a fully staffed legal department of $375,000, corporate staff
salaries of $200,000 and higher management bonuses of $750,000. As a percentage
of net revenues, corporate charges increased to 3.5% in 1995 from 2.7% in 1994.
33
<PAGE>
EBITDA. EBITDA increased to $77,361,000 in 1995 from $65,583,000 in 1994,
an increase of $11,778,000 or 18.0%. As a percentage of net revenues, EBITDA
decreased to 44.7% in 1995 from 47.2% in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of cash flow is its broadcasting operations.
Funds for debt service, capital expenditures and operations historically have
been provided by income from operations and by borrowings. Capital expenditures
include UTG and the Network for the full years ended December 31, 1996 and 1995.
The proceeds of the Offering and borrowings under the New Bank Facility,
along with cash flow from operations, provided the resources necessary to repay
the amounts owing under the Old Bank Facility, terminate the Old Bank Facility,
defease the Senior Subordinated Notes, make a $100 million distribution to the
Network partners, pay all outstanding principal and accrued interest on all
amounts lent by the Principal Stockholders to UTG as Sponsor Loans, reclassify
the preferred stock and pay accrued dividends thereon and repay other related
party debt, pay the Galavision note and fund the Entravision investment.
Additional amounts under the New Bank Facility, together with cash flow from
operations, will be used for debt service, the acquisition of the Sacramento
Affiliated Station in the first quarter of 1997, capital expenditures, working
capital and other general corporate purposes.
Capital expenditures totaled $18,873,000 and $16,060,000 for the twelve
months ended December 31, 1996 and 1995, respectively. These amounts exclude the
capitalized transponder lease obligations of the Network. In addition to
performing normal capital maintenance and replacing several towers and antennas,
the Company is also in the process of upgrading and relocating several of its
television station facilities. Capital spending in 1997, including a carryover
from 1996 of approximately $10,000,000 due to timing of certain projects, will
approximate $35,000,000. Capital spending in 1998 will approximate $25,000,000,
of which approximately $10,000,000 relates to the acquisition of the Sacramento
Affiliated Station. Capital spending in 1999 will approximate $15,000,000.
In connection with the Reorganization, the Company entered into the New Bank
Facility with a syndicate of commercial banks and other lenders. The New Bank
Facility consisted of a $400 million amortizing term loan (the "Term Facility")
with a final maturity of December 31, 2003 and a $200 million reducing revolving
credit facility (the "Revolving Credit Facility") maturing on the same date.
The New Bank Facility will also permit the lenders thereunder to advance up
to an additional $250 million of term loans (the "Incremental Facility")
although the Company has not requested, and there are no commitments at this
time to lend any such additional amounts.
The Term Facility amortizes quarterly commencing in 1997 with $40 million
required to be repaid during 1997. The Revolving Credit Facility will have
quarterly scheduled reductions in availability beginning in 1999. If any loans
are made available under the Incremental Facility, such loans will be amortized
beginning on March 31, 1999 and are required to be repaid in full on or before
August 31, 2004.
Other terms and conditions related to the New Bank Facility are discussed in
Note 5 to the Consolidated Financial Statements.
Financing activities to fund Univision's operations are anticipated to be
favorably impacted by the increased availability of funds under the New Bank
Facility, partially offset by additional cash requirements for the New Bank
Facility in the form of debt acquisition costs, additional quarterly principal
payments and monthly interest as contrasted with semi-annual interest payments
on the Senior Subordinated Notes and deferred interest on the Sponsor Loans.
The Company expects to explore both Spanish-language television and other
media acquisition opportunities to compliment and capitalize on the Company's
existing business and management. The purchase price for such acquisitions may
be paid (i) with cash derived from operating cash flow, proceeds
34
<PAGE>
available under the New Bank Facility or proceeds from future debt or equity
offerings or (ii) with equity or debt securities of the Company or (iii) with
any combination thereof.
As a result of net operating loss carryforwards attributable to the
Acquisition, net operating losses since the Acquisition, tax consequences of the
Reorganization and other timing differences, the Company has available a
deferred tax asset of approximately $86,500,000 to offset future taxes payable
arising from operations. In addition, as of December 31, 1996, the Company has
approximately $560,400,000 of net remaining intangible assets that will be
expensed over the next 20 years for financial reporting purposes that will not
be deductible for tax purposes.
Future free cash flows of the Company will be substantially different from
historical free cash flows after the Reorganization and revision of the various
agreements among the Principal Stockholders due to the (i) amendments in the
Program License Agreements, (ii) discontinuance of Sponsor Loans to the Company,
(iii) elimination of the management fee, (iv) termination of the Program Cost
Sharing Agreement, and (v) changes in debt and capital structure.
SEASONALITY
The advertising revenues of the Company vary over the calendar year.
Historically, approximately 30% of total advertising revenues have been
generated in the fourth quarter and 20% in the first quarter, with the remainder
approximately equally split between the second and third quarters. Because of
the relatively fixed nature of the costs of the Company's business, seasonal
variations in operating income are more pronounced than those of revenues.
IMPACT OF INFLATION
Management believes that the impact of inflation on the Company's business
has not been material.
COMPANY STATEMENTS FOR FORWARD-LOOKING INFORMATION
Certain statements contained in this section and throughout this Annual
Report contain forward-looking statements that represent the Company's
expectations or beliefs concerning future events, including but not limited to
the following: (i) the Company's ability to (a) further develop Hispanic market
advertising as a core media buy, (b) secure larger portions of major advertising
budgets, (c) increase advertiser awareness of the share of television audience
Univision can provide, (d) remain a leading source of news, sports and
entertainment for Hispanic Americans, (e) make successful acquisitions, (f)
maintain its sources and quality of programming and (g) provide continued growth
through operating cash flow; (ii) the growth of the Hispanic population and its
buying power; (iii) the broadcast of DESPIERTA AMERICA as scheduled in the
second quarter of 1997 and its success; (iv) improvement in the New York owned
and operated station's performance; and (v) sufficiency of the Company's working
capital, availability of borrowings under the New Bank Facility and cash flow
from operating activities for the Company's future operating and capital
requirements.
The Company cautions that these statements are qualified by the following
important factors that could cause actual results to differ materially from
those in the forward-looking statements: lack of increase in advertisers'
spending on Univision, decrease in the supply or quality of programming,
increase in the cost of programming, a decrease in Univision's ratings or
audience share, an increase in preference among Hispanics for English-language
television, competitive pressures from other television broadcasters and other
entertainment and news media (some of whom use Televisa programming), the
potential impact of new technologies and regulatory and other obstacles to
making acquisitions. Results actually achieved thus may differ materially from
expected results in these statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See pages F-1 through F-27
35
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information relating to directors required by this item will be
contained under the captions "Board of Directors" and "Election of Directors" in
a definitive Proxy Statement which the registrant will file with the Securities
and Exchange commission not later than 120 days after December 31, 1996 (the
"Proxy Statement"), and such information is incorporated herein by reference.
The information relating to executive officers required by this item is
included herein in Part I under the caption "Executive Officers."
The information required pursuant to Item 405 of Regulation S-K will be
contained under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's Proxy Statement, and such information is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item will be contained under the caption
"Executive Compensation" in the Company's Proxy Statement, and such information
is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item will be contained under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the
Company's Proxy Statement, and such information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is contained under the caption
"Certain Relationships and Related Transactions" in the Company's Proxy
Statement, and such information is incorporated herein by reference.
36
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Reorganization dated as of September 25, 1996
3.1(7) Amended and Restated Articles of Incorporation of the Company
3.2(7) Amended and Restated Bylaws of the Company
4.1 Form of specimen stock certificate
4.2(1) Indenture dated as of December 15, 1992 relating to Univision Television Group Inc.'s 11 3/4% Senior
Subordinated Notes due 2001 (including the form of notes)
4.3(1) First Supplemental Indenture dated as of December 17, 1992 relating to Univision Television Group,
Inc.'s 11 3/4% Senior Subordinated Notes due 2001
4.4(2) Indenture dated as of December 17, 1992 relating to PTI Holdings, Inc.'s Subordinated Ten Year Notes
due 2002 (including the form of notes)
4.5(3) Indenture dated as of December 17, 1992 relating to The Univision Network Holding Limited
Partnership's Subordinated Ten Year Notes due 2002 (including form of notes)
4.6(4) First Supplemental Indenture dated as of October 1, 1993 relating to PTI Holdings, Inc.'s
Subordinated Ten Year Notes due 2002
4.7(4) First Supplemental Indenture dated as of October 1, 1993 relating to The Univision Network Holding
Limited Partnership's Subordinated Ten Year Notes due 2002
4.8(5) Second Supplemental Indenture dated as of July 8, 1994 relating to Univision Television Group, Inc.'s
11 3/4% Senior Subordinated Notes due 2001
4.9(5) Third Supplemental Indenture dated as of August 8, 1994 relating to Univision Television Group,
Inc.'s 11 3/4% Senior Subordinated Notes due 2001
10.1 Indemnification Agreement dated as of September 26, 1996 between the Company and each of its
executive officers and directors
10.2 Registration Rights Agreement dated as of October 2, 1996
10.3(7) 1996 Performance Award Plan
10.4(6) Employment Agreement dated as of January 1, 1995, between Univision Television Group, Inc. and George
W. Blank
10.5(6) Amended Employment Agreement dated as of January 1, 1996, between Univision Television Group, Inc.
and George W. Blank
10.6 Amended and Restated Program License Agreement dated as of October 1, 1996 by and between Dennevar
B.V. and the Company
10.7 Amended and Restated Program License Agreement dated as of October 1, 1996 by and between Univisa,
Inc. and the Company
10.8 Participation Agreement dated as of October 2, 1996 by and among the Company, Perenchio, Televisa,
Venevision and certain of their affiliates
10.9 International Program Rights Agreement by and among the Company, Venevision and Televisa
10.10 Amended and Restated Warrant issued to Televisa dated as of October 2, 1996
10.11 Amended and Restated Warrant issued to Venevision dated as of October 2, 1996
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.12 Credit Agreement dated as of September 26, 1996 among Univision Communications Inc., the banks and
other financial institutions parties thereto (the "Lenders"), The Chase Manhattan Bank, N.A., a
national banking association ("Chase"), as a managing agent and Banque Paribas, a French banking
corporation ("Paribas"), as a managing agent, and Chase as administrative agent
10.13 Security Agreements dated as of September 26, 1996 between Univision Communications Inc. and each of
the Guarantors (as defined therein) in favor of the Administrative Agent, for the benefit of the
Lenders
10.14.1 Guarantee dated as of September 26, 1996 executed by the Guarantors other than Univision Network
Limited Partnership in favor of the Administrative Agent for the benefit of the Lenders
10.14.2 Guarantee dated as of September 26, 1996 executed by Univision Network Limited Partnership in favor
of the Administrative Agent for the benefit of the Lenders
10.15(7) Employment Agreement dated as of January 1, 1995 between the Network and Ray Rodriguez
10.16(7) Amendment to Employment Agreement dated as of January 1, 1996 between the Network and Ray Rodriguez
10.17(7) Warrants dated as of October 21, 1996 issued to The Davila Family, LLC
10.18(6) Transponder Purchase Agreement between Univision, Inc. and Hughes Communications Satellite Services,
Inc. dated as of January 17, 1990 and assumed by the Network
10.19(6) Transponder Service Agreement between Univision, Inc. dated as of January 17, 1990 and assumed by the
Network
10.20 Amendment to Employment Agreement dated as of January 1, 1997 between Univision Television Group,
Inc. and George W. Blank
10.21 Amendment to Employment Agreement dated as of January 1, 1997 between the Network and Ray Rodriguez
10.22 Employment Agreement dated as of February 10, 1997 by and between the Company and Henry Cisneros
10.23 Amendment to Employment Agreement dated as of February 10, 1997 by and between the Company and Henry
Cisneros
11.1 Statement of Computation of Per Share Earnings
21.1(7) Subsidiaries of the Company
24.1 Power of Attorney (contained on page 40)
27.1 Financial Data Schedule
</TABLE>
- ------------------------
(1) Previously filed as an exhibit to the Registration Statement on Form S-1 of
Univision Television Group, Inc. (File No. 33-59534)
(2) Previously filed as an exhibit to the Registration Statement on Form S-1 of
PTI Holdings, Inc. (File No. 33-66432)
(3) Previously filed as an exhibit to the Registration Statement on Form S-1 of
The Univision Network Holding Limited Partnership (File No. 33-66434)
(4) Previously filed as an exhibit to PTI Holdings, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1993
38
<PAGE>
(5) Previously filed as an exhibit to Univision Television Group, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1994
(6) Previously filed as an exhibit to Univision Television Group, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1995.
(7) Previously filed as an exhibit to Univision Communications Inc.'s
Registration Statement on Form S-1 (File No. 333-6309).
(B) FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities Exchange Act of 1934 are not required under the
related instructions or are inapplicable, and therefore have been omitted.
(C) REPORTS ON FORM 8-K
During the three-month period ended December 31, 1996, the registrant filed
no reports on Form 8-K.
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on March 28, 1997.
<TABLE>
<S> <C> <C>
UNIVISION COMMUNICATIONS INC.
By: /s/ GEORGE W. BLANK
-----------------------------------------
George W. Blank
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates so indicated.
Each person whose signature appears below hereby authorizes Robert V. Cahill
and George W. Blank, or either of them, as attorneys-in-fact to sign on his
behalf, individually, and in the capacity stated below, and to file all
amendments and/or supplements to this Annual Report on Form 10-K.
<TABLE>
<C> <S> <C>
/s/ A. JERROLD PERENCHIO
- ------------------------------ Chairman of the Board and March 28, 1997
A. Jerrold Perenchio Chief Executive Officer
Executive Vice President
and Chief Financial
/s/ GEORGE W. BLANK Officer, in his
- ------------------------------ capacities, as chief March 28, 1997
George W. Blank financial officer and
principal accounting
officer
/s/ HENRY CISNEROS
- ------------------------------ President and Chief March 28, 1997
Henry Cisneros Operating Officer
- ------------------------------ Director March 28, 1997
Gustavo Cisneros
/s/ LAWRENCE W. DAM
- ------------------------------ Director March 28, 1997
Lawrence W. Dam
/s/ HAROLD GABA
- ------------------------------ Director March 28, 1997
Harold Gaba
/s/ ALAN HORN
- ------------------------------ Director March 28, 1997
Alan Horn
/s/ JOHN G. PERENCHIO
- ------------------------------ Director March 28, 1997
John G. Perenchio
/s/ RAY RODRIGUEZ
- ------------------------------ Director March 28, 1997
Ray Rodriguez
</TABLE>
40
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization dated as of September 25, 1996...........................
3.1(7) Amended and Restated Articles of Incorporation of the Company.................................
3.2(7) Amended and Restated Bylaws of the Company....................................................
4.1 Specimen stock certificate....................................................................
4.2(1) Indenture dated as of December 15, 1992 relating to Univision Television Group Inc.'s 11 3/4%
Senior Subordinated Notes due 2001 (including the form of notes)............................
4.3(1) First Supplemental Indenture dated as of December 17, 1992 relating to Univision Television
Group, Inc.'s 11 3/4% Senior Subordinated Notes due 2001....................................
4.4(2) Indenture dated as of December 17, 1992 relating to PTI Holdings, Inc.'s Subordinated Ten Year
Notes due 2002 (including the form of notes)................................................
4.5(3) Indenture dated as of December 17, 1992 relating to The Univision Network Holding Limited
Partnership's Subordinated Ten Year Notes due 2002 (including form of notes)................
4.6(4) First Supplemental Indenture dated as of October 1, 1993 relating to PTI Holdings, Inc.'s
Subordinated Ten Year Notes due 2002........................................................
4.7(4) First Supplemental Indenture dated as of October 1, 1993 relating to The Univision Network
Holding Limited Partnership's Subordinated Ten Year Notes due 2002..........................
4.8(5) Second Supplemental Indenture dated as of July 8, 1994 relating to Univision Television Group,
Inc.'s 11 3/4% Senior Subordinated Notes due 2001...........................................
4.9(5) Third Supplemental Indenture dated as of August 8, 1994 relating to Univision Television
Group, Inc.'s 11 3/4% Senior Subordinated Notes due 2001....................................
10.1 Indemnification Agreement dated as of September 26, 1996 between the Company and each of its
executive officers and directors............................................................
10.2 Registration Rights Agreement dated as of October 2, 1996.....................................
10.3(7) 1996 Performance Award Plan...................................................................
10.4(6) Employment Agreement dated as of January 1, 1995 between Univision Television Group, Inc. and
George W. Blank.............................................................................
10.5(6) Amended Employment Agreement dated as of January 1, 1996 between Univision Television Group,
Inc. and George W. Blank....................................................................
10.6 Amended and Restated Program License Agreement dated as of October 1, 1996 by and between
Dennevar B.V. and the Company...............................................................
10.7 Amended and Restated Program License Agreement dated as of October 1, 1996 by and between
Univisa, Inc. and the Company...............................................................
10.8 Participation Agreement dated as of October 2, 1996 by and among the Company, Perenchio,
Televisa, Venevision and certain of their affiliates........................................
10.9 International Program Rights Agreement by and among the Company, Venevision and Televisa......
10.10 Amended and Restated Warrant issued to Televisa dated as of October 2, 1996...................
10.11 Amended and Restated Warrant issued to Venevision dated as of October 2, 1996.................
10.12 Credit Agreement dated as of September 26, 1996 among Univision Communications Inc., the banks
and other financial institutions parties thereto (the "Lenders"), The Chase Manhattan Bank,
N.A., a national banking association ("Chase"), as a managing agent and Banque Paribas, a
French banking corporation ("Paribas"), as a managing agent, and Chase as administrative
agent.......................................................................................
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<S> <C> <C>
10.13 Security Agreements dated as of September 26, 1996 between Univision Communications Inc. and
each of the Guarantors (as defined therein) in favor of the Administrative Agent, for the
benefit of the Lenders......................................................................
10.14.1 Guarantees executed by the Guarantors other than Univision Network Limited Partnership in
favor of the Administrative Agent for the benefit of the Lenders dated as of September 26,
1996........................................................................................
10.14.2 Guarantee executed by Univision Network Limited Partnership in favor of the Administrative
Agent for the benefit of the Lenders dated as of September 26, 1996.........................
10.15(7) Employment Agreement dated as of January 1, 1995 between the Network and Ray Rodriguez........
10.16(7) Amendment to Employment Agreement dated as of January 1, 1996 between the Network and Ray
Rodriguez...................................................................................
10.17(7) Warrants dated as of October 21, 1996 issued to The Davila Family, LLC........................
10.18(6) Transponder Purchase Agreement between Univision, Inc. and Hughes Communications Satellite
Services, Inc. dated as of January 17, 1990 and assumed by the Network......................
10.19(6) Transponder Service Agreement between Univision, Inc. dated as of January 17, 1990 and assumed
by the Network..............................................................................
10.20 Amendment to Employment Agreement dated as of January 1, 1997 between Univision Television
Group, Inc. and George W. Blank.............................................................
10.21 Amendment to Employment Agreement dated as of January 1, 1997 between the Network and Ray
Rodriguez...................................................................................
10.22 Employment Agreement dated as of February 10, 1997 by and between the Company and Henry
Cisneros....................................................................................
10.23 Amendment to Employment Agreement dated as of February 10, 1997 by and between the Company and
Henry Cisneros..............................................................................
11.1 Statement of Computation of Per Share Earnings................................................
21.1(7) Subsidiaries of the Company...................................................................
24.1 Power of Attorney (contained on page 40)......................................................
27.1 Financial Data Schedule.......................................................................
</TABLE>
- ------------------------
(1) Previously filed as an exhibit to the Registration Statement on Form S-1 of
Univision Television Group, Inc. (File No. 33-59534)
(2) Previously filed as an exhibit to the Registration Statement on Form S-1 of
PTI Holdings, Inc. (File No. 33-66432)
(3) Previously filed as an exhibit to the Registration Statement on From S-1 of
The Univision Network Holding Limited Partnership (File No. 33-66434)
(4) Previously filed as an exhibit to PTI Holdings, Inc.'s Annual Report on Form
10K for the year ended December 31, 1993
(5) Previously filed as an exhibit to Univision Television Group, Inc.'s Annual
Report on Form 10K for the year ended December 31, 1994
(6) Previously filed as an exhibit to Univision Television Group, Inc.'s Annual
Report on Form 10K for the year ended December 31, 1995
(7) Previously filed as an exhibit to Univision Communications Inc.'s
Registration Statement on Form S-1 (File No. 333-6309).
42
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To Univision Communications Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Univision Communications Inc. and
subsidiaries for the years ended December 31, 1996, 1995 and 1994 included in
Item 8 of this Form 10-K and have issued our report thereon dated March 6, 1997.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in Item
14(b) of this Form 10-K is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. The schedule for the years ended December 31, 1996, 1995 and 1994
has been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 6, 1997
S-1
<PAGE>
SCHEDULE II
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
-----------------------------
BALANCE AT CHARGED TO
BEGINNING OF COSTS AND CHARGED TO BALANCE AT
DESCRIPTION PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS END OF PERIOD
- --------------------------------------- ------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Debit Debit Debit
(Credit) (Credit) Debit (Credit) Debit (Credit) (Credit)
FOR THE YEAR ENDED DECEMBER 31, 1994:
Allowance for doubtful accounts........ $ (5,180) $ (2,038) $ -- $ 2,128(1) $ (5,090)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of intangible
assets................................ $ (30,894) $ (27,340) $ -- $ -- $ (58,234)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of deferred
financing costs....................... $ (4,710) $ (5,419) $ -- $ 336(2) $ (9,793)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Allowance for deferred tax asset....... $ (39,500) $ -- $ -- $ (10,100)(6) $ (49,600)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
FOR THE YEAR ENDED DECEMBER 31, 1995:
Allowance for doubtful accounts........ $ (5,090) $ (2,809) $ -- $ 4,046(1) $ (3,853)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of intangible
assets................................ $ (58,234) $ (28,264) $ -- $ -- $ (86,498)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of deferred
financing costs....................... $ (9,793) $ (3,925) $ -- $ 121(2) $ (13,597)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Allowance for deferred tax asset....... $ (49,600) $ -- $ 2,000(3) $ 100(6) $ (47,500)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
FOR THE YEAR ENDED DECEMBER 31, 1996:
Allowance for doubtful accounts........ $ (3,853) $ (2,976) $ (4,013)(4) $ 2,104(1) $ (8,738)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of intangible
assets................................ $ (86,498) $ (31,112) $ (16,378)(4) $ -- $ (133,988)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Accumulated amortization of deferred
financing costs....................... $ (13,597) $ (2,934) $ 15,658(5) $ 530(2) $ (343)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
Allowance for deferred tax asset....... $ (47,500) $ -- $ 5,000(3) $ (37,000)(6) $ (79,500)
------------- ------------- -------------- -------------- -------------
------------- ------------- -------------- -------------- -------------
</TABLE>
- ------------------------
(1) Represents write-offs of accounts receivable, net of recoveries.
(2) Represents write-offs of deferred financing costs in connection with the
extinguishment of debt.
(3) Represents allocations between deferred taxes and goodwill.
(4) Network balance at date of Network acquisition (October 2, 1996).
(5) Represents write-off of deferred financing costs prior to the
Reorganization.
(6) Represents the valuation allowance for the deferred tax assets arising
during the year.
S-2
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
UNIVISION COMMUNICATIONS INC.
Report of Independent Public Accountants............................................ F-2
Consolidated Balance Sheets at December 31, 1996 and 1995........................... F-3
Consolidated Statements of Operations for the years ended December 31, 1996, 1995
and 1994.......................................................................... F-5
Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years
ended December 31, 1994, 1995 and 1996............................................ F-6
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995
and 1994.......................................................................... F-7
Notes to Consolidated Financial Statements.......................................... F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Univision Communications Inc.:
We have audited the accompanying consolidated balance sheets of Univision
Communications Inc. (a Delaware Corporation) and subsidiaries as of December 31,
1996 and 1995, and the related consolidated statements of operations, changes in
stockholders' equity (deficit) and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Univision
Communications Inc. and subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 6, 1997
F-2
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
ASSETS
<TABLE>
<CAPTION>
DECEMBER DECEMBER
31, 1996 31, 1995
----------- -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents......................................... $ 11,588 $ 14,029
Short-term investment............................................. 90 --
Accounts receivable, less allowance for doubtful accounts of
$8,738 in 1996 and $3,853 in 1995............................... 87,954 37,951
Program rights.................................................... 4,673 --
Prepaid expenses and other........................................ 7,485 3,043
----------- -----------
Total current assets.......................................... 111,790 55,023
Property and equipment, less accumulated depreciation of $22,183
in 1996 and $13,888 in 1995..................................... 103,373 25,557
Intangible assets, less accumulated amortization of $133,988 in
1996 and $86,498 in 1995........................................ 639,934 449,383
Deferred financing costs, less accumulated amortization of $343 in
1996 and $13,597 in 1995........................................ 8,958 12,193
Deferred income taxes............................................. 7,000 2,000
Note receivable -- Entravision.................................... 10,000 --
Other assets...................................................... 3,312 1,746
----------- -----------
Total assets.................................................. $ 884,367 $ 545,902
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
DECEMBER DECEMBER
31, 1996 31, 1995
----------- -----------
Current liabilities:
<S> <C> <C>
Accounts payable and accrued liabilities.......................... $ 69,596 $ 41,266
Accrued interest.................................................. 2,367 6,281
Accrued license fee............................................... 4,322 --
Accrued station compensation...................................... 926 --
Obligation for program rights..................................... 482 1,899
Due to the Network................................................ -- 64,505
Current portion of long-term debt................................. 42,657 17,313
----------- -----------
Total current liabilities....................................... 120,350 131,264
----------- -----------
Long-term debt, net of current portion and including accrued
interest.......................................................... 458,808 249,840
Capital lease obligations, net of current portion................... 39,329 --
Obligation for program rights, net of current portion............... 331 753
Other long-term liabilities......................................... 3,342 1,301
Related party long-term debt, including accrued interest and accrued
and variable dividends payable.................................... -- 112,381
Sponsor Loans, including accrued interest........................... -- 108,361
Minority interest (including subsidiary's preferred stock and
related dividends due minority stockholders of $8,908 in 1995).... -- 19,059
----------- -----------
Total liabilities............................................... 622,160 622,959
----------- -----------
Stockholders' equity (deficit):
Preferred stock, $.01 par value (10,000,000 shares authorized,
12,000 outstanding and held in escrow in 1996; 108,000 shares
authorized, 90,000 shares issued and outstanding in 1995)....... -- 1
Common stock, $.01 par value (197,660,000 shares authorized,
42,612,180 shares issued and outstanding in 1996; 10,000 shares
authorized, issued and outstanding in 1995)..................... 426 --
Paid-in-capital 331,331 --
Accumulated deficit............................................... (69,550) (77,058)
----------- -----------
Total stockholders' equity (deficit).......................... 262,207 (77,057)
----------- -----------
Total liabilities and stockholders' equity (deficit).......... $ 884,367 $ 545,902
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
Net revenues............................................. $ 244,858 $ 173,108 $ 139,007
<S> <C> <C> <C>
Direct operating expenses................................ 58,443 30,774 24,201
Selling, general and administrative expenses............. 79,818 64,973 49,223
Depreciation and amortization............................ 39,516 33,506 31,719
--------- --------- ---------
Operating income......................................... 67,081 43,855 33,864
Interest expense......................................... 36,207 36,260 32,852
Interest expense on related party debt................... 5,484 3,962 4,394
Amortization of deferred financing costs................. 2,934 3,925 5,419
Non-recurring expense of acquired station................ -- 1,750 --
Minority interest in net (income) loss of consolidated
subsidiary............................................. (1,851) 7,346 (1,202)
--------- --------- ---------
Income (loss) before taxes and extraordinary loss on
extinguishment of debt................................. 24,307 (9,388) (7,599)
Provision for income taxes............................... 5,714 -- 140
--------- --------- ---------
Income (loss) before extraordinary loss on extinguishment
of debt................................................ 18,593 (9,388) (7,739)
Extraordinary loss on extinguishment of debt (net of tax
benefit of $5,485 in 1996)............................. (8,228) (801) (4,321)
--------- --------- ---------
Net income (loss)........................................ $ 10,365 $ (10,189) $ (12,060)
--------- --------- ---------
--------- --------- ---------
Income (loss) per share before extraordinary loss $ 0.32 $ (4.12) $ (3.39)
Extraordinary loss per share............................. (0.14) (0.35) (1.90)
--------- --------- ---------
Net income (loss) per share.............................. $ 0.18 $ (4.47) $ (5.29)
--------- --------- ---------
--------- --------- ---------
Weighted average common shares outstanding............... 57,713,519 2,280,105 2,280,105
--------- --------- ---------
--------- --------- ---------
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON PREFERRED PAID-IN- ACCUMULATED
STOCK STOCK CAPITAL DEFICIT TOTAL
------ --------- -------- ----------- --------
Balance, January 1, 1994.............................................. $-- $1 $ 22,297 $(33,766) $(11,468)
<S> <C> <C> <C> <C> <C>
Net loss for the year................................................. -- -- -- (12,060) (12,060)
Dividends declared.................................................... -- -- -- (5,643) (5,643)
------ --------- -------- ----------- --------
Balance, December 31, 1994............................................ -- 1 22,297 (51,469) (29,171)
Net loss for the year................................................. -- -- -- (10,189) (10,189)
Dividends declared.................................................... -- -- -- (5,066) (5,066)
Minority interest..................................................... -- -- -- (10,334) (10,334)
Conversion of unpaid dividends to
notes payable....................................................... -- -- (22,297) -- (22,297)
------ --------- -------- ----------- --------
Balance, December 31, 1995............................................ -- 1 -- (77,058) (77,057)
Net income for the year............................................... -- -- -- 10,365 10,365
Initial Public Offering of stock...................................... 94 -- 216,002 -- 216,096
Initial Public Offering and
Reorganization costs................................................ -- -- (16,541) -- (16,541)
Stock split........................................................... 331 -- (331) -- --
Partnership distribution in connection
with Reorganization................................................. -- -- (40,000) -- (40,000)
UNHP equity acquired at October 2, 1996............................... -- -- (37,911) -- (37,911)
Acquisition of minority interest liability at historical cost......... -- -- 6,957 -- 6,957
Step up acquired minority interest
and Network......................................................... -- -- 203,044 -- 203,044
Preferred stock conversion
upon Reorganization................................................. 1 (1) -- -- --
Other................................................................. -- -- 111 (23) 88
Dividends declared on preferred stock prior
to Reorganization................................................... -- -- -- (2,834) (2,834)
------ --------- -------- ----------- --------
Balance, December 31, 1996............................................ $426 --$ $331,331 $(69,550) $262,207
------ --------- -------- ----------- --------
------ --------- -------- ----------- --------
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Net income (loss).................................................................................... $ 10,365 $ (10,189)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation......................................................................................... 8,405 5,243
Amortization of intangible assets and deferred financing costs....................................... 34,045 32,188
Accretion of interest on Sponsor Loans............................................................... 7,304 7,298
Non-recurring expense of acquired station............................................................ -- 1,750
Minority interest.................................................................................... (1,851) 7,346
Extraordinary loss on extinguishment of debt......................................................... 13,713 801
Changes in assets and liabilities:
Accounts receivable................................................................................ (939) (3,155)
Due to the Network................................................................................. (18,374) (14,983)
Intangible assets.................................................................................. 5,000 2,000
Deferred income taxes.............................................................................. (5,000) (2,000)
Management and license fees payable................................................................ 11,849 --
Payment of license fees............................................................................ (7,886) --
Accrued station compensation....................................................................... (3,597) --
Program rights..................................................................................... (148) --
Prepaid expenses and other assets.................................................................. (2,815) (264)
Accounts payable and accrued liabilities........................................................... (5,766) 5,267
Accrued interest................................................................................... 3,969 4,157
Obligations for program rights..................................................................... (2,003) (4,417)
Other, net......................................................................................... 306 440
--------- ---------
Net cash provided by operating activities............................................................ 46,577 31,482
--------- ---------
Cash flow from investing activities:
Acquisition of minority interest of PTIH and the Network, including acquisition costs, net of cash
acquired......................................................................................... (39,984) --
Acquisition of Galavision.......................................................................... (15,000) --
Increase interest in Entravision................................................................... (7,000) --
Acquisition of Fort Worth Tower.................................................................... (455) --
Acquisition of stations, including acquisition costs, net of cash acquired......................... -- --
Capital expenditures............................................................................... (12,637) (10,064)
Organization costs................................................................................. (1,677) --
--------- ---------
Net cash used in investing activities................................................................ (76,753) (10,064)
--------- ---------
Cash flow from financing activities:
Proceeds from issuance of long-term debt........................................................... 496,000 39,000
Proceeds from the Offering......................................................................... 216,096 --
Repayment of long-term debt........................................................................ (224,889) (112,793)
Repayments of Sponsor Loans........................................................................ (148,971) --
Repayments of related party debt................................................................... (130,952) --
Payment of Offering costs.......................................................................... (17,189) --
Proceeds from Sponsor Loans........................................................................ 38,381 45,251
Reduction of Sponsor Loans-Program Cost Sharing Agreement.......................................... (5,074) (4,670)
Defeasance of Senior Subordinated Notes............................................................ (70,276) --
Repurchase of Senior Subordinated Notes............................................................ (25,881) (8,132)
Advances to the Network for distribution to the Partners prior to Reorganization................... (60,000) --
Advances (from) to the Network..................................................................... (30,209) 28,148
Deferred financing costs........................................................................... (9,301) (62)
--------- ---------
Net cash provided by (used in) financing activities................................................ 27,735 (13,258)
--------- ---------
Net (decrease) increase in cash...................................................................... (2,441) 8,160
Cash and cash equivalents, beginning of year......................................................... 14,029 5,869
--------- ---------
Cash and cash equivalents, end of year............................................................... $ 11,588 $ 14,029
--------- ---------
--------- ---------
Supplemental disclosure of cash flow information:
Interest paid during the year...................................................................... $ 31,612 $ 28,108
--------- ---------
--------- ---------
Supplemental disclosure of non-cash transactions:
Related party notes issued in payment of preferred stock dividends................................. $ 2,834 $ 37,697
--------- ---------
--------- ---------
Supplemental disclosure of non-cash activity regarding acquisitions:
Total assets acquired, net of cash................................................................. $ 394,475 $ --
Liabilities assumed................................................................................ (147,829) --
--------- ---------
Net assets acquired................................................................................ 246,646 --
Accrued acquisition costs.......................................................................... -- --
Non-cash consideration............................................................................. (191,662) --
--------- ---------
Total cash consideration......................................................................... $ 54,984 $ --
--------- ---------
--------- ---------
<CAPTION>
1994
---------
<S> <C>
Net income (loss).................................................................................... $ (12,060)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation......................................................................................... 4,379
Amortization of intangible assets and deferred financing costs....................................... 32,759
Accretion of interest on Sponsor Loans............................................................... 3,125
Non-recurring expense of acquired station............................................................ --
Minority interest.................................................................................... (1,202)
Extraordinary loss on extinguishment of debt......................................................... 1,450
Changes in assets and liabilities:
Accounts receivable................................................................................ (1,671)
Due to the Network................................................................................. (14,350)
Intangible assets.................................................................................. --
Deferred income taxes.............................................................................. --
Management and license fees payable................................................................ --
Payment of license fees............................................................................ --
Accrued station compensation....................................................................... --
Program rights..................................................................................... --
Prepaid expenses and other assets.................................................................. (1,521)
Accounts payable and accrued liabilities........................................................... 6,651
Accrued interest................................................................................... 4,244
Obligations for program rights..................................................................... 8,069
Other, net......................................................................................... (769)
---------
Net cash provided by operating activities............................................................ 29,104
---------
Cash flow from investing activities:
Acquisition of minority interest of PTIH and the Network, including acquisition costs, net of cash
acquired......................................................................................... --
Acquisition of Galavision.......................................................................... --
Increase interest in Entravision................................................................... --
Acquisition of Fort Worth Tower.................................................................... --
Acquisition of stations, including acquisition costs, net of cash acquired......................... (66,213)
Capital expenditures............................................................................... (5,379)
Organization costs................................................................................. (3,000)
---------
Net cash used in investing activities................................................................ (74,592)
---------
Cash flow from financing activities:
Proceeds from issuance of long-term debt........................................................... 176,000
Proceeds from the Offering......................................................................... --
Repayment of long-term debt........................................................................ (118,575)
Repayments of Sponsor Loans........................................................................ --
Repayments of related party debt................................................................... --
Payment of Offering costs.......................................................................... --
Proceeds from Sponsor Loans........................................................................ 33,936
Reduction of Sponsor Loans-Program Cost Sharing Agreement.......................................... --
Defeasance of Senior Subordinated Notes............................................................ --
Repurchase of Senior Subordinated Notes............................................................ (43,271)
Advances to the Network for distribution to the Partners prior to Reorganization................... --
Advances (from) to the Network..................................................................... 3,999
Deferred financing costs........................................................................... (2,428)
---------
Net cash provided by (used in) financing activities................................................ 49,661
---------
Net (decrease) increase in cash...................................................................... 4,173
Cash and cash equivalents, beginning of year......................................................... 1,696
---------
Cash and cash equivalents, end of year............................................................... $ 5,869
---------
---------
Supplemental disclosure of cash flow information:
Interest paid during the year...................................................................... $ 29,402
---------
---------
Supplemental disclosure of non-cash transactions:
Related party notes issued in payment of preferred stock dividends................................. $ 5,643
---------
---------
Supplemental disclosure of non-cash activity regarding acquisitions:
Total assets acquired, net of cash................................................................. $ 82,117
Liabilities assumed................................................................................ (11,774)
---------
Net assets acquired................................................................................ 70,343
Accrued acquisition costs.......................................................................... (4,130)
Non-cash consideration............................................................................. --
---------
Total cash consideration......................................................................... $ 66,213
---------
---------
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. ORGANIZATION AND ACQUISITION
Through October 2, 1996, Univision Communications Inc. ("UCI"), formerly
Perenchio Communications, Inc. ("PCI"), and its 80% owned subsidiary, PTI
Holdings, Inc. ("PTIH") were beneficially owned by affiliates of A. Jerrold
Perenchio (together with his affiliates, "Perenchio"), affiliates of Grupo
Televisa, S.A. de C.V. (together with its affiliates, "Televisa") and Dennevar,
B.V., an affiliate of Venevision International Limited (together with its
affiliates, "Venevision"), (collectively, the "Principal Stockholders").
Perenchio Television, Inc. ("PTI") was a wholly-owned subsidiary of PTIH, and
Univision Television Group, Inc. ("UTG") was a wholly-owned subsidiary of PTI.
On December 17, 1992 (effective close of business December 16, 1992),
Univision Station Group, Inc. ("USG") and KTVW, Inc. ("KTVW") were acquired by
Perenchio, Televisa and Venevision, with USG as the surviving corporation
changing its name to UTG.
PCI and its subsidiaries had no operations prior to the acquisitions. The
aggregate purchase price for USG and KTVW was approximately $489,000,000,
including approximately $11,000,000 of acquisition costs. A subordinated note
due from PTIH to the seller (which was subsequently sold to a third party and
then sold to the public as a series of notes) financed $5,442,000 of the
purchase price. These subordinated notes were neither guaranteed in any form by
PTI nor secured by its assets. The acquisition was accounted for under the
purchase method of accounting. Accordingly, the assets acquired and liabilities
assumed have been recorded at the fair values at the date of the acquisition. In
addition to current assets and liabilities, the purchase price was allocated
principally to property and equipment of approximately $22,000,000 and
intangible assets of approximately $473,000,000 comprised of approximately
$270,000,000 attributable to affiliation agreements, approximately $156,500,000
attributable to FCC television broadcast licenses and approximately $46,500,000
attributable to all other intangible assets including goodwill.
Effective close of business October 2, 1996, as part of the Offering and
Reorganization (see Note 12), PTIH became a wholly-owned subsidiary of the
Company. PTI was merged with and into PTIH. The Company and one of the Company's
subsidiaries acquired The Univision Network Holding Limited Partnership ("UNHP")
and The Univision Network Limited Partnership ("the Network"). On October 2,
1996, UNHP was liquidated. UCI and PTIH are holding companies and otherwise
inactive. UCI and its subsidiaries are referred to as "the Company" for all
periods discussed subsequent to October 2, 1996. PCI and its subsidiaries are
referred to as "the Company" for all periods discussed prior to October 2, 1996.
Televisa and Venevision also own warrants to acquire from UCI additional
shares of UCI. These warrants cannot be exercised by either Televisa or
Venevision (or by any other non-U.S. citizen) unless the foreign ownership
restrictions of the Communications Act of 1934 are amended to permit increased
alien ownership. Subject to certain restrictions, Televisa and Venevision may
transfer such warrants. If Televisa and Venevision were to exercise these
warrants, their ultimate ownership of UCI would be 20.3% each.
The acquisition of the minority interests of PTIH and the Network has been
accounted for under the purchase method of accounting, and, accordingly, the
Network's operating results have been included with the Company's since October
3, 1996. The total consideration paid in excess of the estimated fair value of
the net assets related to the minority interests of PTIH and the Network
acquired was approximately $203,000,000. The Company has preliminarily allocated
this amount to goodwill pending the outcome of a fair value appraisal of the
individual assets and liabilities, which is expected to be completed by the end
of the second quarter of 1997.
On August 2, 1994, the Company completed its acquisition of all of the stock
of Combined Broadcasting of Chicago, Inc. The purchase price was approximately
$36,000,000, plus the assumption of
F-8
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. ORGANIZATION AND ACQUISITION (CONTINUED)
program rights obligations totaling approximately $11,000,000. A substantial
amount of the program rights obligations assumed were subsequently sub-licensed
to third parties or released by the original licensor. The unpaid portion of
program rights obligations is payable in varying amounts through the year 1999.
The acquisition was financed with borrowings from the Old Bank Facility.
Substantially all of the purchase price has been allocated to intangible assets.
On September 30, 1994, the Company completed its acquisition of all of the
stock of Pueblo Broadcasting Corporation, which owned and operated a television
station affiliated with the Network serving Houston, Texas. The purchase price
was approximately $20,000,000 and was financed with borrowings from the Old Bank
Facility and cash generated through operations. Substantially all of the
purchase price has been allocated to intangible assets. The impact of the
Chicago and Houston acquisitions was not material to the Company's financial
statements taken as a whole.
As of December 31, 1996, the Company owns and operates eleven
Spanish-language full-power television stations serving New York, Los Angeles,
Miami, San Antonio, San Francisco, Fresno, Dallas, Phoenix, Albuquerque, Houston
and Chicago and seven Spanish-language low-power television stations serving
Hartford, Fort Worth, Philadelphia, Tucson, Austin, Albuquerque and Bakersfield.
The Company's television stations are affiliated with the Spanish-language
television network owned and operated by the Network.
Through October 2, 1996, the businesses of the Company and the Network were
under separate management and ownership structures. Notwithstanding this
separation, the business operations of the Company and the Network remained
substantially dependent upon one another. The Company is dependent upon the
Network for programming and advertising sales support, while the Company
represented 78% of the Network's total broadcast distribution.
The Company has made a $10,000,000 investment in Entravision Communications
Company, LLC ("Entravision") in the form of a note which matures on December 30,
2021, and has an annual interest rate of 7.01%, which gives the Company the
option to acquire a 25.55% equity interest in Entravision. Entravision owns
eight Affiliated Stations (stations that have Affiliation Agreements with the
Network) and has an agreement to acquire a ninth. This group of nine stations
represents approximately 13% of the Network's distribution. Exercising the
Company's option to acquire the equity interest in Entravision would not require
additional investment. The Company intends to exercise its option upon
Entravision's receipt of FCC approval.
The following unaudited pro forma consolidated statements of operations give
effect to the Reorganization, the sale of the 9,395,500 shares of Class A Common
Stock and the application of the net proceeds therefrom as if such transactions
had occurred as of January 1, 1996 and January 1, 1995, for the years ended
December 31, 1996, and 1995, respectively.
The pro forma statements do not purport to represent what the Company's
consolidated financial position or results of operations would actually have
been if such transactions in fact had occurred on the dates assumed or to
project consolidated financial position or results of operations for any future
date or period.
During 1996, in addition to the acquisition of the minority interests of
PTIH and the Network, the Company and the Network made other acquisitions, the
effect of which, individually and in the aggregate, were not material to the
Company's consolidated financial position or results of operations.
F-9
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. ORGANIZATION AND ACQUISITION (CONTINUED)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 1996 1995 1996 1995
- ---------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues........................................ $ 106,531 $ 89,331 $ 370,289 $ 321,339
------------- ------------- ------------- -------------
Direct operating expenses........................... 34,194 29,492 122,313 110,232
Selling, general and administrative expenses........ 26,916 27,572 98,265 89,839
Corporate charges................................... 2,627 3,127 9,596 9,700
Depreciation and amortization....................... 13,490 13,776 55,049 53,965
------------- ------------- ------------- -------------
Operating income.................................... 29,304 15,364 85,066 57,603
Interest expense.................................... 9,542 9,169 39,548 37,055
Amortization of deferred financing costs............ 343 372 1,459 1,488
Non-recurring expense of acquired station........... -- -- -- 1,750
------------- ------------- ------------- -------------
Income before taxes and extraordinary loss on
extinguishment of debt............................. 19,419 5,823 44,059 17,310
Provision for income taxes.......................... 145 -- 7,728 6,900
------------- ------------- ------------- -------------
Income before extraordinary loss on extinguishment
of debt............................................ 19,274 5,823 36,331 10,410
Extraordinary loss on extinguishment of debt (net of
tax benefit of $7,455 and $6,900 in 1996 and 1995,
respectively)...................................... (4) -- (11,186) (16,345)
------------- ------------- ------------- -------------
Net income (loss)................................... $ 19,270 $ 5,823 $ 25,145 $ (5,935)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Income per share before extraordinary loss.......... $ 0.33 $ 0.10 $ 0.63 $ 0.18
Extraordinary loss.................................. -- -- (.19) (0.28)
------------- ------------- ------------- -------------
Net income (loss) per share......................... $ 0.33 $ 0.10 $ 0.44 $ (0.10)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average common shares outstanding.......... 57,713,519 57,713,519 57,713,519 57,713,519
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts and operations of
the Company and reflect the acquisitions described above under the purchase
method of accounting. All significant intercompany accounts and transactions
have been eliminated. Certain reclassifications have been made to the prior year
financial statements to conform to current year's presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the
F-10
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
The Company's operations and its ability to grow may be affected by numerous
factors, including changes in audience tastes, priorities of advertisers, new
laws and governmental regulations and policies, changes in broadcast technical
requirements, technological advances, entry of new competitors, proposals to
restrict the tax deductibility of certain advertising expenses incurred by
advertisers and changes in the willingness of financial institutions and other
lenders to finance television station acquisitions and operations. The Company
cannot predict which, if any, of these or other factors might have a significant
impact on the television industry in the future, nor can it predict what impact,
if any, the occurrence of these or other events might have on the Company's
operations.
PROPERTY AND EQUIPMENT AND RELATED DEPRECIATION
Property and equipment is carried on the basis of cost. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets. Buildings and improvements are depreciated over 5 to 20 years; broadcast
and other equipment over 3 to 7 years. Leasehold improvements are amortized over
the remaining life of the lease. Depreciation and amortization include
depreciation on property and equipment of $8,405,000, $5,243,000 and $4,379,000
for the years ended December 31, 1996, 1995 and 1994, respectively, of which
$7,346,000, $4,581,000 and $3,826,000 relate to direct operating expense and
$1,059,000, $662,000 and $553,000 relate to selling, general and administrative
expenses for the years ended December 31, 1996, 1995 and 1994, respectively.
INTANGIBLE ASSETS
Intangible assets consist of amounts by which the cost of acquisitions
exceeded the fair values assigned to net tangible assets. The intangible assets
primarily represent broadcasting licenses, Network affiliation agreements,
organization costs and goodwill. Organization costs are amortized over a five
year period and all other intangible assets are being amortized on the
straight-line method over 20 years.
Subsequent to acquisitions, the Company continually evaluates whether later
events and circumstances have occurred which indicate that the remaining
estimated useful life of intangible assets may warrant revision or that the
remaining balance of such assets may not be recoverable. When factors indicate
that intangible assets should be evaluated for possible impairment, the Company
uses an estimate of the nondiscounted operating income over the remaining life
of the intangible assets in measuring whether the intangible assets are
recoverable.
DEFERRED FINANCING COSTS
Deferred financing costs are amortized over the life of the related debt or,
in the case of interest rate protection instruments, over the period of the
instrument.
F-11
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As of December 31, 1996 and 1995, accounts payable and accrued liabilities
is comprised of the following (in thousands):
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Trade accounts payable and accruals..................................... $ 35,963 $ 15,324
Severance and litigation costs.......................................... 6,232 9,954
Acquired stations integration costs..................................... 2,377 2,305
Facility consolidation costs............................................ 4,340 4,138
Research costs.......................................................... 3,346 612
Accrued compensation.................................................... 8,508 3,990
Other................................................................... 8,830 4,943
--------- ---------
$ 69,596 $ 41,266
--------- ---------
--------- ---------
</TABLE>
MINORITY INTEREST
The minority interest in PTIH was acquired by the Company effective October
2, 1996. Minority interest represented the 20% interest in PTIH held by minority
stockholders. Additionally, it included the PTIH consolidated preferred stock
and related dividends due minority stockholders. To the extent that the minority
interest in the book value of PTIH represented an asset, the Company charged the
asset against the majority interest. Subsequent profits earned by PTIH
applicable to the minority interest were allocated to the majority interest to
the extent that minority losses had been previously absorbed by the majority
stockholder.
PROGRAM RIGHTS FOR TELEVISION BROADCAST
Costs incurred in connection with the production of or purchase of rights to
programs to be broadcast within one year are classified as current assets, while
costs of those programs to be broadcast subsequently are considered non-current.
Program costs are charged to expense as the programs are broadcast.
NET REVENUES
Net revenues represents gross revenues, including a Network service fee
payable to the Network by the Affiliated Stations, less agency commissions and
an allocation of Network revenues to the affiliates. Gross revenues and the
related agency commissions and allocation to the affiliates are recognized when
advertising spots are broadcast. No one advertiser represented more than 10% of
gross advertising revenues of the Company for the years ended December 31, 1996,
1995 and 1994.
F-12
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 121 -- "Accounting for the Impairment
of Long-lived Assets and for Long-lived Assets to be Disposed of." This
statement requires long-lived assets to be held and reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Measurement of an impairment loss for
long-lived assets and identifiable intangibles to be held and used should be
based on the fair value of the asset. It also requires that those long-lived
assets and identifiable intangibles to be disposed of should be reported at the
lower of carrying amount or fair value less cost to sell. This standard was
required to be adopted in 1996. The adoption of this standard did not have a
material effect on the Company's financial statements.
EARNINGS PER SHARE
The 1996 earnings per share calculation has been affected by the impact of
the warrants and options outstanding as common stock equivalents. The
Convertible Preferred Stock (see Note 11 and 14) outstanding and held in escrow
at December 31, 1996, is not considered a common stock equivalent under the
guidelines of SFAS No. 85 (YIELD TEST FOR DETERMINING WHETHER A CONVERTIBLE
SECURITY IS A COMMON STOCK EQUIVALENT) and is not factored in the calculation of
earnings per share. Fully diluted earnings per share is not required to be
disclosed in the financial statements since the effect of the inclusion of the
Convertible Preferred Stock in the calculation as a common stock equivalent
results in dilution of less than 3% (paragraph 14 of APB No. 15).
INCOME TAXES
Income taxes are recognized during the year in which transactions enter into
the determination of financial statement income, with deferred taxes being
provided for temporary differences between amounts of assets and liabilities for
financial reporting purposes and such amounts as measured by tax laws (see Note
9).
3. RELATED PARTY TRANSACTIONS
In the normal course of business, the Company engaged in significant
transactions with the Network during the period January 1, 1996, through October
2, 1996, and during the years ended December 31, 1995 and 1994, and through
various other agreements, with the Principal Stockholders, as described below.
(a) The Company
NETWORK AFFILIATION AGREEMENTS
During the period January 1, 1996, through October 2, 1996, and during the
years ended December 31, 1995 and 1994, pursuant to Network Affiliation
Agreements, the Network acted as the Company's exclusive sales representative
for the sale of all national spot and Network advertising. The Network allocated
a portion of Network advertising revenues to the Company's stations based on a
formula. National spot sales represent time sold on behalf of the Company's
stations by sales representatives employed by the Network. Proceeds of Network
sales were remitted to the Company by the Network, net of an agency commission
and a Network service fee, as described below. The arrangements described above
have continued under UCI.
F-13
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
3. RELATED PARTY TRANSACTIONS (CONTINUED)
The Network was obligated to offer programming to the Company and its
Affiliated Stations for a minimum of 84 hours per week. For this service, during
the period January 1, 1996, through October 2, 1996, and in 1995 and 1994, the
Company incurred a Network service fee due the Network of 38% of its net local,
national and Network sales revenues, subject to certain adjustments. The Network
received two minutes of air time for its own use each hour for which no
compensation was received by the Company. The arrangements described above have
continued under UCI. Net revenues for the period January 1, 1996, through
October 2, 1996, and for the years ended December 31, 1995 and 1994, include
$114,117,000, $140,465,000 and $99,127,000, respectively, in gross revenues,
representing the Company's allocation of Network sales, partially offset by a
Network service fee of $86,320,000, $105,274,000 and $73,459,000 for the period
January 1, 1996, through October 2, 1996, and for the years ended December 31,
1995 and 1994, respectively.
(b) Principal Stockholders
SENIOR SUBORDINATED DEBT AND SUBORDINATED NOTES PAYABLE -- SEE NOTE 5.
SPONSOR LOANS
Prior to the Reorganization, and in connection with the acquisition of UTG
and the Network and the related financing, Televisa and Venevision had agreed to
provide loans to UTG approximately 15 days after the end of each quarter in
amounts as required by its senior lenders, subject to certain thresholds (as
defined) of the Univision Group ("Sponsor Loans"). The obligation to make such
loans terminated when the Company and the Network distributed to the Principal
Stockholders the aggregate amount of $100,000,000 through dividends or other
distributions (the "Return of Initial Financing"). Each Sponsor Loan was
subordinated to all bank debt and Senior Subordinated Notes (third party
acquisition financing), had an initial term of 15 years, bore interest at a rate
of the lesser of the prime rate or 10%, and required no payment of interest or
principal until maturity. The Sponsor Loans were guaranteed by the Network and
PTIH. Such guarantees were subordinated to the Network guarantee of third party
acquisition financing. Upon the Return of Initial Financing, the holders of the
Sponsor Loans could convert them to conversion notes, which would have been
similar to the Sponsor Loans with respect to subordination and interest, but
would have been payable in seven annual installments, subject to certain
restrictions. The Sponsor Loans were made quarterly in arrears approximately 15
days after quarter end. During 1996, 1995 and 1994, Sponsor Loans were made
totaling $38,381,000, $45,251,000 and $33,936,000, respectively. As of October
2, 1996, and December 31, 1995, accrued interest on these loans totaled
$18,356,000 and $11,052,000, respectively. On October 2, 1996, in connection
with the Reorganization, the Company repaid all outstanding Sponsor Loans.
In March 1996 and December 1995, Televisa and Venevision assigned to the
Network $5,074,000 and $4,670,000, respectively, of Sponsor Loans owed to them
by the Company. The assignment was in lieu of payment for program production
costs, under the Program Cost Sharing Agreement, to be incurred by the Network
in the first and second quarters of 1996. This assignment was shown as a
reduction to the Company's Sponsor Loans amount and an increase in the Due to
the Network liability. The payment for production costs for the third quarter of
1996 of $4,500,000 was offset against the third quarter license fee payment due
under the Program License Agreement.
F-14
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
3. RELATED PARTY TRANSACTIONS (CONTINUED)
PROGRAM LICENSE AGREEMENTS
In connection with the Reorganization, the Program License Agreements were
amended, the Program Cost Sharing Agreement (which required Televisa and
Venevision to reimburse the Company for one-half of the cost of certain
productions produced or acquired by the Company) was terminated and the
management fee to the principal Stockholders of 3% of Combined Net Time Sales
(as defined in the Program License Agreement) was eliminated. Under the amended
Program License Agreements, the royalty rate is 11% from the date of
Reorganization through December 31, 1996 and will increase to 13.5% for 1997 and
to 15% for all years thereafter.
OTHER
The Principal Stockholders incurred financing and acquisition costs prior to
the acquisitions. The Principal Stockholders were reimbursed on December 17,
1992, for all of these costs except for $1,000,000 withheld from each. This
$3,000,000 was paid to the Principal Stockholders on March 14, 1994.
4. PROPERTY AND EQUIPMENT
Property and equipment, and accumulated depreciation and amortization,
consists of the following as of December 31, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Land and improvements................................................. $ 6,174 $ 2,394
Building and improvements............................................. 19,200 4,666
Broadcast equipment................................................... 92,090 27,699
Other equipment....................................................... 7,175 4,022
Construction in progress.............................................. 917 664
---------- ----------
125,556 39,445
Accumulated depreciation and amortization............................. (22,183) (13,888)
---------- ----------
$ 103,373 $ 25,557
---------- ----------
---------- ----------
</TABLE>
F-15
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
5. DEBT
Long-term debt (excluding the Sponsor Loans and capital leases) consists of
the following at December 31, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Bank term facility.................................................... $ 400,000 $ 107,250
Standby term facility................................................. -- 50,000
Bank working capital facility......................................... 38,000 9,000
Senior subordinated notes............................................. -- 92,050
Junior subordinated notes payable including accrued interest.......... 60,160 7,768
Related party senior subordinated notes............................... -- 65,204
Related party subordinated debt....................................... -- 19,530
Accrued interest -- related party senior subordinated notes and
related party subordinated debt..................................... -- 12,120
Variable dividend payable............................................. -- 15,527
Other................................................................. 987 1,085
---------- ----------
499,147 379,534
Less current portion.................................................. (40,339) (17,313)
---------- ----------
Long-term debt........................................................ $ 458,808 $ 362,221
---------- ----------
---------- ----------
</TABLE>
The proceeds from the Offering and borrowings under the New Bank Facility
(as defined below), along with cash flows from operations, provided the
resources necessary to repay the amounts owed under and to terminate the Old
Bank Facility (as defined below), defease the Senior Subordinated Notes, make a
$100,000,000 distribution to the Network partners, pay all outstanding principal
and accrued interest on all amounts lent by the Principal Stockholders to UTG as
Sponsor Loans, reclassify the preferred stock and pay accrued dividends thereon
and repay other related party debt, pay the Galavision note and fund the
Entravision investment. Additional amounts under the New Bank Facility, together
with cash flows from operations, will be used for debt service, capital
expenditures, working capital and other general corporate purposes.
In connection with the Reorganization, the Company entered into the new bank
facility (the "New Bank Facility") with a syndicate of commercial banks and
other lenders. The New Bank Facility consists of a $400,000,000 amortizing term
loan (the "Term Facility") with a final maturity of December 31, 2003, and a
$200,000,000 reducing revolving credit facility (the "Revolving Credit
Facility") maturing on the same date.
The New Bank Facility will also permit the lenders thereunder to advance up
to an additional $250,000,000 of term loans (the "Incremental Facility")
although there are no commitments at this time to lend any such additional
amounts.
The Term Facility amortizes quarterly commencing in 1997, with $40,000,000
required to be repaid during 1997. The Revolving Credit Facility will have
quarterly scheduled reductions in availability beginning in 1999. If any loans
are made available under the Incremental Facility, such loans will be amortized
beginning on March 31, 1999, and will be repaid in full on or before August 31,
2004.
At December 31, 1996, the Company had $77,000,000 available under the New
Bank Facility, excluding the "Incremental Facility".
F-16
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
5. DEBT (CONTINUED)
In addition to the scheduled amortization of the Term Facility and scheduled
reductions of the Revolving Credit Facility described above, 66 2/3% of "excess
cash flow" of the Company (50% if certain leverage tests are satisfied) will be
applied each year, first to ratably reduce loans made under the Term Facility
and the Incremental Facility, and thereafter to reduce the availability under
the Revolving Credit Facility. In addition, proceeds from the sale or other
disposition of assets outside of the ordinary course of business and 80% of the
proceeds of equity offerings by the Company will be similarly applied. Any such
mandatory prepayments will ratably reduce each remaining installment or
scheduled reduction of the Term Facility, the Revolving Credit Facility or the
Incremental Facility.
The New Bank Facility may be voluntarily prepaid by the Company at any time
without premium or penalty.
Loans made under the New Bank Facility bear interest at rates determined by
reference to the ratio of the Company's total indebtedness to EBITDA for the
four fiscal quarters most recently concluded (the "Leverage Ratio"). Interest
rates range from a reserve adjusted Eurodollar rate plus 0.75% to 1.50% per
annum (6.625% at December 31, 1996). The Company has the option to elect a prime
rate also determined by reference to the Leverage Ratio. Under such option,
interest rates range from the prime rate to the prime rate plus 0.25% per annum
(8.25% at December 31, 1996).
The Company has entered into interest rate cap agreements to reduce the
impact of changes in interest rates on its Term Facility, which are determined
by the Eurodollar interest rate plus a margin of 0.75% to 1.50%. At December 31,
1996, the Company had two interest rate cap agreements with commercial banks
covering a total notional principal amount of $220,000,000 of its Term Facility.
The agreements effectively limit the Company's Eurodollar interest rate exposure
to 7% on $220,000,000 of the Term Facility. The Eurodollar interest rate
applicable to the Term Facility from the date of the Reorganization has ranged
from 5.38% to 5.60%, and the margin at December 31, 1996, was 1.125%. The fee
for the interest rate protection agreements of $462,000 was capitalized as a
deferred financing cost and is being amortized over two years, the period of the
instruments, on a straight-line basis.
The New Bank Facility is guaranteed by the Company's subsidiaries and is
secured by a security interest in substantially all of the personal property
assets of the Company and its subsidiaries (subject to limitations of federal
law in the case of FCC licenses of the O&Os).
The New Bank Facility contains limitations on the incurrence of debt and
liens by the Company and its subsidiaries, the payment of dividends, the
disposition of assets, financial performance tests and other restrictions
typical of leveraged credits.
In addition to customary events of default, it will be an event of default
if a change of control occurs (defined as a person or persons other than A.
Jerrold Perenchio or his permitted transferees gaining voting control of the
Company).
Financing activities to fund Univision's operations are anticipated to be
favorably impacted by the increased availability of funds under the New Bank
Facility, partially offset by additional cash requirements for the New Bank
Facility in the form of debt acquisition costs, additional quarterly principal
payments and monthly interest as contrasted with semi-annual interest payments
on the Senior Subordinated Notes and deferred interest on the Sponsor Loans.
The Company's prior bank facility ("Old Bank Facility"), which totaled
$400,000,000, consisted of a $180,000,000 five-year amortizing term loan, a
$70,000,000 six-year revolving credit loan, a $30,000,000 six-
F-17
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
5. DEBT (CONTINUED)
year term loan, a $20,000,000 five-and-one-half-year term loan and a
$100,000,000 five-and-one-half-year term loan available under a revolving credit
facility, which was never borrowed against. Interest on the Old Bank Facility
was payable on fixed-rate borrowings at maturity of the borrowing, up to a
maximum of three months, and payable quarterly on floating-rate loans. At
December 31, 1995, interest rates were 6.60% to 8.50% on the Old Bank Facility.
The Junior Subordinated Notes, which have a face value of $10,306,000 and
$61,094,000 and bear simple interest at 7%, were originally payable by PTIH and
UNHP, respectively, to Hallmark Cards, Inc. ("Hallmark") in connection with the
acquisition from the previous owner (the "Junior Subordinated Notes"). The
previous owner has since sold the Junior Subordinated Notes to a third party,
which resold them to the public as a series of notes. The Junior Subordinated
Notes are unsecured, all interest and principal is due on December 17, 2002. As
part of the acquisition of the Network, the Company acquired the obligation
under the Junior Subordinated Notes with the face value of $61,094,000 during
1996. The Junior Subordinated Notes were discounted at an effective rate of
approximately 12.5% in accordance with the purchase method of accounting
described in Note 1. The discounts on the Junior Subordinated Notes with a face
value of $71,400,000 and $10,306,000 are $31,424,000 and $4,731,000 at December
31, 1996 and 1995, respectively. The discounts, which are shown as a reduction
of the related debt, are being amortized under the interest method over the term
of the Junior Subordinated Notes.
During 1996, and as part of the Reorganization, the Company purchased and
defeased the Senior Subordinated Notes. The Senior Subordinated Notes were
scheduled to mature on January 15, 2001, and were subordinate to all Senior
Indebtedness of the Company, including amounts outstanding under the Old Bank
Facility. The Senior Subordinated Notes accrued interest at a rate of 11 3/4%,
payable semi-annually on January 15 and July 15.
As part of the Reorganization, the Company paid the balance of the Related
Party Senior Subordinated Notes. The Related Party Senior Subordinated Notes
represented notes due to affiliates of Televisa and Venevision (See Note 11).
The notes were scheduled to mature on December 16, 2003, and were subordinate to
all Senior Indebtedness of the Company, including amounts outstanding under the
Old Bank Facility. The Notes accrued interest at a rate equal to the AFR average
rate, which was 6.99% at December 31, 1995. Also, notes to the Principal
Stockholders (at the PCI level) that were scheduled to mature on December 17,
2003, accrued interest at a rate of 6.36%.
As part of the Reorganization, the Company paid the balance of the Related
Party Subordinated Debt. The Related Party Subordinated Debt represented debt
due to affiliates of Televisa and Venevision (See Note 11). The notes were
scheduled to mature on December 16, 2005, and were subordinate to all
indebtedness of the Company, including amounts outstanding under the Old Bank
Facility. The Related Party Subordinated Debt accrued interest at a rate equal
to 0.5% per annum in excess of the AFR average rate, which was 7.49% at December
31, 1995. Also, notes to Principal Stockholders that were scheduled to mature on
December 31, 2005, accrued interest at a rate of 6.86%.
The accrued interest payable on the Related Party Senior Subordinated Notes
and the Related Party Subordinated Debt was $12,120,000 and $8,158,000 at
December 31, 1995 and 1994, respectively. Interest expense was $5,484,000,
$3,962,000 and $4,394,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.
F-18
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
5. DEBT (CONTINUED)
As part of the Reorganization, the Company paid the balance of the Senior
Subordinated Debt -- Principal Stockholders (at the PTIH level). The Senior
Subordinated Debt -- Principal Stockholders were scheduled to mature on December
16, 2003, and was subordinate to all Senior Indebtedness of the Company,
including amounts outstanding under the Old Bank Facility. The Senior
Subordinated Debt -- Principal Stockholders accrued interest at a rate of 6.6%
and was payable on December 16, 2003. The debt arose from the preferred stock
dividends which were declared by PTIH to the minority stockholders effective
December 31, 1995. These dividends were reflected as minority interest in the
Company's 1995 financial statements.
Long-term debt matures as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31: AMOUNT
----------
<S> <C>
1997.............................................................................. $ 40,339
1998.............................................................................. 50,340
1999.............................................................................. 50,264
2000.............................................................................. 60,029
2001.............................................................................. 70,015
Thereafter........................................................................ 228,160
----------
Total............................................................................. $ 499,147
----------
----------
</TABLE>
The Company estimates that the fair value of the bank debt and the Junior
Subordinated Notes at December 31, 1996 approximates book value.
Interest expense, net, reflected in the accompanying consolidated statements
of operations is comprised of the following for the years ended December 31, (in
thousands):
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Bank Facilities.............................................. $ 17,249 $ 16,884 $ 15,194
Senior Subordinated Notes.................................... 11,048 11,519 13,752
Junior Subordinated Notes.................................... 964 857 763
Sponsor Loans................................................ 7,304 7,298 3,125
Related Party................................................ 5,484 3,962 4,394
Capital leases (see Note 6).................................. 913 -- --
Other -- net................................................. (1,271) (298) 18
--------- --------- ---------
$ 41,691 $ 40,222 $ 37,246
--------- --------- ---------
--------- --------- ---------
</TABLE>
6. COMMITMENTS
The Company is obligated under long-term operating leases expiring at
various dates through the year 2017 for office, studio, automobile, tower and
transponder rentals. The Company is also obligated under
F-19
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
6. COMMITMENTS (CONTINUED)
long term capital lease obligations through the year 2011. The following is a
schedule by year of future annual rentals under operating and capital leases as
of December 31, 1996 (in thousands):
<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
----------- ----------
<S> <C> <C>
Year ending December 31:
1997......................................................... $ 6,414 $ 6,216
1998......................................................... 6,264 6,276
1999......................................................... 5,819 6,336
2000......................................................... 5,273 6,336
2001......................................................... 3,879 6,336
Thereafter................................................... 24,918 38,078
----------- ----------
Total minimum lease payments................................. $ 52,567 69,578
-----------
-----------
Less: interest and executory costs........................... (27,931)
----------
Total present value of minimum lease payments................ 41,647
Current portion.............................................. (2,318)
----------
Capital lease obligation, net of current portion............. $ 39,329
----------
----------
</TABLE>
Rent expense totaled $4,900,000, $4,460,000, and $2,718,000, for the years
ended December 31, 1996, 1995 and 1994, respectively.
The Company has entered into an agreement with Nielsen Media Research
("Nielsen") to provide television audience measurement services for a five-year
period which began in November 1992. Pursuant to this agreement, the Network and
a competitor are each obligated to pay Nielsen $18,400,000 in increasing annual
amounts from November 1992 through October 1997. As of December 31, 1996 and
1995, included in accrued liabilities are $2,970,000 and $0, respectively,
related to this agreement.
As of December 31, 1996, the Company is committed to pay amounts
approximating $4,200,000, pursuant to multi-year talent contracts, through
December 31, 1997. These payments do not include amounts payable upon the
attainment of certain annual revenue levels or upon the performance of other
contractual provisions. Additionally, the Company has the option to renew
certain long-term talent contracts in 1997 for the year January 1 through
December 31, 1998, for $3,800,000. Concurrent with the Reorganization,
Venevision and Televisa agreed to fund a total of $250,000 per year (one-half of
the costs) of a certain retirement obligation to be paid to one of the personnel
subject to a long-term talent contract.
In January 1997, the Company signed a lease for office and studio premises
for the Dallas, Texas, station. The lease is planned to commence on July 16,
1997, with an expiration date of April 15, 2017. The average cost of the lease
is $570,000 per year, with a total commitment of $11,260,000.
7. EMPLOYEE BENEFITS
The Company has a 401(k) retirement savings plan (the "Plan") covering all
employees who have completed one year of service. The Plan allows the employees
to defer a portion of their annual compensation and the Company may match a
portion of the employees' contributions. During 1996, 1995 and 1994, the Company
made matching contributions to the Plan totaling $817,000, $478,000 and
$171,000, respectively.
F-20
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
8. CONTINGENCIES
On August 4, 1995, a jury in the 57th District Court of Bexar County, Texas
returned an adverse verdict against Univision Television Group, the successor to
Univision Station Group, in Emilio Nicolas, Jr. v. Univision Station Group. The
lawsuit, among other things, alleged breach of a September 1990 separation
agreement following the plaintiff's termination from USG's Los Angeles station.
The jury found USG had breached certain provisions of the agreement. It also
found that USG inflicted emotional distress and violated California Labor Code
Section 1050 by making a misrepresentation to a prospective employer to prevent
plaintiff's employment. Under that Section any damages awarded for a violation
are trebled. If a judgment had been entered on all issues, the total amount
after the statutory trebling would have been $6,800,000, plus prejudgment
interest and attorneys' fees.
The events which led to the plaintiff's lawsuit occurred before the current
ownership took control of the Company. The Company strongly disagreed with the
verdict and filed pleadings requesting the trial court to enter judgment in the
Company's favor notwithstanding the jury's verdict.
On December 12, 1995, the trial court partially granted the Company's motion
for judgment notwithstanding the verdict. Accordingly, the trial court rendered
judgment that plaintiff recover $5,425,000, denied the plaintiff's motion to
recover an additional $1,400,000 and denied the plaintiff's motion to recover
prejudgment interest and attorneys' fees. Both parties then filed motions for a
new trial but agreed to pursue mediation before having those motions decided. As
a result of the mediation, the parties reached a compromise agreement on
February 15, 1996, settling the litigation, without any admission of wrongdoing
on the part of the Company. Pursuant to that settlement, the trial court entered
an agreed upon modified judgment providing that plaintiff recover $2,975,000 in
full satisfaction of his claims. Thereafter, the Company paid the recovery
awarded in the modified judgment, in consideration for which plaintiff released
the Company from the modified judgment and from any and all claims.
There are various legal actions and other claims pending against the Company
incidental to its business and operations. In the opinion of management, the
resolution of these matters will not have a material effect on the consolidated
financial position or results of operations.
The Network, primarily located in Miami and acquired October 2, 1996,
accounted for 22% of the Company's gross advertising revenues for the year ended
December 31, 1996, and 52% of trade accounts receivable as of December 31, 1996.
The Company's television station serving Los Angeles, California accounted for
29%, 36% and 37% of the Company's gross advertising revenues for the years ended
December 31, 1996, 1995 and 1994, respectively, and 18% and 34% of trade
accounts receivable as of December 31, 1996 and 1995, respectively. The
Company's television station serving Miami, Florida accounted for 15%, 20% and
22% of the Company's gross advertising revenues for the years ended December 31,
1996, 1995 and 1994, respectively, and 8% and 22% of trade accounts receivable
as of December 31, 1996 and 1995, respectively.
9. INCOME TAXES
The Company files a consolidated federal income tax return.
The Company accounts for income taxes under the liability method pursuant to
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities
F-21
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
9. INCOME TAXES (CONTINUED)
for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities as
of December 31, are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Deferred tax assets:
Tax basis of property and equipment in excess of book basis................... $ 25,000 $ 100 $ 400
Accrued insurance and litigation.............................................. 3,500 3,100 1,700
Accrued vacation.............................................................. 700 300 400
Deferred compensation......................................................... 2,600 300 600
Purchase accounting accruals.................................................. 1,500 3,300 4,800
Allowance for bad debts....................................................... 3,400 1,300 1,700
Charitable contributions carryforwards........................................ 900 600 300
Other differences............................................................. 1,900 -- --
Net operating loss carryforwards.............................................. 47,000 40,500 39,700
---------- ---------- ----------
Total deferred tax assets..................................................... 86,500 49,500 49,600
Valuation allowance for deferred tax assets................................... (79,500) (47,500) (49,600)
---------- ---------- ----------
Net deferred tax assets....................................................... $ 7,000 $ 2,000 $ 0
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
No federal income taxes have been provided for the years ended December 31,
1995 and 1994, as the Company had a loss for both financial reporting and tax
purposes. For financial reporting and tax purposes, the Company has provided for
$229,000 of taxes in 1996.
At December 31, 1996, the Company has net operating loss carryforwards of
$80,600,000 that expire in years 2002 through 2005, resulting from the 1992
acquisitions. When realized, the tax benefit of those items will be applied to
reduce goodwill related to the acquisitions. The Company also has net operating
loss carryforwards of approximately $48,800,000 for income tax purposes, which
were generated subsequent to the abovementioned acquisitions and expire in years
2007 through 2010. At December 31, 1996 and 1995, the Company recorded net
deferred tax assets of $7,000,000 and $2,000,000, respectively. Management
believes that, more likely than not, tax benefits will be realized from these
net operating loss carryforwards. The realization of any loss carryforwards is
contingent upon the Company's generating income in future years.
For financial reporting purposes, a valuation allowance of approximately
$79,500,000 at December 31, 1996, has been recognized to offset the deferred tax
assets related to these carryforwards and other temporary differences. The
amount of the deferred tax assets considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.
For financial reporting purposes, as of December 31, 1996, the Company has
remaining intangible assets of approximately $639,900,000 which are being
amortized over the next 16 to 20 years. For tax purposes, the Company has
remaining intangible assets of approximately $79,500,000, of which $23,500,000
is expected to be deductible in 1997 and the balance over a 15-year period.
Concurrent with the Offering and Reorganization, the Company recorded
goodwill of approximately $203,000,000 representing the consideration given in
excess of the net assets related to the acquisition of the minority interests of
PTIH and the Network. The amortization of this goodwill is not deductible for
tax
F-22
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
9. INCOME TAXES (CONTINUED)
purposes, and in accordance with SFAS No. 109, no deferred tax liability was
accrued. Consequently, in future periods, the Company's effective tax rate
provided will be greater than the statutory rate.
10. EARLY EXTINGUISHMENT OF DEBT
During the six months ended June 30, 1996, UTG purchased at a premium
$12,650,000 face amount of its Senior Subordinated Notes, resulting in an
extraordinary loss of $1,181,000, including the write-off of the related
financing costs. During the quarter ended September 30, 1996, UTG purchased at a
premium $11,775,000 face amount of its Senior Subordinated Notes, resulting in
an extraordinary loss of $931,000, including the write-off of the related
financing costs. The remaining face amount on the Senior Subordinated Notes of
$67,625,000 was defeased, resulting in an extraordinary loss of $11,601,000,
including the write-off of the remaining related financing cost balance of
$8,946,000. As a result, for the year ended December 31, 1996, UTG purchased and
defeased at a premium $92,050,000 face amount of its Senior Subordinated Notes,
resulting in a total extraordinary loss of $13,713,000, including the write-off
of the related, previously deferred, financing costs. The related income tax
benefits associated with these extraordinary losses were $5,485,000 for the
twelve months ended December 31, 1996.
During the year ended December 31, 1995, UTG purchased at a premium
$7,550,000 face amount of its Senior Subordinated Notes, resulting in a total
extraordinary loss of $801,000, including the write-off of the related,
previously deferred, financing costs. There were no related income tax benefits
associated with the extraordinary loss for the twelve months ended December 31,
1995.
During the year ended December 31, 1994, UTG purchased at a premium
$40,400,000 face amount of its Senior Subordinated Notes, resulting in a total
extraordinary loss of $4,321,000, including the write-off of the related,
previously deferred, financing costs. There were no related income tax benefits
associated with the extraordinary loss for the twelve months ended December 31,
1994.
11. PREFERRED STOCK AND RELATED PARTY DEBT
At December 31, 1995 and 1994, PTIH had 108,000 shares of preferred stock
authorized and 90,553 shares issued and outstanding. Of the amount issued and
outstanding, 72,553 shares, 9,000 shares and 9,000 shares were designated Class
P, T and V Participating Preferred Stock ("Preferred Stock"), respectively. The
Class P shares were held by PCI. The Preferred Stock was entitled to a fixed
dividend of $1,167.89 per share for the Class P shares and $459.27 per share for
both the Class T and V shares ("Fixed Dividends"), in addition to a cumulative
annual dividend based upon a variable interest rate ("Variable Dividends") in an
amount equal to interest on Class P, T and V "Assumed Principal Amounts" from
December 17, 1992, until paid. All Fixed and Variable Dividends were payable
prior to the payment of any common stock dividends, in which the Preferred Stock
generally participates on a share-for-share basis, including any such dividends
resulting from a liquidation or dissolution of PTIH. All shares of Preferred
Stock had the same voting rights as common stock, generally on a share-for-share
basis.
At December 31, 1995 and 1994, PCI had 108,000 shares of preferred stock
authorized and 90,000 shares issued and outstanding. Of the amount issued and
outstanding, 85,500 shares, 2,250 shares and 2,250 shares had been designated
Class P, T and V Participating Preferred Stock ("Preferred Stock"),
respectively. The Preferred Stock was entitled to a fixed dividend of $362.58
per share for the Class P, T and V shares ("Fixed Dividends"), in addition to a
cumulative annual dividend based upon a variable
F-23
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
11. PREFERRED STOCK AND RELATED PARTY DEBT (CONTINUED)
interest rate ("Variable Dividends") in an amount equal to interest on Class P,
T and V "Assumed Principal Amounts" from December 17, 1992, until paid. All
Fixed and Variable Dividends were payable prior to the payment of any common
stock dividends, in which the Preferred Stock generally participated on a share-
for-share basis, including any such dividends resulting from a liquidation or
dissolution of PCI. All shares of Preferred Stock had the same voting rights as
common stock, generally on a share-for-share basis.
Effective December 31, 1995, the Fixed Dividends aggregating $40,899,060
were paid in the form of Senior Subordinated and Subordinated Notes (see Note
5).
As part of the Reorganization, the Company converted all of the PCI and PTIH
Preferred Stock to Common Stock. At December 31, 1996, the Company had
10,000,000 shares of new Preferred Stock authorized and 12,000 outstanding and
held in escrow (see Note 14).
12. THE OFFERING AND REORGANIZATION
On September 26, 1996, UCI's initial public offering (the "Offering") of
9,395,500 shares of its Class A Common Stock was declared effective. In
connection with the Offering, on October 2, 1996, the operations of UTG and the
Network were combined and the ownership was reorganized under UCI.
Concurrent with the Offering, the Company exchanged PCI preferred stock and
PTIH common and preferred stock outstanding for PCI common stock resulting in
126,666 common shares outstanding prior to the Reorganization.
The Company consummated the following transactions concurrent with the
Offering and Reorganization:
(a) On September 30, 1996, the Company entered into the New Bank Facility,
repaid $164,900,000 owed under the Old Bank Facility and terminated the
Old Bank Facility;
(b) On September 30, 1996, the Company defeased UTG's Senior Subordinated
Notes by, among other things, depositing $74,200,000 with the trustee
under the indenture governing such notes;
(c) On September 30, 1996, the Network made a distribution to its partners
in the amount of $60,000,000. UCI advanced the Network $60,000,000 to
fund this distribution;
(d) On September 30, 1996, the Program License Agreements were amended, the
Program Cost Sharing Agreement (which required Televisa and Venevision to
reimburse the Company for one-half of the cost of certain productions
produced or acquired by the Company) was terminated and the management
fee to the Principal Stockholders of 3% of Combined Net Time Sales was
eliminated. Under the amended Program License Agreements, the royalty
rate was 11% from October 1, 1996, through December 31, 1996, and will
increase to 13.5% for 1997 and to 15% for all years thereafter;
(e) On October 2, 1996, the Company acquired the Network from its partners
in exchange for 19,014.5 shares of Common Stock and $40,000,000 in cash,
and UTG became a wholly-owned subsidiary of the Company. The Company
effected a dividend of 227.0 shares on each share of Class P Common
Stock, Class T Common Stock and Class V Common Stock, and the warrants
were adjusted to reflect the new capital structure of the Company;
F-24
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
12. THE OFFERING AND REORGANIZATION (CONTINUED)
(f) On October 2, 1996, the Company paid $88,000,000 to the Principal
Stockholders and their affiliates, representing payment of outstanding
principal of and accrued interest on certain debentures and accrued
dividends on certain preferred stock issued by the Company and its
subsidiaries in connection with the Acquisition and approximately
$43,000,000 to the Principal Stockholders and their affiliates,
representing full payment of outstanding principal of, and interest on,
certain notes issued in payment of certain accrued dividends as of
December 31, 1995;
(g) On October 2, 1996, the Company paid $149,000,000 to Televisa and
Venevision, representing full payment of outstanding principal of, and
accrued interest on, all amounts owed to them by UTG with respect to
Sponsor Loans made subsequent to the Acquisition, and the obligations to
make the Sponsor Loans terminated;
(h) On October 2, 1996, the Company paid $15,300,000 to Televisa,
representing full payment of outstanding principal of and accrued
interest on the note issued by the Company as of July 1, 1996 to Televisa
as payment for the acquisition of Galavision. This acquisition was
accounted for under the purchase method of accounting and accordingly,
Galavision's operating results have been included with the Company's
since October 3, 1996.
13. 1996 PERFORMANCE AWARD PLAN
In 1996, the Company adopted a 1996 Performance Award Plan that reserves
shares of Class A Common Stock for issuance to Company officers, key employees
and other eligible persons as determined by the Board of Directors or Plan
Committee (as appointed by the Board). The Company has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards (SFAS)
No. 123, "Accounting for Stock-Based Compensation". Accordingly, no compensation
cost has been recognized for the Plan. Had compensation cost for the Company's
Plan been determined based on the fair value at the grant date for awards in
1996 consistent with the provisions of SFAS No. 123, the Company's net income
and earnings per share would have been reduced to the pro forma amounts
indicated below:
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1996
- ----------------------------------------------------------------------------------- ---------
<S> <C>
Net income -- as reported.......................................................... $ 10,365
Net income -- pro forma............................................................ $ 8,892
Earnings per share -- as reported.................................................. $ 0.18
Earnings per share -- pro forma.................................................... $ 0.15
</TABLE>
Under the 1996 Performance Award plan covering stock options issued in 1996,
no options vested in 1996.
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996: dividend yield of 0%, expected volatility
of 31.865%, risk-free interest rate of 6.02%, and expected lives of three years.
Under the Plan approved by the Board of Directors and stockholders, the
maximum number of shares of Class A Common Stock that may be granted is
5,500,000. The maximum number of shares that may be granted to any individual
during any calendar year is 500,000. For 1996, the maximum number was 2,000,000
and thereafter, 1,375,000 shares per year, excluding any awards, if any, granted
to an eligible employee who is hired in that year to become the chief executive
officer of the Company. The Plan
F-25
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
13. 1996 PERFORMANCE AWARD PLAN (CONTINUED)
provides that shares granted come from the Company's authorized but unissued
Class A Common Stock and any shares of its Class A Common Stock held as treasury
shares. Grants may be in the form of either nonqualified stock options,
incentive stock options, stock appreciation rights, restricted stock awards,
performance share awards, stock bonuses or cash bonus awards.
The price of the options granted pursuant to the Plan will not be less than
100% of the fair market value of the shares on the date of grant (110% in the
case of an incentive stock option). No award will be exercisable after ten years
from the date granted. No award may vest more quickly than 25% per year, other
than in the case of options issued in connection with the Offering or awards
granted in lieu of cash bonuses, which may vest at the rate of 50% per year.
Information regarding the Plan for 1996 is as follows:
<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
SHARES EXERCISE PRICE
---------- ----------------
<S> <C> <C>
Options outstanding, beginning of year......................... 0 N/A
Options granted................................................ 1,934,000 $23.00
Options exercised.............................................. 0 N/A
Options outstanding, end of year............................... 1,934,000 $23.00
Option price range at end of year.............................. $ 23.00
Options available for grant at end of year..................... 3,566,000
Weighted-average fair value of options, granted during the
year......................................................... $ 6.77
</TABLE>
14. SACRAMENTO ACQUISITION
The Company has entered into an acquisition agreement with the owners of its
Sacramento Affiliated Station. The purchase price, payable in cash and preferred
stock, is approximately $40,000,000. If consummated, the Company would pay a
portion of the purchase price in cash and issue 12,000 shares of preferred
stock, which were deposited into escrow in October 1996, having one vote per
share, a liquidation preference of $1,000 per share (plus accrued and unpaid
dividends) and a cumulative annual dividend preference (commencing on the
closing of the acquisition) of 6% per share per annum ($15.00 per quarter per
share), increasing to 9% per share per annum if accrued and unpaid dividends per
share equal or exceed $30.00. The preferred stock would be convertible into
Class A Common Stock at the option of the holder until the fourth anniversary of
the closing of the acquisition at a conversion price of $32.6875. The preferred
stock would be redeemable at the option of the holder at any time, and by the
Company after the fourth anniversary of the issuance of the preferred stock, in
each case, for an amount equal to the liquidation preference. Consequently,
holders of any preferred stock issued in connection with such acquisition would
have greater rights than holders of the Class A Common Stock. The Company has
sufficient borrowing capacity under the New Bank Facility to consummate such
acquisition.
On March 6, 1997, the FCC granted a waiver of its signal overlap rules. The
acquisition is expected to be consummated by the end of March 1997. The
acquisition was not considered significant under Rule 3-05 of the Securities and
Exchange Commission's Regulation S-X.
F-26
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER TOTAL YEAR
--------- --------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1996
Net revenues............................. $ 39,191 $ 52,229 $ 48,462 $ 104,976(a) $ 244,858
Operating income......................... $ 6,555 $ 17,258 $ 14,721 $ 28,547(a) $ 67,081
Extraordinary (loss) income.............. $ (283) $ (362) $ (10,913) $ 3,330(b) $ (8,228)
Net (loss) income........................ $ (3,956) $ 4,205 $ (8,455) $ 18,571(a) $ 10,365
1995
Net revenues............................. $ 34,547 $ 47,732 $ 42,777 $ 48,052 $ 173,108
Operating income......................... $ 5,532 $ 16,286 $ 11,715 $ 10,322 $ 43,855
Extraordinary (loss)..................... $ -- $ -- $ (433) $ (368) $ (801)
Net (loss) income........................ $ (5,078) $ 3,404 $ (1,704) $ (6,811) $ (10,189)
</TABLE>
- ------------------------
(a) Effective October 2, 1996, UCI acquired and consolidated the results of
operations of the Network for the year ended 1996. As a result, significant
variances exist when the results for the fourth quarter and year ended 1996
are compared to those for the year ended 1995. For the period of October 3,
1996 to December 31, 1996, the Network generated net revenues of $51,067,
operating income of $12,065, and net income of $7,817.
(b) Extraordinary loss reported net of tax and subject to inter period tax
allocation (see Notes 9 and 10).
F-27
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is
entered into as of September 25, 1996 by and among A. Jerrold Perenchio
("Perenchio"), Sunshine Acquisition L.P., a California limited partnership
("SALP"), Sunshine Acquisition Corp., a California corporation ("SAC"),
Univision Special Partnership I, L.P., a Delaware limited partnership
("USPI", and together with Perenchio, SALP and SAC, the "Perenchio
Entities"), Grupo Televisa S.A., a Mexican corporation ("Grupo Televisa"),
Univisa, Inc., a Delaware corporation ("Univisa"), Grupo Telesistema S.A. de
C.V., a Mexican corporation ("Telesistema"), Univisa Broadcasting L.P, a
Delaware limited partnership ("Univisa Broadcasting"), Univision Special
Partnership II, L.P., a Delaware limited partnership ("USPII", and together
with Grupo Televisa, Univisa, Telesistema and Univisa Broadcasting, the
"Televisa Entities"), Ricardo Cisneros, Gustavo Cisneros (together with
Ricardo Cisneros, the "Cisneros Brothers"), Venevision International Limited,
a British Virgin Islands corporation ("Venevision International Limited"),
Pack-A-Snack N.V., a Netherlands Antilles corporation ("Pack-A-Snack"),
Dennevar B.V., a Netherlands corporation ("Dennevar"), Venevision
International, Inc., a Florida Corporation ("Venevision International,
Inc."), Bravo Enterprises, Inc., a Delaware corporation ("Bravo"), Univision
Special Partnership III, L.P., a Delaware limited partnership ("USPIII", and
together with the Cisneros Brothers, Venevision International Limited,
Pack-A-Snack, Dennevar, Venevision International, Inc. and Bravo, the
"Venevision Entities"), Stephen P. Rader ("Rader"), Davila Family L.L.C., a
New York limited liability company ("Davila LLC"), Univision Communications
Inc., a Delaware corporation ("UCI"), PTI Holdings, Inc., a Delaware
corporation ("PTIH"), Univision Television Group, Inc., a Delaware
corporation ("UTG"), The Univision Network Holding Limited Partnership, a
Delaware limited partnership ("UNHLP"), The Univision Network Limited
Partnership, a Delaware limited partnership ("UNLP"), and Network Limited
Partner, Inc., a Delaware corporation ("NLPI", and together with UCI, PTIH,
UTG, UNHLP and UNLP, the "Univision Entities").
R E C I T A L S
WHEREAS, UCI has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") with
respect to an initial public offering of Class A Common Stock of UCI (the
"Offering").
WHEREAS, the parties hereto have agreed to reorganize the Univision
Entities to facilitate the Offering (the "Reorganization").
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto agree as follows:
1
<PAGE>
I. DEFINITIONS.
"AFFILIATE" means any person or entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
another Person.
"AMENDED AND RESTATED PROGRAM LICENSE AGREEMENTS" means the Amended
and Restated Program License Agreement to be entered into by and between
Univisa and UNLP, and the Amended and Restated Program License Agreement to
be entered into by and between Dennevar and UNLP.
"GALAVISION" means Galavision, Inc., a Delaware corporation.
"INTERNATIONAL PROGRAM RIGHTS AGREEMENT" means the International
Program Rights Agreement to be entered into by and between UNLP, Grupo
Televisa (or an Affiliate of Grupo Televisa) and Venevision or an Affiliate
of Venevision).
"PACK-A-SNACK SENIOR DEBENTURE" means the UCI Senior Subordinated
Debenture Due 2003 in Principal Amount of $19,719,198 in favor of
Pack-A-Snack.
"PACK-A-SNACK SPONSOR NOTES" means the notes in favor of
Pack-A-Snack made pursuant to the Sponsor Loan Agreements.
"PACK-A-SNACK SUBORDINATED DEBENTURE" means the UCI Subordinated
Debenture Due 2005 in Principal Amount of $6,338,634 in favor of Pack-A-Snack.
"PARTICIPATION AGREEMENT" means the Participation Agreement to be
entered into by and among UCI, Perenchio, Grupo Televisa, the Cisneros
Brothers and Corporacion Venezolana de Television (Venevision) C.A.
"PERENCHIO SENIOR NOTE" means the UCI Senior Subordinated Note Due
2003 in Principal Amount of $24,490,466.10 in favor of Perenchio.
"PERENCHIO SUBORDINATED NOTE" means the UCI Subordinated Note Due
2005 in Principal Amount of $6,510,123.90 in favor of Perenchio.
"PERSON" means an individual, a corporation, a partnership, an
association, a limited liability company or a trust.
"PROGRAM LICENSE AGREEMENTS" means the Program License Agreement,
dated as of December 17, 1992, by and between Univisa and UNLP, and the
Program License Agreement, dated as of December 17, 1992, by and between
Dennevar and UNLP.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement to be entered into by and among UCI and certain stockholders of UCI.
2
<PAGE>
"SECURITIES ACT" means the Securities Act of 1933, as amended and
the rules and the regulations of the Securities and Exchange Commission
thereunder.
"SPONSOR LOAN AGREEMENTS" means that certain Scheduled Loan
Agreement [Televisa] dated as of December 17, 1992 between UTG and Grupo
Televisa, that certain Scheduled Loan Agreement [Venevision] dated as of
December 17, 1992 between UTG and Pack-A-Snack, that certain Additional Loan
Agreement [Televisa]dated as of December 17, 1992 between UTG and Grupo
Televisa, and that certain Additional Loan Agreement [Venevision] dated as of
December 17, 1992 between UTG and Pack-A-Snack.
"TELEVISA AND VENEVISION WARRANTS" means the Amended and Restated
Warrants to purchase 6,855,779, 6,855,779, 364,631 and 364,631 shares of UCI
common stock to be granted by UCI in favor of Telesistema, Venevision
International Limited, USPII and USPIII respectively.
"TELEVISA SENIOR DEBENTURE" means the UCI Senior Subordinated
Debenture Due 2003 in Principal Amount of $19,719,198 in favor of Grupo
Televisa.
"TELEVISA SPONSOR NOTES" means the notes in favor of Grupo Televisa
made pursuant to the Sponsor Loan Agreements.
"TELEVISA SUBORDINATED DEBENTURE" means the UCI Subordinated
Debenture Due 2005 in Principal Amount of $6,338,634 in favor of Grupo
Televisa.
"TRANSACTION AGREEMENTS" means the Amended and Restated Program
License Agreements, the International Program Rights Agreement, the
Participation Agreement, and the Registration Rights Agreement and the other
documents and agreements referred to herein.
"UNIVISA SENIOR NOTE" means, as the context requires, the UCI Senior
Subordinated Note Due 2003 in Principal Amount of $644,485.95 in favor of
Univisa, or the PTIH Senior Subordinated Note Due 2003 in Principal Amount of
$4,133,430 in favor of Univisa.
"UNIVISA SUBORDINATED NOTE" means the UCI Subordinated Note Due 2005
in Principal Amount of $171,319.05 in favor of Univisa.
"UNIVISION EQUITY SECURITIES" means, as the context requires, the
partnership interests in UNHLP, the shares of Common Stock and Preferred
Stock of PTIH and the shares of Common Stock and Preferred Stock of UCI,
including shares of Common Stock of UCI being issued pursuant to the
Reorganization.
3
<PAGE>
"UNIVISION SECURITIES" means, as the context requires, the
partnership interests in UNHLP, the shares of Common Stock and Preferred
Stock of PTIH and UCI, the Pack-A-Snack Senior Debenture, Pack-A-Snack
Sponsor Notes, Pack-A-Snack Subordinated Debenture, Perenchio Senior Note,
Perenchio Subordinated Note, Televisa Senior Debenture, Televisa Subordinated
Debenture, Televisa Sponsor Notes, Univisa Senior Note, Univisa Subordinated
Note, Venevision Senior Note, and/or Venevision Subordinated Note.
"VENEVISION SENIOR NOTE" means, as the context requires, the UCI
Senior Subordinated Note Due 2003 in Principal Amount of $644,485.95 in favor
of Venevision International Limited, or the PTIH Senior Subordinated Note Due
2003 in Principal Amount of $4,133,430 in favor of Venevision International
Limited.
"VENEVISION SUBORDINATED NOTE" means the UCI Subordinated Note Due
2005 in Principal Amount of $171,319.05 in favor of Venevision International
Limited.
II. THE REORGANIZATION.
A. On the second business day after the execution of the
underwriting agreement by UCI and the underwriters with respect to the
Offering, the parties shall cause the following transactions to occur in the
order set forth below:
1. UCI, UTG and UNLP will enter into a new credit facility on the
terms set forth in the commitment letter attached as Exhibit A
hereto (the "New Facility").
2. UTG will draw the full term loan amount under the New Facility.
3. UTG will pay off all amounts owing to the lender under UTG's
existing bank facility and UTG will terminate such facility.
4. UTG will deposit approximately $85,000,000 with the trustee and
take all other required action to defease UTG's 11 3/4% Notes.
5. UTG will pay all intercompany debt owed to UNLP.
6. NLPI will be dissolved and its assets (UNLP and UNHLP partnership
interests) will be distributed to SALP, Univisa Broadcasting and
Bravo.
7. UNHLP will pay to SALP, Bravo and Univisa Broadcasting all
management fees accrued to such date pursuant to the UNHLP
Partnership Agreement.
4
<PAGE>
8. UNLP will pay to Univisa and Dennevar all license fees accrued to
such date pursuant to the Program License Agreements (net of
amounts due to UNLP under the Cost Sharing Agreement).
9. Subject to applicable withholding, the following Network
distributions will be made:
a. $60,000,000 distribution from UNLP to its partners
($59,994,000 to UNHLP, $3,000 to SALP, $1,500 to Univisa
Broadcasting and $1,500 to Bravo).
b. $59,994,000 distribution from UNHLP to its partners
($28,103,293 to SALP, $14,794,499 to Univisa Broadcasting
and $14,794,499 to Bravo, $727,989 to USPI, $786,858 to
USPII and $786,858 to USPIII).
c. $28,106,293 distribution from SALP to its partners
($25,365,929 to Perenchio, $1,405,314 to Rader and
$1,335,049 to SAC).
d. $1,335,049 dividend from SAC to Perenchio.
e. Distribution of management fee paid to SALP in Section A(7)
above to Perenchio.
10. The Restated Certificate of Incorporation of UCI will be amended
as set forth on Exhibit B hereto to authorize additional shares
of Class P Common Stock, Class T Common Stock and Class V Common
Stock (sufficient to create enough shares to effectuate the
issuance described in Sections B(1), B(6), and B(7) and the stock
dividend described in Section B(9).
11. The Restated Certificate of Incorporation of PTIH will be amended
as set forth on Exhibit C hereto to authorize additional shares
of Class P Common Stock (sufficient to create enough shares to
effectuate the issuance described in Section B(8).
B. On the fourth business day after the execution of the
underwriting agreement with respect to the Offering by UCI and the
underwriters, the parties shall cause the following transactions to occur in
the order set forth below:
1. Subject to applicable withholding, the following contributions
to, and issuances by, UCI will be made:
5
<PAGE>
a. Univisa Broadcasting will contribute its UNHLP and UNLP
partnership interests in exchange for 4,513 shares of UCI
Class T Common Stock and $9,495,000 in cash.
b. Bravo will contribute its UNHLP and UNLP partnership
interests in exchange for 4,513 shares of UCI Class V Common
Stock and $9,495,000 in cash.
c. USPI will contribute its UNHLP partnership interests in
exchange for 240.1 shares of UCI Class P Common Stock and
$505,000 in cash.
d. USPII will contribute its UNHLP partnership interests in
exchange for 240.1 shares of UCI Class T Common Stock and
$505,000 in cash.
e. USPIII will contribute its UNHLP partnership interests in
exchange for 240.1 shares of UCI Class V Common Stock and
$505,000 in cash.
f. Perenchio will contribute his partnership interest in SALP
in exchange for 8,363.6 shares of UCI Class P Common Stock
and $17,594,237 in cash.
g. Perenchio will contribute his stock of SAC in exchange for
441.65 shares of UCI Class P Common Stock and $926,012 in
cash.
h. Rader will contribute his partnership interest in SALP in
exchange for 462.17 shares of UCI Class P Common Stock and
$974,750 in cash.
2. UNHLP will be liquidated and its assets will be distributed to
UCI and SALP (with UCI assuming all obligations under the UNHLP
Hallmark Note).
3. The UNLP Partnership Agreement will be amended to reflect UCI as
general partner having a 71.85% interest in UNLP and SALP as a
limited partner having a 28.15% interest in UNLP and an Amended
Certificate of Limited Partnership will be filed.
4. Variable Dividends will be declared on UCI Class P Preferred
Stock, Class T Preferred Stock and Class V Preferred Stock
($16,827,723 on Class P, $442,834 on Class T and $442,834 on
Class
6
<PAGE>
V, in each case subject to adjustment in accordance with
Section C below) (see Section B(30) for payment of these
dividends).
5. Variable Dividends will be declared on PTIH Class T Preferred
Stock and Class V Preferred Stock ($980,791 on Class T and
$980,791 on Class V, in each case subject to adjustment in
accordance with Section C below) (see Section B(32) for payment
of these dividends).
6. The following contributions to, and issuances by, UCI will be
made:
a. Univisa will contribute 495 shares of PTIH Class T Common
Stock to UCI in exchange for 660 shares of UCI Class T
Common Stock.
b. Univisa will contribute 9,000 shares of PTIH Class T
Preferred Stock to UCI in exchange for 12,000 shares of UCI
Class T Common Stock.
c. Dennevar will contribute 495 shares of PTIH Class V Common
Stock to UCI in exchange for 660 shares of UCI Class V
Common Stock.
d. Venevision International Limited will contribute 9,000
shares of PTIH Class V Preferred Stock to UCI in exchange
for 12,000 shares of UCI Class V Common Stock.
e. USPII will contribute 505 shares of PTIH Class T Common
Stock to UCI in exchange for 673.5 shares of UCI Class T
Common Stock.
f. USPIII will contribute 505 shares of PTIH Class V Common
Stock to UCI in exchange for 673.5 shares of UCI Class V
Common Stock.
7. Each share of UCI Class P, T and V Preferred Stock held by the
Perenchio Entities, Televisa Entities and Venevision Entities
will be exchanged for a share of UCI Class P, T and V Common
Stock, respectively.
8. Each share of PTIH Class T and V Common Stock and each share of
Class P, T and V Preferred Stock held by UCI will be exchanged
for 1/100 of a share of PTIH Class P Common Stock.
7
<PAGE>
9. There will be a stock dividend of 227.010528 shares on each share
of UCI Class P, T and V Common Stock.
10. UCI's Restated Certificate of Incorporation will be Amended and
Restated as set forth on Exhibit D hereto.
11. UCI's Bylaws will be amended as set forth on Exhibit E hereto.
12. PTIH's Restated Certificate of Incorporation will be amended as
set forth on Exhibit F hereto.
13. PTIH's Bylaws will be amended as set forth on Exhibit G hereto.
14. PTI will be merged with and into PTIH.
15. The Amended and Restated Program License Agreements, the
Registration Rights Agreement, the Participation Agreement, the
International Program Rights Agreement, as set forth on Exhibits
H through L hereto, will be entered into by and among the parties
thereto.
16. Televisa and Venevision Warrants will be entered into as set
forth on Exhibits M(a)-(d) hereto.
17. UTG's Restated Certificate of Incorporation will be amended as
set forth on Exhibit N hereto.
18. UTG's Bylaws will be amended as set forth on Exhibit O hereto.
19. Rader will convert each share of UCI Class P Common Stock owned
by him into one share of UCI Class A Common Stock.
20. The USPI Partnership Agreement will be amended to name Davila LLC
as the managing general partner thereof and USPI will convert
595,659 shares of UCI Class P Common Stock into the same number
of shares of UCI Class A Common Stock.
21. The USPII Partnership Agreement will be amended to name Davila
LLC as the managing general partner thereof and USPII will
convert 234,675 shares of UCI Class T Common Stock into the same
number of shares of UCI Class A Common Stock.
22. The USPIII Partnership Agreement will be amended to name Davila
LLC as the managing general partner thereof and USPIII
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will convert 234,675 shares of UCI Class V Common Stock into
the same number of shares of UCI Class A Common Stock.
23. USPI, USPII and USPIII will each enter into a voting agreement
with UCI in the form of Exhibit P hereto.
24. UCI will close the Offering.
25. UCI will draw down a sufficient amount under the revolver portion
of the New Facility that, when added to the remainder of the term
portion previously drawn and the net proceeds from the Offering,
will give UCI and its subsidiaries sufficient funds to make the
payments described in Sections B(29), (30), (31), (32), (33) and
(34).
26. UCI will contribute a sufficient amount to PTIH (to pay amounts
described in Sections B(32) and (33)).
27. UTG will borrow a sufficient amount from UCI (to pay amounts
described in Section B(34)).
28. UCI will advance sufficient amount to UNLP to allow UNLP to pay
principal and interest on the note issued to Univisa in
connection with the acquisition of Galavision and UNLP will repay
such note.
29. UNLP will transfer Galavision stock to UCI in repayment of the
advance.
30. Subject to applicable withholding, UCI will pay dividends on UCI
Class P, T and V Preferred Stock declared in Section B(4).
31. Subject to applicable withholding, UCI will repay principal and
interest on its debt securities as follows, with all amounts
subject to adjustment as provided in Section C below:
a. $25,202,588 to Grupo Televisa as repayment of Televisa
Senior Debenture.
b. $8,239,959 to Grupo Televisa as repayment of Televisa
Subordinated Debenture.
c. $25,202,588 to Pack-A-Snack as repayment of Pack-A-Snack
Senior Debenture.
d. $8,239,959 to Pack-A-Snack as repayment of Pack-A-Snack
Subordinated Debenture.
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e. $668,405 to Univisa as repayment of Univisa Senior Note.
f. $178,177 to Univisa as repayment of Univisa Subordinated
Note.
g. $668,405 to Venevision International Limited as repayment of
Venevision Senior Note.
h. $178,177 to Venevision International Limited as repayment of
Venevision Subordinated Note.
i. $25,399,418 to Perenchio as repayment of Perenchio Senior
Note.
j. $6,670,739 to Perenchio as repayment of Perenchio
Subordinated Note.
32. Subject to applicable withholding, PTIH will pay dividends on
PTIH Preferred Stock declared in Section B(5).
33. Subject to applicable withholding, PTIH will repay principal and
interest on its debt securities as follows, with all amounts
subject to adjustment as provided in Section C below:
a. $4,302,036 to Univisa as repayment of Univisa Senior Note.
b. $4,302,036 to Venevision International Limited as repayment
of Venevision Senior Note.
34. Subject to applicable withholding, UTG will repay principal and
interest on its debt securities as follows, with all amounts
subject to adjustment as provided in Section C below:
a. $103,632,461 to Grupo Televisa as repayment of Televisa
Sponsor Notes.
b. $ 43,512,960 to Pack-A-Snack as repayment of Pack-A-Snack
Sponsor Notes.
C. Calculations of accrued interest and dividends in this Agreement
were made with an assumption that such accrued interest and dividends would be
paid on July 31, 1996. To the extent such payments are made on a different
date, the amount of accrued interest and dividends payable hereunder will be
adjusted in accordance with the terms of the applicable instrument.
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III. REPRESENTATIONS AND WARRANTIES.
A. Perenchio represents and warrants to the other parties hereto
as follows:
1. Each corporation and other entity listed on Schedule 2 is
an Affiliate of Perenchio, and all right, title and interest therein is
beneficially owned by Mr. A. Jerrold Perenchio, except as set forth on
Schedule 2.
2. Each corporation and other entity listed on Schedule 2 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to own the Univision Securities that it owns
and to execute, deliver and perform the Transaction Agreements to which it is
a party, and is duly qualified or licensed to do business as a foreign
corporation or other entity and in good standing in all jurisdictions where
such qualification is necessary in connection with such ownership or
performance.
3. The execution, delivery and performance of this Agreement
and each of the Transaction Agreements and the sale or transfer of the
Univision Securities by each Perenchio Entity who is doing so has been duly
and validly authorized by the Board of Directors or other appropriate
authority of, and by all other necessary action on the part of, each such
Perenchio Entity. This Agreement and each of the Transaction Agreements to
which Perenchio or any Perenchio Entity is a party constitutes the legally
valid and binding obligation of Perenchio or such Perenchio Entity,
enforceable against Perenchio or such Perenchio Entity in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally. The
execution, delivery and performance of the Transaction Agreements by
Perenchio and such Perenchio Entities, and the transfer or sale of the
Univision Securities by Perenchio or the Perenchio Entities will not violate,
or constitute a breach or default (whether upon lapse of time and/or the
occurrence of any act or event or otherwise) under, the charter documents or
by-laws of any such Perenchio Entity or any contract or agreement to which
Perenchio or any such Perenchio Entity may be a party, result in the
imposition of any lien or encumbrance against any assets or properties of
Perenchio or any such Perenchio Entity, or violate any applicable law, rule
or regulation. Except for filings with the Federal Communications Commission,
the United States Department of Justice and the Federal Trade Commission,
which have been duly made, the execution, delivery and performance of this
Agreement and the Transaction Agreements by Perenchio and such Perenchio
Entities and the sale or transfer of the Univision Securities by Perenchio or
such Perenchio Entities will not require filing or registration with, or the
issuance of any permit or other authorization by, any third party or
governmental authority.
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4. Perenchio and such Perenchio Entities that are transferring
Univision Securities hereunder, own such securities, and are transferring such
securities free and clear of any liens.
5. The shares Common Stock of UCI being acquired by the Perenchio
Entities hereunder (i) are being acquired for the own account of such Perenchio
Entities, for investment purposes and without a view towards resale thereof and
(ii) will not be sold or otherwise disposed of by such Perenchio Entities except
in compliance with the Securities Act and other applicable securities laws.
B. Grupo Televisa represents and warrants to the other parties
hereto as follows:
1. Each corporation and other entity listed on Schedule 3 is an
Affiliate of Grupo Televisa, and all right, title and interest therein is
beneficially owned by Grupo Televisa, except as set forth on Schedule 3.
2. Each corporation and other entity listed on Schedule 3 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to own the Univision Securities that it owns
and to execute, deliver and perform the Transaction Agreements to which it is
a party, and is duly qualified or licensed to do business as a foreign
corporation or other entity and in good standing in all jurisdictions where
such qualification is necessary in connection with such ownership or
performance.
3. The execution, delivery and performance of this Agreement
and each of the Transaction Agreements and the sale or transfer of the
Univision Securities by Grupo Televisa and each Televisa Entity who is doing
so has been duly and validly authorized by the Board of Directors or other
appropriate authority of, and by all other necessary action on the part of,
each such Televisa Entity. This Agreement and each of the Transaction
Agreements to which Grupo Televisa and such Televisa Entity is a party
constitutes the legally valid and binding obligation of Grupo Televisa or
such Televisa Entity, enforceable against Grupo Televisa or such Televisa
Entity in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles relating to or limiting creditors'
rights generally. The execution, delivery and performance of the Transaction
Agreements by Grupo Televisa and such Televisa Entities, and the transfer or
sale of the Univision Securities by Grupo Televisa or the Televisa Entities
will not violate, or constitute a breach or default (whether upon lapse of
time and/or the occurrence of any act or event or otherwise) under, the
charter documents or by-laws of Grupo Televisa or any such Televisa Entity or
any contract or agreement to which Grupo Televisa or any such Televisa Entity
may be a party, result in the imposition of any lien or encumbrance against
any assets or properties of Grupo Televisa or any such Televisa Entity, or
violate any applicable law, rule or regulation.
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Except for filings with the Federal Communications Commission, the United
States Department of Justice and the Federal Trade Commission, which have
been duly made, the execution, delivery and performance of this Agreement and
the Transaction Agreements by Grupo Televisa and such Televisa Entities and
the sale or transfer of the Univision Securities by Grupo Televisa and such
Televisa Entities will not require filing or registration with, or the
issuance of any permit or other authorization by, any third party or
governmental authority.
4. Grupo Televisa and such Televisa Entities that are transferring
Univision Securities hereunder, own such securities, and are transferring such
securities free and clear of any liens.
5. The shares Common Stock of UCI being acquired by the Televisa
Entities hereunder (i) are being acquired for the own account of such Televisa
Entities, for investment purposes and without a view towards resale thereof and
(ii) will not be sold or otherwise disposed of by such Televisa Entities except
in compliance with the Securities Act and other applicable securities laws.
C. Each of the Cisneros Brothers represents and warrants to the
other parties hereto as follows:
1. Each corporation and other entity listed on Schedule 4 is an
Affiliate of the Cisneros Brothers, except as set forth on Schedule 4.
2. Each corporation and other entity listed on Schedule 4 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to own the Univision Securities that it owns and
to execute, deliver and perform the Transaction Agreements to which it is a
party, and is duly qualified or licensed to do business as a foreign corporation
or other entity and in good standing in all jurisdictions where such
qualification is necessary in connection with such ownership or performance.
3. The execution, delivery and performance of this Agreement
and each of the Transaction Agreements and the sale or transfer of the Univision
Securities by each Venevision Entity who is doing so has been duly and validly
authorized by the Board of Directors or other appropriate authority of, and by
all other necessary action on the part of, each such Venevision Entity. This
Agreement and each of the Transaction Agreements to which the Cisneros Brothers
or a Venevision Entity is a party constitutes the legally valid and binding
obligation of the Cisneros Brothers or such Venevision Entity, enforceable
against the Cisneros Brothers or such Venevision Entity in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally. The execution, delivery
and performance of the Transaction Agreements by the Cisneros Brothers and such
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<PAGE>
Venevision Entities, and the transfer or sale of the Univision Securities by
the Cisneros Brothers or the Venevision Entities will not violate, or
constitute a breach or default (whether upon lapse of time and/or the
occurrence of any act or event or otherwise) under, the charter documents or
by-laws of any such Venevision Entity or any contract or agreement to which
the Cisneros Brothers or any such Venevision Entity may be a party, result in
the imposition of any lien or encumbrance against any assets or properties of
the Cisneros Brothers or any such Venevision Entity, or violate any
applicable law, rule or regulation. Except for filings with the Federal
Communications Commission, the United States Department of Justice and the
Federal Trade Commission, which have been duly made, the execution, delivery
and performance of this Agreement and the Transaction Agreements by the
Cisneros Brothers and such Venevision Entities and the sale or transfer of
the Univision Securities by the Cisneros Brothers or any such Venevision
Entity will not require filing or registration with, or the issuance of any
permit or other authorization by, any third party or governmental authority.
4. The Cisneros Brothers and such Venevision Entities that are
transferring Univision Securities hereunder, own such securities, and are
transferring such securities free and clear of any liens.
5. The shares Common Stock of UCI being acquired by the Venevision
Entities hereunder (i) are being acquired for the own account of such
Venevision Entities, for investment purposes and without a view towards
resale thereof and (ii) will not be sold or otherwise disposed of by such
Venevision Entities except in compliance with the Securities Act and other
applicable securities laws.
D. Rader represents and warrants to the other parties hereto as follows:
1. This Agreement and each of the Transaction Agreements to which
Rader is a party constitutes the legally valid and binding obligation of Rader,
enforceable against Rader in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally. The execution, delivery and performance
of the Transaction Agreements by Rader, and the transfer or sale of the
Univision Securities by Rader will not violate, or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under any contract or agreement to which Rader may be a party, result
in the imposition of any lien or encumbrance against any assets or properties of
Rader, or violate any applicable law, rule or regulation. Except for filings
with the Federal Communications Commission, the United States Department of
Justice and the Federal Trade Commission, which have been duly made, the
execution, delivery and performance of this Agreement and the Transaction
Agreements by Rader and the sale or transfer of the Univision Securities by
Rader will not require filing or registration with, or the issuance of any
permit or other authorization by, any third party or governmental authority.
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<PAGE>
2. Rader owns the Univision Securities being transferred by Rader
hereunder, and is transferring such securities free and clear of any liens.
3. The shares Common Stock of UCI being acquired by Rader hereunder
(i) are being acquired for Rader's own account, for investment purposes and
without a view towards resale thereof and (ii) will not be sold or otherwise
disposed of by Rader except in compliance with the Securities Act and other
applicable securities laws.
E. Davila LLC represents and warrants to the other parties hereto as
follows:
1. Davila LLC is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Davila LLC has
all necessary power and authority to execute, deliver and perform the
Transaction Agreements to which it is a party, and is duly qualified or
licensed to do business as a foreign corporation or other entity and in good
standing in all jurisdictions where such qualification is necessary in
connection with such ownership or performance.
2. The execution, delivery and performance of this Agreement
and each of the Transaction Agreements by Davila LLC has been duly and
validly authorized by the appropriate authority of, and by all other
necessary action on the part of, Davila LLC. This Agreement and each of the
Transaction Agreements to which Davila LLC is a party constitutes the legally
valid and binding obligation of Davila LLC, enforceable against Davila LLC in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors' rights generally.
The execution, delivery and performance of the Transaction Agreements by
Davila LLC will not violate, or constitute a breach or default (whether upon
lapse of time and/or the occurrence of any act or event or otherwise) under
any contract or agreement to which Davila LLC may be a party, result in the
imposition of any lien or encumbrance against any assets or properties of
Davila LLC, or violate any applicable law, rule or regulation. Except for
filings with the Federal Communications Commission, the United States
Department of Justice and the Federal Trade Commission, which have been duly
made, the execution, delivery and performance of this Agreement and the
Transaction Agreements by Davila LLC will not require filing or registration
with, or the issuance of any permit or other authorization by, any third
party or governmental authority.
F. Each Univision Entity represents and warrants to the other parties
hereto as follows:
1. Such Univision Entity is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization. Such
Univision Entity has all necessary power and authority to own the Univision
Securities which it owns and
15
to execute, deliver and perform the Transaction Agreements to which it is a
party, and is duly qualified or licensed to do business as a foreign
corporation or other entity and in good standing in all jurisdictions where
such qualification is necessary in connection with such ownership or
performance.
2. The execution, delivery and performance of this Agreement
and each of the Transaction Agreements and the issuance of the Univision
Securities by such Univision Entity who is doing so has been duly and validly
authorized by the Board of Directors or other appropriate authority of, and
by all other necessary action on the part of, each such Univision Entity.
This Agreement and each of the Transaction Agreements to which such Univision
Entity is a party constitutes the legally valid and binding obligation of
such Univision Entity, enforceable against such Univision Entity in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors' rights generally.
The execution, delivery and performance of the Transaction Agreements by such
Univision Entity, and the issuance of the Univision Securities by such
Univision Entity will not violate, or constitute a breach or default (whether
upon lapse of time and/or the occurrence of any act or event or otherwise)
under, the charter documents or by-laws of any such Univision Entity or any
contract or agreement to which such Univision Entity may be a party, result
in the imposition of any lien or encumbrance against any assets or properties
of such Univision Entity, or violate any applicable law, rule or regulation.
Except for filings with the Federal Communications Commission, the United
States Department of Justice and the Federal Trade Commission, which have
been duly made, the execution, delivery and performance of this Agreement and
the Transaction Agreements by such Univision Entity and the sale or transfer
of the Univision Securities by such Univision Entity will not require filing
or registration with, or the issuance of any permit or other authorization
by, any third party or governmental authority.
3. The common stock of UCI being issued hereunder will be upon
issuance, validly issued, fully paid and non-assessable.
IV. TAX MATTERS.
A. The parties hereto agree that all payments made with respect to
the Univision Securities will be treated and reported for federal, state and
local income or franchise tax purposes in accordance with their form or
characterization as set forth in the documents pertaining thereto, and no party
hereto shall make any statement or take any position, or permit any of its
Affiliates to make any statement or take any position, inconsistent therewith in
connection with any tax matter, including but not limited to any tax return or
in the course of any audit by a taxing authority within the United States;
provided that the foregoing shall not apply if (i) such treatment is contrary to
a "determination" within the meaning of Section 1313 of the Internal Revenue
Code (or equivalent state law provision), (ii) any party provides an unqualified
opinion of nationally recognized tax counsel that there is no reasonable basis
for such treatment,
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and none of the other parties provides an opinion of nationally recognized
tax counsel to the contrary, or (iii) the parties hereto unanimously consent
to a different treatment.
B. Other than as set forth on Schedule 1, each of the undersigned
represents and warrants that such Person has not transferred any of the
Univision Equity Securities since December 17, 1992. Other than as set forth
in this Agreement, each of the undersigned represents and warrants that such
Person does not currently have, and will not have at the time of the
Reorganization, a plan, intention or arrangement to sell, exchange, transfer,
distribute, pledge or otherwise dispose of any of the Univision Equity
Securities, including the shares of UCI's stock that such Person will receive
in the Reorganization, and in no event will the undersigned sell any of such
shares of UCI stock within the six month period following the date of the
closing of the Offering, except, in each case, for transfers of Univision
Equity Securities to Affiliates of any of the parties hereto; provided that,
prior to any such transfer, the transferor (the "Intragroup Transferor")
delivers to UCI an unqualified opinion of (w) Fried, Frank, Harris, Shriver &
Jacobson, (x) Milbank, Tweed, Hadley & McCloy, (y) O'Melveny & Myers LLP or
(z) other nationally recognized tax counsel which other counsel shall be
reasonably acceptable to UCI, that such transfer will not reduce the number
of shares of UCI received, held, owned and/or deemed owned "immediately
after" the Reorganization by a party treated as a transferor of property in
exchange for UCI stock for purposes of determining "control" under Section
351 of the Internal Revenue Code, other than, in the case of Grupo Televisa
and its Affiliates and Venevision and its Affiliates, transfers to Grupo
Televisa or its Affiliates or Venevision or its Affiliates, as the case may
be, of (i) shares of UCI owned by such Intragroup Transferor prior to the
date hereof, (ii) shares of UCI received pursuant to Section II(B)(1) hereof
and (iii) shares of UCI received as a dividend on the shares described in
clauses (i) and (ii) above pursuant to Section II(B)(9) hereof.
C. The parties agree that (i) the contributions to UCI described
in Article II(B)(1) and (6) above, (ii) the Offering and (iii) the
transactions contemplated by that certain Purchase Agreement among UCI and
the partners of Sainte Limited, a California limited partnership, are
intended to constitute interdependent components of a single integrated plan
for the capitalization of UCI under Section 351 of the Internal Revenue Code.
V. MISCELLANEOUS.
A. ENTIRE AGREEMENT. The express provisions of this Agreement and
the Transaction Agreements, and the documents delivered in connection with any
thereof, constitute the entire agreement among the parties and their Affiliates,
and supersede all other agreements and understandings, both written and oral,
among the parties and their Affiliates, or any of them, with respect to the
subject matter hereof and thereof. No implied agreements shall be deemed to
exist with respect to such subject
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matter. All references to sections, subsections and schedules shall be
deemed references to such part of this Agreement, unless the context shall
otherwise require.
B. ASSIGNMENTS. Neither this Agreement nor any rights or
obligations hereunder may be assigned or delegated by any of the parties, in
whole or in part, whether voluntarily, by operation of law or otherwise,
except for (i) assignments or delegations to transferees of Univision Equity
Securities in connection with transfers of Univision Equity Securities made
in compliance with Section IV(B) above and (ii) assignments or delegations to
transferees of Univision Securities (other than Univision Equity Securities)
in connection with transfers of such Univision Securities made in compliance
with the agreements and instruments governing such Univision Securities. Any
attempted assignment or delegation in violation of this prohibition shall be
null and void. Subject to the foregoing, all of the terms and provisions
hereof shall be binding upon, and inure to the benefit of, the permitted
successors and assigns of the parties. Nothing contained herein, express or
implied, is intended to confer on any Person other than the parties or their
respective permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
C. JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United
States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties irrevocably
appoints CT Corporation System (the "Process Agent"), with an office on the
date hereof at 818 West 7th Street, Los Angeles, CA 90017 as his or its agent
to receive on behalf of him or it and his or its property service of copies
of the summons and complaint and any other process which may be served in any
such action or proceeding. Such service may be made by delivering a copy of
such process to any of the parties in care of the Process Agent at the
Process Agent's above address or such other address the Process Agent may
have in the future, and each of the parties irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternate method of service, each of the parties consents to the service of
copies of the summons and complaint and any other process which may be served
in any such action or proceeding by the mailing or delivering of a copy of
the such process to such party at its address specified in or in accordance
with Section V.D. Each of the parties agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
D. NOTIFICATION. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail (air mail if addressed to an address outside of the country in which
mailed), postage prepaid, return
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receipt requested, (c) by a generally recognized overnight courier service
which provides written acknowledgement by the addressee of receipt, or (d) by
facsimile or other generally accepted means of electronic transmission
(provided that a copy of any notice delivered pursuant to this clause (d)
shall also be sent pursuant to clause (b)), addressed as set forth on
Schedule 1 hereto or to such other addresses as may be specified by like
notice to the other parties.
E. INDEMNIFICATION. Each of the parties (an "INDEMNIFYING PARTY")
indemnifies each of the other parties, their respective Affiliates, the
officers, directors, shareholders, agents, employees and attorneys of each of
the other parties and their respective Affiliates, and their respective
heirs, administrators, successors and assigns, and agrees to hold each of
them harmless, from and against any and all Losses which any of them may
incur or suffer, or which may be asserted against or imposed on any of them,
directly or indirectly, arising out of, as a result of or based upon any
inaccuracy in or breach or nonperformance of any of the representations,
warranties, covenants or agreements made by the Indemnifying Party in this
Agreement. As used in this Agreement, "LOSSES" refers to any and all
liability, losses, costs, deficiencies, damages, demands, claims, actions,
judgments, causes of action and expenses (including, without limitation,
attorneys' and accountants' fees, costs incurred to investigate or defend,
and costs incurred to enforce the provision hereof).
F. INVALIDITY. If any provision of this Agreement is too broad to
permit enforcement to its full extent, such provision shall nevertheless be
enforced to the maximum extent permitted by law, and each party agrees that
such provisions may be judicially modified accordingly in any proceeding
brought to enforce this Agreement. If any portion of this Agreement shall be
held to be indefinite, invalid or otherwise entirely unenforceable, the
entire Agreement shall not fail on account thereof. The balance of this
Agreement shall continue in full force and effect.
G. AMENDMENTS AND WAIVERS. No modification, amendment,
termination or waiver of any provision of this Agreement, nor consent to any
departure therefrom, shall in any event be effective unless the same shall be
in writing and signed by the parties, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given. Neither any course of dealing nor any failure or delay on the part of
any of the parties in exercising any right, power or privilege hereunder
shall impair any such power, right or privilege or operate as a waiver
thereof or as a waiver or acquiescence in any default, nor shall any single
or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. No notice to or demand on any of the
parties in any case shall entitle such party to any other or further notice
or demand in the same, similar or other circumstances.
H. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall
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<PAGE>
become effective when one or more counterparts have been signed by each party
and delivered to each party.
I. FURTHER ACTIONS. Subject to the terms and conditions of this
Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all action necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
J. SPECIFIC PERFORMANCE. The parties hereby acknowledge that each
party would suffer irreparable injury and would not have an adequate remedy
at law for money damages if the provisions of this Agreement were not
performed in accordance with their terms. Each party agrees that the others
shall be entitled to specific enforcement of the terms of this Agreement in
addition to any other remedy to which they are entitled, at law or in equity.
Furthermore, if any action or proceeding shall be instituted to enforce the
provisions hereof, any party against whom such action or proceeding is
brought hereby waives the claim or defense therein that there is an adequate
remedy at law, and agrees not to urge in any such action or proceeding the
claim or defense that such remedy at law exists.
K. SECTION AND OTHER HEADINGS. Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.
L. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable
to contracts between California parties made and performed in that State,
without regard to conflict of laws principles.
M. ATTORNEYS' FEES; COSTS AND EXPENSES. In any action or
proceeding brought to enforce any provision of the Agreement, or where any
provision hereof is validly asserted as a defense, the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its cost and
expense and any other available remedy.
N. TERMINATION OF CERTAIN AGREEMENTS. The parties agree that
effective upon the consumation of the transactions contemplated by this
Agreement, the agreements set forth on Schedule 1 hereto shall be deemed
terminated effective as of the date set forth on such schedule.
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ A. Jerrold Perenchio
--------------------------------
A. JERROLD PERENCHIO
SUNSHINE ACQUISITION L.P.
By: Sunshine Acquisition Corp.,
its General partner
By: /s/ Robert V. Cahill
---------------------------
Title: Vice President
--------------------------
SUNSHINE ACQUISITION CORP.
By: /s/ Robert V. Cahill
---------------------------
Title: Vice President
--------------------------
UNIVISION SPECIAL PARTNERSHIP L.L.P.
By: Sunshine Acquisition, L.P.
---------------------------
Its: General Partner
---------------------------
By: Sunshine Acquisition Corp., its General Partner
By: /s/ Robert V. Cahill
----------------------
Title: Vice President
-------------------
S-1
<PAGE>
GRUPO TELEVISA S.A.
By: /s/ Javier Mondragon
---------------------------
Title: Attorney in fact
------------------------
UNIVISA, INC.
By: /s/ [Illegible]
---------------------------
Title: President & Chief Operating
------------------------
Officer
GRUPO TELESISTEMA S.A. DE C.V.
By: /s/ Felix Araujo
---------------------------
Title: President
------------------------
UNIVISA BROADCASTING L.P.
By: Univisa Broadcasting Corp.,
its General Partner
By: /s/ [Illegible]
---------------------------
Its: Vice President & Secretary
--------------------------
By: /s/ [Illegible]
----------------------
Title:
-------------------
S-2
<PAGE>
UNIVISION SPECIAL PARTNERSHIP II,
L.P.
By: Univision Broadcasting L.P.,
its General Partner
By: Univision Broadcasting Corp.
--------------------------------
Its: General Partner
-------------------------------
By: /s/ [Illegible]
---------------------------
Title: President
------------------------
/s/ Ricardo Cisneros
-----------------------------------
RICARDO CISNEROS
/s/ Gustavo Cisneros
-----------------------------------
GUSTAVO CISNEROS
VENEVISION INTERNATIONAL LIMITED
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
PACK-A-SNACK N.V.
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
S-3
<PAGE>
DENNEVAR B.V.
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
VENEVISION INTERNATIONAL, INC.
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
BRAVO ENTERPRISES, INC.
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
UNIVISION SPECIAL PARTNERSHIP III,
L.P.
By: Tisdell International Management, LTD
-------------------------------
Its: Managing General Partner
------------------------------
By: /s/ [Illegible]
---------------------------
Title: Attorney-in-fact
-----------------------
/s/ Stephen P. Rader
-----------------------------------
STEPHEN P. RADER
S-4
<PAGE>
UNIVISION COMMUNICATIONS INC.
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Title: Vice President and Secretary
----------------------------
PTI HOLDINGS, INC.
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Title: Vice President and Secretary
----------------------------
UNIVISION TELEVISION GROUP, INC.
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Title: Vice President and Secretary
----------------------------
THE UNIVISION NETWORK HOLDING
LIMITED PARTNERSHIP
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Its: Managing Director and Secretary
------------------------------
By:
---------------------------
Title:
-----------------------
S-5
<PAGE>
THE UNIVISION NETWORK LIMITED
PARTNERSHIP
The Univision Network Holding
By: Limited Partnership
-------------------------------
Its: General Partner
------------------------------
By: /s/ Robert V. Cahill
---------------------------
Robert V. Cahill
Title: Managing Director and
-----------------------
Secretary
NETWORK LIMITED PARTNER, INC.
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Title: Vice President and Secretary
----------------------------
THE DAVILA FAMILY L.L.C.
By: /s/ [Illegible]
------------------------------
Title: [Illegible]
----------------------------
S-6
<PAGE>
EXHIBIT INDEX
Exhibit A - Commitment Letter for New Facility
Exhibit B - Amendment to UCI Certificate to Authorize Additional Shares
Exhibit C - Amendment to PTIH Certificate to Authorize Addtional Shares
Exhibit D - UCI Restated Certificate of Incorporation
Exhibit E - UCI Amended Bylaws
Exhibit F - PTIH Restated Certificate of Incorporation
Exhibit G - PTIH Amended Bylaws
Exhibit H - Univisa Amended and Restated Program License Agreement
Exhibit I - Dennevar Amended and Restated Program License Agreement
Exhibit J - Registration Rights Agreement
Exhibit K - Participation Agreement
Exhibit L - International Program Rights Agreement
Exhibit M(a) - Televisa Amended and Restated Warrant
Exhibit M(b) - Venevision Amended and Restated Warrant
Exhibit M(c) - Televisa Amended and Restated Warrant
Exhibit M(d) - Venevision Amended and Restated Warrant
Exhibit N - UTG Restated Certificate of Incorporation
Exhibit O - UTG Amended Bylaws
Exhibit P - Voting Agreement
S-i
<PAGE>
Pursuant to Item 601(b)(2) of Regulation S-K:
(1) the exhibits listed on the foregoing page have not been filed; and
(2) the Company hereby agrees to furnish supplementally a copy of any of
these omitted exhibits to the Commission upon request.
<PAGE>
Exhibit 4.1
CLASS A [GRAPHIC] CLASS A
COMMON STOCK COMMON STOCK
PAR VALUE $.01 PAR VALUE $.01
- -------------- --------------
D Unreadable Unreadable
- -------------- --------------
INCORPORATED UNDER THE LAWS SEE REVERSE FOR
OF THE STATE OF DELAWARE CERTAIN DEFINITIONS
DOMESTIC SHARE UNIVISION COMMUNICATIONS INC. CUSIP 914906 10 2
CERTIFICATE
- -------------------------------------------------------------------------------
Two Lines of Unreadable Text
- -------------------------------------------------------------------------------
THE TRANSFERABILITY OF THESE SHARES IS SUBJECT TO THE CONDITIONS SET FORTH ON
THE REVERSE SIDE
"CERTIFICATE OF STOCK" overlaid on text
FULLY PAID AND NONASSESSABLE SHARES OF THE CLASS A COMMON STOCK OF
Univision Communications Inc., transferable on the books of the Corporation,
in person or by duly authorized attorney upon presentation of this
Certificate properly endorsed. This Certificate is valid when countersigned
by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
COUNTERSIGNED AND REGISTERED UNIVISION COMMUNICATIONS INC.
THE BANK OF NEW YORK CORPORATE SEAL
TRANSFER AGENT AND 1992
BY DELAWARE
AUTHORIZED SIGNATURE SEAL
AMERICAN BANK NOTE COMPANY
Dated:
(Illegible Signature) (Illegible Signature)
Secretary President
<PAGE>
The Corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional, or other special rights of each class of stock or series thereof
and the qualifications, limitations or restrictions of such preferences
and/or rights. Such requests shall be made to the Corporation's Secretary at
the principal office of the Corporation.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenents in common UNIF GIFT MN ACT - _______________ Custodian ______________
TEN ENT - as tenents by the entities (Cust) (Minor)
JR TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ____________________________________
in common (Street)
UNIF TRF MN ACT - ____________ Custodian (until age ______
(Cust)
________________ under Uniform Transfers
(Minor)
to Minors Act __________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED,_____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- -----------------------------------------------------------------------Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated _____________________________________
X --------------------------------------
X --------------------------------------
Notice: THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By _________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP AS AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAMS, PURSUANT
TO S.E.C. RULE 17 Act 15.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE REDEEMABLE BY THE COMPANY
UPON THE OCCURRENCE OF CERTAIN EVENTS AS SET FORTH IN THE RESTATED
CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED FROM TIME TO TIME (A
COPY OF WHICH IS ON FILE WITH THE TRANSFER AGENT).
NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE WILL BE
REGISTERED ON THE BOOKS OF THE CORPORATION UNLESS AN APPLICATION FOR TRANSFER
OF SHARES HAS BEEN EXECUTED BY THE ASSIGNEE. ANY ASSIGNEE WHO CANNOT EXECUTE
THE APPLICATION SET FORTH BELOW SHOULD CONTACT THE TRANSFER AGENT WHO WILL
PROVIDE AN ALTERNATIVE FORM OF TRANSFER APPLICATION FREE OF CHARGE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
APPLICATION FOR TRANSFER OF SHARES OF COMMON STOCK
THE UNDERSIGNED ASSIGNEE HEREBY MAKES APPLICATION FOR THE TRANSFER TO
THE NAME OF THE UNDERSIGNED OF THE SHARES OF COMMON STOCK REPRESENTED BY THE
WITHIN CERTIFICATE ("THE SHARES") AND HEREBY CERTIFIES TO UNIVISION
COMMUNICATIONS INC. THAT:
(1) ASSIGNEE IS A UNITED STATES CITIZEN AND IS NEITHER CONTROLLED (DIRECTLY
OR INDIRECTLY) BY, NOR THE REPRESENTATIVE OF, AN ALIEN OR A FOREIGN
GOVERNMENT
(2) IF ASSIGNEE HOLDS THE SHARES AS THE NOMINEE OR, OR SUBJECT TO THE
DIRECTION OR CONTROL OF, ANY OTHER PERSON, SUCH PERSON IS A UNITED
STATES CITIZEN AND IS NEITHER CONTROLLED (DIRECTLY OR INDIRECTLY) BY,
NOR THE REPRESENTATIVE OF, AN ALIEN OR A FOREIGN GOVERNMENT
-------------------------- --------------------------------------------
DATE NAME OF ASSIGNEE (PLEASE PRINT)
--------------------------------------------
SIGNATURE
--------------------------------------------
TITLE (IF APPLICABLE)
<PAGE>
EXHIBIT 10.1
SCHEDULE OF DOCUMENTS OMITTED
PURSUANT TO ITEM 601, INSTRUCTION NO. 2
OF REGULATION S-K
The following documents are substantially identical in all material respects to
Exhibit 10.1 except as to the material details set forth below:
Indemnification Agreements by and between the Company and each of the following:
A.J. Perenchio
Ray Rodriguez
George W. Blank
Andrew W. Hobson
Robert V. Cahill
John G. Perenchio
Henry Baray
Lawrence W. Dam
Alejandro Rivera
Gustavo A. Cisneros
Emilio Romano
Harold E. Gaba - Agreement dated October 2, 1996
<PAGE>
UNIVISION COMMUNICATIONS INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made as of
September 26, 1996, by and between Univision Communications Inc., a Delaware
corporation (the "Company"), and the individual whose name appears below the
word "Indemnitee" on the signature page hereto (the "Indemnitee"), a director
and/or officer of the Company.
BACKGROUND
A. The Indemnitee has agreed to serve as a director and/or officer
of the Company and in such capacity has rendered and/or will render valuable
services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and Delaware statutory indemnification provisions to provide
its directors and officers with adequate protection against various legal risks
and potential liabilities to which directors and officers are subject due to
their position with the Company and has concluded that insurance and statutory
provisions may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and officers.
C. In order to induce and encourage highly experienced and capable
persons such as the Indemnitee to serve as a director and/or officer of the
Company, the Board of Directors has determined, after due consideration and
investigation of the terms and provisions of this Agreement and the various
other options available to the Company and the Indemnitee in lieu of this
Agreement, that this Agreement is not only reasonable and prudent but necessary
to promote and ensure the best interests of the Company and its stockholders.
1
<PAGE>
AGREEMENT
In consideration of the continued services of the Indemnitee and in
order to induce the Indemnitee to continue to serve as a director and/or
officer, the Company and the Indemnitee agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement:
(a) A "Change in Control" shall be deemed to have occurred if
(i) any "person" (as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the Company's
then outstanding voting securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of the two year period constitute the
Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board of Directors, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such a merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity)
2
<PAGE>
at least 80% of the total voting power represented by the voting securities
of the Company or the surviving entity outstanding immediately after the
merger or consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions)
of all or substantially all the Company's assets.
(b) The term "Expenses" includes, without limitation, attorneys'
fees, disbursements and retainers, accounting and witness fees, travel and
deposition costs, expenses of investigations, judicial or administrative
proceedings or appeals, amounts paid in settlement by or on behalf of
Indemnitee, and any expenses of establishing a right to indemnification,
pursuant to this Agreement. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
(c) A "Potential Change in Control" shall be deemed to have
occurred if (i) the Company enters into an agreement or arrangement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) any person (including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would constitute a Change in
Control; (iii) any person (other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company acting in such capacity
or a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company), who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power
of the Company's then outstanding voting securities increases his or her
beneficial ownership of the securities by 5% or more over the percentage so
owned by that person on the date this Agreement is executed; or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
3
<PAGE>
(d) The term "Proceeding" shall include any threatened, pending
or completed action, suit or proceeding, whether brought by or in the name of
the Company or otherwise and whether of a civil, criminal or administrative or
investigative nature, by reason of the fact that the Indemnitee is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, whether or not he or she is serving in such capacity at the time any
liability or Expense is incurred for which indemnification or reimbursement is
to be provided under this Agreement.
SECTION 2. INDEMNIFICATION
2.1 INDEMNIFICATION IN THIRD PARTY ACTIONS
The Company shall indemnify the Indemnitee if the Indemnitee is a
party to or is threatened to be made a party to, or is a witness or other
participant in, or is otherwise involved in any Proceeding (other than a
Proceeding by or in the name of the Corporation to procure a judgment in its
favor), by reason of the fact that the Indemnitee is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise against
all Expenses, judgments, fines, penalties and ERISA excise tax actually and
reasonably incurred by the Indemnitee in connection with the defense or
settlement of the Proceeding, to the fullest extent permitted by applicable law;
provided that any settlement be approved in writing by the Company.
2.2 INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY
The Company shall indemnify the Indemnitee if the Indemnitee is a
party to or is threatened to be made a party to, or is a witness or other
participant in, or is otherwise involved in any Proceeding by or in the name of
the Company to procure a judgment in its favor by reason of the fact that
Indemnitee was or is a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses
4
<PAGE>
actually and reasonably incurred by Indemnitee in connection with the defense
or settlement of the Proceeding, to the fullest extent permitted by
applicable law.
2.3 PARTIAL INDEMNIFICATION
If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of, but not the total
amount of, the Expenses, judgments, fines, penalties or ERISA excise taxes
actually and reasonably incurred by him or her in the investigation, defense,
appeal or settlement of any Proceeding, the Company shall nevertheless indemnify
the Indemnitee for the portion of the Expenses, judgments, fines, penalties or
ERISA excise taxes to which the Indemnitee is entitled.
2.4 INDEMNIFICATION HEREUNDER NOT EXCLUSIVE
The indemnification provided by this Agreement shall not be deemed
exclusive of any other rights to which the Indemnitee may be entitled under the
Articles of Incorporation, the Bylaws, any agreement, any vote of stockholders
or disinterested directors, applicable law, or otherwise, both as to action in
his or her official capacity and as to action in another capacity on behalf of
the Company while holding office.
2.5 INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY
Notwithstanding any other provisions of this Agreement, to the extent
that the Indemnitee has been successful in defense of any Proceeding or in
defense of any claim, issue or matter in the Proceeding, on the merits or
otherwise, including the dismissal of a Proceeding without prejudice, the
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith to the fullest extent permitted by applicable law.
5
<PAGE>
SECTION 3. PRESUMPTIONS
3.1 PRESUMPTION REGARDING STANDARD OF CONDUCT
The Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct as defined by applicable law for indemnification pursuant
to this Agreement, unless a determination that the Indemnitee has not met the
relevant standards is made by (i) the Board of Directors of the Company by a
majority vote of a quorum consisting of directors who were not parties to the
Proceedings, (ii) the stockholders of the Company by majority vote, or (iii) in
a written opinion by independent legal counsel, selection of whom has been
approved by the Indemnitee in writing.
3.2 DETERMINATION OF RIGHT TO INDEMNIFICATION
If a claim under this Agreement is not paid by the Company within 30
days of receipt of written notice, the right to indemnification as provided by
this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. The burden of proving by clear and convincing evidence that
indemnification or advances are not appropriate shall be on the Company.
Neither the failure of the directors nor stockholders of the Company or
independent legal counsel to have made a determination prior to the commencement
of the action that indemnification or advances are proper in the circumstances
because the Indemnitee has met the applicable standard of conduct, nor an actual
determination by the directors or stockholders of the Company nor independent
legal counsel that the Indemnitee has not met the applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.
(a) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his or her right to indemnification or advances in whole
or in part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of the Proceeding, unless a court of competent
jurisdiction determines that each
6
<PAGE>
of the material assertions made by the Indemnitee in the Proceeding was not
made in good faith or was frivolous.
SECTION 4. ADVANCES OF EXPENSES
The Expenses incurred by the Indemnitee in any Proceeding shall be
paid promptly by the Company in advance of the final disposition of the
Proceeding at the written request of the Indemnitee to the fullest extent
permitted by applicable law. Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall be determined ultimately that
Indemnitee is not entitled to be indemnified by the Company pursuant to this
Agreement. The advances to be made hereunder shall be paid by the Company to
Indemnitee within (30) days following delivery of the referenced written request
by Indemnitee to the Company.
SECTION 5. CHANGE IN CONTROL
The Company agrees that if there is a Change in Control or a Potential
Change in Control of the Company (other than a Change in Control or Potential
Change in Control which has been approved by a majority of the Company's Board
of Directors who were directors immediately prior to the Change in Control or
Potential Change in Control) then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense advances
under this Agreement or any other agreement, the Company's Articles of
Incorporation, or the Company's Bylaws in effect relating to claims for
indemnifiable events, the Company shall seek legal advice only from independent
counsel selected by Indemnitee, and reasonably satisfactory to the Company, and
who has not otherwise performed services for the Company or Indemnitee within
the last five years (other than in connection with such matters) ("Special
Independent Counsel"). The Special Independent Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent the Indemnitee would be permitted to be indemnified under
applicable law. The
7
<PAGE>
Company agrees to pay the reasonable fees of the Special Independent Counsel
referred to above and may fully indemnify the Special Independent Counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement.
SECTION 6. INDEMNIFICATION PROCEDURE
6.1 NOTICE
Promptly after receipt by the Indemnitee of notice of the commencement
of any Proceeding, the Indemnitee will, if a claim is to be made against the
Company under this Agreement, notify the Company of the commencement of the
Proceeding. The omission to notify the Company will not relieve it from any
liability which it may have to the Indemnitee otherwise than under this
Agreement.
6.2 COMPANY PARTICIPATION
With respect to any Proceeding for which indemnification is requested,
the Company will be entitled to participate in the Proceeding at its own expense
and, except as otherwise provided below, to the extent that it may wish, the
Company may assume the defense of the Proceeding, with counsel reasonably
satisfactory to the Indemnitee. After notice from the Company to the Indemnitee
of its election to assume the defense of a Proceeding, during the Company's good
faith active defense the Company will not be liable to the Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense of the Proceeding, other than
reasonable costs of investigation or as otherwise provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employ his or her counsel in any Proceeding
but the fees and expenses of the counsel incurred after notice from the Company
of its assumption of the defense of the Proceeding shall be at the expense of
the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the
8
<PAGE>
Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the
conduct of the defense of a Proceeding, or (iii) the Company shall not in
fact have employed counsel to assume the defense of a Proceeding, in each of
which cases the fees and expenses of the Indemnitee's counsel shall be at the
expense of the Company. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or as to
which the Indemnitee has made the conclusion that there may be a conflict of
interest between the Company and the Indemnitee.
6.3 SUBROGATION
In the event of payment of Expenses under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee vis a vis a third party, and Indemnitee shall do all
things that may be necessary to secure such rights, including the execution of
such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
SECTION 7. LIMITATIONS ON INDEMNIFICATION
No payments pursuant to this Agreement shall be made by the Company:
(a) to indemnify or advance Expenses to the Indemnitee with respect
to Proceedings initiated or brought voluntarily by the Indemnitee and not by way
of defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable law, but the indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;
(b) to indemnify the Indemnitee for any Expenses, judgments, fines,
penalties or ERISA excise taxes for which payment is actually made to the
Indemnitee
9
<PAGE>
under a valid and collectible insurance policy, except in respect of any
excess beyond the amount of payment under the insurance;
(c) to indemnify the Indemnitee for any Expenses, judgments, fines or
penalties sustained in any Proceeding for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, the rules
and regulations promulgated thereunder and amendments thereto or similar
provisions of any federal, state or local statutory law;
(d) to indemnify the Indemnitee for any Expenses, judgments, fines,
penalties or ERISA excise taxes resulting from Indemnitee's conduct which is
finally adjudged to have been willful misconduct, knowingly fraudulent or
deliberately dishonest; or
(e) if a court of competent jurisdiction shall finally determine that
any indemnification hereunder is unlawful.
SECTION 8. MAINTENANCE OF LIABILITY INSURANCE
8.1 AFFIRMATIVE COVENANT OF THE COMPANY
The Company covenants and agrees that, as long as the Indemnitee shall
continue to serve as a director of the Company and thereafter so long as the
Indemnitee shall be subject to any possible Proceeding, the Company, subject to
subsection 8.3 of this Agreement, shall promptly obtain and maintain in full
force and effect directors' and officers' liability insurance ("D&O Insurance")
in reasonable amounts from established and reputable insurers.
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8.2 INDEMNITEE NAMED AS INSURED
In all D&O Insurance policies, the Indemnitee shall be named as an
insured in a manner that provides the Indemnitee the same rights and benefits as
are accorded to the most favorably insured of the Company's directors.
8.3 EXEMPTION FROM MAINTENANCE OF INSURANCE
Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain D&O Insurance if the Company determines in good faith that
insurance is not reasonably available, the premium costs for insurance are
disproportionate to the amount of coverage provided, the coverage provided by
insurance is so limited by exclusions that it provides an insufficient benefit,
or the Indemnitee is covered by similar insurance maintained by a subsidiary of
the Company.
SECTION 9. MISCELLANEOUS
9.1 AGREEMENT TO SERVE
Indemnitee agrees to serve or continue to serve as a director and/or
officer of the Company for so long as he or she is duly elected or appointed or
until such time as he or she voluntarily resigns. Indemnitee agrees to tender
written notice to the Company at least thirty (30) days prior to voluntarily
resigning.
9.2 EFFECT OF THIS AGREEMENT ON EMPLOYMENT AGREEMENT
The terms of any existing employment agreement between the Indemnitee
and the Company shall continue in effect but shall be modified or supplemented
by the terms of this Agreement. Nothing contained in this Agreement is intended
to create in Indemnitee any right of continued employment.
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9.3 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon, and shall inure to the benefit
of the Indemnitee and his or her heirs, personal representatives and assigns,
and the Company and its successors and assigns.
9.4 SEPARABILITY
Each provision of this Agreement is a separate and distinct agreement
and independent of the others, so that if any provision of this Agreement shall
be held to be invalid or unenforceable for any reason, the invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions of this Agreement. To the extent required, any provision of this
Agreement may be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under applicable law.
9.5 SAVINGS CLAUSE
If this Agreement or any portion of it is invalidated on any ground by
any court of competent jurisdiction, then the Company shall nevertheless
indemnify Indemnitee as to Expenses, judgments, fines, penalties or ERISA excise
taxes with respect to any Proceeding to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated or by
any other applicable law.
9.6 INTERPRETATION; GOVERNING LAW
This Agreement shall be construed as a whole and in accordance with
its fair meaning. Headings are for convenience only and shall not be used in
construing meaning. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Delaware.
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9.7 AMENDMENTS
No amendment, waiver, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by the party against
whom enforcement is sought. The indemnification rights afforded to the
Indemnitee by this Agreement are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Company's Certificate of
Incorporation, Bylaws or agreements including D&O Insurance policies.
9.8 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each party and delivered to
the other.
9.9 NOTICES
Any notice to be given hereunder shall be directed as follows (or to
another address as either shall designate in writing):
IF TO UNIVISION COMMUNICATIONS INC.:
1999 Avenue of the Stars, Suite 3050
Los Angeles, CA 90067
Attention: Robert Cahill
WITH A COPY TO:
6701 Center Drive West, Suite 1600
Los Angeles, CA 90045
Attention: General Counsel
IF TO INDEMNITEE:
At the Indemnitee's most recent address on the books and records of the
Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INDEMNITEE
/S/ Alan Horn
-------------
Print Name: Alan Horn
UNIVISION COMMUNICATIONS INC.
By: /s/ A. Jerrold Perenchio
------------------------
Title: Chairman, President and CEO
S-1
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is entered
into as of October 2, 1996, by and among Univision Communications Inc., a
Delaware corporation (the "Company"), A. Jerrold Perenchio, Venevision
International, Limitied, a British Virgin Islands corporation, Grupo
Televisa, S.A., a Mexican coropration and the holders of Common Stock of the
Company named on the signature pages hereof (collectively, the "Holders", and
individually, a "Holder").
RECITALS
WHEREAS, the Holders own shares of the Company's Class P Common
Stock, Class T Common Stock, Class V Common Stock and Class A Common Stock of
the Company (the "Original Common Stock");
WHEREAS, the Original Common Stock was issued without registration
under the Securities Act, and therefore, the resale thereof by the Holders is
subject to restrictions under the Securities Act; and
WHEREAS, in connection with the Company's initial Offering of its
Class A Common Stock the Company has agreed to enter into this Agreement with
the Holders;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
AGREEMENT
Section 1 CERTAIN DEFINITIONS. As used in this Agreement, unless
the context otherwise requires:
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with another Person.
"Business Day" means any day on which commercial banks are not
authorized or required to close in Los Angeles, California.
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"Commission" means the Securities and Exchange Commission or any
other similar or successor agency of the United States government
administering the Securities Act.
"Common Stock" means the Class A Common Stock, the Class P Common
Stock, the Class T Common Stock and the Class V Common Stock of the Company,
par value $0.01 per share.
"Davila LLC" means The Davila Family LLC and its Permitted
Transferees.
"Exchange Act" means the Securities Exchange Act of 1934, and any
similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Initiating Holders" means those Holders who have given a Demand
Notice pursuant to Section 2.1.
"Offering" with respect to any of the Company's securities means
the registration of such securities, whether underwritten or not, for sale to
the public.
"Ordinary S-3 Registration Statement" means a Registration
Statement on Form S-3 that includes only those items and that information
that is required to be included in Parts I and II of such Form, and does not
include any additional or extraneous items or information (e.g., a
description of the Company or the Company's business).
"Perenchio" means A. Jerrold Perenchio and his Permitted
Transferees.
"Perenchio Initiating Holders" means Holders of Perenchio
Registerable Securities who, in the aggregate, own at least a majority of
Perenchio Registrable Securities then held by all Holders of Perenchio
Registrable Securities and who have given a Demand Notice pursuant to Section
2.1.
"Perenchio Registerable Securities" means Registerable Securities
held by Perenchio, Rader and Davila LLC; provided that in the case of Davila
LLC, Perenchio Registerable Securities shall be limited to 23,828,750 shares
of Class A Common Stock (adjusted for stock splits and stock dividends).
"Permitted Transferee" means
(i) any entity all of the equity (other than directors'
qualifying shares) of which is directly or indirectly owned by the
transferor and that is not an Affiliate of any other Person;
(ii) in the case of a transferor who is an individual, (a)
such transferor's spouse and lineal descendants, (b) such transferor's
successors, personal representatives and heirs, (c) any trustee of any
trust created primarily for the benefit
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of any, some or all of such spouse and lineal descendants (but which may
include beneficiaries which are charities) or of any revocable trust
created by such transferor, (d) following the death of such transferor,
all beneficiaries under either such trust, (e) the transferor, in the
case of a transfer from any Permitted Transferee back to its transferor
and (f) any entity all of the equity of which is directly or indirectly
owned by any of the foregoing which is not an Affiliate of any other
Person;
(iii) (a) in the case of the Class P Common Stock, A. Jerrold
Perenchio, (b) in the case of the Class T Common Stock, Grupo Televisa
S.A., and (c) in the case of Class V Common Stock, Gustavo A. Cisneros
and Ricardo J. Cisneros (the "Cisneros Brothers"). For the purposes of
this definition, if an entity is directly or indirectly owned by either
of the Cisneros Brothers, it shall be deemed owned by both of them; and
(iv) in the case of Davila LLC, (a) Jaime Davila, (b) Jaime
Davila's spouse, (c) Jaime Davila's lineal descendants, (d) the
successors, personal representatives and heirs of any of the individuals
referred to in subclauses (a) through (c) of this clause (iv), (e) any
trustee of any trust created solely for the benefit of any, some or all
of the Persons referred to in this clause (iv) and the collateral
relatives of such Persons (but which may include beneficiaries which are
charities) or any revocable trust created by any, some or all of the
Persons referred to in subclauses (a) through (c) of this clause (iv),
(f) following the death of any individual referred to in subclauses (a)
through (c) of this clause (iv), all beneficiaries under either such
trust, and (g) any entity all of the equity of which is directly or
indirectly owned by any of the foregoing which is not an Affiliate of
any other Person.
"Person" means a corporation, an association, a trust, a
partnership, a joint venture, an organization, a business, an individual, a
government or political subdivision thereof or a governmental body.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the Offering of any portion of the Registrable
Securities covered by the Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and
all material incorporated by reference in such Prospectus.
"Rader" means Stephen P. Rader and his Permitted Transferees.
"Registering Holders" means Holders who are participating in the
particular Registration Statement under Section 2 of this Agreement.
"Registrable Securities" means shares of the Class A Common Stock of
the Company held by the Holders or otherwise acquired by the Holders (including
by way of conversion of shares of the Class P Common Stock, the Class T Common
Stock and the
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Class V Common Stock of the Company (collectively, the "Shares") and any
securities issued or issuable with respect to the Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, reclassification or other
reorganization; PROVIDED, HOWEVER, that a security shall cease to be a
Registrable Security at such time as it (i) has been effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) is distributed to the public pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, (iii) has
otherwise been transferred and a new certificate or other evidence of
ownership for it not bearing a restrictive legend and not subject to any stop
transfer order lawfully has been delivered by or on behalf of the Company and
no other restriction on transfer exists, or (iv) has ceased to be outstanding.
"Registration Statement" shall mean a registration statement filed
by the Company with the Commission at the time such registration becomes
effective, as amended and supplemented by any post-effective amendment.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"Televisa" means Grupo Televisa, S.A. and its Permitted Transferees.
"Televisa Initiating Holders" means Holders of Televisa
Registerable Securities who, in the aggregate, own at least a majority of
Televisa Registrable Securities then held by all Holders of Televisa
Registrable Securities and who have given a Demand Notice pursuant to Section
2.1.
"Televisa Registerable Securities" means Registerable Securities
held by Televisa and Davila LLC; provided that in the case of Davila LLC,
Televisa Registerable Securities shall be limited to 11,914,375 shares of
Class A Common Stock (adjusted for stock splits and stock dividends).
"Venevision" means Venevison International Limited and its
Permitted Transferees.
"Venevision Initiating Holders" means Holders of Venevision
Registerable Securities who, in the aggregate, own at least a majority of
Venevision Registrable Securities then held by all Holders of Venevision
Registrable Securities and who have given a Demand Notice pursuant to Section
2.1.
"Venevision Registerable Securities" means Registerable Securities
held by Venevision and Davila LLC; provided that in the case of Davila LLC,
Venevision Registerable Securities shall be limited to 11,914,375 shares of
Class A Common Stock (adjusted for stock splits and stock dividends).
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OTHER DEFINITIONS. The following terms shall have the meanings
ascribed to them in the sections indicated below:
DEFINITION SECTION
---------- -------
"Company" Introduction
"Controlling Person" 6.1
"Demand Notice" 2.1
"Demand Registration Statement" 2.1
"Original Common Stock" Recitals
"Other Holders" 2.1
"Other Shares" 2.1.2
"Piggyback Notice" 2.2.1
"Piggyback Registration Statement" 2.2
"Registration Expenses" 5
"Shares" 1
Section 2 REGISTRATION RIGHTS.
2.1 DEMAND REGISTRATION. Commencing six months after the initial
Offering of the Class A Common Stock of the Company, the Perenchio Initiating
Holders, the Televisa Initiating Holders or the Venevision Initiating Holders
may, by written notice to the Company (the "Demand Notice"), demand that the
Company file, and the Company shall file, a Registration Statement as soon as
practicable but no later than 90 days following such demand, covering the
Registrable Securities specified in the Demand Notice by the Initiating
Holders on such form as shall be appropriate under the Securities Act (a
"Demand Registration Statement"). The Perenchio Holders shall be entitled to
demand that the Company file and cause to be declared effective such Demand
Registration Statements on four (4) separate occasions, the Televisa Holders
shall be entitled to demand that the Company file and cause to be declared
effective such Demand Registration Statements on two (2) separate occasions
and the Venevision Holders shall be entitled to demand that the Company file
and cause to be declared effective such Demand Registration Statements on two
(2) separate occasions. In addition, each Holder shall be entitled to demand
that the Company file and cause to be declared effective Ordinary S-3
Registration Statements as provided herein. The Company shall use its best
efforts to cause the Demand Registration Statement to be declared effective
on the date requested by the managing underwriter for the Offering (no
earlier than 60 days from the date of the Demand Notice), or, if such
Offering is not underwritten, as soon as practicable after the filing thereof
with the Commission, and shall keep such Demand Registration Statement
effective for so long as the Offering has not been completed (but in no event
longer than 180 days from the effective date of such Demand Registration
Statement).
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Upon receipt of a Demand Notice, the Company shall provide notice
thereof to the Holders other than the Initiating Holders (the "Other
Holders"). The Other Holders and the Company shall be permitted to register
equity securities of the Company in any Demand Registration Statement or to
participate in the Offering, but only as provided in this Section 2.1, by
requesting that any of their Registrable Securities be included in the Demand
Registration Statement for sale in the Offering on the following terms and
conditions:
2.1.1 Each such Other Holder and/or the Company must give
written notice of such election to the Initiating Holders within 15 days of
the date notice of the Demand Notice was given by the Company to the Holders,
such notice to specify the number of Shares proposed to be sold by each Other
Holder and/or the Company in the Offering (the "Other Shares");
2.1.2 As a condition to participation in a Demand
Registration Statement, each such Other Holder and/or the Company must agree
to sell such Other Shares on the same basis provided in the underwriting
arrangements approved by the Initiating Holders and the Company (including
the standard indemnification provisions contained therein) and to timely
complete and execute all questionnaires, powers of attorney, indemnities,
holdback agreements, underwriting agreements and other documents required
under the terms of such underwriting arrangements or by the Commission or by
any state securities regulatory body;
2.1.3 If the managing underwriter of the Offering determines
that marketing factors require a limitation of the number of shares to be
underwritten, the number of Shares that may be sold by the Other Holders
and/or the Company in the Offering shall be limited to such number of Shares
as the managing underwriter determines may be included therein. In such
event, the Company shall so advise the Other Holders, and the number of
Shares that may be sold in the Offering shall be allocated first, pro rata
among the Initiating Holders and Holders of the same category of Registerable
Securities as those held by the Initiating Holders, second, to the extent
available, to the Company and, third, pro-rata among the Other Holders not
included in the first category above and fourth, to any other party having
registration rights with respect to Shares based upon the respective number
of Shares sought to be included in such Offering; and
2.1.4 If any Other Holder and/or the Company desires to
withdraw its Other Shares from the Demand Registration Statement, it may do
so only during the time period and on the terms to be determined by the
Initiating Holders.
Notwithstanding the generality of the foregoing, the Holders shall
not be entitled to request the Company to file and cause to be effective a
Demand Registration Statement unless the proposed size of the offering of the
Class A Common Stock that relates to the Demand Notice is equal to or greater
than $20,000,000 (based upon the reported trading price of such stock at the
time of the Demand Notice).
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Notwithstanding anything contained in this Section 2.1 to the
contrary, the Company may delay the registration of the Registrable
Securities to which a Demand Notice relates if upon receipt of such Demand
Notice (i) the Company notifies the Holders in writing that it is
contemplating filing a registration statement within 120 days of such demand
(which shall not affect the Holders' other rights hereunder, including
without limitation the Holders' rights under Section 2.2 below), (ii) the
Company notifies the Holders that a material event has occurred or is likely
to occur that has not been publicly disclosed and if disclosed would have a
material adverse effect on the Company and its ability to consummate the
Offering under the Demand Registration Statement or (iii) the Company
determines that the registration and offering could interfere with any
financing, acquisition, disposition, corporate reorganization or other
material transaction involving the Company or its subsidiaries. In the case
of clause (i) of this paragraph, the Company shall use its best efforts, as
soon as practicable, upon the first to occur of the abandonment by the
Company of its contemplated registration statement or the expiration of the
120-day period above to register the Registrable Securities to which a Demand
Notice relates, unless such Demand Notice is withdrawn by the Initiating
Holders. In the case of clause (ii) or clause (iii) of this paragraph, the
Company may not delay the filing of the Demand Registration Statement for
more than 120 days from the date of the Demand Notice unless such Demand
Notice is withdrawn by the Initiating Holders. The Company cannot exercise
the rights of postponement set forth above more than once in any 12-month
period. If there is a postponement under either clause (i), (ii) or (iii)
above, the Demand Notice may be withdrawn by the Initiating Holders by notice
to the Company. In such case, no demand shall have been made for the
purposes of Section 2.1.
2.2 "PIGGYBACK" REGISTRATION. If at any time, or from time to
time, the Company shall determine to file a Registration Statement covering
any shares of its Common Stock (other than a registration statement on Form
S-4 or S-8, or any form substituted therefor) for its own account or for the
account of any stockholder or a Registration Statement filed upon a demand
pursuant to Section 2.1 hereof (a "Piggyback Registration Statement"), the
Holders shall be entitled to include their Registrable Securities in such
registration and related underwritten Offering, if any, on the following
terms and conditions:
2.2.1 The Company shall promptly give written notice of such
determination to the Holders (a "Piggyback Notice") and the Holders shall
have the right to request, by written notice given to the Company within ten
(10) Business Days of the date the Piggyback Notice was given by the Company
to the Holders, that a specific number of Registrable Securities held by the
Holders be included in the Piggyback Registration Statement and related
underwritten Offering, if any;
2.2.2 If the Piggyback Registration Statement relates to an
underwritten Offering, the Piggyback Notice shall specify the name of the
managing underwriter for such Offering. The Piggyback Notice shall also
specify the number of securities to be registered for the account of the
Company and for the account of any stockholder, and the intended method of
disposition of such securities;
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2.2.3 If the Piggyback Registration Statement relates to an
underwritten Offering, as a condition to participation in such Piggyback
Registration Statement, the Holders must agree to sell their Registrable
Securities on the same basis provided in the underwriting arrangements
approved by the Company (including the standard indemnification provisions
contained therein) and to timely complete and execute all questionnaires,
powers of attorney, indemnities, holdback agreements, underwriting agreements
and other documents required under the terms of such underwriting
arrangements or by the Commission or by any state securities regulatory body;
2.2.4 The Company shall use its best efforts to include the
Registrable Securities requested to be registered in the Piggyback
Registration Statement. However, if the managing underwriter for any
underwritten Offering under the Piggyback Registration Statement reasonably
determines that inclusion of all or any portion of the Registrable Securities
in such Offering would materially adversely affect the ability of the
underwriter for such Offering to sell all of the securities requested to be
included for sale in such Offering, and delivers to the Holders its written
opinion to such effect, the number of shares that may be sold in such
Offering shall be allocated, first, to the Company (or, if the Offering is
being made principally for the account of another Person, to such Person),
second to the Holders pro rata among the Holders based upon the respective
number of shares sought by each to be included in the Offering and, third, to
any other third party having registration rights with respect to Shares;
2.2.5 The Holders shall have the right to withdraw their
Registrable Securities from the Piggyback Registration Statement, but if the
same relates to an underwritten Offering, they may only do so during the time
period and on terms agreed upon by the Holders and the underwriters for such
underwritten Offering.
Notwithstanding the foregoing, the Company shall, on five (5)
Business Days notice to the Holders, have the right to withdraw any Piggyback
Registration Statement filed pursuant to this Section 2.2 at any time prior
to the effective date thereof.
2.3 SELECTION OF UNDERWRITERS. If the Registrable Securities
covered by a Demand Registration Statement are to be sold in an underwritten
Offering, the managing underwriter of such Offering may be designated by the
Initiating Holder which underwriter shall be reasonably acceptable to the
Company. Alternatively, if the Registrable Securities included in a Piggyback
Registration Statement are to be sold in an underwritten Offering, the
managing underwriter of such Offering shall be designated by the Company.
Section 3 HOLDBACK AGREEMENTS.
3.1 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company
agrees not to effect any public or private sale or distribution of securities
of the same class as the Registrable Securities, or securities convertible
into or exchangeable or exercisable for securities of the same class as the
Registrable Securities, including a sale pursuant to
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Regulation D under the Securities Act, during the 10-day period prior to, and
during the 90-day period beginning on the closing date of, an Offering made
pursuant to Section 2.1 herein.
3.2 RESTRICTIONS ON PUBLIC SALE BY THE HOLDERS. The Holders
agree, if requested by the managing underwriter of an underwritten Offering
(including, but not limited to, the Company's initial Offering), not to
effect any public sale or distribution of securities of the same class (or
securities exchangeable or exercisable for or convertible into securities of
the same class) as the securities included in the Offering, including, but
not limited to, a sale pursuant to Rule 144 of the Securities Act (except as
part of such underwritten Offering), during the 10-day period prior to, and
during the 180-day period (in the case of the Company's initial Offering) and
90-day period (in the case of subsequent Offerings) (or shorter period
requested by the underwriter) beginning on the effective date of, such
Offering.
Section 4 REGISTRATION PROCEDURES. In connection with the
Company's registration obligations pursuant to Section 2 hereof, the Company
will use its best efforts to effect such registration to permit the sale of
the Registrable Securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company
will as promptly as practicable:
4.1 At least five (5) Business Days before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, furnish to
the Holders who are participating in such Registration Statement (the
"Registering Holders") and the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review
of the Registering Holders and such underwriters (and their respective
counsel), and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto to which the
Registering Holders or the underwriters, if any, shall reasonably object;
except that if the Registration Statement is a Piggyback Registration
Statement relating to an underwritten Offering and the underwriters do not
agree with such objection by the Registering Holders and the Registering
Holders are permitted to withdraw any Registrable Securities from such
Offering, the Company can file the Piggyback Registration Statement
notwithstanding such objection by the Registering Holders;
4.1.1 Prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
time period required herein; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Registering Holders set forth in
such Registration Statement or Prospectus supplement;
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4.1.2 Promptly notify the Registering Holders and the
managing underwriters, and (if requested by any such Person) confirm such
advice in writing, (a) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same has
become effective; (b) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information; (c) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose; (d) if at any time the representations
and warranties of the Company contemplated by Section 8 below cease to be
true and correct; (e) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and (f) of the happening of any event which
makes any material statement made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement, the
Prospectus or any document incorporated therein by reference in order to make
the statements therein not misleading in any material respect;
4.1.3 Make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statement at
the earliest possible moment;
4.1.4 If requested by the managing underwriters or the
Registering Holders, immediately incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and
the Registering Holders agree should be included therein relating to the sale
of the Registrable Securities, including, without limitation, information
with respect to the number of Registrable Securities being sold to such
underwriters or other Persons, the purchase price being paid therefor by such
underwriters or other Persons and any other terms of the distribution of the
Registrable Securities to be sold in such Offering including, if applicable,
any required disclosure of arrangements with underwriters; and make all
required filings of such Prospectus supplement or post-effective amendment as
promptly as practicable after being notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
4.1.5 Promptly furnish to the Registering Holders and each
managing underwriter without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
4.1.6 Promptly deliver to the Registering Holders and the
underwriters without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Registering Holders
and the underwriters in connection with the Offering and
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<PAGE>
sale of the Registrable Securities covered by the Prospectus or any amendment
or supplement thereto;
4.1.7 Prior to any Offering of Registrable Securities covered
by a Registration Statement under Section 2, register or qualify or cooperate
with the Registering Holders, the underwriters and their respective counsel
in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as the Registering Holders or underwriter reasonably requests
in writing and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statement, except that the Company shall not be
required to take any actions under this paragraph 4.1.7 if such actions would
require it to submit to the general taxation of such jurisdiction or to file
therein any general consent to service of process, unless this limitation
means that the Registrable Securities would not be qualified for offer and
sale in at least 20 states;
4.1.8 Use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such governmental agencies or authorities other than the
Commission and state securities regulatory bodies as may be necessary to
enable the Registering Holders or the underwriters to consummate the
disposition of such Registrable Securities;
4.1.9 Cooperate with the Registering Holders and the managing
underwriter to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold which do not bear any
restrictive legends; and cause such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter may
request at least two business days prior to any sale of Registrable
Securities to the underwriters;
4.1.10 Upon the occurrence of any event contemplated by
paragraph 4.1.2(f) above, promptly prepare a supplement or post-effective
amendment to the Registration Statement or the Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading;
4.1.11 (a) In addition to the representations and warranties
contained herein, make such representations and warranties to the Registering
Holders and the underwriters as are customarily made by issuers to underwriters
in primary underwritten offerings (or as may be reasonably requested by the
underwriters); (b) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions shall be reasonably satisfactory to the Registering
Holders); (c) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the
underwriters, such letters to be in customary form and covering matters of the
type customarily requested in "cold comfort" letters by underwriters in
connection with primary underwritten offerings
11
<PAGE>
(or as may be reasonably requested by the underwriters) and to use its best
efforts to obtain such a letter for the Registering Holders or to obtain a
letter from such accountants authorizing the Registering Holders to rely on
such "cold comfort" letter; (d) if an underwriting agreement is entered into,
ensure that the same shall set forth in full the indemnification provisions
and procedures of Section 6 hereof with respect to the Company and the
Registering Holders; and (e) deliver such documents and certificates as may
be requested by the Registering Holders and the managing underwriter to
evidence compliance with clause (a) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company with the Registering Holders. The above shall be done in
connection with each closing under such underwriting or similar agreement or
as and to the extent required thereunder;
4.1.12 Make available for inspection by the Registering
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by the
Registering Holders or managing underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to be available to discuss and to
supply all information reasonably requested by any such representative,
underwriter, attorney or accountant (or their respective representatives) in
connection with the Registration Statement; PROVIDED, that all such records,
information or documents shall be subject to standard confidentiality
arrangements;
4.1.13 Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and state securities
regulatory bodies; and
4.1.14 Make generally available to its stockholders earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
no later than 30 days after the end of any 12-month period (or 60 days, if
such period is a fiscal year) (a) commencing at the end of any fiscal quarter
in which Registrable Securities are sold to underwriters in a firm or best
efforts underwritten Offering, or, if not sold to underwriters in such an
Offering, (b) beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement,
which statements shall cover such 12-month period.
The Registering Holders agree that, upon receipt of any notice from
the Company of the happening of any event of the kind described in paragraph
4.1.2(f) hereof, the Registering Holders will forthwith discontinue
disposition of Registrable Securities under the Prospectus related to the
applicable Registration Statement until the Registering Holders' receipt of
the copies of the supplemented or amended Prospectus contemplated by
paragraph 4.1.10 hereof, or until it is advised in writing by the Company
that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus. The period during which distribution of the Shares is suspended
pursuant to this paragraph shall not be counted toward completion of the
required period of effectiveness for any registration statement.
12
<PAGE>
Section 5 REGISTRATION EXPENSES. Except as provided in the next
to last sentence of this Section 5, all expenses incident to the Company's
performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger expenses,
telephone and delivery expenses, and fees and disbursements of Company
counsel and of independent certified public accountants of the Company
(including the expenses of any special audit required by or incident to such
performance), shall be borne by the Company. The Company will also pay its
internal expenses, the expense of any annual audit and the fees and expenses
of any Person retained by the Company. In addition, the Company agrees to
pay all reasonable fees and disbursements of one counsel (designated by the
Initiating Holders, and if there is no Initiating Holder, by a majority of
the Holders participating in an Offering) to the Holders. All such expenses
are referred to herein as "Registration Expenses." Notwithstanding the
foregoing, if a Holder demands that the Company file and cause to be declared
effective an Ordinary S-3 Registration Statement pursuant to Section 2.1,
such Holder shall bear all Registration Expenses related thereto (other than
the registration fees relating to the Shares to be registered by any Other
Holders, which shall be borne by such Other Holders). All underwriting fees
and commissions with respect to an underwritten Offering, and transfer taxes,
if any, shall be borne by the Company and each Holder in proportion to the
number of Registrable Securities sold by the Company and such Holder.
Section 6 INDEMNIFICATION.
6.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Holders, their officers, directors, agents
(including counsel) and employees and each Person who controls the Holders
(within the meaning of Section 15 of the Securities Act) (each, a
"Controlling Person") from and against any and all losses, claims, damages
and liabilities (including any investigation, legal or other expenses
("Losses") reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted) to which
the Holders may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or
otherwise, insofar as such Losses arise out of or are based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or preliminary prospectus or any
amendment or supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (b) any violation by the Company of
the Securities Act or the Exchange Act, or other federal or state law
applicable to the Company and relating to any action or inaction required of
the Company in connection with such registration, and shall reimburse the
Holders or such officer, director, agent (including counsel), employee or
Controlling Person for any legal or other expenses incurred by such Person in
connection with investigating or defending any such Loss; PROVIDED, HOWEVER,
that the Company shall not be liable to the Holders in any such case only to
the extent that any such Loss arises out of or is based upon any alleged
untrue statement or alleged omission made in such Registration Statement,
preliminary Prospectus, Prospectus, or amendment or
13
<PAGE>
supplement in reliance upon and in conformity with written information
furnished to the Company by the Holders specifically for use therein. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holders or such officer, director,
agent (including counsel), employee or Controlling Person, and shall survive
the transfer of such securities by the Holders. The Company will also
indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act) to the same extent customarily
requested by such Persons in similar circumstances.
6.2 INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. If
the Holders sell Registrable Securities under a Prospectus which is part of a
Registration Statement, then the Holders, by exercising their registration
rights hereunder, agree to indemnify and hold harmless the Company, its
directors and each officer who signed such Registration Statement and each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act) under the same circumstances as the foregoing indemnity from
the Company to the Holders to the extent, but only to the extent, that such
Losses arise out of or are based upon any untrue statement of a material fact
or omission of a material fact that was made in the Prospectus, the
Registration Statement, or any amendment or supplement thereto, in reliance
upon and in conformity with written information relating to the Holders
furnished to the Company by the Holders expressly for use therein. In no
event shall the aggregate liability of the Holders exceed the amount of the
net proceeds received by the Holders upon the sale of the Registrable
Securities giving rise to such indemnification obligation. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of the Company or such officer, director, employee or
Controlling Person, and shall survive the transfer of such securities by the
Holders. The Company and the Holders shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the
same extent as customarily furnished by such Persons in similar circumstances.
6.3 CONTRIBUTION. If the indemnification provided for in
Sections 6.1 or 6.2 is unavailable to an indemnified party or is insufficient
to hold such indemnified party harmless for any Losses in respect of which
Section 6.1 or 6.2 would otherwise apply by its terms (other than by reason
of exceptions provided in Section 6.1 or 6.2), then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
have a joint and several obligation to contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the actions, statements or omissions that resulted
in such Losses as well as any other relevant equitable considerations. The
relative fault of such indemnifying party, on the one hand, and indemnified
party, on the other hand, shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to state
a material fact, has been taken or made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information
14
<PAGE>
and opportunity to correct or prevent any such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be
deemed to include any legal or other fees or expenses incurred by such party
in connection with any investigation or proceeding, to the extent such party
would have been indemnified for such expenses if the indemnification provided
for in Section 6.1 or 6.2 was available to such party.
6.4 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder will (a) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (b) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party;
PROVIDED, HOWEVER, that any Person entitled to indemnification hereunder
shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such Person and not of the indemnifying party unless (i) the
indemnifying party has agreed to pay such fees or expenses, (ii) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person, or (iii) in the
opinion of counsel of the Person to be indemnified, a conflict of interest
may exist between such Person and the indemnifying party with respect to such
claims (in which case, if the Person notifies the indemnifying party in
writing that such Person elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such claim on behalf of such Person). If such defense
is not assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). No indemnified party will
be required to consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by all
claimants or plaintiffs to such indemnified party of a release from all
liability in respect to such claim or litigation. Any indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim.
As used in this Section 6, the terms "indemnifying party," "indemnified
party" and other terms of similar import are intended to include only the
Company (and its officers, directors, employees and each Control Person of
the Company as set forth above) on the one hand, and the Holders (and their
officers, directors, agents (including counsel) employees and each Control
Person of each Holder as set forth above) on the other hand, as applicable.
Section 7 RULE 144. The Company covenants that it will file, on a
timely basis, all reports required to be filed by it under the Securities Act
and the Exchange Act, and it will take such further action and provide such
documents as any holder of Registrable Securities may request, all to the
extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the
limitation of the conditions provided by (a) Rule 144 under the Securities
Act, as such rules may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission. Upon the request of the
Holders, the Company will deliver to the Holders a written statement
verifying that it has complied with such information and requirements.
15
<PAGE>
Section 8 REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company
represents and warrants to and agrees with the Holders that this Agreement
has been duly and validly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms (except in each such case as enforceability may be
limited to bankruptcy, insolvency, reorganization and other similar laws now
or hereafter in effect relating to or affecting creditors' rights generally
and except that the remedy of specific performance and injunctive and other
forms of equitable relief are subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws).
Section 9 MISCELLANEOUS.
9.1 SPECIFIC PERFORMANCE. The Holders, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, will be entitled to specific performance of their rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reasons of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
9.2 NO INCONSISTENT AGREEMENTS. The Company has not previously
entered into, and will not on or after the date of this Agreement enter into,
any agreement with respect to its securities which is inconsistent with the
terms of this Agreement, including any agreement which impairs or limits the
registration rights granted to the Holders or which otherwise conflicts with
the provisions hereof or would preclude the Company from discharging its
obligations hereunder.
9.3 FURNISH INFORMATION. The Company agrees that it shall
promptly deliver to the Holders copies of all financial statements, reports
and proxy statements which the Company is required to send to its
stockholders generally.
9.4 AMENDMENTS. The terms of this Agreement may be amended, and
the observance of any term therein may be waived, but only with the written
consent of Holders of a majority of the then outstanding Perenchio
Registrable Securities, Holders of a majority of the then outstanding
Televisa Registrable Securities, Holders of a majority of the then
outstanding Venevision Registrable Securities and the Company.
9.5 NOTICES. Any notice, demand or delivery pursuant to the
provisions hereof shall be sufficiently delivered or made if and when delivered
in person or by recognized overnight courier, addressed to each the Holders at
its last known address appearing on the books of the Company, or, except as
herein otherwise expressly provided, to the Company at its principal executive
office, 1999 Avenue of the Stars, Suite 3050, Los
16
<PAGE>
Angeles, California, 90067, or such other address as shall have been
furnished to the party giving or making such notice, demand or delivery.
9.6 ASSIGNMENT. This Agreement is assignable by the parties
hereto to (i) their respective Permitted Transferees, and upon assignment
such Permitted Transferees shall become Holders under this Agreement, so long
as such Permitted Transferees agree in writing to be bound by the terms
hereof and (ii) to any lender in connection with a loan to a Holder that is
secured by Registerable Securities, so long as such lender agrees in writing
to be bound by the terms hereof. Other than as set forth above, this
Agreement shall not be assignable.
9.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
9.8 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9.9 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of California.
9.10 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any
such provision in every other and of the remaining provisions contained
herein shall not be affected or impaired thereby.
9.11 JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United
States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties consents to
the service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding by delivering of a copy
of the such process to such party at its address specified in or pursuant to
Section 10.3. Each of the parties agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
9.12 ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
17
<PAGE>
forth or referred to herein with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
9.13 ATTORNEY'S FEES. In the event of any action, controversy,
claim, counter claim, appeal, arbitration, mediation or dispute between the
parties hereto arising out of or relating to this Agreement or any of the
documents provided for herein, or the breach thereof, the prevailing party
shall be entitled to recover from the other party reasonable attorneys' fees,
expenses and costs incurred in bringing and prosecuting such action and/or
enforcing any judgment, order, ruling or award.
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]
18
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first above written.
UNIVISION COMMUNICATIONS INC.
/s/ Gabe R. Cahill
------------------------
By:
Its:
"HOLDERS"
/s/ A. Jerrold Perenchio
------------------------
A. JERROLD PERENCHIO
/s/ A. Jerrold Perenchio
------------------------
A. JERROLD PERENCHIO, Trustee of the
Jerry Perrenchio Living Trust dated
April 16, 1987
UNIVISION SPECIAL PARTNERSHIP I, L.P.
By: The Davila Family L.L.C.
Its: Managing General Partner
By: /s/ Joseph Stern
-------------------------
Joseph Stern
Title: Trustee of the Jaime
Davila 1995 Generation -
Skipping Trust, Member
<PAGE>
GRUPO TELEVISA S.A.
By: /s/ Guillermo Canedo White
---------------------------
Guillermo Canedo White
Title: Exec. Vice President &
Chief Financial Officer
------------------------
UNIVISA, INC.
By: /s/ Lawrence Dam
--------------------------
Lawrence Dam
Title: President & Chief Operating Officer
-------------------------------------
GRUPO TELESISTEMA S.A. DE C.V.
By:/s/ Guillermo Canedo White
--------------------------
Guillermo Canedo White
Its: Exec. Vice Presient &
Chief Financial Officer
-----------------------
UNIVISA BROADCASTING L.P.
By: Univisa Broadcasting Corp.,
Its: General Partner
By: /s/Lawrence Dam
------------------------
Vice President
Secretary
Its: Lawrence Dam
-----------------------
By: /s/Lawrence Dam
---------------------------
Title:
------------------------
20
<PAGE>
UNIVISION SPECIAL PARTNERSHIP II,
L.P.
By: The Davila Family L.L.C.
Its: Managing General Partner
By: /s/ Joseph Stern
--------------------------
Joseph Stern
Title: Trustee of the Jaime Davila
1995 Generation - Skipping Trust
VENEVISION INTERNATIONAL LTD.
By: /s/ Edwardo L. Illegible
-------------------------------
Title: Attorney-in-fact
----------------------------
21
<PAGE>
DENNEVAR B.V.
By: illegible
----------------------------
Title: Attorney-in-fact
-------------------------
BRAVO ENTERPRISES, INC.
By: illegible
----------------------------
Title: Attorney-in-fact
--------------------------
UNIVISION SPECIAL PARTNERSHIP III,
L.P.
By: The Davila Family L.L.C.
Its: Managing General Partner
By: /s/ Joseph Stern
----------------------
Joseph Stern
Title: Trustee of the Jaime Davila
1995 Generation - Skipping
Trust, Member
22
<PAGE>
RADER FAMILY PARTNERSHIP, L.P.
By: /s/ Stephen Rader
-----------------------------
Stephen Rader
Its: General Partner
By: /s/ Anne Rader
-----------------------------
Anne Rader
Its: General Partner
RADER LIVING TRUST dated
September 9, 1994
By: /s/ Stephen Rader
----------------------------
Stephen Rader
Its: Trustee
<PAGE>
AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT
This AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT is
entered into as of October 1, 1996 by and between DENNEVAR B.V., a
Netherlands corporation, (hereinafter "Licensor") and THE UNIVISION NETWORK
LIMITED PARTNERSHIP, a Delaware limited partnership ("Licensee"), and amends
and restates that certain PROGRAM LICENSE AGREEMENT made as of the 17th day
of December, 1992 by and between Licensor and Licensee.
WHEREAS, Licensor has or will have rights in the United
States of America, including all territories and possessions thereof other
than Puerto Rico (the "Territory"), to license certain television programs in
the Spanish language or with Spanish subtitles produced by and to be produced
by CORPORACION VENEZOLANA DE TELEVISION, C.A. (VENEVISION) ("CVT") and other
entities controlled by CVT (CVT and all of the companies it controls, and
Licensor being hereinafter referred to collectively as "Venevision").
WHEREAS, Licensee operates the Univision Spanish language
television network and the Galavision Spanish language television network of
affiliated television broadcast stations and cable television systems (such
networks being hereinafter referred to as the "Networks" and those television
broadcast stations affiliated with such Networks that are now or hereafter
directly or indirectly majority owned and operated by Univision
Communications Inc. ("UCI") or a direct or indirect subsidiary of UCI or with
respect to which UCI or a direct or indirect subsidiary of UCI has the right
to designate a majority of the board or similar governing body, and in each
case, which broadcast in the Spanish language format being hereinafter
referred to as the "Stations") and desires to acquire the right to broadcast
certain of the programs produced, to be produced or otherwise marketed by
Licensor over the Networks in the Territory and Licensor is willing to grant
such a license upon the terms, provisions and conditions herein set forth.
WHEREAS, Univisa, Inc. ("Univisa") is simultaneously herewith
entering into an Amended and Restated Program License Agreement, dated as of
the date hereof (the "Univisa Agreement"), with the Licensee to license
certain television programming for broadcast over the Networks.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto agree as follows:
1. RIGHT OF FIRST OFFER OF PROGRAMMING.
1.1 Pursuant to the terms and conditions hereof,
Licensor hereby grants Licensee the option to obtain an exclusive license for
the broadcast over the Networks in the Territory of all Programs (as
hereinafter defined). The option may be exercised as follows:
<PAGE>
(a) First, Licensee will have a first option to
accept for exclusive license in the Territory, subject to all the other terms
and conditions of this Agreement: (i) Programs in an amount that, when
aggregated with Programs accepted pursuant to Section 1.1(a) of the Univisa
Agreement, will be sufficient to fill 18 hours of programming per day in
aggregate for the two Networks combined, and (ii) any news Programs.
(b) Second, Licensee will have a first option,
subject to all the other terms and conditions of this Agreement, to accept
for exclusive license in the Territory, any Programs in an amount which, when
aggregated with the amount of Programs accepted pursuant to paragraph (a)
above, will be sufficient to satisfy the representation and warranty included
in Section 7.3 hereof.
1.2 For purposes of this Agreement only:
(a) "Programs" means (i) programs initially
produced in the Spanish language or programs with Spanish subtitles produced
by third parties or co-produced by Venevision with third parties to which
Venevision owns sole television broadcast rights in the Territory (and which
is not a Co-Produced Program (as defined below)); (ii) all television
programs in the Spanish language or programs with Spanish subtitles,
previously produced directly or indirectly by or for Venevision and to be
produced directly or indirectly by or for Venevision for broadcast at any
time to which Venevision or Licensor owns television broadcast rights in the
Territory and which are available for broadcast including, without
limitation, in the following categories: novelas, musicals, variety shows,
situation comedies, game shows, talk shows, children's shows, news shows,
cultural and educational programs, and sports programs; and (iii) movies
produced by Venevision and for which Venevision or Licensor owns the
television broadcast rights in the Territory, from and after the time that
such movies become available for free television broadcast in the Territory.
Each Program shall be available for license to Licensee in the Territory
pursuant to the terms of this Agreement upon the first to occur of (i) the
date when such Program is initially broadcast by Venevision or (ii) the date
when such Program is first made available for broadcast by any third party.
Except as provided in the following paragraph, if Licensor or Venevision
shall produce directly or indirectly any Spanish Language or Spanish
subtitled programming for broadcast in the Territory it shall be deemed a
Program subject to the terms and conditions of this Agreement.
The term "Programs" does not include Special Programs (other
than Venevision Produced U.S. Special Programs, as defined below),
Co-Produced Programs or Default Programs (each as defined below) or local
news or public affairs programs (it being understood that all such local
programs will be produced or acquired by Licensee or its affiliated
stations). "Co-Produced Programs" means programs originally produced for
broadcast in the Spanish language or with Spanish subtitles, previously
produced, or to be produced, by Venevision for broadcast pursuant to
co-production agreements with unaffiliated third parties or produced by
unaffiliated third parties (in each case, other than
2
<PAGE>
any broadcaster in and to the Territory) (i) under which Venevision does not
own the right to permit the broadcast of such program in the Territory and/or
(ii) under which Venevision is required to share with such third parties the
revenue derived from the broadcast of such program in the Territory. No
program that would otherwise be a Program under Section 1.2(a)(ii) shall
become a Co-Produced Program solely because Venevision or Licensor licenses
or sells distribution rights in the Territory prior to or during production
of such program and neither Venevision nor Licensor shall enter into any
agreement to the contrary. In order for a program to be a Co-Produced
Program, some material underlying property right of such program must be
provided by such unaffiliated third party and such unaffiliated third party
must participate in the development and production of the Program in exchange
for such third party's distribution rights in the Territory or participation
in distribution revenues from the Territory. Nothing contained in this
Agreement shall prevent Licensor or Venevision from licensing broadcast
rights (in exchange for cash or in-kind services or property other than
Programs) for territories other than the Territory to programs initially
produced in the Spanish language or programs with Spanish language subtitles
that are developed and produced in the Territory by unaffiliated third party
producers located in the Territory, including broadcasters, provided that
neither Licensor nor Venevision has participated in any way in the
development or production of any such program. Venevision agrees that it
will use its good faith efforts not to structure agreements with respect to
programs in a manner intended to cause such programs not to be considered
Programs hereunder.
(b) "broadcast" or "network broadcast" means all
electronic forms or other means now known or hereafter developed of
transmission and re-transmission, including but not limited to over-the-air
television, cable television, low power television, multi-point distribution
systems, wire, fiber optics, microwave, and satellite, except for purposes of
delivery of the Programs pursuant to Section 4.
(c) "Affiliate" of a person means any person
that directly or indirectly controls, is controlled by, or is under common
control with the person in question. For the purposes of this definition,
"control", when used with respect to any person, means the power to direct
the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
Affiliate shall not mean any television station that has entered into an
affiliation agreement with the Networks but is otherwise not an Affiliate of
UCI any Person that controls CVT or any person under common control with, but
not directly or indirectly controlled by, CVT.
1.3 Licensor and its Affiliates shall have the right
and ability to, and to permit others to: (i) transmit or re-transmit in any
electronic form or other means, from any television station in Venezuela, or
via satellite which receives its signal from any earth station or other
facility in Venezuela, any Programs which may also be covered by this
Agreement, notwithstanding the fact that such transmissions or
re-transmissions may be viewed in the Territory, provided that neither
Licensor nor its Affiliates consent to the re-transmission of such Programs
by any television station in the Territory or by any cable
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system in the Territory; and (ii) market and promote and otherwise generate
revenues (including, but not limited to the sale of advertising time)
attributable to the ability of viewers in the Territory to receive such
Programs.
2. NOTIFICATION, ACCEPTANCE AND LICENSING OF PROGRAMMING.
Not less than once in each calendar quarter during the term of this
Agreement, Licensor will deliver a written notice (an "Availability Notice")
to Licensee specifying all Programs which (a) have become available for
license by Licensee since the delivery of the preceding Availability Notice
or (b) may no longer be available to Licensee on an exclusive basis. Such
notice shall be accompanied, if practicable, by a video tape pilot or
representative episode of each of the new Programs (except for live
Programs). If Licensee desires to license any Programs, it must notify
Licensor of its acceptance in writing (an "Acceptance") within thirty days of
receipt of the Availability Notice. Such Acceptance shall specify the name
of the Accepted Program, the name of the Network on which it is to be
broadcast, the date and time period in which Licensee intends to commence the
broadcast of the Accepted Program (which date shall be not more than 180 days
from the date of Acceptance with respect to Programs other than novelas and
shall be not more than 270 days from the date of Acceptance with respect to
novelas), and such other information as may reasonably be requested by
Licensor. An Acceptance shall constitute the exercise by Licensee of its
option for the Program(s) accepted and upon receipt by Licensor of such
Acceptance, the Program(s) covered by each such Acceptance shall without
further action be automatically licensed to Licensee on the terms and
conditions of this Agreement. Subject to the terms and conditions set forth
herein, Licensee shall have exclusivity in the carriage of all accepted
Programs ("Accepted Programs") for broadcast in the Territory from the date
of acceptance to the conclusion of the applicable Broadcast Period. If no
such Acceptance is received with respect to any or all available Programs,
Licensor shall be free to license all such unaccepted Programs ("Unaccepted
Programs") to others in the Territory for not more than one run over a period
of one year (which license, in the case of novelas, may also provide for one
rerun), subject to Licensee's right of first refusal described in Section 3;
provided, however, that during the Broadcast Period of a Program licensed by
Licensee, Licensor shall not license any other person or entity to broadcast
in the Territory reruns of such Program or other Programs of the same series
as such Program.
In order to avoid the "warehousing" of Programs by the
Licensee, (A) Licensee shall not issue Acceptance Notices without specifying
the intended broadcast commencement date and time period; however, Licensee
shall have the right at any time for any bona fide reason, on not less than
10 days' written notice to Licensor at least 60 days prior to the intended
broadcast date, (i) to switch dates and times among previously Accepted
Programs or among previously Accepted Programs and programs acquired from
another source, provided that after giving effect to such switch all other
requirements with respect to broadcast and scheduling of Programs contained
in this Agreement continue to be satisfied and/or (ii) to rescind Acceptance
with respect to any Program, and to issue an Acceptance Notice with respect
to a substitute Program, provided that (x) the substitute
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Program shall be broadcast in the time slot originally reserved for the
rescinded Program and (y) the rescinded Program shall thereafter constitute a
Default Program, (B) Licensee shall not issue Acceptance Notices with respect
to more Programs than it is capable of airing over the Networks; and (C)
Licensee shall not broadcast any First-Run Program (other than news) on
either of the Networks (X) between the hours of 1:00 a.m. and 9:00 a.m.
unless Licensee can demonstrate that it is commercially reasonable to
broadcast such program during such period or (Y) during any other time period
during which Licensee cannot reasonably expect the 70% broadcast coverage
requirement described in the following paragraph to be satisfied.
Subject to the preceding paragraph, with respect to any
Accepted Program, Licensee must commence the broadcast of the Program on one
of the Networks over at least 70% of such Network's coverage (as determined
by the number of Hispanic television households potentially reached by the
applicable Network) within 180 days following notice of its Acceptance
(except for novelas where the time for commencement may be extended for an
additional 90 days because of scheduling problems) and shall continue to
broadcast the Program without substantial interruption over such minimum of
70% Network coverage until the conclusion of the Broadcast Period (as defined
below). Should Licensee fail to comply with the broadcast commencement, 70%
coverage and continuous broadcast provisions of this paragraph, Licensee's
license with respect to the Program (a "Default Program") shall be terminated
10 days following written notice of non-compliance unless Licensee
demonstrates compliance or excusable non-compliance with such provisions. In
the event of termination, the Default Program shall be subject to re-license
by Licensor to others at any time or from time to time (without any right of
first refusal or other right applicable to Licensee, whether pursuant to
Section 3 or otherwise). The parties acknowledge that this provision is
designed to avoid "warehousing" of product by Licensee and that in the event
Licensee breaches the provisions of this paragraph, Licensor's damages are
incapable of calculation and the remedies set forth herein are appropriate
under the circumstances.
For purposes of this Agreement only:
(a) "Broadcast Period" means (i) for novelas
or other Programs with a plot line continuing through more than one episode,
the time necessary to broadcast all episodes on a continuing basis without
substantial interruption and (ii) for all other programs (excluding
one-program shows), (x) for weekly programs, the time period necessary to
broadcast 26 episodes of the Program without substantial interruption, which
under normal circumstances is expected to be 26 continuous weeks and (y) for
daily programs (Monday through Friday), 26 weeks.
(b) "without substantial interruption" means that
the Programs will be scheduled and run on a continuing periodic basis except
for occasional network preemption to accommodate one-time specials or
programs which, because of their nature or timeliness or because of FCC
Rules, must in Licensee's reasonable judgment be broadcast in lieu of the
regularly scheduled Program.
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3. RIGHT OF FIRST REFUSAL. If any other person or entity
wishes to accept for broadcast in the Territory any Unaccepted Programs which
Licensor has offered to it pursuant to Section 2, Licensor shall send a
written notice (a "Second Chance Notice") to Licensee specifying the name of
any such Programs and the license terms offered by such person or entity that
wishes to accept such Unaccepted Programs. Licensee shall have a right of
first refusal, good for three business days from receipt of the Second Chance
Notice to acquire such Unaccepted Program, subject to the same conditions
offered by such other person or entity, for the Program Royalty (as defined
in Section 5) plus the amount, if any, by which the license fee offered by
such other person or entity exceeds the Program Royalty attributable to
combined net time sales for the time slot in which such Program is broadcast.
Any such Unaccepted Programs which are not accepted in writing by Licensee
within three business days of receiving a Second Chance Notice may be
licensed to such other person or entity. Rights to exploit Unaccepted
Programs will be granted to other persons or entities for not more than one
run over a period of one year (provided that, in the case of novelas, such
rights may include the right to one rerun), and if the same Program is
offered thereafter in the Territory, it will once again be offered to
Licensee pursuant to Section 1 hereof. All episodes of a novela which are to
be shown within one year from the showing of the first episode shall be
deemed to be the same Program for the purposes of the requirement to offer
all programming first to Licensee.
4. DELIVERY, EXPENSES AND USE OF PROGRAMS.
4.1 Following Licensee's acceptance of Programs
pursuant to Sections 2 or 3 of this Agreement, Licensor shall deliver to
Licensee, at Licensee's expense, and in accordance with Licensee's reasonable
and customary instructions, a visual and aural reproduction of each such
Program or Program episode via satellite or video tape suitable for broadcast
and formatted for U.S. broadcast in accordance with past practices, at least
ten days prior to Licensee's scheduled broadcast, except for live broadcasts
or as otherwise agreed by the parties. Programs will be deemed delivered by
Licensor when transmitted to the satellite when actually received if shipped
by freight, or when made available through permission to re-transmit the
signal of an affiliate of Licensee.
4.2 Licensee agrees that as soon as practicable
following receipt of each satellite transmission or video tape delivery, it
will examine it to determine whether it is physically suitable for
broadcasting and notify Licensor immediately upon detecting any defect
rendering such copy unsuitable for telecast. In such cases, Licensor shall
promptly deliver at its own expense either a physically suitable tape or
(except in the case of novelas) a tape of another Program in the same series,
subject to verification of the defect.
4.3 Licensee agrees to return each video tape
delivered by Licensor to Licensor on the reels and in the containers in which
it was shipped, in the same condition as received, reasonable wear and tear
through proper use excepted, as soon as practicable after telecast. Licensee
shall pay all costs of returning the tapes to
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Licensor. Should Licensor request that the video tape be sent to a location
other than Licensor's warehouse, Licensor will bear responsibility for
shipping costs above those which would have been applicable for shipping the
video tape to Licensor's warehouse.
4.4 The video tapes shall at all times remain
the property of Licensor subject to Licensee's rights as herein provided.
The risk of loss, damage, destruction or disappearance of any tape shall be
borne by Licensee from the time of delivery to Licensee until the return
thereof to Licensor or Licensor's designee and as to any tape or part thereof
lost, stolen, destroyed or damaged after delivery to Licensee and before the
return thereof, Licensee shall pay Licensor the cost of replacement thereof,
which payment shall be limited to the cost of replacing the raw video tape.
4.5 Licensee will not, and will not authorize
others to copy, duplicate or re-license any Program unless necessary for
Licensee's own network broadcast. Any duplicate or copy of any part of the
Program (including trailers) made by Licensee for its own purposes will be
erased following the broadcast of the Program. Upon receipt of written
request from Licensor, an officer of Licensee shall certify in writing the
destruction of all such copies.
4.6 Licensor will furnish to Licensee glossy
prints of still photos, synopses, casts and all other promotional material
for the promotion and exploitation of the Programs, if available. Licensor
grants to Licensee the right to use and license others to use Licensor's name
and, unless Licensee is advised by Licensor that the rights of Licensor are
limited (in which case, to the extent not limited), to use and license others
to use the name and likeness of, and biographical material concerning, each
star, featured performer, writer, director and producer in the Programs and
the titles of each program and fictitious persons and locales therein, for
advertising and publicity, of the Programs, and any broadcaster or sponsor
thereof, but not for direct endorsement of any product or service, provided
that any such use will protect the copyrights of Licensor. To the extent
available to Licensor after reasonable efforts, Licensor will furnish
Licensee with music cue sheets for the Programs and the information necessary
for administration of rights payments and compliance with Section 507 of the
Federal Communications Act of 1934, as amended concerning broadcast matter
and disclosures required thereunder, insofar as that Section applies to
persons furnishing program material for television broadcasting ("Section
507"). Subject to the foregoing and subject to Licensor's reasonable prior
approval, Licensee shall have the right to produce its own promotional
material for or from the Programs.
4.7 Licensee agrees to include in its broadcast
of Accepted Programs all copyright notices and all credits made part of each
Accepted Program including but not limited to stars, directors, producers and
writers. Licensee shall exhibit the Accepted Program as delivered in the
Spanish language or with Spanish subtitles and no change, alteration or
addition may be made to any Program without Licensor's consent except as may
be necessary for the insertion of commercials during natural breaks in the
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Program, or except as may be necessary to comply with Licensee's broadcast
standards and practices and applicable government rules and regulations.
4.8 Subject to Section 7.1 and 7.3 and
Licensee's remedies for a breach thereof, Licensor may, at its sole and
absolute discretion, withdraw any Program and terminate any license with
respect to such Program if Licensor reasonably determines that the broadcast
thereof is likely to: (i) infringe the rights of third parties, (ii) violate
any law, court order, governmental regulation or ruling of any governmental
agency, (iii) otherwise subject the Licensor to any material liability. In
addition, Licensor reserves the right to withdraw any Program prior to the
conclusion of the applicable Broadcast Period if, for any reason, the program
is no longer being produced by or available to Venevision or Licensor. In
the event of any such withdrawal or termination, Licensor shall give Licensee
as much notice as possible, and the parties shall have no obligations to each
other with regard to Programs not produced, subject to Section 7.1 and 7.3
and Licensee's remedies for a breach thereof. No Program that is withdrawn
pursuant to this Section 4.8 shall be relicensed to a third party in the
Territory without being first offered to Licensee pursuant to Section 1.
4.9 The license granted to Licensee with respect
to each Accepted Program (other than novelas) shall be for one Network
broadcast of each Program or Program episode, subject only to FCC rules and
regulations and to tape delay in certain of Licensee's affiliated outlets to
accommodate time zone differences. In addition, within 24 hours of the
original broadcast, Licensee may broadcast a repeat of any Program, free of
the restrictions contained herein regarding Network coverage. Except as
herein provided, without the express permission of Licensor, not to be
unreasonably withheld, no Program or Program episode may be rerun during any
Broadcast Period.
Notwithstanding the prohibition on reruns during a Broadcast
Period, Licensee will have the option at the end of any Broadcast Period to
license one (1) rerun of each novela (herein "Protected Rerun"). Such option
must be exercised in writing not later than thirty (30) days before the end
of the Broadcast Period for each such novela. The terms of such Protected
Rerun license shall be the same as for the original license, except that the
time during which the broadcast must commence will be one (1) year instead of
one hundred and eighty (180) days.
5. ROYALTIES.
5.1 Except as set forth in Section 5.2 below,
Licensee shall pay Licensor a royalty (the "Program Royalty") in cash for the
Programs offered to it in an aggrgate amount equal to 5.5% of combined net
time sales (as defined below) for the period commencing on the date hereof
and ending on December 31, 1996, 6.75% of combined net time sales for the
period commencing on January 1, 1997 and ending on December 31, 1997, and
7.5% of combined net time sales for all periods commencing on or after
January 1, 1998 until the termination of this Agreement. For purposes of
this Agreement, "combined net time sales" shall mean all time sales of the
Stations and the
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Networks, including barter and trade and television subscription revenue
(including, without limitation, satellite subscription revenue), less
advertising commissions, Special Event Revenue (as defined below), music
license fees, outside affiliate compensation, and taxes (other than
withholding taxes) paid by Licensee pursuant to Section 5.5 hereof and
similar taxes paid by the Stations calculated in accordance with U.S.
generally accepted accounting principles ("GAAP"). Notwithstanding the
foregoing, no revenues of the Galavision Network received prior to the
closing of the acquisition of the assets of the Galavision Network by
Licensee pursuant to the Galavision Network Option Agreement between Univisa
and Licensee entered into as of December 17, 1992 shall be included in
combined net times sales for purposes of computing the Program Royalty.
Unless otherwise agreed in writing between the parties, barter and trade
sales shall be valued at the fair market value of the goods or services
received by the Licensee or the Stations.
5.2 Notwithstanding Section 5.1 above, to the
extent from time to time specified in a writing signed by both Licensor and
Univisa and delivered to Licensee, the amounts of the Program Royalties
payable in accordance with Sections 5.1 of this Agreement and the Univisa
Agreement may be changed by Licensor and Televisa, so long as the aggregate
of the amounts of such Program Royalties under this Agreement and the Univisa
Agreement does not exceed for any period twice the applicable amount computed
in accordance with Section 5.1 of this Agreement. Licensor and Univisa shall
not deliver such a writing more than twice a year.
5.3 Program Royalties shall be paid currently on
a monthly basis on the twelfth business day after the end of each month in a
single payment to Licensor based upon the parties' good faith best estimate
at such time of the amounts accrued. Appropriate adjustment (the
"Adjustment") will be made to Program Royalties on a quarterly basis within
45 days after the end of each quarter, and the full amount thereof shall be
paid or credited, as the case may be, with the next monthly payment of
Program Royalties for any difference between the amounts so paid and those
finally determined to have accrued. In all cases, the calculation of the
Adjustment will be made as promptly as practicable by Licensee, and in the
event of any disputes the determination shall be made by a nationally
recognized independent certified public accounting firm mutually selected by
Licensor and Licensee (or, if they fail to designate such a firm within 10
days after written notice of a dispute, by such firm designated by the
President of the American Arbitration Association (or his designee)), whose
determination will be final and binding upon the parties. The fees and
expenses of such firm shall be paid one-half by Licensor and one-half by
Licensee, unless such firm determines it would be more equitable to otherwise
allocate such fees and expenses.
5.4 All payments made pursuant to this section
shall be in cash in U.S. currency with accompanying back-up information in
reasonable detail of combined net time sales for the applicable period. Such
payments shall be calculated as provided above regardless of the amount of
Programs licensed hereunder or whether any such Programs are broadcast. In
order to assure compliance with the terms of this Agreement, Licensor shall
have the right to receive once each year a certificate from Licensee's
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independent certified public accounting firm, which certificate shall attest
to the combined net time sales for the year. Licensee shall pay for the
preparation of such certificate and its delivery to Licensor. Licensor may
request additional certificates and services either from Licensee's
accounting firm or from a firm of certified public accountants chosen by
Licensor. The fees and expenses of the certified public accountants
providing such additional certificates and performing such additional
services pursuant to this Section 5.4 shall be paid by Licensor, unless such
verification results in an adjustment in Licensor's favor equal or greater
than 5% of the amount originally computed by Licensee, in which case such fee
will be paid by Licensee. Licensee agrees to provide any certified public
accountants designated by Licensor with access to all business records of
Licensor related to the computation of combined net time sales. Licensor
agrees to maintain the confidentiality of all information learned from
Licensee in connection with the performance of this Agreement, other than
information (i) which becomes public (unless it becomes public because of a
breach of this covenant by Licensor), (ii) which otherwise becomes known to
Licensor (unless Licensor knows that the information has been disclosed in
violation of a confidentiality agreement with Licensee), or (iii) which
Licensor is required by law, order or administrative law request or by stock
exchange rule or regulation to divulge.
5.5 Any and all sums payable on account of
sales, use or other similar taxes arising out of or relating to the licensing
or exhibition by Licensee of the Programs, in addition to any personal
property or other tax assessed or levied by any governmental unit arising out
of or relating to the storage or possession of the Programs thereof by
Licensee shall be paid by Licensee.
5.6 Licensee may deduct and withhold from any
payment to or for the account of Licensor with respect to the Program
Royalties such amounts as it in good faith determines it is required to
withhold with respect to such payment under applicable United States and
state tax withholding laws, and shall promptly remit such amounts to the
appropriate taxing authority. Within 30 days of any such remittance Licensee
shall furnish to Licensor the original or certified copy of a receipt
evidencing payment, or other evidence of payment reasonably satisfactory to
Licensor. If Licensor has timely filed with Licensee a duly completed Form
4224, 1001, W-8 or W-9, of the Internal Revenue Service (or successor form
thereto) or has complied with applicable procedures under state law,
entitling it to exemption from, or a reduced rate of, withholding under the
applicable law or regulations, the amount withheld shall be accordingly
limited. Licensee shall cooperate in any reasonable manner requested by
Licensor to minimize Licensor's withholding tax liability.
5.7 If Licensee is more than 30 days late in
paying any amount due to Licensor under this Section 5, such late amounts
shall thereafter bear interest at a rate equal to LIBOR plus 5%, plus any
applicable withholding.
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6. SPECIAL PROGRAMS AND CO-PRODUCED PROGRAMS.
6.1 For purposes of this Agreement:
(a) "Special Programs" means special
programs such as the World Cup, other sporting events, political conventions,
election coverage, parades, pageants, special variety shows and other
non-episodic and non-continuing shows.
(b) "Non-Venevision-Produced Special
Programs" means Special Programs not produced directly or indirectly by or
for Venevision.
(c) "Venevision-Produced U.S. Special
Programs" means Venevision-Produced Special Programs for which Licensor has
adequate rights to license such Special Programs to Licensee under the terms
of this Agreement.
(d) "Venevision-Produced Non-U.S.
Special Programs" means Venevision-Produced Special Programs for which
Licensor does not have adequate rights to license such Special Programs to
Licensee under the terms of this Agreement.
(e) "Venevision-Produced Special
Programs" means Special Programs directly or indirectly produced by or for
Venevision.
(f) "Special Event Revenue" means net
time sales for Non-Venevision-Produced Special Programs and
Non-Televisa-Produced Special Programs as defined in the Univisa Agreement
broadcast by Licensee on either Network.
6.2 Licensor shall use its best efforts, and
shall cause its Affiliates to use their best efforts, to coordinate its
Non-Venevision-Produced Special Program acquisitions with those of Licensee,
so as to permit Licensee to participate therein and to acquire rights in the
Territory to such programs on an advantageous basis and on terms satisfactory
to Licensee; PROVIDED, HOWEVER, that the obligation to use "best efforts"
shall not be interpreted to include any obligation of Licensor or its
Affiliates to expend additional money to permit Licensee's participation or
to acquire rights on an advantageous basis.
6.3 Venevision-Produced U.S. Special Programs
shall be "Programs" for all purposes of this Agreement.
6.4 At the request of Licensee, Licensor shall
use its best efforts, and shall cause its Affiliates to use their best
efforts, to acquire broadcast rights in the Territory on terms satisfactory
to Licensee for Venevision-Produced Non-U.S. Special Programs and any
Co-Produced Program that falls within clause (i) (but not clause (ii)) of the
definition of "Co-Produced Program" in Section 1.2 (a); provided, however,
that the obligation to use its "best efforts" shall not be interpreted to
include any obligation of Licensor to expend additional money, except to the
extent reimbursed by the "Special
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Event Fee" (as defined below). Such programs accepted by Licensee shall be
licensed hereunder to Licensee for the Program Royalty plus a fee (the
"Special Event Fee") in the amount of the cost to Licensor of the acquisition
of broadcast rights in the Territory to such program, such costs to be
determined by the parties in good faith based on the portion of the total
amount paid by Licensor for broadcast rights that is reasonably allocated to
the acquisition of broadcast rights in the Territory.
6.5 Licensor shall offer Licensee in accordance
with all applicable provisions of this Agreement all Co-Produced Programs
that fall within clause (ii) of the definition of "Co-Produced Program" in
Section 1.2(a) for which program Licensor has or can obtain adequate rights
and licensing authority to offer such programs to Licensee in compliance with
the terms and conditions of this Agreement, except that the Program Royalty
specified in Section 5 hereof shall not include the license fee for
Co-Produced Programs. Compensation to Licensor for all Co-Produced Programs
accepted by Licensee shall be computed and paid in accordance with such terms
as the parties may mutually agree in writing. If the parties are unable to
agree on the royalty for any Co-Produced Program within 10 days after such
program is offered by Licensor, such program may be sold to others in the
Territory, so long as Licensor in good faith determines that the terms and
conditions applicable to such sale are more favorable to the Licensor than
those offered by the Licensee in writing within such 10-day period.
7. REPRESENTATIONS AND WARRANTIES OF LICENSOR.
7.1 Licensor hereby agrees, warrants and represents
as follows:
(a) Subject to Section 1.4 hereof
Licensor is free to enter into and fully perform this Agreement;
(b) Licensor has or will have the right
to grant to Licensee the broadcast rights to the Accepted Programs in the
Territory set forth in this Agreement, including but not limited to the
necessary literary, artistic, technological and intellectual property rights
and has secured or will secure all necessary written consents, permissions
and approvals for incorporation into such Programs of the names, trademarks,
likenesses and/or biographies of all persons, firms, products, companies and
organizations depicted or displayed in such Programs, and any preexisting
film or video footage produced by third parties;
(c) There are no and will not be any
pending claims, liens, charges, restrictions or encumbrances on the Accepted
Programs that conflict with the broadcast rights granted hereunder to such
Programs in the Territory;
(d) Licensor has paid or will pay all
compensation, residuals, reuse fees, synchronization royalties, and other
payments which must be made in connection with the Accepted Programs and in
connection with exploitation of the rights herein granted to Licensee to any
third parties including, but not limited to, musicians,
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directors, writers, producers, announcers, publishers, composers, on-camera
and off-camera performers and other persons who participated in production of
such Programs, and to any applicable unions, guilds or other labor
organizations; PROVIDED, HOWEVER, that Licensor has not acquired performing
rights for performance in the Territory of the music contained in such
Programs, which rights shall be obtained by Licensee; PROVIDED, FURTHER,
however, that Licensor warrants and represents that all music is available
for licensing through ASCAP, BMI or SESAC (or any successor or similar entity
in the United States) or is in the public domain or is owned or controlled by
Licensor to the extent necessary to permit broadcasts hereunder in the
Territory and no additional clearance or payment is required for such
broadcast;
(e) The main and end titles of the
Accepted Programs and all publicity, promotion, advertising and packaging
information and materials supplied by Licensor will contain all necessary and
proper credits for the actors, directors, writers and all other persons
appearing in or connected with the production of such Programs who are
entitled to receive credit and comply with all applicable contractual, guild,
union and statutory requirements and agreements;
(f) Exercise of the broadcast rights to
the Accepted Programs in the Territory will not infringe on any rights of any
third party, including but not limited to copyright, patent, trademark,
unfair competition, contract, property, defamation, privacy, publicity or
"moral rights" (to the extent such moral rights are recognized by U.S. law);
(g) Except to the extent expressly
permitted by this Agreement, Licensor has not and will not grant or license
to others, and will not itself exercise, any rights to broadcast the Accepted
Programs in or to the Territory;
(h) Each and every one of the
representations and warranties made by Licensor herein shall survive the
Broadcast Period for each Accepted Program;
(i) To the extent Section 507 (as
defined in Section 4.6 above) is applicable, no Accepted Program includes or
will include any matter for which any money, service or other valuable
consideration is directly or indirectly paid or promised to Licensor by a
third party, or accepted from or charged to a third party by Licensor, unless
such is disclosed in accordance with Section 507. Licensor shall exercise
reasonable diligence to inform its employees, and other persons with whom it
deals directly in connection with such programs, of the requirements of
Section 507; provided, however, that no act of any such employee or of any
independent contractor connected with any of the programs, in contravention
of the provisions of Section 507, shall constitute a breach of the provisions
of this paragraph unless Licensor has actual notice thereof and fails
promptly to disclose such act to Licensee. As used in this paragraph, the
term "service or other valuable consideration" shall not include any service
or property furnished without charge or at a nominal charge for use in, or in
connection with, any of
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the programs "unless it is so furnished in consideration for an
identification in a broadcast of any person, product, service, trademark or
brand name beyond an identification which is reasonably related to the use of
such service or property on the broadcast," as such terms are used in Section
507. No inadvertent failure by Licensor to comply with this paragraph shall
be deemed a breach of this Agreement; and
(j) For purposes of this Section 7.1
only, "Accepted Programs" shall be deemed to include Venevision Produced U.S.
Special Programs to the extent broadcast by Licensee.
7.2 Licensor further agrees that, while it has
no obligation to do so, if it secures a producer's (Errors and Omissions)
liability policy covering the Programs, or any part thereof, it will cause
Licensee to be named as an additional insured on such policy and will cause a
certificate of insurance to be promptly furnished to Licensee, provided,
however, that the inclusion of Licensee as an additional insured does not
result in any additional cost or expense to Licensor. Licensor will notify
Licensee when such insurance is obtained and, after obtained if canceled.
Any such insurance as to which Licensee is an additional insured shall be
primary as to Licensee and not in excess of or contributory to any other
insurance provided for the benefit of or by Licensee.
7.3 Licensor warrants that the amount of
Programs made available throughout the term hereunder for license hereunder,
when aggregated with (i) the amount of Programs (as defined in the Univisa
Agreement) made available for license by Univisa pursuant to the Univisa
Agreement, (ii) any local-produced programming by the Stations to the extent
such locally produced programming is used on either of the Networks, (iii)
any programs produced by Licensee, and (iv) any programs purchased by
Licensee other than from Licensor, will be sufficient (when including an
estimated six hours of repeat broadcasting) to fill a twenty-four hour a day,
seven day a week time schedule for each of the Univision Network and the
Galavision Network (as currently operated), which such time schedules as
between the two networks shall be separate and non-duplicative.
8. INDEMNIFICATION.
8.1 Licensor agrees to hold Licensee, its
partners, the partners of any partnership that is a partner of Licensee,
officers, employees, and agents and the shareholders, officers, directors,
employees and agents of the partners or any corporation or partnership that
is a partner of Licensee (collectively the "Licensee Indemnitees"), harmless,
from any claims, deficiencies, assessments, liabilities, losses, damages,
expenses (including, without limitation, reasonable fees and expenses of
counsel) (collectively "Losses") which any Licensee Indemnitee may suffer by
reason of Licensor's breach of, or non-compliance with, any covenant or
provision herein contained or the inaccuracy of any warranty or
representation made in this Agreement and any such damages shall be reduced
by: (i) the amount of any net tax benefit ultimately accruing to Licensee on
account of Licensee's payment of such claim; (ii) insurance proceeds which
Licensee has
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or will receive in connection with such claim, and (iii) any recovery from
third parties in connection with such claim; PROVIDED, HOWEVER, that Licensor
shall not delay payment of its indemnification obligations hereunder pending
resolution of any tax benefit or insurance or third party claim if Licensee
provides Licensor with an undertaking to reimburse Licensor for the amount of
any such claim ultimately received; and PROVIDED, FURTHER, that Licensee
shall have no obligation to obtain any such insurance proceeds or recovery
from third parties if and to the extent Licensor is subrogated (in form and
substance satisfactory to Licensor) to Licensee claims in respect of such
insurance or third parties.
8.2 Licensee agrees to indemnify Licensor, its
direct and indirect shareholders and all officers, directors, employees and
agents of any of the foregoing (the "Licensor Indemnitees") against and hold
the Licensor Indemnitees harmless from any and all Losses incurred or
suffered by any Licensor Indemnitee arising out of a breach by Licensee of
the representations, warranties, covenants or agreements made or to be
performed by it pursuant hereto, or arising out of any program or commercial
material (apart from the Programs) furnished by Licensee and any such damages
shall be reduced by: (i) the amount of any net tax benefit ultimately
accruing to Licensor on account of Licensor's payment of such claim; (ii)
insurance proceeds which Licensor has or will receive in connection with such
claim, and (iii) any recovery from third parties in connection with such
claim; PROVIDED, HOWEVER, that Licensee shall not delay payment of its
indemnification obligations hereunder pending resolution of any tax benefit
or insurance or third party claim if Licensor provides Licensee with an
undertaking to reimburse Licensee for the amount of any such claim ultimately
received; and PROVIDED, FURTHER, that Licensor shall have no obligation to
obtain any such insurance proceeds or recovery from third parties if and to
the extent Licensee is subrogated (in form and substance satisfactory to
Licensee) to Licensor claims in respect of such insurance or third parties.
8.3 The following procedures shall govern all
claims for indemnification made under any provision of this Agreement. A
written notice (an "Indemnification Notice") with respect to any claim for
indemnification shall be given by the party seeking indemnification (the
"Indemnitee") to the party from which indemnification is sought (the
"Indemnitor") within thirty (30) days of the discovery by the Indemnitee of
such claim which Indemnification Notice shall set forth the facts relating to
such claim then known to the Indemnitee (provided that failure to give such
Indemnification Notice as aforesaid shall not release the Indemnitor from its
indemnification obligations hereunder unless and to the extent the Indemnitor
has been prejudiced thereby). The party receiving an Indemnification Notice
shall send a written response to the party seeking indemnification stating
whether it agrees with or rejects such claim in whole or in part. Failure to
give such response within ninety (90) days after receipt of the
Indemnification Notice shall be conclusively deemed to constitute
acknowledgment of the validity of such claim. If any such claim shall arise
by reason of any claim made by third parties, the Indemnitor shall have the
right, upon written notice to Indemnitee within 30 days after receipt of the
Indemnification Notice, to assume the
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defense of the matter giving rise to the claim for indemnification through
counsel of its selection reasonably acceptable to Indemnitee, at Indemnitor's
expense, and the Indemnitee shall have the right, at its own expense, to
employ counsel to represent it; PROVIDED, HOWEVER, that if any action shall
include both the Indemnitor and the Indemnitee and there is a conflict of
interest because of the availability of different or additional defenses to
the Indemnitee, the Indemnitee shall have the right to select separate
counsel to participate in the defense of such action on its behalf, at the
Indemnitor's expense. The Indemnitee shall cooperate fully to make available
to the Indemnitor all pertinent information under the Indemnitee's control as
to the claim and shall make appropriate personnel available for any
discovery, trial or appeal. If the Indemnitor does not elect to undertake
the defense as set forth above, the Indemnitee shall have the right to assume
the defense of such matter on behalf of and for the account of the
Indemnitor; PROVIDED, HOWEVER, the Indemnitee shall not settle or compromise
any claim without the consent of the Indemnitor, which consent shall not be
unreasonably withheld. The Indemnitor may settle any claim at any time at
its expense, so long as such settlement includes as an unconditional term
thereof the giving by the claimant of a release of the Indemnitee from all
liability with respect to such claim.
9. TERM. The term of this Agreement shall be until December 17,
2017. Any license in effect for any Program at the date of termination of
this Agreement shall continue through the Broadcast Period for such Program,
with no right of re-license or extension at the end thereof, and all of the
rights and obligations of the parties under this Agreement with respect to
such license will continue through the Broadcast Period for such Program, it
being agreed that the parties shall enter into mutually satisfactory royalty
arrangements with respect to the Broadcast Period following the termination
of this Agreement in order to compensate Licensor for the use of Programs
during such period and, if the parties are unable to agree upon such royalty
arrangements, the amount thereof shall be determined based on prevailing
market conditions.
In addition this Agreement may be terminated by either party in the
event that the other party (i) materially breaches its obligations hereunder
and fails to cure such breach within 180 days of notice thereof (90 days for
failure to pay the Program Royalty when due) by the party seeking termination
(which notice shall describe the breach in reasonable detail); PROVIDED,
HOWEVER, that the inaccuracy of any of Licensor's representations and
warranties contained in Section 7 hereof shall not be deemed to be a breach
of its obligations for purposes of this Section 9 to the extent that Licensor
satisfies its indemnification obligations with respect to such inaccuracy, or
(ii) asserts Force Majeure under Section 10 as a relief from substantially
all of its obligations hereunder for a period in excess of one year. Any
notice of material breach referred to in (i) above shall concurrently be sent
to the Managing Agents for any lenders providing financing to the Stations
and the Networks, and the Managing Agents on behalf of such lenders shall
have the right to cure such alleged material breach within such 90-day or
180-day cure period. Any notice of termination for Force Majeure pursuant to
(ii) above shall concurrently be sent to such Managing Agents.
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10. FORCE MAJEURE. Neither party hereto shall be liable for or
suffer any penalty or termination of rights hereunder by reason of any
failure or delay in performing any of its obligations hereunder if such
failure or delay is occasioned by compliance with governmental regulation or
order, or by circumstances beyond the reasonable control of the party (except
in the case of Section 7.3 a Force Majeure Event affecting Univisa shall be
deemed to be a Force Majeure Event beyond the reasonable control of Licensor)
so failing or delaying, including but not limited to acts of God, war,
insurrection, fire, flood, accident, strike or other labor disturbance,
interruption of or delay in transportation (a "Force Majeure Event"). Each
party shall promptly notify the other in writing of any such event of force
majeure, the expected duration thereof, and its anticipated effect on the
party affected and make reasonable efforts to remedy any such event, except
that neither party shall be under any obligation to settle a labor dispute.
If Licensor is prevented by a Force Majeure Event from delivering any
Accepted Program to Licensee, the running of the time period for purposes of
computing the applicable Broadcast Period for such Program shall be suspended
and, if such Force Majeure Event prevents Licensor from delivering any
substitute Programs to Licensee, then Licensee's obligations to pay the
Program Royalty under Section 5.1 hereof shall be reduced (but not below
zero) for the time period or periods so affected to the extent necessary to
compensate Licensee for the cost of obtaining substitute programming. Any
notice of Force Majeure sent pursuant to this Section 10 shall concurrently
be sent to the Managing Agents referred to in Section 9 above.
11. MODIFICATION. This Agreement shall not be modified or waived
in whole or in part except in writing signed by an officer of the party to be
bound by such modification or waiver.
12. WAIVER OF BREACH. A waiver by either party of any breach or
default by the other party shall not be construed as a waiver of any other
breach or default whether or not similar and whether or not occurring before
or after the subject breach.
13. JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United
States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties
irrevocably appoints CT Corporation System (the "Process Agent"), with an
office on the date hereof at 818 West 7th Street, Los Angeles, CA 90017 as
his or its agent to receive on behalf of him or it and his or its property
service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding. Such service may be made by
delivering a copy of such process to any of the parties in care of the
Process Agent at the Process Agent's above address, and each of the parties
irrevocably authorizes and directs the Process Agent to accept such service
on its behalf. As an alternate method of service,
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each of the parties consents to the service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding by the mailing or delivering of a copy of such process to such
party at its address specified in or pursuant to Section 14. Each of the
parties agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
14. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon
actual receipt, and shall be delivered (a) in person, (b) by registered or
certified mail (air mail if addressed to an address outside of the country in
which mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgment by
the addressee of receipt, or (d) by facsimile or other generally accepted
means of electronic transmission (provided that a copy of any notice
delivered pursuant to this clause (d) shall also be sent pursuant to clause
(b)), addressed as set forth in Schedule 1 or to such other addresses as may
be specified by like notice to the other parties.
15. ASSIGNMENTS. Either of the parties may assign its rights
hereunder and delegate its duties hereunder, in whole or in part, to an
Affiliate capable to perform the assignor's obligations hereunder, and either
of the parties may assign its rights hereunder and delegate its duties
hereunder to any person or entity to which all or substantially all of such
party's businesses and assets are pledged or transferred. No such assignment
or delegation shall relieve any party of its obligations hereunder. Any such
assignment or delegation authorized pursuant to this Section 15 shall be
pursuant to a written agreement in form and substance reasonably satisfactory
to the parties and to the Managing Agents referred to in Section 9 above.
Except as otherwise expressly provided herein, neither this Agreement nor any
rights, duties or obligations hereunder may be assigned or delegated by any
of the parties, in whole or in part, whether voluntarily, by operation of law
or otherwise; PROVIDED, HOWEVER, that Licensor may assign, grant a security
interest in or otherwise transfer its rights to payment hereunder in
connection with one or more financings. Any attempted assignment or
delegation in violation of this prohibition shall be null and void. Subject
to the foregoing, all of the terms and provisions hereof shall be binding
upon, and inure to the benefit of, the successors and assigns of the parties.
Nothing contained herein, express or implied, is intended to confer on any
person other than the parties or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
16. GOVERNING LAW. This Agreement and the legal relations among
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California parties
made and performed in that State, without regard to conflict of laws
principles.
17. FURTHER ASSURANCES. Each party hereto agrees to execute any
and all additional documents and do all things and perform all acts necessary
or proper to further
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effectuate on evidence this Agreement including any required filings with the
U.S. Copyright Office.
18. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original instrument and all of which, when taken
together, shall constitute one and the same agreement.
19. SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, then the remainder of this Agreement and application of such
provision to other persons or circumstances shall continue in full force and
effect and in no way be affected, impaired or invalidated; provided that the
aggregate of all such provisions found to be invalid or unenforceable does
not materially affect the benefits and obligations of the parties of the
Agreement taken as a whole.
20. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage may occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties may be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction pursuant to
Section 13, this being in addition to any other remedy to which they are
entitled at law or in equity.
21. ACKNOWLEDGEMENT OF SECURITY INTEREST. Pursuant to the
financing documents referred to in Section 9 above, the Administrative Agent
(for the benefit of the various lenders) has been granted a security interest
in and to all of Licensee's rights in this Agreement. The parties hereto
acknowledge and consent to the grant of such security interest.
22. PARTICIPATION AGREEMENT. All the terms and conditions of this
Agreement shall at all times be subject to the terms and conditions of the
Participation Agreement of even date herewith among Univision Television
Holdings, Inc., A. Jerrold Perenchio, Grupo Televisa, S.A., and Messrs.
Gustavo A. Cisneros and Ricardo J. Cisneros, and if there is any
inconsistency between any terms and conditions of this Agreement and the
terms and conditions of the Participation Agreement, the Participation
Agreement shall prevail.
23. VENEVISION ADVERTISING. Advertising time which is not sold to
advertisers or used by the Network or the Stations for their own purposes
will be made available without charge to Venevision and its Affiliates.
Other than as set forth in the following sentence, such time may be used for
promotion or direct sale (i.e., telemarketing) of products or services now or
hereafter owned or being provided by Venevision or its Affiliates (including,
without limitation, theatrical motion pictures produced or being distributed
by any of them). Such time, however, will not be available for any product
or service that is marketed primarily by telemarketing that was not owned or
being provided by Venevision or its Affiliates as of December 17, 1992, and
provided, further, that such time may be preempted by the Network or any
Station to the extent that
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such time is to be sold to a paying advertiser. Venevision and its
Affiliates will be permitted to purchase for such purposes advertising time
which cannot be preempted by the Network or the Stations for the lowest spot
rate then being offered for a non-preemptable spot in the program during
which such time is sold. Venevision may not, however, directly or indirectly
make such free or purchased time available to Persons other than its
Affiliates. All material provided for broadcast by Venevision or its
Affiliates shall comply with the quality standards for unaffiliated
advertisers established by the Network or the Stations from time to time.
The Board of Directors of Licensee, by a vote which includes, in addition to
any other required vote of directors, the affirmative vote of a majority of
the Class T Director(s) (so long as a Class T Voting Conversion (as defined
in the Restated Certificate of Incorporation of UCI) has not occurred) or a
majority of the Class V Director(s) (so long as a Class V Voting Conversion
(as defined in the Restated Certificate of Incorporation of UCI) has not
occurred, may make such rules in connection with the use of such time by
Venevision and its Affiliates as it determines to be appropriate, including,
without limitation, rules for the fair allocation of such time between
Venevision and [Televisa] and their respective Affiliates.
IN WITNESS WHEREOF, the parties have set their hands as of the day
and year first above written.
DENNEVAR, B.V.
By: [ILLEGIBLE]
----------------------------------
Title: Attorney-in-fact
-------------------------------
THE UNIVISION NETWORK LIMITED
PARTNERSHIP
By: The Univision Network Holding
Limited Partnership
Its: General Partner
By: [ILLEGIBLE]
----------------------------------
Its: Managing Director
---------------------------------
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Exhibit 10.7
AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT
This AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT is
entered into as of October 1, 1996 by and between UNIVISA, INC., a Delaware
corporation, (hereinafter "Licensor") and THE UNIVISION NETWORK LIMITED
PARTNERSHIP, a Delaware limited partnership ("Licensee"), and amends and
restates that certain PROGRAM LICENSE AGREEMENT made as of the 17th day of
December, 1992 by and between Licensor and Licensee.
WHEREAS, Licensor has or will have rights in the United
States of America, including all territories and possessions thereof other
than Puerto Rico (the "Territory"), to license certain television programs in
the Spanish language or with Spanish subtitles produced by and to be produced
by Televisa, S.A. and other entities controlled by Grupo Televisa, S.A.
("GT") (GT and all of the companies it controls, including Televisa, S.A.,
and Licensor being hereinafter referred to collectively as "Televisa").
WHEREAS, Licensee operates the Univision Spanish language
television network and the Galavision Spanish language television network of
affiliated television broadcast stations and cable television systems (such
networks being hereinafter referred to as the "Networks" and those television
broadcast stations affiliated with such Networks that are now or hereafter
directly or indirectly majority owned and operated by Univision
Communications Inc. ("UCI") or a direct or indirect subsidiary of UCI or with
respect to which UCI or a direct or indirect subsidiary of UCI has the right
to designate a majority of the board or similar governing body, and in each
case, which broadcast in the Spanish language format being hereinafter
referred to as the "Stations") and desires to acquire the right to broadcast
certain of the programs produced, to be produced or otherwise marketed by
Televisa over the Networks in the Territory and Licensor is willing to grant
such a license upon the terms, provisions and conditions herein set forth.
WHEREAS, Dennevar B.V. ("Venevision") is simultaneously
herewith entering into an Amended and Restated Program License Agreement,
dated as of the date hereof (the "Venevision Agreement"), with the Licensee
to license certain television programming for broadcast over the Networks.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto agree as follows:
1. RIGHT OF FIRST OFFER OF PROGRAMMING.
1.1 Pursuant to the terms and conditions hereof,
Licensor hereby grants Licensee the option to obtain an exclusive license for
the broadcast over the Networks in the Territory of all Programs (as hereinafter
defined). The option may be exercised as follows:
<PAGE>
(a) First, Licensee will have a first option to
accept for exclusive license in the Territory, subject to all the other terms
and conditions of this Agreement: (i) Programs in an amount that, when
aggregated with Programs accepted pursuant to Section 1.1(a) of the Venevision
Agreement, will be sufficient to fill 18 hours of programming per day in
aggregate for the two Networks combined, and (ii) any news Programs.
(b) Second, Licensor may make available for license
to the owners and operators of KWHY-TV, Channel 22 ("KWHY") all Programs (other
than news Programs) not accepted by Licensee pursuant to paragraph (a) above for
exclusive use in the Los Angeles ADI; PROVIDED, HOWEVER, that during the
Broadcast Period (as defined below) of any Program licensed by Licensee,
Licensor shall not license KWHY to broadcast reruns of such Program or Programs
of the same series as such Program. KWHY will be entitled to accept an amount
of programs that will be sufficient to fill up to one 85 hour-per-week time
schedule. The terms of the license to KWHY will provide for payment by KWHY of
a license royalty at a price to be negotiated between Licensor and KWHY. The
license will be assignable by Licensee with a transfer of control of KWHY. The
term of Licensor's obligation to offer Programs to KWHY on the terms described
herein shall not exceed five years from December 17, 1992.
(c) After selection by KWHY of Programs pursuant to
paragraph (b) above, Licensee will have a first option, subject to all the other
terms and conditions of this Agreement, including the 70% coverage requirement
set forth in Section 2 below (determined as provided therein), to accept for
exclusive license in the Territory, any Programs (i) for markets outside of
KWHY's Los Angeles ADI, Programs accepted by KWHY pursuant to paragraph
(b) above and (ii) when paragraph (b) above is no longer applicable, any
Programs for all markets, including Los Angeles, in an amount which, when
aggregated with the amount of Programs accepted pursuant to paragraph (a) above,
will be sufficient to satisfy the representation and warranty included in
Section 7.3 hereof.
1.2 For purposes of this Agreement only:
(a) "Programs" means (i) programs initially produced
in the Spanish language or programs with Spanish subtitles produced by third
parties or co-produced by Televisa with third parties to which Televisa owns
sole television broadcast rights in the Territory (and which is not a
Co-Produced Program (as defined below)); (ii) all programs initially produced in
the Spanish language or programs with Spanish subtitles, previously produced
directly or indirectly by or for Televisa and to be produced directly or
indirectly by or for Televisa for broadcast at any time to which Televisa owns
television broadcast rights in the Territory and which are available for
broadcast including, without limitation, in the following categories: novelas,
musicals, variety shows, situation comedies, game shows, talk shows, children's
shows, news shows, cultural and educational programs, and sports programs; and
(iii) movies produced by Televisa and for which Televisa owns the
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television broadcast rights in the Territory, from and after the time that such
movies become available for free television broadcast in the Territory. Each
Program shall be available for license to Licensee in the Territory pursuant to
the terms of this Agreement upon the first to occur of (i) the date when such
Program is initially broadcast by Televisa or (ii) the date when such Program is
first made available for broadcast by any third party. Except as provided in
the following paragraph, if Licensor or Televisa shall produce directly or
indirectly any Spanish Language or Spanish subtitled programming for broadcast
in the Territory it shall be deemed a Program subject to the terms and
conditions of this Agreement.
The term "Programs" does not include Special Programs (other
than Televisa Produced U.S. Special Programs, as defined below), Co-Produced
Programs or Default Programs (each as defined below) or local news or public
affairs programs (it being understood that all such local programs will be
produced or acquired by Licensee or its affiliated stations). "Co-Produced
Programs" means programs originally produced for broadcast in the Spanish
language or with Spanish subtitles, previously produced, or to be produced,
by Televisa for broadcast pursuant to co-production agreements with
unaffiliated third parties or produced by unaffiliated third parties (in each
case, other than any broadcaster in and to the Territory) (i) under which
Televisa does not own the right to permit the broadcast of such program in
the Territory and/or (ii) under which Televisa is required to share with such
third parties the revenue derived from the broadcast of such program in the
Territory. No program that would otherwise be a Program under Section
1.2(a)(ii) shall become a Co-Produced Program solely because Televisa or
Licensor licenses or sells distribution rights in the Territory prior to or
during production of such program and neither Televisa nor Licensor shall
enter into any agreement to the contrary. In order for a program to be a
Co-Produced Program, some material underlying property right of such program
must be provided by such unaffiliated third party and such unaffiliated third
party must participate in the development and production of the Program in
exchange for such third party's distribution rights in the Territory or
participation in distribution revenues from the Territory. Nothing contained
in this Agreement shall prevent Licensor or Televisa from licensing broadcast
rights (in exchange for cash or in-kind services or property other than
Programs) for territories other than the Territory to programs initially
produced in the Spanish language or programs with Spanish language subtitles
that are developed and produced in the Territory by unaffiliated third party
producers located in the Territory, including broadcasters, provided that
neither Licensor nor Televisa has participated in any way in the development
or production of any such program. Televisa agrees that it will use its good
faith efforts not to structure agreements with respect to programs in a
manner intended to cause such programs not to be considered Programs
hereunder.
(b) "broadcast" or "network broadcast" means all
electronic forms or other means now known or hereafter developed of transmission
and re-transmission, including but not limited to over-the-air television, cable
television, low
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power television, multi-point distribution systems, wire, fiber optics,
microwave, and satellite, except for purposes of delivery of the Programs
pursuant to Section 4.
(c) "Affiliate" of a person means any person that
directly or indirectly controls, is controlled by, or is under common control
with the person in question. For the purposes of this definition, "control",
when used with respect to any person, means the power to direct the management
and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise. Affiliate shall not
mean any television station that has entered into an affiliation agreement with
the Networks but is otherwise not an Affiliate of UCI, any Person that controls
Grupo Televisa S.A. or any person under common control with, but not directly
or indirectly controlled by, Grupo Televisa S.A.
1.3 Licensor and its Affiliates shall have the right and
ability to, and to permit others to: (i) transmit or re-transmit in any
electronic form or other means, from any television station in Mexico, or via
satellite which receives its signal from any earth station or other facility in
Mexico, any Programs which may also be covered by this Agreement,
notwithstanding the fact that such transmissions or re-transmissions may be
viewed in the Territory, provided that neither Licensor nor its Affiliates
consent to the retransmission of such Programs by any television station in the
Territory or by any cable system in the Territory that is located beyond 35
miles from the community of license of any transmitting television station in
Mexico transmitting the Programs (any such cable re-transmission within such 35
mile limit being hereby expressly permitted); and (ii) market and promote and
otherwise generate revenues (including, but not limited to, the sale of
advertising time) attributable to the ability of viewers in the Territory to
receive such Programs.
2. NOTIFICATION, ACCEPTANCE AND LICENSING OF PROGRAMMING. Not
less than once in each calendar quarter during the term of this Agreement,
Licensor will deliver a written notice (an "Availability Notice") to Licensee
specifying all Programs which (a) have become available for license by Licensee
since the delivery of the preceding Availability Notice or (b) may no longer be
available to Licensee on an exclusive basis. Such notice shall be accompanied,
if practicable, by a video tape pilot or representative episode of each of the
new Programs (except for live Programs). If Licensee desires to license any
Programs, it must notify Licensor of its acceptance in writing (an "Acceptance")
within thirty days of receipt of the Availability Notice. Such Acceptance shall
specify the name of the Accepted Program, the name of the Network on which it is
to be broadcast, the date and time period in which Licensee intends to commence
the broadcast of the Accepted Program (which date shall be not more than 180
days from the date of Acceptance with respect to Programs other than novelas and
shall be not more than 270 days from the date of Acceptance with respect to
novelas), and such other information as may reasonably be requested by Licensor.
An Acceptance shall constitute the exercise by Licensee of its option for the
Program(s) accepted and upon receipt by Licensor of such Acceptance, the
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Program(s) covered by each such Acceptance shall without further action be
automatically licensed to Licensee on the terms and conditions of this
Agreement. Subject to the terms and conditions set forth herein, Licensee shall
have exclusivity in the carriage of all accepted Programs ("Accepted Programs")
for broadcast in the Territory from the date of acceptance to the conclusion of
the applicable Broadcast Period. If no such Acceptance is received with respect
to any or all available Programs, Licensor shall be free to license all such
unaccepted Programs ("Unaccepted Programs") to others in the Territory for not
more than one run over a period of one year (which license, in the case of
novelas, may also provide for one rerun), subject to Licensee's right of first
refusal described in Section 3; provided, however, that during the Broadcast
Period of a Program licensed by Licensee, Licensor shall not license any other
person or entity to broadcast in the Territory reruns of such Program or other
Programs of the same series as such Program.
In order to avoid the "warehousing" of Programs by the
Licensee, (A) Licensee shall not issue Acceptance Notices without specifying
the intended broadcast commencement date and time period; however, Licensee
shall have the right at any time for any bona fide reason, on not less than
10 days' written notice to Licensor at least 60 days prior to the intended
broadcast date, (i) to switch dates and times among previously Accepted
Programs or among previously Accepted Programs and programs acquired from
another source, provided that after giving effect to such switch all other
requirements with respect to broadcast and scheduling of Programs contained
in this Agreement continue to be satisfied and/or (ii) to rescind Acceptance
with respect to any Program and to issue an Acceptance Notice with respect to
a substitute Program, provided that (x) the substitute Program shall be
broadcast in the time slot originally reserved for the rescinded Program and
(y) the rescinded Program shall thereafter constitute a Default Program, (B)
Licensee shall not issue Acceptance Notices with respect to more Programs
than it is capable of airing over the Networks, and (C) Licensee shall not
broadcast any First-Run Program (other than news) on either of the Networks
(X) between the hours of 1:00 a.m. and 9:00 a.m. unless Licensee can
demonstrate that it is commercially reasonable to broadcast such program
during such period, or (Y) during any other time period during which Licensee
cannot reasonably expect the 70% broadcast coverage requirement described in
the following paragraph to be satisfied.
Subject to the preceding paragraph, with respect to any
Accepted Program, Licensee must commence the broadcast of the Program on one
of the Networks over at least 70% of such Network's coverage (as determined
by the number of Hispanic television households potentially reached by the
applicable Network) within 180 days following notice of its Acceptance
(except for novelas where the time for commencement may be extended for an
additional 90 days because of scheduling problems) and shall continue to
broadcast the Program without substantial interruption over such minimum of
70% Network coverage until the conclusion of the Broadcast Period (as defined
below). Should Licensee fail to comply with the broadcast commencement, 70%
coverage and continuous broadcast provisions of this paragraph, Licensee's
license with respect to the Program (a "Default
5
Program") shall be terminated 10 days following written notice of
non-compliance unless Licensee demonstrates compliance or excusable
non-compliance with such provisions. In the event of termination, the
Default Program shall be subject to re-license by Licensor to others at any
time or from time to time (without any right of first refusal or other right
applicable to Licensee, whether pursuant to Section 3 or otherwise). The
parties acknowledge that this provision is designed to avoid "warehousing" of
product by Licensee and that in the event Licensee breaches the provisions of
this paragraph, Licensor's damages are incapable of calculation and the
remedies set forth herein are appropriate under the circumstances.
For purposes of this Agreement only:
(a) "Broadcast Period" means (i) for novelas or other Programs
with a plot line continuing through more than one episode, the time necessary
to broadcast all episodes on a continuing basis without substantial
interruption and (ii) for all other programs (excluding one-program shows),
(x) for weekly programs, the time period necessary to broadcast 26 episodes
of the Program without substantial interruption, which under normal
circumstances is expected to be 26 continuous weeks and (y) for daily
programs (Monday through Friday), 26 weeks.
(b) "without substantial interruption" means that the Programs
will be scheduled and run on a continuing periodic basis except for
occasional network preemption to accommodate one-time specials or programs
which, because of their nature or timeliness or because of FCC Rules, must in
Licensee's reasonable judgment be broadcast in lieu of the regularly
scheduled Program.
3. RIGHT OF FIRST REFUSAL. If any other person or entity (other
than KWHY, or its assignees, with respect to Programs licensed by it pursuant
to Section 1.1(b) hereof) wishes to accept for broadcast in the Territory any
Unaccepted Programs which Licensor has offered to it pursuant to Section 2,
Licensor shall send a written notice (a "Second Chance Notice") to Licensee
specifying the name of any such Programs and the license terms offered by
such person or entity that wishes to accept such Unaccepted Programs.
Licensee shall have a right of first refusal, good for three business days
from receipt of the Second Chance Notice to acquire such Unaccepted Program,
subject to the same conditions offered by such other person or entity, for
the Program Royalty (as defined in Section 5) plus the amount, if any, by
which the license fee offered by such other person or entity exceeds the
Program Royalty attributable to combined net time sales for the time slot in
which such Program is broadcast. Any such Unaccepted Programs which are not
accepted in writing by Licensee within three business days of receiving a
Second Chance Notice may be licensed to such other person or entity. Rights
to exploit Unaccepted Programs will be granted to other persons or entities
for not more than one run over a period of one year (provided that, in the
case of novelas, such rights may include the right to one rerun), and if the
same Program is offered thereafter in the Territory, it will once
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again be offered to Licensee pursuant to Section I hereof. All episodes of a
novela which are to be shown within one year from the showing of the first
episode shall be deemed to be the same Program for the purposes of the
requirement to offer all programming first to Licensee.
4. DELIVERY, EXPENSES AND USE OF PROGRAMS.
4.1 Following Licensee's acceptance of Programs pursuant to
Sections 2 or 3 of this Agreement, Licensor shall deliver to Licensee, at
Licensee's expense, and in accordance with Licensee's reasonable and
customary instructions, a visual and aural reproduction of each such Program
or Program episode via satellite or video tape suitable for broadcast and
formatted for U.S. broadcast in accordance with past practices, at least ten
days prior to Licensee's scheduled broadcast, except for live broadcasts or
as otherwise agreed by the parties. Programs will be deemed delivered by
Licensor when transmitted to the satellite, when actually received if shipped
by freight, or when made available through permission to re-transmit the
signal of an affiliate of Licensee.
4.2 Licensee agrees that as soon as practicable following
receipt of each satellite transmission or video tape delivery, it will
examine it to determine whether it is physically suitable for broadcasting
and notify Licensor immediately upon detecting any defect rendering such copy
unsuitable for telecast. In such cases, Licensor shall promptly deliver at
its own expense either a physically suitable tape or (except in the case of
novelas) a tape of another Program in the same series, subject to
verification of the defect.
4.3 Licensee agrees to return each video tape delivered by
Licensor to Licensor on the reels and in the containers in which it was
shipped, in the same condition as received, reasonable wear and tear through
proper use excepted, as soon as practicable after telecast. Licensee shall
pay all costs of returning the tapes to Licensor. Should Licensor request
that the video tape be sent to a location other than Licensor's warehouse,
Licensor will bear responsibility for shipping costs above those which would
have been applicable for shipping the video tape to Licensor's warehouse.
4.4 The video tapes shall at all times remain the property of
Licensor subject to Licensee's rights as herein provided. The risk of loss,
damage, destruction or disappearance of any tape shall be borne by Licensee
from the time of delivery to Licensee until the return thereof to Licensor or
Licensor's designee and as to any tape or part thereof lost, stolen,
destroyed or damaged after delivery to Licensee and before the return
thereof, Licensee shall pay Licensor the cost of replacement thereof, which
payment shall be limited to the cost of replacing the raw video tape.
4.5 Licensee will not, and will not authorize others to copy,
duplicate or re-license any Program unless necessary for Licensee's own
network broadcast. Any
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duplicate or copy of any part of the Program (including trailers) made by
Licensee for its own purposes will be erased following the broadcast of the
Program. Upon receipt of written request from Licensor, an officer of
Licensee shall certify in writing the destruction of all such copies.
4.6 Licensor will furnish to Licensee glossy prints of still
photos, synopses, casts and all other promotional material for the promotion
and exploitation of the Programs, if available. Licensor grants to Licensee
the right to use and license others to use Licensor's name and, unless
Licensee is advised by Licensor that the rights of Licensor are limited (in
which case, to the extent not limited), to use and license others to use the
name and likeness of, and biographical material concerning, each star,
featured performer, writer, director and producer in the Programs and the
titles of each program and fictitious persons and locales therein, for
advertising and publicity, of the Programs, and any broadcaster or sponsor
thereof, but not for direct endorsement of any product or service, provided
that any such use will protect the copyrights of Licensor. To the extent
available to Licensor after reasonable efforts, Licensor will furnish
Licensee with music cue sheets for the Programs and the information necessary
for administration of rights payments and compliance with Section 507 of the
Federal Communications Act of 1934, as amended concerning broadcast matter
and disclosures required thereunder, insofar as that Section applies to
persons furnishing program material for television broadcasting ("Section
507"). Subject to the foregoing and subject to Licensor's reasonable prior
approval, Licensee shall have the right to produce its own promotional
material for or from the Programs.
4.7 Licensee agrees to include in its broadcast of Accepted
Programs all copyright notices and all credits made part of each Accepted
Program including but not limited to stars, directors, producers and writers.
Licensee shall exhibit the Accepted Program as delivered in the Spanish
language or with Spanish subtitles and no change, alteration or addition may
be made to any Program without Licensor's consent except as may be necessary
for the insertion of commercials during natural breaks in the Program or
except as may be necessary to comply with Licensee's broadcast standards and
practices and applicable government rules and regulations.
4.8 Subject to Section 7.1 and 7.3 and Licensee's remedies
for a breach thereof, Licensor may, at its sole and absolute discretion,
withdraw any Program and terminate any license with respect to such Program
if Licensor reasonably determines that the broadcast thereof is likely to:
(i) infringe the rights of third parties, (ii) violate any law, court order,
governmental regulation or ruling of any governmental agency, (iii) otherwise
subject the Licensor to any material liability. In addition Licensor reserves
the right to withdraw any Program prior to the conclusion of the applicable
Broadcast Period if, for any reason, the program is no longer being produced
by or available to Televisa. In the event of any such withdrawal or
termination, Licensor shall give Licensee as much notice as possible, and the
parties shall have no obligations to each other with regard to Programs not
produced, subject to Section 7.1 and 7.3 and Licensee's remedies for a breach
thereof. No
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Program that is withdrawn pursuant to this Section 4.8 shall be relicensed to
a third party in the Territory without being first offered to Licensee
pursuant to Section 1.
4.9 The license granted to Licensee with respect to each
Accepted Program (other than novelas) shall be for one Network broadcast of
each Program or Program episode, subject only to FCC rules and regulations
and to tape delay in certain of Licensee's affiliated outlets to accommodate
time zone differences. In addition, within 24 hours of the original
broadcast, Licensee may broadcast a repeat of any Program, free of the
restrictions contained herein regarding Network coverage. Except as herein
provided, without the express permission of Licensor, not to be unreasonably
withheld, no Program or Program episode may be rerun during any Broadcast
Period.
Notwithstanding the prohibition on reruns during a Broadcast
Period, Licensee will have the option at the end of any Broadcast Period to
license one (1) rerun of each novela (herein "Protected Rerun"). Such option
must be exercised in writing not later than thirty (30) days before the end
of the Broadcast Period for each such novela. The terms of such Protected
Rerun license shall be the same as for the original license, except that the
time during which the broadcast must commence will be one (1) year instead of
one hundred and eighty (180) days.
5. ROYALTIES.
5.1 Except as set forth in Section 5.2 below, Licensee shall
pay Licensor a royalty (the "Program Royalty") in cash for the Programs
offered to it in an aggrgate amount equal to 5.5% of combined net time sales
(as defined below) for the period commencing on the date hereof and ending on
December 31, 1996, 6.75% of combined net time sales for the period commencing
on January 1, 1997 and ending on December 31, 1997, and 7.5% of combined net
time sales for all periods commencing on or after January 1, 1998 until the
termination of this Agreement. For purposes of this Agreement, "combined net
time sales" shall mean all time sales of the Stations and the Networks,
including barter and trade and television subscription revenue (including,
without limitation, satellite subscription revenue), less advertising
commissions, Special Event Revenue (as defined below), music license fees,
outside affiliate compensation, and taxes (other than withholding taxes) paid
by Licensee pursuant to Section 5.5 hereof and similar taxes paid by the
Stations calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"). Notwithstanding the foregoing, no revenues of the
Galavision Network received prior to the closing of the acquisition of the
assets of the Galavision Network by Licensee pursuant to the Galavision
Network Option Agreement between Univisa and Licensee entered into as of
December 17, 1992 shall be included in combined net times sales for purposes
of computing the Program Royalty. Unless otherwise agreed in writing between
the parties, barter and trade sales shall be valued at the fair market value
of the goods or services received by the Licensee or the Stations.
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5.2 Notwithstanding Section 5.1 above, to the extent from
time to time specified in a writing signed by both Licensor and Venevision
and delivered to Licensee, the amounts of the Program Royalties payable in
accordance with Sections 5.1 of this Agreement and the Venevision Agreement
may be changed by Licensor and Venevision, so long as the aggregate of the
amounts of such Program Royalties under this Agreement and the Venevision
Agreement does not exceed for any period twice the applicable amount computed
in accordance with Section 5.1 of this Agreement. Licensor and Venevision
shall not deliver such a writing more than twice a year.
5.3 Program Royalties shall be paid currently on a monthly
basis on the twelfth business day after the end of each month in a single
payment to Licensor based upon the parties' good faith best estimate at such
time of the amounts accrued. Appropriate adjustment (the "Adjustment") will
be made to Program Royalties on a quarterly basis within 45 days after the
end of each quarter, and the full amount thereof shall be paid or credited,
as the case may be, with the next monthly payment of Program Royalties for
any difference between the amounts so paid and those finally determined to
have accrued. In all cases, the calculation of the Adjustment will be made
as promptly as practicable by Licensee, and in the event of any disputes the
determination shall be made by a nationally recognized independent certified
public accounting firm mutually selected by Licensor and Licensee (or, if
they fail to designate such a firm within 10 days after written notice of a
dispute, by such firm designated by the President of the American Arbitration
Association (or his designee)), whose determination will be final and binding
upon the parties. The fees and expenses of such firm shall be paid one-half
by Licensor and one-half by Licensee, unless such firm determines it would be
more equitable to otherwise allocate such fees and expenses.
5.4 All payments made pursuant to this section shall be in
cash in U.S. currency with accompanying back-up information in reasonable
detail of combined net time sales for the applicable period. Such payments
shall be calculated as provided above regardless of the amount of Programs
licensed hereunder or whether any such Programs are broadcast. In order to
assure compliance with the terms of this Agreement, Licensor shall have the
right to receive once each year a certificate from Licensee's independent
certified public accounting firm, which certificate shall attest to the
combined net time sales for the year. Licensee shall pay for the preparation
of such certificate and its delivery to Licensor. Licensor may request
additional certificates and services either from Licensee's accounting firm
or from a firm of certified public accountants chosen by Licensor. The fees
and expenses of the certified public accountants providing such additional
certificates and performing such additional services pursuant to this Section
5.4 shall be paid by Licensor, unless such verification results in an
adjustment in Licensor's favor equal or greater than 5% of the amount
originally computed by Licensee, in which case such fee will be paid by
Licensee. Licensee agrees to provide any certified public accountants
designated by Licensor with access to all business records of Licensor
related to the computation of combined net time sales. Licensor agrees to
maintain the confidentiality of all information learned from Licensee in
connection with the performance of this Agreement, other than
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information (i) which becomes public (unless it becomes public because of a
breach of this covenant by Licensor), (ii) which otherwise becomes known to
Licensor (unless Licensor knows that the information has been disclosed in
violation of a confidentiality agreement with Licensee), or (iii) which
Licensor is required by law, order or administrative law request or by stock
exchange rule or regulation to divulge.
5.5 Any and all sums payable on account of sales, use or other
similar taxes arising out of or relating to the licensing or exhibition by
Licensee of the Programs, in addition to any personal property or other tax
assessed or levied by any governmental unit arising out of or relating to the
storage or possession of the Programs thereof by Licensee shall be paid by
Licensee.
5.6 Licensee may deduct and withhold from any payment to or for the
account of Licensor with respect to the Program Royalties such amounts as it
in good faith determines it is required to withhold with respect to such
payment under applicable United States and state tax withholding laws, and
shall promptly remit such amounts to the appropriate taxing authority.
Within 30 days of any such remittance Licensee shall furnish to Licensor the
original or certified copy of a receipt evidencing payment, or other evidence
of payment reasonably satisfactory to Licensor. If Licensor has timely filed
with Licensee a duly completed Form 4224, 1001, W-8 or W-9, of the Internal
Revenue Service (or successor form thereto) or has complied with applicable
procedures under state law, entitling it to exemption from, or a reduced rate
of, withholding under the applicable law or regulations, the amount withheld
shall be accordingly limited. Licensee shall cooperate in any reasonable
manner requested by Licensor to minimize Licensor's withholding tax liability.
5.7 If Licensee is more than 30 days late in paying any amount due to
Licensor under this Section 5, such late amounts shall thereafter bear
interest at a rate equal to LIBOR plus 5%, plus any applicable withholding.
6. SPECIAL PROGRAMS AND CO-PRODUCED PROGRAMS.
6.1 For purposes of this Agreement:
(a) "Special Programs" means special programs such as the World
Cup, other sporting events, political conventions, election coverage,
parades, pageants, special variety shows and other non-episodic and
non-continuing shows.
(b) "Non-Televisa-Produced Special Programs" means Special
Programs not produced directly or indirectly by or for Televisa.
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(c) "Televisa-Produced U.S. Special Programs" means
Televisa-Produced Special Programs for which Licensor has adequate rights to
license such Special Programs to Licensee under the terms of this Agreement.
(d) "Televisa-Produced Non-U.S. Special Programs" means
Televisa-Produced Special Programs for which Licensor does not have adequate
rights to license such Special Programs to Licensee under the terms of this
Agreement.
(e) "Televisa-Produced Special Programs" means Special Programs
directly or indirectly produced by or for Televisa.
(f) "Special Event Revenue" means net time sales for
Non-Televisa-Produced Special Programs and Non-Venevision-Produced Special
Programs as defined in the Venevision Agreement broadcast by Licensee on
either Network.
6.2 Licensor shall use its best efforts, and shall cause its
Affiliates to use their best efforts, to coordinate its Non-Televisa-Produced
Special Program acquisitions with those of Licensee, so as to permit Licensee
to participate therein and to acquire rights in the Territory to such
programs on an advantageous basis and on terms satisfactory to Licensee;
PROVIDED, HOWEVER, that the obligation to use "best efforts" shall not be
interpreted to include any obligation of Licensor or its Affiliates to expend
additional money to permit Licensee's participation or to acquire rights on
an advantageous basis.
6.3 Televisa-Produced U.S. Special Programs shall be "Programs" for
all purposes of this Agreement.
6.4 At the request of Licensee, Licensor shall use its best
efforts, and shall cause its Affiliates to use their best efforts, to acquire
broadcast rights in the Territory on terms satisfactory to Licensee for
Televisa-Produced Non-U.S. Special Programs and any Co-Produced Program that
falls within clause (i) (but not clause (ii)) of the definition of
"Co-Produced Program" in Section 1.2(a); provided, however, that the
obligation to use its "best efforts" shall not be interpreted to include any
obligation of Licensor to expend additional money, except to the extent
reimbursed by the "Special Event Fee" (as defined below). Such programs
accepted by Licensee shall be licensed hereunder to Licensee for the Program
Royalty plus a fee (the "Special Event Fee") in the amount of the cost to
Licensor of the acquisition of broadcast rights in the Territory to such
program, such costs to be determined by the parties in good faith based on
the portion of the total amount paid by Licensor for broadcast rights that is
reasonably allocated to the acquisition of broadcast rights in the Territory.
6.5 Licensor shall offer Licensee in accordance with all applicable
provisions of this Agreement all Co-Produced Programs that fall within clause
(ii) of the definition of "Co-Produced Program" in Section 1.2(a) for which
program Licensor has or
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can obtain adequate rights and licensing authority to offer such programs to
Licensee in compliance with the terms and conditions of this Agreement,
except that the Program Royalty specified in Section 5 hereof shall not
include the license fee for Co-Produced Programs. Compensation to Licensor
for all Co-Produced Programs accepted by Licensee shall be computed and paid
in accordance with such terms as the parties may mutually agree in writing.
If the parties are unable to agree on the royalty for any Co-Produced Program
within 10 days after such program is offered by Licensor, such program may be
sold to others in the Territory, so long as Licensor in good faith determines
that the terms and conditions applicable to such sale are more favorable to
the Licensor than those offered by the Licensee in writing within such 10-day
period.
7. REPRESENTATIONS AND WARRANTIES OF LICENSOR.
7.1 Licensor hereby agrees, warrants and represents as follows:
(a) Subject to Section 1.4 hereof Licensor is free to enter
into and fully perform this Agreement;
(b) Licensor has or will have the right to grant to Licensee
the broadcast rights to the Accepted Programs in the Territory set forth in
this Agreement, including but not limited to the necessary literary,
artistic, technological and intellectual property rights and has secured or
will secure all necessary written consents, permissions and approvals for
incorporation into such Programs of the names, trademarks, likenesses and/or
biographies of all persons, firms, products, companies and organizations
depicted or displayed in such Programs, and any preexisting film or video
footage produced by third parties;
(c) There are no and will not be any pending claims, liens,
charges, restrictions or encumbrances on the Accepted Programs that conflict
with the broadcast rights granted hereunder to such Programs in the Territory;
(d) Licensor has paid or will pay all compensation, residuals,
reuse fees, synchronization royalties, and other payments which must be made
in connection with the Accepted Programs and in connection with exploitation
of the rights herein granted to Licensee to any third parties including, but
not limited to, musicians, directors, writers, producers, announcers,
publishers, composers, on-camera and off-camera performers and other persons
who participated in production of such Programs, and to any applicable
unions, guilds or other labor organizations; PROVIDED, HOWEVER, that Licensor
has not acquired performing rights for performance in the Territory of the
music contained in such Programs, which rights shall be obtained by Licensee;
PROVIDED, FURTHER, however, that Licensor warrants and represents that all
music is available for licensing through ASCAP, BMI or SESAC (or any
successor or similar entity in the United States) or is in the public domain
or is owned or controlled by Licensor to the extent necessary to permit
broadcasts
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hereunder in the Territory and no additional clearance or payment
is required for such broadcast;
(e) The main and end titles of the Accepted Programs and all
publicity, promotion, advertising and packaging information and materials
supplied by Licensor will contain all necessary and proper credits for the
actors, directors, writers and all other persons appearing in or connected
with the production of such Programs who are entitled to receive credit and
comply with all applicable contractual, guild, union and statutory
requirements and agreements;
(f) Exercise of the broadcast rights to the Accepted
Programs in the Territory will not infringe on any rights of any third party,
including but not limited to copyright, patent, trademark, unfair
competition, contract, property, defamation, privacy, publicity or "moral
rights" (to the extent such moral rights are recognized by U.S. law);
(g) Except to the extent expressly permitted by this
Agreement, Licensor has not and will not grant or license to others, and will
not itself exercise, any rights to broadcast the Accepted Programs in or to
the Territory;
(h) Each and every one of the representations and warranties
made by Licensor herein shall survive the Broadcast Period for each Accepted
Program;
(i) To the extent Section 507 (as defined in Section 4.6
above) is applicable, no Accepted Program includes or will include any matter
for which any money, service or other valuable consideration is directly or
indirectly paid or promised to Licensor by a third party, or accepted from or
charged to a third party by Licensor, unless such is disclosed in accordance
with Section 507. Licensor shall exercise reasonable diligence to inform its
employees, and other persons with whom it deals directly in connection with
such programs, of the requirements of Section 507; provided, however, that no
act of any such employee or of any independent contractor connected with any
of the programs, in contravention of the provisions of Section 507, shall
constitute a breach of the provisions of this paragraph unless Licensor has
actual notice thereof and fails promptly to disclose such act to Licensee.
As used in this paragraph, the term "service or other valuable consideration"
shall not include any service or property furnished without charge or at a
nominal charge for use in, or in connection with, any of the programs "unless
it is so furnished in consideration for an identification in a broadcast of
any person, product, service, trademark or brand name beyond an
identification which is reasonably related to the use of such service or
property on the broadcast," as such terms are used in Section 507. No
inadvertent failure by Licensor to comply with this paragraph shall be deemed
a breach of this Agreement; and
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(j) For purposes of this Section 7.1 only, "Accepted
Programs" shall be deemed to include Televisa Produced U.S. Special Programs
to the extent broadcast by Licensee.
7.2 Licensor further agrees that, while it has no obligation to do
so, if it secures a producer's (Errors and Omissions) liability policy
covering the Programs, or any part thereof, it will cause Licensee to be
named as an additional insured on such policy and will cause a certificate of
insurance to be promptly furnished to Licensee, provided, however, that the
inclusion of Licensee as an additional insured does not result in any
additional cost or expense to Licensor. Licensor will notify Licensee when
such insurance is obtained and, after obtained if cancelled. Any such
insurance as to which Licensee is an additional insured shall be primary as
to Licensee and not in excess of or contributory to any other insurance
provided for the benefit of or by Licensee.
7.3 Licensor warrants that the amount of Programs made available
throughout the term hereunder for license hereunder, when aggregated with
(i) the amount of Programs (as defined in the Venevision Agreement) made
available for license by Venevision pursuant to the Venevision Agreement,
(ii) any local-produced programming by the Stations to the extent such
locally produced programming is used on either of the Networks, (iii) any
programs produced by Licensee, and (iv) any programs purchased by Licensee
other than from Licensor, will be sufficient to fill a twenty-four hour a
day, seven day a week time schedule for each of the Univision Network and the
Galavision Network, which such time schedules as between the two networks
shall be separate and non-duplicative.
8. INDEMNIFICATION.
8.1 Licensor agrees to hold Licensee, its partners, the partners of
any partnership that is a partner of Licensee, officers, employees, and
agents and the shareholders, officers, directors, employees and agents of the
partners or any corporation or partnership that is a partner of Licensee
(collectively the "Licensee Indemnitees"), harmless, from any claims,
deficiencies, assessments, liabilities, losses, damages, expenses (including,
without limitation, reasonable fees and expenses of counsel) (collectively,
"Losses") which any Licensee Indemnitee may suffer by reason of Licensor's
breach of, or non-compliance with, any covenant or provision herein contained
or the inaccuracy of any warranty or representation made in this Agreement
and any such damages shall be reduced by: (i) the amount of any net tax
benefit ultimately accruing to Licensee on account of Licensee's payment of
such claim; (ii) insurance proceeds which Licensee has or will receive in
connection with such claim, and (iii) any recovery from third parties in
connection with such claim; PROVIDED, HOWEVER, that Licensor shall not delay
payment of its indemnification obligations hereunder pending resolution of
any tax benefit or insurance or third party claim if Licensee provides
Licensor with an undertaking to reimburse Licensor for the amount of any such
claim ultimately received; and PROVIDED, FURTHER, that Licensee shall have no
15
obligation to obtain any such insurance proceeds or recovery from third
parties if and to the extent Licensor is subrogated (in form and substance
satisfactory to Licensor) to Licensee claims in respect of such insurance or
third parties.
8.2 Licensee agrees to indemnify Licensor, its direct and indirect
shareholders and all officers, directors, employees and agents of any of the
foregoing (the "Licensor Indemnitees") against and hold the Licensor
Indemnitees harmless from any and all Losses incurred or suffered by any
Licensor Indemnitee arising out of a breach by Licensee of the
representations, warranties, covenants or agreements made or to be performed
by it pursuant hereto, or arising out of any program or commercial material
(apart from the Programs) furnished by Licensee and any such damages shall be
reduced by: (i) the amount of any net tax benefit ultimately accruing to
Licensor on account of Licensor's payment of such claim; (ii) insurance
proceeds which Licensor has or will receive in connection with such claim,
and (iii) any recovery from third parties in connection with such claim;
PROVIDED, HOWEVER, that Licensee shall not delay payment of its
indemnification obligations hereunder pending resolution of any tax benefit
or insurance or third party claim if Licensor provides Licensee with an
undertaking to reimburse Licensee for the amount of any such claim ultimately
received; and PROVIDED, FURTHER, that Licensor shall have no obligation to
obtain any such insurance proceeds or recovery from third parties if and to
the extent Licensee is subrogated (in form and substance satisfactory to
Licensee) to Licensor claims in respect of such insurance or third parties.
8.3 The following procedures shall govern all claims for
indemnification made under any provision of this Agreement. A written notice
(an "Indemnification Notice") with respect to any claim for indemnification
shall be given by the party seeking indemnification (the "Indemnitee") to the
party from which indemnification is sought (the "Indemnitor") within thirty
(30) days of the discovery by the Indemnitee of such claim, which
Indemnification Notice shall set forth the facts relating to such claim then
known to the Indemnitee (provided that failure to give such Indemnification
Notice as aforesaid shall not release the Indemnitor from its indemnification
obligations hereunder unless and to the extent the Indemnitor has been
prejudiced thereby). The party receiving an Indemnification Notice shall
send a written response to the party seeking indemnification stating whether
it agrees with or rejects such claim in whole or in part. Failure to give
such response within ninety (90) days after receipt of the Indemnification
Notice shall be conclusively deemed to constitute acknowledgment of the
validity of such claim. If any such claim shall arise by reason of any claim
made by third parties, the Indemnitor shall have the right, upon written
notice to Indemnitee within 30 days after receipt of the Indemnification
Notice, to assume the defense of the matter giving rise to the claim for
indemnification through counsel of its selection reasonably acceptable to
Indemnitee, at Indemnitor's expense, and the Indemnitee shall have the right,
at its own expense, to employ counsel to represent it; PROVIDED, HOWEVER,
that if any action shall include both the Indemnitor and the Indemnitee and
there is a conflict of interest because of the availability of different or
additional defenses to the Indemnitee, the Indemnitee shall have the right to
select separate
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counsel to participate in the defense of such action on its behalf, at the
Indemnitor's expense. The Indemnitee shall cooperate fully to make available
to the Indemnitor all pertinent information under the Indemnitee's control as
to the claim and shall make appropriate personnel available for any
discovery, trial or appeal. If the Indemnitor does not elect to undertake
the defense as set forth above, the Indemnitee shall have the right to assume
the defense of such matter on behalf of and for the account of the
Indemnitor; PROVIDED, HOWEVER, the Indemnitee shall not settle or compromise
any claim without the consent of the Indemnitor, which consent shall not be
unreasonably withheld. The Indemnitor may settle any claim at any time at
its expense, so long as such settlement includes as an unconditional term
thereof the giving by the claimant of a release of the Indemnitee from all
liability with respect to such claim.
9. TERM. The term of this Agreement shall be until
December 17, 2017. Any license in effect for any Program at the date of
termination of this Agreement shall continue through the Broadcast Period for
such Program, with no right of re-license or extension at the end thereof,
and all of the rights and obligations of the parties under this Agreement
with respect to such license will continue through the Broadcast Period for
such Program, it being agreed that the parties shall enter into mutually
satisfactory royalty arrangements with respect to the Broadcast Period
following the termination of this Agreement in order to compensate Licensor
for the use of Programs during such period and, if the parties are unable to
agree upon such royalty arrangements, the amount thereof shall be determined
based on prevailing market conditions.
In addition this Agreement may be terminated by either party in the
event that the other party (i) materially breaches its obligations hereunder
and fails to cure such breach within 180 days of notice thereof (90 days for
failure to pay the Program Royalty when due) by the party seeking termination
(which notice shall describe the breach in reasonable detail); PROVIDED,
HOWEVER, that the inaccuracy of any of Licensor's representations and
warranties contained in Section 7 hereof shall not be deemed to be a breach
of its obligations for purposes of this Section 9 to the extent that Licensor
satisfies its indemnification obligations with respect to such inaccuracy, or
(ii) asserts Force Majeure under Section 10 as a relief from substantially
all of its obligations hereunder for a period in excess of one year. Any
notice of material breach referred to in (i) above shall concurrently be sent
to the Managing Agents for any lenders providing financing to the Stations
and the Networks, and the Managing Agents on behalf of such lenders shall
have the right to cure such alleged material breach within such 90-day or
180-day cure period. Any notice of termination for Force Majeure pursuant to
(ii) above shall concurrently be sent to such Managing Agents.
10. FORCE MAJEURE. Neither party hereto shall be liable for or
suffer any penalty or termination of rights hereunder by reason of any
failure or delay in performing any of its obligations hereunder if such
failure or delay is occasioned by compliance with governmental regulation or
order, or by circumstances beyond the reasonable control of the
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party so failing or delaying, including but not limited to acts of God, war,
insurrection, fire, flood, accident, strike or other labor disturbance,
interruption of or delay in transportation (a "Force Majeure Event"). Each
party shall promptly notify the other in writing of any such event of force
majeure, the expected duration thereof, and its anticipated effect on the
party affected and make reasonable efforts to remedy any such event, except
that neither party shall be under any obligation to settle a labor dispute.
If Licensor is prevented by a Force Majeure Event from delivering any
Accepted Program to Licensee, the running of the time period for purposes of
computing the applicable Broadcast Period for such Program shall be suspended
and, if such Force Majeure Event prevents Licensor from delivering any
substitute Programs to Licensee, then Licensee's obligations to pay the
Program Royalty under Section 5.1 hereof shall be reduced (but not below
zero) for the time period or periods so affected to the extent necessary to
compensate Licensee for the cost of obtaining substitute programming. Any
notice of Force Majeure sent pursuant to this Section 10 shall concurrently
be sent to the Managing Agents referred to in Section 9 above.
11. MODIFICATION. This Agreement shall not be modified or waived
in whole or in part except in writing signed by an officer of the party to be
bound by such modification or waiver.
12. WAIVER OF BREACH. A waiver by either party of any breach or
default by the other party shall not be construed as a waiver of any other
breach or default whether or not similar and whether or not occurring before
or after the subject breach.
13. JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United
States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties irrevocably
appoints CT Corporation System (the "Process Agent"), with an office on the
date hereof at 818 West 7th Street, Los Angeles, CA, 90017 as his or its
agent to receive on behalf of him or it and his or its property service of
copies of the summons and complaint and any other process which may be served
in any such action or proceeding. Such service may be made by delivering a
copy of such process to any of the parties in care of the Process Agent at
the Process Agent's above address, and each of the parties irrevocably
authorizes and directs the Process Agent to accept such service on its
behalf. As an alternate method of service, each of the parties consents to
the service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding by the mailing or
delivering of a copy of such process to such party at its address specified
in or pursuant to Section 14. Each of the parties agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
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14. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon
actual receipt, and shall be delivered (a) in person, (b) by registered or
certified mail (air mail if addressed to an address outside of the country in
which mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgment by
the addressee of receipt, or (d) by facsimile or other generally accepted
means of electronic transmission (provided that a copy of any notice
delivered pursuant to this clause (d) shall also be sent pursuant to clause
(b)), addressed as set forth in Schedule 1 or to such other addresses as may
be specified by like notice to the other parties.
15. ASSIGNMENTS. Either of the parties may assign its rights
hereunder and delegate its duties hereunder, in whole or in part, to an
Affiliate capable to perform the assignor's obligations hereunder, and either
of the parties may assign its rights hereunder and delegate its duties
hereunder to any person or entity to which all or substantially all of such
party's businesses and assets are pledged or transferred. No such assignment
or delegation shall relieve any party of its obligations hereunder. Any such
assignment or delegation authorized pursuant to this Section 15 shall be
pursuant to a written agreement in form and substance reasonably satisfactory
to the parties and to the Managing Agents referred to in Section 9 above.
Except as otherwise expressly provided herein, neither this Agreement nor any
rights, duties or obligations hereunder may be assigned or delegated by any
of the parties, in whole or in part, whether voluntarily, by operation of law
or otherwise; provided, however, that Licensor may assign, grant a security
interest in or otherwise transfer its rights to payment hereunder in
connection with one or more financings. Any attempted assignment or
delegation in violation of this prohibition shall be null and void. Subject
to the foregoing, all of the terms and provisions hereof shall be binding
upon, and inure to the benefit of, the successors and assigns of the parties.
Nothing contained herein, express or implied, is intended to confer on any
person other than the parties or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
16. GOVERNING LAW. This Agreement and the legal relations among
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California parties
made and performed in that State, without regard to conflict of laws
principles.
17. FURTHER ASSURANCES. Each party hereto agrees to execute any
and all additional documents and do all things and perform all acts necessary
or proper to further effectuate or evidence this Agreement including any
required filings with the U.S. Copyright Office.
18. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original instrument and all of which, when taken
together, shall constitute one and the same agreement.
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19. SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, then the remainder of this Agreement and application of such
provision to other persons or circumstances shall continue in full force and
effect and in no way be affected, impaired or invalidated; provided that the
aggregate of all such provisions found to be invalid or unenforceable does
not materially affect the benefits and obligations of the parties of the
Agreement taken as a whole.
20. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage may occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties may be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction pursuant to
Section 13, this being in addition to any other remedy to which they are
entitled at law or in equity.
21. ACKNOWLEDGEMENT OF SECURITY INTEREST. Pursuant to the
financing documents referred to in Section 9 above, the Administrative Agent
(for the benefit of the various lenders) has been granted a security
interest in and to all of Licensee's rights in this Agreement. The parties
hereto acknowledge and consent to the grant of such security interest.
22. PARTICIPATION AGREEMENT. All the terms and conditions of this
Agreement shall at all times be subject to the terms and conditions of the
Participation Agreement of even date herewith among Univision Television
Holdings, Inc, A. Jerrold Perenchio, Grupo Televisa, S.A., and Messrs.
Gustavo A. Cisneros and Ricardo J. Cisneros, and if there is any
inconsistency between any terms and conditions of this Agreement and the
terms and conditions of the Participation Agreement, the Participation Agreement
shall prevail.
23. TELEVISA ADVERTISING. Advertising time which is not sold to
advertisers or used by the Network or the Stations for their own purposes
will be made available without charge to Televisa and its Affiliates. Other
than as set forth in the following sentence, such time may be used for
promotion or direct sale (i.e., telemarketing) of products or services now
or hereafter owned or being provided by Televisa or its Affiliates (including,
without limitation, theatrical motion pictures produced or being distributed
by any of them). Such time, however, will not be available for any product
or service that is marketed primarily by telemarketing that was not owned or
being provided by Televisa or its Affiliates as of December 17, 1992, and
provided, further, that such time may be preempted by the Network or any
Station to the extent that such time is to be sold to a paying advertiser.
Televisa and its Affiliates will be permitted to purchase for such purposes
advertising time which cannot be preempted by the Network or the Stations
for the lowest spot rate then being offered for a non-preemptable spot in the
program during which such
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time is sold. Televisa may not, however, directly or indirectly make such
free or purchased time available to Persons other Affiliates. All material
provided for broadcast by the Televisa or its Affiliates shall comply with the
quality standards for unaffiliated advertisers established by the Network or the
Stations from time to time. The Board of Directors of Licensee, by a vote which
includes, in addition to any other required vote of directors, the affirmative
vote of a majority of the Class T Director(s) (so long as a Class T Voting
Conversion (as defined in the Restated Certificate of Incorporation of UCI) has
not occurred) or a majority of the Class V Director(s) (so long as a Class V
Voting Conversion (as defined in the Restated Certificate of Incorporation of
UCI) has not occurred, may make such rules in connection with the use of such
time by Televisa and its Affiliates as it determines to be appropriate,
including, without limitation, rules for the fair allocation of such time
between Televisa and [Venevision] and their respective Affiliates.
IN WITNESS WHEREOF, the parties have set their hands as of the
day and year first above written.
UNIVISA, INC.
By:___________________________
Title:________________________
THE UNIVISION NETWORK LIMITED
PARTNERSHIP
By: The Univision Network Holding
Limited Partnership
Its: General Partner
By: /s/[illegible]
---------------------------
Its: Managing Director
--------------------------
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Exhibit 10.8
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (this "Agreement") is made and
entered into as of the 2nd day of October, 1996, by and among Univision
Communications Inc., a Delaware corporation ("Univision"), Mr. A. Jerrold
Perenchio ("Perenchio"), Grupo Televisa S.A., a Mexican corporation
("Televisa"), and Messrs. Gustavo A. Cisneros and Ricardo J. Cisneros (the
"Cisneros Brothers") and Corporacion Venezolana de Television (Venevision)
C.A. ("Venevision" and together with Perenchio, Televisa and the Cisneros
Brothers, the "Principals"), with reference to the following facts:
A. In December 1992, Perenchio, Televisa and the
Cisneros Brothers jointly undertook the acquisition from Hallmark Cards and
subsequent operation of nine full power and six low power Spanish language
television stations (the "Stations") and the Univision Spanish language
television network (the "Network").
B. The Stations and the Network are being reorganized
in connection with an initial public offering of the Common Stock of
Univision, which will be the parent company of the Stations and the Network.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto agree as follows:
1. EXCLUSIVE TRANSACTIONS.
1.1 Each of the Principals acknowledges that the various
arrangements and agreements referred to above and the other relationships of the
Principals and their Affiliates to Univision continue to create a fiduciary
relationship between the Principals and their respective Affiliates, on one
hand, and Univision on the other hand, with respect to entering into certain
activities in competition with Univision which would make it inappropriate for
any of them, directly or indirectly, to act independently of the others in
connection with an Exclusive Transaction. Accordingly, none of the Principals
will, and each of the Principals will cause its Affiliates not to, directly or
indirectly, engage or participate in any Exclusive Transaction otherwise than as
permitted in this Agreement, or without first permitting Univision to
participate therein on the terms provided below.
1.2 If any of the Principals or any of their respective
Affiliates, intends to engage in an Exclusive Transaction, such Principal (the
"Offeror") shall, or shall cause its Affiliate to, offer to Univision the
opportunity to participate in such transaction. Univision shall have thirty
days after the Offeror gives it notice in accordance with Section 5.4 of the
material terms and conditions of a transaction in reasonable detail within which
to decide whether or not it wishes to participate therein and to give notice
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to the Offeror, in accordance with Section 5.4, of its decision. Univision
shall have only the right to elect to participate in the entire opportunity
offered to it on substantially the same terms available to the Offeror, and the
failure to give any notice in accordance with Section 5.4 within such thirty
days, or any response other than a timely unqualified acceptance, shall
constitute an election not to participate. If Univision does not notify the
Offeror that it wishes to participate in any such transaction prior to the end
of the thirtieth day following the business day on which such notice is given,
the Offeror and its Affiliates may pursue the transaction for their own
accounts. However, if the material terms and conditions of such transaction
change from the material terms and conditions that Univision failed to accept,
the opportunity shall again be offered to Univision as set forth above, except
that Univision shall have only seven days after receiving such notice within
which to give notice to the Offeror in accordance with Section 5.4 that it will
participate. The preceding sentence shall continue to apply to subsequent
changes in the material terms of such transaction prior to the closing thereof.
Not less than seven days prior to first offering any such opportunity to
Univision, the Offeror will notify Univision that an opportunity may be
presented, and will make available to it the information that the Offeror has
about the potential transaction which is reasonably necessary so that Univision
can familiarize itself with such opportunity and prepare to make decisions
hereunder. However, if the Offeror has less than fifteen business days notice
of a potential transaction, the Offeror shall comply with the preceding sentence
as soon as practicable after it determines that it wishes to evaluate whether or
not to participate in such potential transaction itself.
Notwithstanding the foregoing, (i) if an Exclusive
Transaction offered by Televisa or an Affiliate of Televisa is presented to
the Univision board of Directors and such Exclusive Transaction fails to
receive the requisite approval required by Article III, Section 12(a) of the
Bylaws of Univision on account of the failure to obtain the approval of the
Class T Directors, then neither Televisa nor any of its Affiliates shall be
entitled to engage in such Exclusive Transaction; (ii) if an Exclusive
Transaction offered by the Cisneros Brothers or an Affiliate of the Cisneros
Brothers is presented to the Univision Board of Directors and such
Transaction fails to receive the requisite approval required by Article III,
Section 12(a) of the Bylaws of Univision on account of the failure to obtain
the approval of the Class V Directors, then neither the Cisneros Brothers nor
any of their Affiliates shall be entitled to engage in such Exclusive
Transaction; and (iii) if an Exclusive Transaction offered by Perenchio or an
Affiliate of Perenchio is presented to the Univision Board of Directors and
such Transaction fails to receive the requisite approval required by Article
III, Section 12(a) of the Bylaws of Univision on account of the failure to
obtain the approval of the Class A/P Directors, then neither Perenchio nor
any of his Affiliates shall be entitled to engage in such Exclusive
Transaction.
The parties hereto agree that until the second anniversary of
this Agreement, Univision may participate for its own account in 100% of, and
none of the Principals nor any of their Affiliates may participate for their
own account in, any Exclusive Transaction that is discussed by the Univision
Board of Directors and reflected in the minutes of a Univision Board meeting
prior to the date of this Agreement;
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provided that if the reason that the transactions described herein have not
occurred by the second anniversary of this Agreement is that such transactions
(or any portion thereof, including the financing, thereof) have failed to
receive the requisite approval required by Article III, Section 12(a) of the
Bylaws of Univision on account of the failure to obtain the approval of the
Class T Directors and/or the Class V Directors required thereunder, Univision
shall have the right described herein until the fifth anniversary of this
Agreement.
1.3 If Univision accepts the opportunity to participate in an
Exclusive Transaction, then such opportunity shall be taken by Univision (or one
of its subsidiaries, as determined by the Board of Directors of Univision). In
such case, unless the Offeror and Univision agree otherwise, the Offeror and
Univision will enter into a joint venture to participate in such Exclusive
Transaction on substantially the following terms:
(a) the Offeror and Univision will each have a 50% economic interest in
the joint venture;
(b) the Offeror will control the joint venture either through contract
or through the right to designate a majority of directors or similar
persons;
(c) the Offeror will owe to Univision the same duty that a majority
shareholder owes to a minority shareholder;
(d) Univision will have approval rights over material transactions
relating to the joint venture and the business or entity subject to the
joint venture (the "Target Business") to the same extent as the approval
of the Class T and/or Class V Directors of Univision would be required in
respect of Univision; provided that if one or more Persons which are not
affiliated with the Offeror own in the aggregate 25% or more of the
common equity in the Target Business, Univision's sole approval rights
will be with respect to the joint venture owning the interest of
Univision and the Offeror in the Target Business and the right to approve
a change in the line(s) of business engaged in by the Target Business
from the line(s) of business disclosed in the offer made pursuant to
Section 1.2 with respect to such Exclusive Transaction (to the extent the
Offeror has such right), it being agreed that the Offeror shall be
entitled to make all other decisions concerning such Target Business.
Without limiting the foregoing, Univision shall be under no obligation to
make capital contributions or provide financing to the joint venture
except as set forth in such offer, and the Offeror may make such capital
contributions or provide such financing, for its own account, if such
transaction is made the subject of an offer pursuant to Section 1.2 and
Univision elects not to accept such offer in accordance with the terms
hereof.
(e) the parties will have customary tag along rights, drag along rights
and rights of first refusal.
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1.4 (a) If, in compliance with Sections 1.2 and 1.3, any of the
Principals, or any of their Affiliates, acquires an interest in any means of
Broadcasting in an Exclusive Station Transaction, the means of Broadcasting
which is the subject matter of such Exclusive Station Transaction must promptly
become subject to an affiliation agreement with the Network. If it does not do
so for any reason whatsoever, the Principal who, or whose Affiliates, has an
interest in such means will cause it to Broadcast less than 10 hours of
Programming per week.
(b) If any of the Principals, or any of their Affiliates, acquires an
interest in any means of Broadcasting, and such acquisition is not an Exclusive
Station Transaction because at the time of such acquisition there is not an
intention that such means will Broadcast at least 10 hours of Programming per
week on a regular basis, then there is no obligation to offer Univision the
opportunity to participate in such acquisition pursuant to Section 1.2.
However, if such means thereafter begins to Broadcast at least 10 hours of
Programming per week on a regular basis, so that the ownership and operation of
such means is an Exclusive Station Transaction, such means must promptly become
subject to an affiliation agreement with the Network and remain subject to such
an affiliation agreement for so long as such means continues to Broadcast at
least 10 hours of Programming per week on a regular basis. If it does not do so
for any reason whatsoever, the Principal who, or whose Affiliates, has an
interest in such means will use their best efforts to cause it to Broadcast less
than 10 hours of Programming per week.
(c) The affiliation agreements contemplated by Sections 1.4(a) and
1.4(b) above will be in the standard form used by the Network from time to time
for similar means of Broadcasting which are not owned by Univision, with any
items left for negotiation in such standard form being on terms which would be
fair and reasonable between unrelated parties dealing at arm's length in the
market conditions prevailing at the various times of entering into and renewing
such affiliation agreement. If the Network has no standard form of such
affiliation agreement and the parties cannot agree on an appropriate form, or if
items left for negotiation cannot be agreed upon, at the request of any party
all issues pertaining to such affiliation agreement on which the parties cannot
agree shall be submitted to arbitration as provided in Section 1.4(d) below.
Any arbitrator hereunder shall be experienced in the television industry, and
shall be bound by the terms of this Agreement. Any such arbitration shall be
final and binding upon the parties.
(d) Any arbitration provided for in this Agreement shall be conducted
by a single arbitrator in Los Angeles, California in accordance with the
Commercial Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") in effect on the date that such notice is
given, with the following exception: the party that requests arbitration shall
in writing in such notice nominate a competent person to act as the arbitrator.
Within seven days after receipt of such written notice, the other party shall
indicate in writing its concurrence or non-concurrence in the arbitrator
nominated by the other party. If the parties concur on the proposed arbitrator,
that arbitrator shall promptly decide all such issues on which the parties
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cannot agree in accordance with the Arbitration Rules. If the parties fail to
concur on the proposed arbitrator within fourteen days of the receipt of such
notice, then upon application by either party all such issues on which the
parties cannot agree shall be referred for resolution by a single arbitrator
appointed in accordance with the Arbitration Rules by the AAA. Each party shall
pay the fees of its own attorneys, expenses of its witnesses and all other
expenses connected with the presentation of such party's case. The other costs
of any arbitration shall be paid as the arbitrator may direct.
1.5 The provisions of this Section 1 are not intended to prevent
Televisa and its Affiliates from owning the television stations presently owned
in northern Mexico close to the border with the United States or from acquiring
for their own accounts additional television stations in communities in northern
Mexico which are close to the border; provided that Televisa shall not consent
to the transmission or further retransmission by translator or otherwise of the
Programming broadcast by such stations beyond each such station's equivalent to
a Grade B Contour (as such term is currently defined by the Federal
Communications Commission), to the extent such equivalent to a Grade B Contour
is in the United States, or by a cable system in the United States whose
principal head-end is located beyond 35 miles from the community of license of
any transmitting television station in Mexico transmitting the Programming (any
such cable retransmission within such 35 mile limit being hereby expressly
permitted). Televisa agrees to take commercially reasonable action to prevent
any such transmission or further retransmission beyond such reception areas.
1.6 The provisions of this Section 1 are not intended to prevent
Televisa or the Cisneros Brothers or their respective Affiliates from delivering
Programming to Broadcasters or viewers that are outside the United States by
satellite or any other means of Broadcasting originating outside the United
States, provided that except as hereinafter provided neither Televisa, the
Cisneros Brothers nor their respective Affiliates will, during the term of this
Agreement, consent to reception in the United States of such Programming by a
viewer or Broadcaster, including, without limitation, any cable system, master
antenna or multi-point distribution system, and Televisa, the Cisneros Brothers
and their respective Affiliates agree to take commercially reasonable action to
prevent any such Broadcaster from further transmitting such Programming to
viewers in the United States. In the event that Televisa, the Cisneros Brothers
or any of their respective Affiliates desires to engage in the business of
Broadcasting Programming to viewers in the United States from outside the United
States via satellite or any other means of Broadcasting (except to the limited
extent provided in Section 1.5 above) on any pay, subscription or advertising
supported basis, or any combination thereof, then Televisa, the Cisneros
Brothers and their respective Affiliates, as the case may be, shall first offer
to Univision pursuant to Section 1.2 the opportunity to participate in such
business on reasonable terms and conditions. The terms and conditions of
Sections 1.2 and 1.3 shall apply with respect to such offer except that the
thirty days and seven business days periods provided for in Section 1.2 shall
for this purpose be 60 days and 10 business days respectively.
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1.7 The provisions of this Section 1 shall not prevent Televisa, the
Cisneros Brothers or their respective Affiliates from selling time to
advertisers on Broadcasts of Programming originating outside the United
States based on the available viewers ("audience") incidentally available for
such Broadcasts in the United States as well as the audience outside the
United States provided that such audience in the United States has the legal
right to receive such Broadcast (for this purpose, individuals with the
current type of satellite reception antenna commonly called "back-yard
dishes" are deemed to have the legal right to receive such broadcast), and
Univision shall not have the right to share in any incremental revenue to
Televisa, the Cisneros Brothers or their respective Affiliates attributable
to such audience in the United States. If, however, Televisa, the Cisneros
Brothers or any of their respective Affiliates sell time to any advertiser
based on its own audience outside the United States for the Broadcast of
Programming and Univision's audience for the Broadcast of such Programming,
the revenue for Broadcasting to the combined audiences shall be allocated
between Univision and Televisa, the Cisneros Brothers or their respective
Affiliates, as the case may be, on the basis of their respective rate cards
for the time period(s) during which such advertising is carried. Neither
Univision, Televisa, the Cisneros Brothers nor their respective Affiliates
shall be required to carry any such advertising without its prior written
approval.
1.8 The provisions of Sections 1.5, 1.6 and 1.7 hereof shall also apply
MUTATIS MUTANDIS to television station affiliates of the Network and
television stations owned by Univision on the United States side of the
northern border of Mexico; Univision delivering Programming to Broadcasters
or viewers inside the United States by satellite or any other means of
Broadcasting originating inside the United States; and Univision selling time
to advertisers on Broadcasts of Programming originating inside the United
States based on the available viewers incidentally available for such
Broadcasts outside the United States.
1.9 The provisions of Section 1 shall not prohibit any Person from
acting as an employee, agent, advisor or otherwise for any business or
investment vehicle which neither engages in Exclusive Network Transactions
nor owns or operates any means of Broadcasting which regularly broadcasts at
least 10 hours of Programming per week. The provisions of Section 1 shall
also not prohibit any Person from owning a less than 5%, beneficial ownership
interest in any business or investment vehicle, and the provisions of Section
1 shall not apply to any transaction by any such business or investment
vehicle.
1.10 To the maximum extent permitted by law, subject to the obligations
of the Principals and their Affiliates under the Transaction Agreements, the
Principals, their respective Affiliates and the shareholders, officers,
directors and employees of the Principals and their respective Affiliates (i)
may engage in any activity, including but not limited to competing with
Univision and its subsidiaries, (ii) may acquire, own, broker, lease or
operate any business and (iii) shall not be under any obligation to
communicate
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or present any opportunity or potential transaction or matter to Univision or
its subsidiaries.
2. COMPLIANCE BY AFFILIATES. Each of the parties will cause all of its
Affiliates to comply with all of the Transaction Agreements.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Perenchio represents and warrants to Televisa, the Cisneros Brothers,
Venevision and Univision as follows:
(a) Each corporation and other entity listed on Schedule 3.1 is an
Affiliate of Perenchio, and all right, title and interest therein is
beneficially owned by Mr. A. Jerrold Perenchio.
(b) Each corporation and other entity listed on Schedule 3.1 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to execute, deliver and perform the Transaction
Agreements to which it is a party, and is duly qualified or licensed to do
business as a foreign corporation or other entity and in good standing in all
jurisdictions where such qualification is necessary in connection with such
ownership or performance.
(c) The execution, delivery and performance of each of the
Transaction Agreements by each Affiliate of Perenchio who is doing so has
been duly and validly authorized by the Board of Directors or other
appropriate authority of, and by all other necessary action on the part of,
each such Affiliate. This Agreement and each of the Transaction Agreements to
which Perenchio or an Affiliate of Perenchio is a party constitutes the
legally valid and binding obligation of Perenchio or such Affiliate,
enforceable against Perenchio or such Affiliate in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors rights generally. The execution, delivery
and performance of the Transaction Agreements by Perenchio and such
Affiliates, will not violate, or constitute a breach or default (whether upon
lapse of time and/or the occurrence of any act or event or otherwise) under,
the charter documents or by-laws of any such Affiliate or any contract or
agreement to which Perenchio or any such Affiliate may be a party, result in
the imposition of any lien or encumbrance against any assets or properties of
Perenchio or any such Affiliate, or violate any applicable law, rule or
regulation. Except for filings with the Federal Communications Commission,
the United States Department of Justice and the Federal Trade Commission,
which have been duly made, the execution, delivery and performance of this
Agreement and the Transaction Agreements by Perenchio and such Affiliates
will not require filing or registration with, or the issuance of any permit
or other authorization by, any third party or governmental authority.
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3.2 Televisa represents and warrants to Perenchio, the Cisneros
Brothers, Venevision and Univision as follows:
(a) Each corporation and other entity listed on Schedule 3.2 is an
Affiliate of Televisa, and all right, title and interest therein is
beneficially owned by Televisa.
(b) Each corporation and other entity listed on Schedule 3.2 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to execute, deliver and perform the Transaction
Agreements to which it is a party, and is duly qualified or licensed to do
business as a foreign corporation or other entity and in good standing in all
jurisdictions where such qualification is necessary in connection with such
ownership or performance.
(c) The execution, delivery and performance of this Agreement and
each of the Transaction Agreements by Televisa, has been duly and validly
authorized by the Board of Directors of Televisa and by all other necessary
action on the part of Televisa. The execution, delivery and performance of
each of the Transaction Agreements by each Affiliate of Televisa which is
doing so has been duly and validly authorized by the Board of Directors or
other appropriate authority of, and by all other necessary action on the part
of, each such Affiliate. This Agreement and each of the Transaction
Agreements to which Televisa or an Affiliate of Televisa is a party
constitutes the legally valid and binding obligation of Televisa or such
Affiliate, enforceable against Televisa or such Affiliate in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors rights generally. The
execution, delivery and performance of the Transaction Agreements by Televisa
and such Affiliates, will not violate, or constitute a breach or default
(whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under, the charter documents or by-laws of Televisa or any such
Affiliate or any contract or agreement to which Televisa or any such
Affiliate may be a party, result in the imposition of any lien or encumbrance
against any assets or properties of Televisa or any such Affiliate, or
violate any applicable law, rule or regulation. Except for filings with the
Federal Communications Commission, the United States Department of Justice
and the Federal Trade Commission, which have been duly made, the execution,
delivery and performance of this Agreement and the Transaction Agreements by
Televisa and such Affiliates will not require filing or registration with, or
the issuance of any permit or other authorization by, any third party or
governmental authority.
3.3 Each of the Cisneros Brothers represents and warrants to Televisa,
Perenchio and Univision as follows:
(a) Each corporation and other entity listed on Schedule 3.3 is an
Affiliate of the Cisneros Brothers.
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(b) Each corporation and other entity listed on Schedule 3.3 is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each such corporation and other entity has all
necessary power and authority to execute, deliver and perform the Transaction
Agreements to which it is a party, and is duly qualified or licensed to do
business as a foreign corporation or other entity and in good standing in all
jurisdictions where such qualification is necessary in connection with such
ownership or performance.
(c) The execution, delivery and performance of each of the
Transaction Agreements by each Affiliate of the Cisneros Brothers which is
doing so has been duly and validly authorized by the Board of Directors or
other appropriate authority of, and by all other necessary action on the part
of, each such Affiliate. This Agreement and each of the Transaction
Agreements to which the Cisneros Brothers or any such Affiliate is a party
constitutes the legally valid and binding obligation of the Cisneros Brothers
or such Affiliate, enforceable against the Cisneros Brothers or such
Affiliate in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles relating to or limiting creditors
rights generally. The execution, delivery and performance of the Transaction
Agreements by the Cisneros Brothers and such Affiliates, will not violate, or
constitute a breach or default (whether upon lapse of time and/or the
occurrence of any act or event or otherwise) under, the charter documents or
by-laws of any such Affiliate or any contract or agreement to which the
Cisneros Brothers or any such Affiliate may be a party, result in the
imposition of any lien or encumbrance against any assets or properties of the
Cisneros Brothers or any such Affiliate, or violate any applicable law, rule
or regulation. Except for filings with the Federal Communications
Commission, which have been duly made, the execution, delivery and
performance of this Agreement and the Transaction Agreements by the Cisneros
Brothers and such Affiliates will not require filing or registration with, or
the issuance of any permit or other authorization by, any third party or
governmental authority.
4. DEFINITIONS.
4.1 When used in this Agreement, the following terms shall have
the meanings set forth below, except as otherwise expressly modified herein,
and include the plural as well as the singular:
"AFFILIATE" of a Person means any Person that is, directly or
indirectly, controlled by the Person in question. For the purposes of this
definition, (i) "control," when used with respect to any Person, means the
power to direct the management and policies of such Person, whether through
the direct or indirect ownership of voting securities, by contract or
otherwise and (ii) Univision and its controlled Affiliates shall not be
deemed to be Affiliates of any of the parties or any of the Affiliates of any
of the parties.
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"BROADCAST" or "BROADCASTING" means transmitting or otherwise delivering
or distributing Programming, either free or on any pay or subscription basis,
directly to viewers in the United States by any means now known or hereafter
developed, including, without limitation, by means of over-the-air
television, HDTV, cable and cable systems, master antennas, satellite,
microwave, closed circuit, multi-point distribution, wire, fiber optic,
direct broadcast satellites and any means subject to regulation under the
Communications Act as then in effect or successor legislation or then subject
to regulation by the Federal Communications Commission or successor agency.
Broadcast and Broadcasting shall include, without limitation, delivery of
Programming either free or on any pay or subscription basis to viewers in the
United States in any manner in which the time of reception of the Programming
by the viewer is determined by such viewer. For purposes of illustration
(and not limitation) of the previous sentence, a technology now existing or
hereafter developed that enables a television viewer to order a program for
viewing at the time of his choice is Broadcasting. Broadcast or
Broadcasting, however, does not include the production or distribution of
theatrical motion pictures, including distribution of such motion pictures to
any Person for Broadcasting, or the manufacture or distribution to the public
of Programming recorded on a physical device like a video cassette or a laser
disc for home video use. A "Broadcaster" is a Person that Broadcasts.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended,
or any similar Federal statute, and the rules, regulations and policies of
the Federal Communications Commission thereunder.
"DENNEVAR" means Dennevar B.V, a Netherlands corporation.
"EXCLUSIVE NETWORK TRANSACTIONS" means supplying Programming to any
Person for the purpose of Broadcasting whether by such Person or by a direct
or remote transferee from such Person unless such supplying of Programming
results solely from a party's interest in a satellite or common carrier
facility with respect to which it has no direct or indirect control over or
interest in the content of what is being transmitted by such
telecommunications facility. Exclusive Network Transactions do not, however,
include the supply, by satellite or otherwise, by Univisa, Dennevar or their
respective Affiliates (a "Supplier" of Programming), strictly in compliance
with the Program License Agreements and Section 1.6 hereof, which does not
contain advertising sold by the Supplier or an Affiliate of the Supplier, to
Persons other than the Partnership so long as that in supplying such
Programming (a) the Supplier does not act, directly or indirectly, as a
network, or lease or broker time on a network (whether such Programming is
provided on a free or any pay basis), or (b) if such Programming is a live
program it is supplied on an individual basis and not as a group of more than
one live programs. For the purpose of the preceding sentence, "network" means
an entity which transmits the same Programming for simultaneous
retransmission by more than one Broadcaster or which otherwise provides the
same Programming to more than one Broadcaster and designates the time for
Broadcast of such Programming.
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"EXCLUSIVE STATION TRANSACTIONS" means the acquisition, ownership,
brokerage, leasing or operation of any means of Broadcasting, now known or
hereafter developed other than a satellite or common carrier facility with
respect to which the party having an interest therein has no direct or
indirect control over the content of what is being transmitted by such
satellite or common carrier facility. Exclusive Station Transactions,
however, do not include the acquisition of any such means of Broadcasting so
long as at the time of such acquisition there is not an intention that such
means will broadcast at least 10 hours of Programming per week on a regular
basis, or the ownership, brokerage, leasing or operation of any such means of
Broadcasting so long as such means does not broadcast at least 10 hours of
Programming per week on a regular basis.
"EXCLUSIVE TRANSACTIONS" means Exclusive Network Transactions and
Exclusive Station Transactions.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PROGRAMMING" means television programming in any form, in Spanish
(whether directly recorded or dubbed) or with Spanish subtitles, of the type
Broadcast at any time in the United States. Television programming means
programming of every kind appearing on television.
"PROGRAM LICENSE AGREEMENTS" means the agreements to be entered
into between The Univision Network Limited Partnership and Univisa and The
Univision Network Limited Partnership and Dennevar with respect to the
furnishing to Univision of program material for exploitation by the Network.
"TRANSACTION AGREEMENTS" means this Agreement and the agreements
and instruments listed in Schedule A hereto, as they may be amended,
supplemented or superseded from time to time.
"UNITED STATES" means the 50 states plus all territories of the
United States except Puerto Rico.
"UNIVISA" means Univisa, Inc., a Delaware corporation.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT. The express provisions of this
Agreement and the Transaction Agreements, and the documents delivered in
connection with any thereof, constitute the entire agreement among the
parties and their Affiliates, and supersede all other agreements and
understandings, both written and oral, among the parties and their
Affiliates, or any of them, with respect to the subject matter hereof and
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thereof. No implied agreements shall be deemed to exist with respect to such
subject matter. All references to sections, subsections and schedules shall
be deemed references to such part of this Agreement, unless the context shall
otherwise require.
5.2 ASSIGNMENTS. Neither this Agreement nor any rights or
obligations hereunder may be assigned or delegated by any of the parties, in
whole or in part, whether voluntarily, by operation of law or otherwise. Any
attempted assignment or delegation in violation of this prohibition shall be
null and void. Subject to the foregoing, all of the terms and provisions
hereof shall be binding upon, and inure to the benefit of, the permitted
successors and assigns of the parties. Nothing contained herein, express or
implied, is intended to confer on any Person other than the parties or their
respective permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. Pursuant to
the financing documents relating to financing to Univision, the
Administrative Agent (for the benefit of the various lenders) has been
granted a security interest in and to all of Univision's rights in this
Agreement. The parties hereto acknowledge and consent to the grant of such
security interest.
5.3 JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the
parties irrevocably submits to the jurisdiction of any California State or
United States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties
irrevocably appoints CT Corporation System (the "Process Agent"), with an
office on the date hereof at 818 West 7th Street, Los Angeles, CA 90017 as
his or its agent to receive on behalf of him or it and his or its property
service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding. Such service may be made by
delivering a copy of such process to any of the parties in care of the
Process Agent at the Process Agent's above address or such other address the
Process Agent may have in the future, and each of the parties irrevocably
authorizes and directs the Process Agent to accept such service on its
behalf. As an alternate method of service, each of the parties consents to
the service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding by the mailing or
delivering of a copy of the such process to such party at its address
specified in or in accordance with Section 5.4. Each of the parties agrees
that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
5.4 NOTIFICATION. All notices and other communications
required or permitted hereunder shall be in writing, shall be deemed duly
given upon actual receipt, and shall be delivered (a) in person, (b) by
registered or certified mail (air mail if addressed to an address outside of
the country in which mailed), postage prepaid, return receipt requested, (c)
by a generally recognized overnight courier service which provides
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written acknowledgement by the addressee of receipt, or (d) by facsimile or
other generally accepted means of electronic transmission (provided that a
copy of any notice delivered pursuant to this clause (d) shall also be sent
pursuant to clause (b)), addressed as set forth on Schedule 1 hereto or to
such other addresses as may be specified by like notice to the other parties.
5.5 INDEMNIFICATION. Each of the parties (an "INDEMNIFYING
PARTY") indemnifies each of the other parties, their respective Affiliates,
the officers, directors, shareholders, agents, employees and attorneys of
each of the other parties and their respective Affiliates, and their
respective heirs, administrators, successors and assigns, and agrees to hold
each of them harmless, from and against any and all Losses which any of them
may incur or suffer, or which may be asserted against or imposed on any of
them, directly or indirectly, arising out of, as a result of or based upon
any inaccuracy in or breach or nonperformance of any of the representations,
warranties, covenants or agreements made by the Indemnifying Party in this
Agreement. As used in this Agreement, "LOSSES" refers to any and all
liability, losses, costs, deficiencies, damages, demands, claims, actions,
judgments, causes of action and expenses (including, without limitation,
attorneys' and accountants' fees, costs incurred to investigate or defend,
and costs incurred to enforce the provision hereof).
5.6 INVALIDITY. If any provision of this Agreement is too
broad to permit enforcement to its full extent, such provision shall
nevertheless be enforced to the maximum extent permitted by law, and each
party agrees that such provisions may be judicially modified accordingly in
any proceeding brought to enforce this Agreement. If any portion of this
Agreement shall be held to be indefinite, invalid or otherwise entirely
unenforceable, the entire Agreement shall not fail on account thereof. The
balance of this Agreement shall continue in full force and effect.
5.7 AMENDMENTS AND WAIVERS. No modification, amendment,
termination or waiver of any provision of this Agreement, nor consent to any
departure therefrom, shall in any event be effective unless the same shall be
in writing and signed by the parties, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given. Neither any course of dealing nor any failure or delay on the part of
any of the parties in exercising any right, power or privilege hereunder
shall impair any such power, right or privilege or operate as a waiver
thereof or as a waiver or acquiescence in any default, nor shall any single
or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. No notice to or demand on any of the
parties in any case shall entitle such party to any other or further notice
or demand in the same, similar or other circumstances.
5.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each party and delivered to each party.
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5.9 FURTHER ACTIONS. Subject to the terms and conditions of
this Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all action necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
5.10 PUBLICITY. The parties will coordinate, and no party
will issue, or allow the issuance of, any press release, publicity statement,
letter to shareholders or other public notice relating to the Transaction
Agreement or the transactions contemplated thereby without the concurrence of
the other parties. Notwithstanding the foregoing, a party may issue such
press release, publicity statement, letter to shareholders or other public
notice if it believes, based upon the advice of such party's counsel, that
the issuance thereof is required by applicable law, rule or stock exchange
regulation, provided, however, to the extent reasonably practicable within
the requirements of the law, rule or stock exchange regulation, such party
shall give the other parties the opportunity to review and comment on any
such press release, publicity statement, letter or notice and shall revise it
to the extent reasonably practicable within the requirements of the
applicable law, rule or stock exchange regulation to reflect their concern.
5.11 SPECIFIC PERFORMANCE. The parties hereby acknowledge
that each party would suffer irreparable injury and would not have an
adequate remedy at law for money damages if the provisions of this Agreement
(including, without limitation Sections 1 and 2) were not performed in
accordance with their terms. Each party agrees that the others shall be
entitled to specific enforcement of the terms of this Agreement in addition
to any other remedy to which they are entitled, at law or in equity.
Furthermore, if any action or proceeding shall be instituted to enforce the
provisions hereof, any party against whom such action or proceeding is
brought hereby waives the claim or defense therein that there is an adequate
remedy at law, and agrees not to urge in any such action or proceeding the
claim or defense that such remedy at law exists.
5.12 SECTION AND OTHER HEADINGS. Section titles are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text.
5.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable
to contracts between California parties made and performed in that State,
without regard to conflict of laws principles.
5.14 ATTORNEYS' FEES; COSTS AND EXPENSES. In any action or
proceeding brought to enforce any provision of the Agreement, or where any
provision hereof is validly asserted as a defense, the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its cost and
expense and any other available remedy.
5.15 TERM. With respect to Exclusive Transactions relating
to direct broadcast satellite or direct to home satellite to the U.S. market,
this Agreement shall no
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longer apply to Televisa or the Cisneros Brothers or their respective
Affiliates when the Amended and Restated Program License Agreement to which
an Affiliate of such Principal is a party terminates and shall no longer
apply to Perenchio or his Affiliates when both such Amended and Restated
Program License Agreements terminate. With respect to any other Exclusive
Transaction, this Agreement shall no longer apply to a Principal or its
Affiliates when such Principal no longer owns the Required Amount (as that
term is defined in Univision's Restated Certificate of Incorporation) as
determined pursuant to Univision's Restated Certificate of Incorporation.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
/s/ A. Jerrold Perenchio
------------------------------------
A. Jerrold Perenchio
By: /s/ Guillermo Canedo White
-------------------------------
Name: Guillermo Canedo White
-------------------------------
Title: Exec. Vice President & Chief
Financial Officer
-----------------------------
/s/ Gustavo A. Cisneros
------------------------------------
Gustavo A. Cisneros
/s/ Ricardo J. Cisneros
------------------------------------
Ricardo J. Cisneros
Univision Communications Inc.
By: /s/ Robert V. Cahill
-------------------------------
Name: Robert V. Cahill
------------------------------
Title: Vice President and Secretary
-----------------------------
Corporacion Venezolana de Television,
C.A.(Venevision)
By: /s/ ILLEGIBLE
--------------------------------
Name:
------------------------------
Title: Attorney-in-fact
-----------------------------
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INTERNATIONAL PROGRAM RIGHTS AGREEMENT
This INTERNATIONAL PROGRAM RIGHTS AGREEMENT is entered into as of
October 2, 1996 by and between UNIVISION COMMUNICATIONS INC., a Delaware
corporation ("UCI" and other entities directly or indirectly controlled by UCI
including The Univision Network Limited Partnership being hereinafter referred
to collectively as "Univision"), Grupo Televisa, S.A. ("Televisa") and
Venevision International, Inc. ("Venevision").
I. GRANDFATHERED PROGRAMS.
A. The parties hereto agree that with respect to each Grandfathered
Program to which Univision has applicable rights (i) Univision shall own in the
United States and its territories and possessions, excluding Puerto Rico (the
"Univision Territory") in perpetuity all rights of every kind and nature,
including without limitation all television, theatrical motion picture, live
stage, merchandising, music, publication, sequel, remake, spin-off, ancillary
and subsidiary rights, in and to such Grandfathered Program and (ii) to the
extent Univision has acquired the applicable rights in each applicable
territory, Televisa shall own in Mexico (the "Televisa Territory"), Venevision
shall own in Venezuela (the "Venevision Territory"), and Televisa and Venevision
shall each own an undivided interest in 100% of the remainder of the world
outside the Univision Territory, Mexico and Venezuela (the "Remainder
Territory") in such respective percentages as Televisa and Venevision shall from
time to time designate in a joint notice to Univision, corresponding rights and
the copyrights, renewals and extensions of copyrights in all such Grandfathered
Programs for the period described in Section 1.2 below. Without limiting the
generality of the foregoing, the holders of the respective rights described
above have the sole, exclusive and unencumbered right in their respective
Territories to distribute, cut, edit, telecast, exhibit, sell, use, license and
otherwise exploit each Grandfathered Program and all rights therein in any
medium, whether now known or hereafter devised, and in such manner and to the
extent, if at all, as the party(ies) holding such rights shall determine in its
sole discretion. Notwithstanding the foregoing, a remake, sequel, prequel,
spinoff or other derivative work (each, a "derivative work") based on a
Grandfathered Program, shall not be a Grandfathered Program hereunder unless
such derivative work, if produced by Univision, by its own terms falls within
the definition of a Grandfathered Program under this Agreement. Univision,
Televisa and Venevision shall execute or cause to be executed such further
documents and instruments as any one thereof may reasonably request in order to
effectuate the terms and intentions of this Section 1.1. Subject to Section 6,
Univision agrees to use commercially reasonable efforts to obtain the rights in
the Territories for all Grandfathered Programs and agrees to use good faith
efforts not to structure agreements with respect to Grandfathered Programs in a
manner intended to
<PAGE>
cause such rights not to be available. The parties acknowledge that
Univision has no rights in Chile to the Program "Sabado Gigante."
B. 1. At such time as the Televisa Program License is terminated,
all rights in Grandfathered Programs granted to Televisa pursuant to paragraph
1.1 above, shall revert to Univision, and subject to Section 10, Televisa shall
have no further right to any Grandfathered Program under this Agreement.
2. At such time as the Venevision Program License Agreement is
terminated, all rights in Grandfathered Programs granted to Venevision pursuant
to paragraph 1.1 above, shall revert to Univision, and subject to Section 10,
Venevision shall have no further right to any Grandfathered Program under this
Agreement.
II. NEW PROGRAMS.
A. The parties hereto agree that with respect to each New Program to
which Univision has applicable rights (i) subject to clause (ii) below,
Univision shall own in perpetuity all worldwide rights of every kind and nature,
including without limitation all television, theatrical motion picture, live
stage, merchandising, music, publication, sequel, remake, spin-off, ancillary
and subsidiary rights, in and to such New Program and (ii) to the extent
Univision has acquired the applicable rights in each applicable territory, (x)
Televisa and Venevision shall have the sole, exclusive and unencumbered right to
Broadcast (as defined in the Program License Agreements) the New Program(s) in
their respective Territories and the right to cut and edit such New Program(s)
for such Broadcast and (y) Televisa and Venevision shall have merchandising
rights in such New Program(s) in their respective Territories. Univision,
Televisa and Venevision shall execute or cause to be executed such further
documents and instruments as any one thereof may reasonably request in order to
effectuate the terms and intentions of this Section 2.1. Subject to Section 6,
Univision agrees to use commercially reasonable efforts to obtain the rights in
the Territories for all New Programs and agrees to use good faith efforts not to
structure agreements with respect to New Programs in a manner intended to cause
such rights not to be available.
B. 1. At such time as Televisa and its Affiliates no longer own
the Required Amount, all rights in New Programs granted to Televisa pursuant to
Section 2.1 above, shall revert to Univision, and subject to Section 10,
Televisa shall have no further right to any New Program under this Agreement.
2. At such time as the Cisneros Brothers and their Affiliates
no longer own the Required Amount, all rights in New Programs granted to
Venevision pursuant to Section 2.1 above, shall revert to Univision, and subject
to Section 10, Venevision shall have no further right to any New Program under
this Agreement.
III. UNIVISION RIGHTS. Univision and its Affiliates shall have
the right and ability to, and to permit others to: (i) transmit or
re-transmit in any electronic form
<PAGE>
or other means, from any television station in the United States, or via
satellite which receives its signal from any earth station or other facility
in the United States any Programs which may also be covered by this
Agreement, notwithstanding the fact that such transmissions or
re-transmissions may be viewed in Territories other than the Univision
Territory; provided that neither Univision nor its Affiliates consent to the
retransmission of such Programs by any television station in any Territory
other than the Univision Territory or by any cable system in any Territory
other than the Univision Territory that is located beyond 35 miles from the
community of license of any transmitting television station in the United
States transmitting the Programs (any such cable re-transmission within such
35 mile limit being hereby expressly permitted); and (ii) market and promote
and otherwise generate revenues (including, but not limited to, the sale of
advertising time) attributable to the ability of viewers in the Territories
other than the Univision Territory to receive such Programs.
IV. OTHER NETWORKS. 1. If Univision forms any network (an "Other
Network") other than the Univision Network or the Galavision Network, subject to
the provisions of this Section 4 and Section 5(b) below, neither Televisa nor
Venevision shall have any rights in or to any program produced or acquired by
Univision for any Other Network in accordance with the terms of this Agreement.
2. Univision shall not be entitled to air any Grandfathered
Program, New Program or Designated Special, or any remake, sequel, prequel or
spinoff (as those terms are customarily defined in the television broadcast
industry) of any Grandfathered Program, New Program or Designated Special on
any Other Network without the consent of Televisa and Venevision.
3. Univision shall not be entitled to air any program on the
Univision Network or the Galavision Network (i) that has previously been aired
on any Other Network and (ii) for which broadcast rights have been licensed by
Univision to a third party in either Mexico or Venezuela without the consent of
Televisa or Venevision, respectively.
V. RIGHTS OF FIRST NEGOTIATION AND OFFER.
(a) If Univision wishes to engage a third party distributor to
distribute Programs in which Univision has rights in any Territory other than in
the Univision Territory, Univision will first offer to Televisa and Venevision a
joint right of first negotiation to act as distributor for Univision in such
Territories. If Televisa and Venevision wish to negotiate with Univision to act
as distributor to Univision, Univision, Televisa and Venevision will negotiate
in good faith for a period of 30 days to reach agreement on the terms of a
distribution arrangement. If Univision, Televisa and Venevision cannot reach
agreement on the terms of a distribution arrangement within such 30 day period,
Univision shall be free to enter into a distribution arrangement with a third
party distributor on terms no less favorable to Univision than those offered by
Televisa and Venevision.
<PAGE>
(b) If Univision wishes to license any program not broadcast on
the Univision Network or the Galavision Network in Mexico or Venezuela,
Univision will first offer to Televisa and/or Venevision, as applicable, a right
of first offer to license such program in Mexico or Venezuela, as the case may
be. Televisa and Venevision will have a period of 10 business days to make an
offer with respect to the license of such program. If Univision does not wish
to accept such offer, Univision shall be free to license such program to a third
party for broadcast in Mexico or Venezuela on terms no less favorable to
Univision than those offered by Televisa or Venevision, as the case may be.
VI. COST OBLIGATIONS. To the extent any costs are incurred or
payment or clearances are required with respect to the exploitation of any
Program in any the Remainder Territory, the Televisa Territory or the Venevision
Territory, including, but not limited to, residual or royalty obligations and
participations, the party or parties having the rights to exploit such Program
in such Territory shall be responsible for all such costs, payments or
clearances, as applicable. Notwithstanding the generality of the foregoing,
Univision shall not have the ability to commit Televisa or Venevision to any of
the foregoing costs, payments or clearances with respect to any Program unless
(i) Televisa or Venevision, as the case may be, gives prior approval or (ii)
Televisa or Venevision, as the case may be, airs or licenses such Program.
VII. DEFINITIONS.
"Affiliates" of a person means any person that directly or indirectly
controls, is controlled by, or is under common control with the person in
question. For the purposes of this definition, "control", when used with
respect to any person, means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Broadcast Period" means (i) for novelas or other Programs with a plot
line continuing through more than one episode, the time necessary to broadcast
all episodes on a continuing basis without substantial interruption and (ii) for
all other programs (excluding one-program shows), (x) for weekly programs, the
time period necessary to broadcast 26 episodes of the Program without
substantial interruption, which under normal circumstances is expected to be 26
continuous weeks and (y) for daily programs (Monday through Friday), 26 weeks.
"Designated Specials" means the Specials set forth on Schedule 1
hereto (to the extent and frequency described on such schedule), and if such
specials are not produced on the frequency set forth on Schedule 1, such other
specials having the same format, theme and frequency as the specials not so
produced. Univision agrees to determine the frequency of specials in the
ordinary course and use good faith in determining Designated Specials.
<PAGE>
"Existing Programs" means all Programs being produced by Univision as
set forth on Schedule 1 hereto.
"Grandfathered Programs" means all Existing Programs, all Replacement
Programs and all Designated Specials.
"New Programs" means all Programs other than Grandfathered Programs.
"Program License Agreements" means the Televisa Program License
Agreement and the Venevision Program License Agreement.
"Programs" means television programs initially produced in the
Spanish language or programs with Spanish subtitles produced directly or
indirectly by or for the Univision Network or the Galavision Network and to
be produced directly or indirectly by or for the Univision Network or the
Galavision Network for broadcast at any time and which are available for
broadcast and to which the Univision Network or the Galavision Network has
the rights to Broadcast in an applicable Territory including, without
limitation, in the following categories: novelas, musicals, variety shows,
situation comedies, game shows, talk shows, children's shows, news shows,
cultural and educational programs, and sports programs. Programs do not
include programs acquired by Univision from Televisa or Venevision.
"Replacement Program" means any Program that (A) shares at least
two out of four of the following characteristics with an Existing Program or
another Replacement Program (each, a "Replaced Program") (i) it has a
substantially similar format and theme to such Replaced Program, (ii) it
shares a material amount of talent with such Replaced Program, (iii) it is in
the same day-part as such Replaced Program and (iv) it shares the same or a
substantially similar name with such Replaced Program; and (B) commences
broadcast on Univision Network or Galavision Network within six months prior
to or within six months after the termination of broadcast of such Replaced
Program on such network. A special will only be required to comply with
clause (A) above.
"Required Amount" in the case of Televisa and Venevision shall have
the meaning given to such term in the Restated Certificate of Incorporation of
Univision Communications Inc.
"Televisa Program License Agreement" that certain Amended and Restated
Program License Agreement between Univisa, Inc. and The Univision Network
Limited Partnership dated as of the date hereof, as it may be amended from time
to time.
"Territories" means the Univision Territory, the Televisa Territory,
the Venevision Territory and the Remainder Territory.
<PAGE>
"Venevision Program License Agreement" that certain Amended and
Restated Program License Agreement between Dennevar, B.V., and The Univision
Network Limited Partnership dated as of the date hereof, as it may be amended
from time to time.
"without substantial interruption" means that the Programs will be
scheduled and run on a continuing periodic basis except for occasional network
preemption to accommodate one-time specials or programs which, because of their
nature or timeliness or because of applicable rules, must in a person's
reasonable judgment be broadcast in lieu of the regularly scheduled Program.
VIII. REPRESENTATIONS AND WARRANTIES OF UNIVISION.
A. To the extent Univision is granting rights hereunder,
Univision hereby agrees, warrants and represents as follows:
1. Univision has or will have the right to grant to
Televisa and Venevision the rights to the Programs in the applicable
Territories set forth in this Agreement, including but not limited to the
necessary literary, artistic, technological and intellectual property rights
and has secured or will secure all necessary written consents, permissions
and approvals for incorporation into such Programs of the names, trademarks,
likenesses and/or biographies of all persons, firms, products, companies and
organizations depicted or displayed in such Programs, and any preexisting
film or video footage produced by third parties;
2. There are no and will not be any pending claims,
liens, charges, restrictions or encumbrances on the Programs that conflict
with the rights granted hereunder to such Programs in the applicable
Territories;
3. The main and end titles of the Programs and all
publicity, promotion, advertising and packaging information and materials
supplied by Univision will (i) contain all necessary and proper credits for the
actors, directors, writers and all other persons appearing in or connected with
the production of such Programs who are entitled to receive credit and (ii)
comply with all applicable contractual, guild, union and statutory requirements
and agreements;
4. The broadcast of Programs in the applicable Territories
will not infringe on the rights of any third party, (including but not limited
to copyright, patent, trademark, unfair competition, contract, property,
defamation, privacy, publicity or "moral rights" (to the extent such moral
rights are recognized by United States law));
5. Except to the extent expressly permitted by this
Agreement, Univision has not and will not grant or license to others, and will
not itself exercise, any rights to broadcast the Programs in the applicable
Territories; and
<PAGE>
6. All Programs (and elements thereof) will be delivered
as reasonably agreed to by the parties in a manner consistent with customary
practice.
IX. INDEMNIFICATION.
A. Univision agrees to hold Televisa and Venevision and their
respective directors, officers, employees, agents and shareholders (collectively
the "Televisa and Venevision Indemnitees") harmless, from any claims,
deficiencies, assessments, liabilities, losses, damages, expenses (including,
without limitation, reasonable fees and expenses of counsel) (collectively,
"Losses") which any Televisa or Venevision Indemnitee may suffer by reason of
Univision's breach of, or non-compliance with, any covenant or provision herein
contained or the inaccuracy of any warranty or representation made in this
Agreement and any such damages shall be reduced by: (i) the amount of any net
tax benefit ultimately accruing to such Televisa or Venevision Indemnitee on
account of such Televisa or Venevision Indemnitee's payment of such claim; (ii)
insurance proceeds which such Televisa or Venevision Indemnitee has or will
receive in connection with such claim, and (iii) any recovery from third parties
in connection with such claim; PROVIDED, HOWEVER, that Univision shall not delay
payment of its indemnification obligations hereunder pending resolution of any
tax benefit or insurance or third party claim if such Televisa or Venevision
Indemnitee provides Univision with an undertaking to reimburse Univision for the
amount of any such claim ultimately received; and PROVIDED, FURTHER, that no
Televisa or Venevision Indemnitee shall have any obligation to obtain any such
insurance proceeds or recovery from third parties if and to the extent Univision
is subrogated (in form and substance satisfactory to Univision) to such Televisa
or Venevision Indemnitee's claims in respect of such insurance or third parties.
B. Televisa and Venevision agree to indemnify Univision, its
direct and indirect partners or shareholders and all officers, directors,
employees and agents of any of the foregoing (the "Univision Indemnitees")
against and hold the Univision Indemnitees harmless from any and all Losses
incurred or suffered by any Univision Indemnitee arising out of any program or
commercial material (apart from the Programs) furnished by such person and any
such damages shall be reduced by: (i) the amount of any net tax benefit
ultimately accruing to such Univision Indemnitee on account of such Univision
Indemnitee's payment of such claim; (ii) insurance proceeds which such Univision
Indemnitee has or will receive in connection with such claim, and (iii) any
recovery from third parties in connection with such claim; PROVIDED, HOWEVER,
that neither Televisa nor Venevision shall delay payment of its indemnification
obligations hereunder pending resolution of any tax benefit or insurance or
third party claim if such Univision Indemnitee provides Televisa or Venevision,
as the case may be, with an undertaking to reimburse Televisa or Venevision, as
the case may be, for the amount of any such claim ultimately received; and
PROVIDED, FURTHER, that such Univision Indemnitee shall have no obligation to
obtain any such insurance proceeds or recovery from third parties if and to the
extent Televisa or Venevision is subrogated (in form and
<PAGE>
substance satisfactory to Televisa or Venevision) to such Univision
Indemnitee's claims in respect of such insurance or third parties.
C. The following procedures shall govern all claims for
indemnification made under any provision of this Agreement. A written notice
(an "Indemnification Notice") with respect to any claim for indemnification
shall be given by the party seeking indemnification (the "Indemnitee") to the
party from which indemnification is sought (the "Indemnitor") within thirty
(30) days of the discovery by the Indemnitee of such claim, which
Indemnification Notice shall set forth the facts relating to such claim then
known to the Indemnitee (provided that failure to give such Indemnification
Notice as aforesaid shall not release the Indemnitor from its indemnification
obligations hereunder unless and to the extent the Indemnitor has been
prejudiced thereby). The party receiving an Indemnification Notice shall send
a written response to the party seeking indemnification stating whether it
agrees with or rejects such claim in whole or in part. Failure to give such
response within ninety (90) days after receipt of the Indemnification Notice
shall be conclusively deemed to constitute acknowledgment of the validity of
such claim. If any such claim shall arise by reason of any claim made by
third parties, the Indemnitor shall have the right, upon written notice to
Indemnitee within thirty (30) days after receipt of the Indemnification
Notice, to assume the defense of the matter giving rise to the claim for
indemnification through counsel of its selection reasonably acceptable to
Indemnitee, at Indemnitor's expense, and the Indemnitee shall have the right,
at its own expense, to employ counsel to represent it; PROVIDED, HOWEVER,
that if any action shall include both the Indemnitor and the Indemnitee and
there is a conflict of interest because of the availability of different or
additional defenses to the Indemnitee, the Indemnitee shall have the right to
select separate counsel to participate in the defense of such action on its
behalf, at the Indemnitor's expense. The Indemnitee shall cooperate fully to
make available to the Indemnitor all pertinent information under the
Indemnitee's control as to the claim and shall make appropriate personnel
available for any discovery, trial or appeal. If the Indemnitor does not
elect to undertake the defense as set forth above, the Indemnitee shall have
the right to assume the defense of such matter on behalf of and for the
account of the Indemnitor; PROVIDED, HOWEVER, the Indemnitee shall not settle
or compromise any claim without the consent of the Indemnitor, which consent
shall not be unreasonably withheld. The Indemnitor may settle any claim at
any time at its expense, so long as such settlement includes as an
unconditional term thereof the giving by the claimant of a release of the
Indemnitee from all liability with respect to such claim.
X. TERM. Subject to Sections 1.2 and 2.2, the term of this
Agreement shall be until December 17, 2017. Any license in effect for any
Program at the date of termination of this Agreement (or the termination of
any rights under this Agreement) shall continue through the Broadcast Period
for such Program, with no right of re-license or extension at the end thereof
and all of the rights and obligations of the parties under this Agreement
with respect to such license will continue through the Broadcast Period for
such Program, it being agreed that the parties shall enter into mutually
satisfactory royalty arrangements with respect to the Broadcast Period
following the termination of
<PAGE>
this Agreement in order to compensate Univision for the use of Programs
during such period and, if the parties are unable to agree upon such royalty
arrangements, the amount thereof shall be determined based on prevailing
market conditions.
In addition this Agreement may be terminated by Univision with respect
to Televisa or Venevision, as the case may be, if Televisa or Venevision, as the
case may be (i) materially breaches its obligations hereunder and fails to cure
such breach within 180 days of notice thereof by the party seeking termination
(which notice shall describe the breach in reasonable detail); or (ii) asserts a
Force Majeure Event under Section 11 as a relief from substantially all of its
obligations hereunder for a period in excess of one year and this Agreement may
be terminated by Televisa and Venevision with respect to Univision, if Univision
(i) materially breaches its obligations hereunder and fails to cure such breach
within 180 days of notice thereof by the party seeking termination (which notice
shall describe the breach in reasonable detail); or (ii) asserts a Force Majeure
Event under Section 11 as a relief from substantially all of its obligations
hereunder for a period in excess of one year.
XI. FORCE MAJEURE. No party hereto shall be liable for or suffer any
penalty or termination of rights hereunder by reason of any failure or delay in
performing any of its obligations hereunder if such failure or delay is
occasioned by compliance with governmental regulation or order, or by
circumstances beyond the reasonable control of the party so failing or delaying,
including but not limited to acts of God, war, insurrection, fire, flood,
accident, strike or other labor disturbance, interruption of or delay in
transportation (a "Force Majeure Event"). Each party shall promptly notify the
others in writing of any such Force Majeure Event, the expected duration
thereof, and its anticipated effect on the party affected and make reasonable
efforts to remedy any such event, except that no party shall be under any
obligation to settle a labor dispute.
XII. MODIFICATION. This Agreement shall not be modified or waived in
whole or in part except in writing signed by an officer of the party to be bound
by such modification or waiver.
XIII. WAIVER OF BREACH. A waiver by one party of any breach or
default by another party shall not be construed as a waiver of any other breach
or default whether or not similar and whether or not occurring before or after
the subject breach.
XIV. JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United States
Federal court sitting in Los Angeles County in any action or proceeding arising
out of our relating to this Agreement or the transactions contemplated hereby,
and irrevocably agrees that any such action or proceeding may be heard and
determined only in such California State or Federal court. Each of the parties
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of any such action or proceeding.
Each of the parties irrevocably appoints CT
<PAGE>
Corporation System (the "Process Agent"), with an office on the date hereof
at 818 West 7th Street, Los Angeles, CA, 90017 as his or its agent to receive
on behalf of him or it and his or its property service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding. Such service may be made by delivering a copy of such
process to any of the parties in care of the Process Agent at the Process
Agent's above address, and each of the parties irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternate method of service, each of the parties consents to the service of
copies of the summons and complaint and any other process which may be served
in any such action or proceeding by the mailing or delivering of a copy of
such process to such party at its address specified in or pursuant to Section
15. Each of the parties agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
XV. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail (air mail if addressed to an address outside of the country in which
mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgment by
the addressee of receipt, or (d) by facsimile or other generally accepted means
of electronic transmission (provided that a copy of any notice delivered
pursuant to this clause (d) shall also be sent pursuant to clause (b)),
addressed as set forth on Schedule 1 or to such other addresses as may be
specified by like notice to the other parties.
XVI. ASSIGNMENTS. Any party may assign its rights hereunder and
delegate its duties hereunder, in whole or in part, to an Affiliate able to
perform the assignor's obligations hereunder, and any party may assign its
rights hereunder and delegate its duties hereunder to any person or entity to
which all or substantially all of such party's businesses and assets are
pledged or transferred. No such assignment or delegation shall relieve any
party of its obligations hereunder. Any such assignment or delegation
authorized pursuant to this Section 16 shall be pursuant to a written
agreement in form and substance reasonably satisfactory to the parties.
Except as otherwise expressly provided herein, neither this Agreement nor any
rights, duties or obligations hereunder may be assigned or delegated by any
of the parties, in whole or in part, whether voluntarily, by operation of law
or otherwise. Any attempted assignment or delegation in violation of this
prohibition shall be null and void. Subject to the foregoing, all of the
terms and provisions hereof shall be binding upon, and inure to the benefit
of, the successors and assigns of the parties. Nothing contained herein,
express or implied, is intended to confer on any person other than the
parties or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Pursuant to the financing documents relating to financing to UCI, the
Administrative Agent (for the benefit of the various lenders) has been
granted a security interest in and to all of UCI's rights in this Agreement.
The parties hereto acknowledge and consent to the grant of such security
interest.
<PAGE>
XVII. GOVERNING LAW. This Agreement and the legal relations among
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California parties made
and performed in that State, without regard to conflict of laws principles.
XVIII. FURTHER ASSURANCES. Each party hereto agrees to execute any
and all additional documents and do all things and perform all acts necessary or
proper to further effectuate or evidence this Agreement including any required
filings with the United States Copyright Office.
XIX. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original instrument and all of which, when taken
together, shall constitute one and the same agreement.
XX. SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, then the remainder of this Agreement and application of such
provision to other persons or circumstances shall continue in full force and
effect and in no way be affected, impaired or invalidated; provided that the
aggregate of all such provisions found to be invalid or unenforceable does not
materially affect the benefits and obligations of the parties of the Agreement
taken as a whole.
<PAGE>
SCHEDULE 1
EXISTING PROGRAMS
Noticiero Univision
Noticiero Univision Edicion Nocturna
Cristina
Cristina Edicion Especial
Primer Impacto
Primer Impacto Edicion Nocturna
Primer Impacto Extra
Fuera De Serie
Lente Loco
Lo Mejor de Lente Loco
Onda Max
Caliente
Control
De Buen Humor con Sabado Gigante*
Amor Gigante
Sabado Gigante
La Santa Misa
Temas Y Debates
Domingo Deportivo (Excluding U.S. Rights Only Events)
Futbol MLS (Excluding U.S. Rights Only Events)
Titulares Deportivos
Camino A La Copa (Excluding U.S. Rights Only Events)
Boxeo Estclar
DESIGNATED SPECIALS
Aqui y Ahora (Quarterly)
Calle Ocho (Yearly)
Cuentamelo*
Desfile De Las Rosas (Yearly)
Desfile De Navidad-Disney (Yearly)
Desfile De Pascuas-Disney (Yearly)
El Reventon En El Astrodome (Yearly)
Felix Ano Nuevo (Yearly)
L.A. Fiesta Broadway (Yearly)
Noche De Carnaval (Yearly)
Noticiero Univision Presenta (Quarterly)
Nuestra Belleza Internacional (Yearly)
Las Bellas y La Bestia (Yearly)
Premio Lo Nuestro (Yearly)
* No longer being produced by Univision.
<PAGE>
XXI. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage may occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties may be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction pursuant to Section 14, this being in addition
to any other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UNIVISION COMMUNICATIONS INC.
By: /s/ Robert V. Cahill
-------------------------------
Robert V. Cahill
Title: Vice President and Secretary
----------------------------
GRUPO TELEVISA S.A.
By: /s/ Guillermo Canedo White
-------------------------------
Guillermo Canedo White
Exec. Vice President &
Title: Chief Financial Officer
----------------------------
VENEVISION INTERNATIONAL, INC.
By: /s/ [Illegible]
-------------------------------
Title: Attorney-in-fact
----------------------------
<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE
PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER
APPLICABLE FEDERAL OR STATE SECURITIES LAWS.
AMENDED AND RESTATED WARRANT
TO PURCHASE COMMON STOCK OF
UNIVISION COMMUNICATIONS INC.,
A DELAWARE CORPORATION
THIS IS TO CERTIFY THAT: Grupo Telesistema, S.A. de C.V., a Mexican
corporation ("Televisa") or registered transferees (the "Holder") is entitled to
purchase from Univision Communications Inc., a Delaware corporation (the
"Company"), at any time and from time to time on and after the date hereof an
aggregate of 6,855,779 shares of Class T Common Stock (or Class A Common Stock
as provided herein) at a purchase price of $0.12878 per share, all on the terms
and conditions and subject to the adjustments provided herein. This Amended and
Restated Warrant (this "Warrant") is executed and delivered with reference to
the following facts:
A. On December 17, 1992, the Company issued warrants to Televisa to
purchase up to 35,000 shares of Class T Common Stock of the Company (the
"Original Warrant").
B. The Original Warrant contemplated the merger of PTI Holdings
Inc., a Delaware corporation that is 80% owned by the Company, ("PTIH") with the
Company.
C. Prior to such merger, the number of shares of Class T Common
Stock issuable upon exercise of the Original Warrant was limited to 26,000
shares.
D. The Original Warrant contained provisions regarding adjustment to
the number of shares issuable upon exercise of the Original Warrant upon the
merger of PTIH and the Company.
E. The Original Warrant provided that if PTIH merged into the
Company, the number of shares which could be purchased upon exercise of this
Warrant would be reduced in accordance with the terms of the Original Warrant.
1
<PAGE>
F. The Company and PTIH are combining other than through a merger
and the Company will be the sole owner of PTIH.
G The Company and the Holder wish to amend and restate the Original
Warrant to reflect the combination of PTIH and the Company and accurately to
reflect the number of shares of Common Stock that will be issuable upon exercise
of this Warrant.
SECTION 1. CERTAIN DEFINITIONS. As used in this Warrant, unless the
context otherwise requires:
"Affiliate" means, with respect to a specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Business Day" means any day on which commercial banks are not
authorized or required to close in Los Angeles, California.
"Class A Common Stock" means the Company's authorized Class A Common
Stock, par value $.01 per share.
"Class P Common Stock" means the Company's authorized Class P Common
Stock, par value $.01 per share.
"Class T Common Stock" means the Company's authorized Class T Common
Stock, par value $.01 per share.
"Class V Common Stock" means the Company's authorized Class V Common
Stock, par value $.01 per share.
"Common Stock" means the Class A Common Stock, Class P Common Stock,
Class T Common Stock and Class V Common Stock.
"Communications Act" means the Federal Communications Act of 1934, as
amended, or any other similar Federal statute, and the rules and regulations of
the Federal Communications Commission promulgated thereunder.
"Exercise Price" means, on the date hereof, the purchase price per
share as set forth on the first page of this Warrant and thereafter shall mean
such amount as adjusted pursuant to Section 4.
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"Permitted Holder" means Grupo Televisa S.A. and its wholly-owned
subsidiaries.
"Person" means a corporation, an association, a trust, a partnership,
a joint venture, an organization, a business, an individual, a government or
political subdivision thereof or a governmental body.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
at the time.
"Warrant Shares" at any time means the shares of Class T Common Stock
or Class A Common Stock then purchasable by the Holder upon the exercise of this
Warrant.
SECTION 2. EXERCISE OF WARRANT.
2.1 CONDITIONS OF EXERCISE. The Holder may at any time on and after
the date hereof exercise this Warrant in whole or in part from time to time, for
the number of Warrant Shares which the Holder is then entitled to purchase
hereunder; provided, however, that this Warrant may not be exercised unless at
the time of such exercise all of the following conditions are met:
(a) it is lawful at the time of exercise for the Holder to own the
number of shares of Common Stock which the Holder would own upon such
exercise of this Warrant, and the exercise of this Warrant and such
Holder's acquisition of such shares hereunder does not violate the
Communications Act or other applicable law, rule or regulation;
(b) the Company has received such evidence as it may reasonably
request confirming the foregoing, including, without limitation, an opinion
in form and substance, and from counsel, reasonably satisfactory to the
Company and, if the Company requests, an agreement from the Holder
reasonably satisfactory to the Company indemnifying the Company against
losses in the event the exercise of this Warrant violates the
Communications Act; and
(c) any required approval from the Federal Communications Commission
has been received.
In the event that the Company declines to permit the exercise of this Warrant
because it believes that paragraphs (a) or (b) above have not been satisfied and
a procedure exists for obtaining a binding determination of whether or not such
exercise will cause a violation of applicable law, including, without
limitation, obtaining a declaratory ruling from the Federal Communications
Commission under Rule 1.2 of the rules promulgated under the Communications Act
(or any successor rule), then at the request of the Holder
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or the Company, the Company and the Holder will use reasonable efforts to
obtain such determination. Any such efforts shall be at the expense of the
Holder, unless the Company is unreasonable in refusing to rely on the
assurances provided pursuant to paragraph (b), in which case such efforts
shall be at the expense of the Company.
2.2 METHOD OF EXERCISE. The Holder may exercise this Warrant in
whole or in part by delivering to the Company (i) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased, (ii) this Warrant, (iii) the evidence
and agreement requested by the Company referred to in Section 2.1(b) above and
(iv) a sum equal to the Exercise Price for all Warrant Shares being purchased
pursuant to the exercise of this Warrant in the form of a cashiers' check or
wire transfer.
2.3 ISSUANCE OF WARRANT SHARES. Upon the Holder's exercise of this
Warrant, the Company shall issue the Warrant Shares so purchased to the Holder
and within two Business Days shall cause to be executed and delivered to the
Holder a certificate or certificates representing the aggregate number of fully-
paid and nonassessable shares of Common Stock issuable upon such exercise. The
stock certificate or certificates for Warrant Shares so delivered shall be in
such denominations as may be specified in such notice and shall be registered in
the name of the Holder. Such certificate or certificates shall be deemed to
have been issued and the Holder shall be deemed to have become a holder of
record of such shares, with the right, to the extent permitted by law, to vote
such shares or to consent or to receive notice as a stockholder, as of the close
of business on the date all of the conditions referred to in Section 2.1 are
satisfied (including, without limitation, the obtaining of any requested
declaratory ruling from the Federal Communications Commission) and all of the
items specified in Section 2.2 above are delivered to the Company. If this
Warrant shall have been exercised only in part the Company shall, within two
Business Days of delivery of such certificate or certificates, deliver to the
Holder either (i) a new warrant dated the date it is issued evidencing the
rights of the Holder to purchase the remaining Warrant Shares called for by this
Warrant or (ii) this Warrant bearing an appropriate notation of such partial
exercise. The Holder shall pay all expenses, transfer taxes and other charges
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 2.
2.4 CLASS OF SHARES ISSUED. If the Holder is a Permitted Holder, the
Holder may elect to receive shares of Class T Common Stock or shares of Class A
Common Stock upon exercise of this Warrant. If the Holder is not a Permitted
Holder, the Company shall issue to the Holder shares of Class A Common Stock
upon exercise of this Warrant.
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SECTION 3. TRANSFER OF WARRANT.
3.1 RESTRICTIONS ON TRANSFER. Subject to Section 5 hereof, this
Warrant and all Warrant Shares issued hereunder may be sold, transferred,
pledged or hypothecated (collectively, "Transferred") to any third party. Any
certificate for any Warrant Shares issued hereunder shall be stamped or
otherwise imprinted with legends in substantially the form of the legends
contained on the first page hereof.
3.2 MECHANICS OF TRANSFERS. Subject to satisfaction of the
conditions set forth in Section 3.1, this Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company to be maintained
for such purpose, upon surrender of this Warrant at the office of the Company,
together with a written assignment of this Warrant duly executed by the Holder
or its agent or attorney. Upon such surrender, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment, and this
Warrant shall promptly be canceled. This Warrant, if properly Transferred in
compliance with this Section 3, may be exercised by an assignee for the purchase
of Warrant Shares without having a new Warrant issued.
SECTION 4. ADJUSTMENT OF WARRANT SHARES; ANTI-DILUTION PROVISIONS.
If any of the following events occurs at any time hereafter prior to
the full exercise of this Warrant, then the Exercise Price and/or the number of
Warrant Shares remaining to be purchased hereunder immediately prior to such
event shall be adjusted as described below:
4.1 REDEMPTIONS AND REPURCHASES. If at any time there is a pro rata
(based upon the respective number of outstanding shares of each class)
redemption or repurchase of the Class A Common Stock, Class P Common Stock,
Class T Common Stock, and Class V Common Stock, the number of Warrant Shares
remaining to be purchased hereunder shall be decreased by a percentage equal to
the percentage of Common Stock so redeemed or repurchased.
4.2 STOCK SUBDIVISIONS OR STOCK CONSOLIDATIONS. If at any time the
outstanding shares of Class A Common Stock, Class P Common Stock, Class T Common
Stock, and Class V Common Stock are subdivided into a greater number of shares,
whether by stock split, stock dividend or otherwise, then the Exercise Price
will be reduced proportionately and the number of Warrant Shares remaining to be
purchased hereunder, will be increased proportionately. Conversely, if at any
time the outstanding shares of Class A Common Stock, Class P Common Stock, Class
T Common Stock, and Class V Common Stock are consolidated into a smaller number
of shares, then the Exercise Price will be increased proportionately and the
number of Warrant Shares remaining to be purchased hereunder, will be reduced
proportionately. Each adjustment to the Exercise Price and the number of
Warrant Shares shall be effective on the record
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date, or if there is no record date, the effective date for such subdivision
or consolidation.
4.3 CONSOLIDATION, MERGER OR SALE OF ASSETS. If the Company shall
at any time (i) consolidate with or merge into another corporation or (ii)
merge with another corporation and be the surviving corporation in such
merger, and in connection therewith all or part of the Class T Common Stock
or Class A Common Stock shall be changed into or exchanged for securities of
any other entity or cash or other property, the Holder of this Warrant will
thereafter receive, upon the exercise hereof in accordance with the terms
hereof, the securities, cash or other property to which the holder of the
number of shares of Common Stock then deliverable upon the exercise of this
Warrant would have received upon such consolidation or merger, and the
Company shall take such steps in connection with such consolidation or merger
as may be necessary to assure that the provisions thereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to any securities or
property thereafter deliverable upon the exercise of this Warrant. The
Company or the successor corporation, as the case may be, shall execute and
deliver to the Holder a supplemental Warrant so providing. A sale of all or
substantially all the assets of the Company for a consideration (apart from
the assumption of obligations) consisting primarily of securities shall be
deemed a consolidation or merger for the foregoing purposes. The provisions
of this Section 4.3 similarly shall apply to successive mergers or
consolidations or sales or other transfers.
4.4 DIVIDENDS. If the Company proposes to declare a dividend on
or make a distribution with respect to the Class T Common Stock or Class A
Common Stock, whether in cash, property or securities, the Company will
deliver written notice of such proposed event, in reasonable detail, to the
Holder not less than fifteen (15) days prior to the record date for such
dividend or distribution.
4.5 NOTICES. When any adjustments are required to be made under
this Section 4, the Company shall as promptly as practicable (i) determine
such adjustments, (ii) prepare a statement describing in reasonable detail
the method used in arriving at the adjustment and setting forth the
calculation thereof; and (iii) cause a copy of such statement to be mailed to
the Holder.
4.6 COMPUTATIONS AND ADJUSTMENTS. Upon each computation of an
adjustment under this Section 4, the Exercise Price shall be computed to the
nearest 1/1000 cent and the number of Warrant Shares shall be calculated to
the nearest whole share (i.e., fractions of less than one-half shall be
disregarded and fractions of one-half or greater shall be treated as being
the next greater integer). However, the fractional amount shall be used in
calculating any future adjustments.
SECTION 5. SECURITIES LAWS. The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant and the Warrant Shares
which may be issued pursuant thereto have not been registered under the
Securities Act, or applicable state securities laws. The Holder of this
Warrant, by acceptance hereof, represents that it is
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<PAGE>
fully informed as to the applicable limitations upon any distribution or
resale of the Warrant Shares under the Securities Act or any applicable state
securities laws and agrees not to distribute or resell any Warrant Shares if
such distribution or resale would constitute a violation of the Securities
Act or any applicable state securities laws or would cause the issuance by
the Company of the Warrant or the Warrant Shares to be in violation of the
Securities Act or any applicable state securities laws. The Holder agrees
that all certificates representing Warrant Shares will carry an appropriate
legend substantially in the form of the first legend contained on the first
page hereof. Any exercise hereof by the Holder shall constitute a
representation by the Holder that the Warrant Shares are not being acquired
with the view to, or for resale in connection with, any distribution or
public offering thereof in violation of the Securities Act or applicable
state securities laws.
SECTION 6. NO VOTING RIGHTS. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a stockholder of the
Company.
SECTION 7. RESERVATION OF WARRANT SHARES. The Company has reserved
and will keep available, out of the authorized and unissued shares of Common
Stock, the full number of shares sufficient to provide for the exercise of the
rights of purchase represented by this Warrant. Upon issuance and delivery
against payment pursuant to the terms of this Warrant, all Warrant Shares will
be validly issued, fully paid and nonassessable.
SECTION 8. LOSS, DESTRUCTION OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity satisfactory to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock.
SECTION 9. MISCELLANEOUS PROVISIONS.
9.1 AMENDMENTS. The terms of this Warrant may be amended, and the
observance of any term herein may be waived, but only with the written consent
of the Holder and the Company. If at any time this Warrant is split into
multiple Warrants, any consent to be given by the Holder with respect to any
amendment hereto shall be made by the Holders of Warrants exercisable for a
majority of the unissued Warrant Shares, provided that no amendment may change
the number of Warrant Shares or the Exercise Price without the written consent
of the Holders all Warrants.
9.2 JURISDICTION; VENUE; SERVICE OF PROCESS. The Company and the
Holder each irrevocably submits to the jurisdiction of any California State or
United
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States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties
irrevocably appoints CT Corporation System (the "PROCESS AGENT"), with an
office on the date hereof at 818 West 7th Street, Los Angeles, CA 90017 as
his or its agent to receive on behalf of him or it and his or its property
service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding. Such service may be made by
delivering a copy of such process to any of the parties in care of the
Process Agent at the Process Agent's above address, and each of the parties
irrevocably authorizes and directs the Process Agent to accept such service
on its behalf. As an alternate method of service, each of the parties
consents to the service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the mailing
or delivering of a copy of such process to such party at its address
specified in or pursuant to Section 9.3. Each of the parties agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
9.3 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail (air mail if addressed to an address outside of the country in which
mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgement by
the addressee of receipt, or (d) by facsimile or other generally accepted means
of electronic transmission (provided that a copy of any notice delivered
pursuant to this clause (d) shall also be sent pursuant to clause (b)),
addressed as follows:
(i) If to the Company:
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Attn: Robert V. Cahill, Esq.
Telecopier: (310) 556-3568
with a copy to:
O'Melveny & Myers
1999 Avenue of the Stars, Suite 700
Los Angeles, California 90067
Attn: Donald V. Petroni, Esq.
Telecopier: (310) 246-6779
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(ii) If to the Holder:
Avenida Chapultepec No. 28
06724 Mexico, D.F.
Attn: Alejandro Sada
Telecopier: (011) (525) 709-1157
with copies to:
Univisa, Inc.
2121 Avenue of the Stars, Suite 3300
Los Angeles, California 90067
Attn: Lawrence W. Dam
Telecopier: (305) 286-1615
and
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attn: Joseph A. Stern
Telecopier: (212) 747-1526
or to such other addresses as may be specified by like notice to the other
parties.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name by its President or a Vice President.
Dated: October 2, 1996
---------
UNIVISION COMMUNICATIONS INC.
By: /s/ Robert Cahill
-----------------------------------
Name:
Title:
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<PAGE>
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE
PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER
APPLICABLE FEDERAL OR STATE SECURITIES LAWS.
AMENDED AND RESTATED WARRANT
TO PURCHASE COMMON STOCK OF
UNIVISION COMMUNICATIONS INC.,
A DELAWARE CORPORATION
THIS IS TO CERTIFY THAT: Venevision International Limited, a British
Virgin Islands Corporation ("Venevision") or registered transferees (the
"Holder") is entitled to purchase from Univision Communications Inc., a
Delaware corporation (the "Company"), at any time and from time to time on
and after the date hereof an aggregate of 6,855,779 shares of Class V Common
Stock (or Class A Common Stock as provided herein) at a purchase price of
$0.12878 per share, all on the terms and conditions and subject to the
adjustments provided herein. This Amended and Restated Warrant (this
"Warrant") is executed and delivered with reference to the following facts:
A. On December 17, 1992, the Company issued warrants to
Venevision to purchase up to 35,000 shares of Class V Common Stock of the
Company (the "Original Warrant").
B. The Original Warrant contemplated the merger of PTI Holdings
Inc., a Delaware corporation that is 80% owned by the Company, ("PTIH") with
the Company.
C. Prior to such merger, the number of shares of Class V Common
Stock issuable upon exercise of the Original Warrant was limited to 26,000
shares.
D. The Original Warrant contained provisions regarding adjustment
to the number of shares issuable upon exercise of the Original Warrant upon
the merger of PTIH and the Company.
E. The Original Warrant provided that if PTIH merged into the
Company, the number of shares which could be purchased upon exercise of this
Warrant would be reduced in accordance with the terms of the Original Warrant.
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F. The Company and PTIH are combining other than through a merger
and the Company will be the sole owner of PTIH.
G. The Company and the Holder wish to amend and restate the
Original Warrant to reflect the combination of PTIH and the Company and
accurately to reflect the number of shares of Common Stock that will be
issuable upon exercise of this Warrant.
SECTION 1. CERTAIN DEFINITIONS. As used in this Warrant, unless
the context otherwise requires:
"Affiliate" means, with respect to a specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Business Day" means any day on which commercial banks are not
authorized or required to close in Los Angeles, California.
"Class A Common Stock" means the Company's authorized Class A
Common Stock, par value $.01 per share.
"Class P Common Stock" means the Company's authorized Class P
Common Stock, par value $.01 per share.
"Class T Common Stock" means the Company's authorized Class T
Common Stock, par value $.01 per share.
"Class V Common Stock" means the Company's authorized Class V
Common Stock, par value $.01 per share.
"Common Stock" means the Class A Common Stock, Class P Common
Stock, Class T Common Stock and Class V Common Stock.
"Communications Act" means the Federal Communications Act of 1934,
as amended, or any other similar Federal statute, and the rules and
regulations of the Federal Communications Commission promulgated thereunder.
"Exercise Price" means, on the date hereof, the purchase price per
share as set forth on the first page of this Warrant and thereafter shall
mean such amount as adjusted pursuant to Section 4.
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"Permitted Holder" means
(i) Gustavo A. Cisneros, Ricardo J. Cisneros (each a "Cisneros
Brother"), and any entity all of the equity (other than directors'
qualifying shares) of which is directly or indirectly owned by a Cisneros
Brother, or both of them, and that is not an Affiliate of any other Person;
(ii) (a) the spouse and lineal descendants of each Cisneros
Brother, (b) the personal representative and heirs of each Cisneros
Brother, (c) any trustee of any trust created primarily for the benefit of
any, some or all of such spouse and lineal descendants (but which may
include beneficiaries which are charities) or of any revocable trust
created by such Cisneros Brother, (d) following the death of such Cisneros
Brother, all beneficiaries under either such trust, (e) any entity all of
the equity of which is directly or indirectly owned by any of the foregoing
which is not an Affiliate of any Person other than the Person described in
clauses (a)-(d) above.
"Person" means a corporation, an association, a trust, a
partnership, a joint venture, an organization, a business, an individual, a
government or political subdivision thereof or a governmental body.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder, all as the same shall be in
effect at the time.
"Warrant Shares" at any time means the shares of Class V Common
Stock or Class A Common Stock then purchasable by the Holder upon the
exercise of this Warrant.
SECTION 2. EXERCISE OF WARRANT.
2.1 CONDITIONS OF EXERCISE. The Holder may at any time on and
after the date hereof exercise this Warrant in whole or in part from time to
time, for the number of Warrant Shares which the Holder is then entitled to
purchase hereunder; provided, however, that this Warrant may not be exercised
unless at the time of such exercise all of the following conditions are met:
(a) it is lawful at the time of exercise for the Holder to own the
number of shares of Common Stock which the Holder would own upon such
exercise of this Warrant, and the exercise of this Warrant and such
Holder's acquisition of such shares hereunder does not violate the
Communications Act or other applicable law, rule or regulation;
(b) the Company has received such evidence as it may reasonably
request confirming the foregoing, including, without limitation, an opinion
in form
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and substance, and from counsel, reasonably satisfactory to the
Company and, if the Company requests, an agreement from the Holder
reasonably satisfactory to the Company indemnifying the Company against
losses in the event the exercise of this Warrant violates the
Communications Act; and
(c) any required approval from the Federal Communications Commission
has been received.
In the event that the Company declines to permit the exercise of this Warrant
because it believes that paragraphs (a) or (b) above have not been satisfied
and a procedure exists for obtaining a binding determination of whether or
not such exercise will cause a violation of applicable law, including,
without limitation, obtaining a declaratory ruling from the Federal
Communications Commission under Rule 1.2 of the rules promulgated under the
Communications Act (or any successor rule), then at the request of the Holder
or the Company, the Company and the Holder will use reasonable efforts to
obtain such determination. Any such efforts shall be at the expense of the
Holder, unless the Company is unreasonable in refusing to rely on the
assurances provided pursuant to paragraph (b), in which case such efforts
shall be at the expense of the Company.
2.2 METHOD OF EXERCISE. The Holder may exercise this Warrant in
whole or in part by delivering to the Company (i) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased, (ii) this Warrant, (iii) the
evidence and agreement requested by the Company referred to in Section 2.1(b)
above and (iv) a sum equal to the Exercise Price for all Warrant Shares being
purchased pursuant to the exercise of this Warrant in the form of a cashiers'
check or wire transfer.
2.3 ISSUANCE OF WARRANT SHARES. Upon the Holder's exercise of
this Warrant, the Company shall issue the Warrant Shares so purchased to the
Holder and within two Business Days shall cause to be executed and delivered
to the Holder a certificate or certificates representing the aggregate number
of fully-paid and nonassessable shares of Common Stock issuable upon such
exercise. The stock certificate or certificates for Warrant Shares so
delivered shall be in such denominations as may be specified in such notice
and shall be registered in the name of the Holder. Such certificate or
certificates shall be deemed to have been issued and the Holder shall be
deemed to have become a holder of record of such shares, with the right, to
the extent permitted by law, to vote such shares or to consent or to receive
notice as a stockholder, as of the close of business on the date all of the
conditions referred to in Section 2.1 are satisfied (including, without
limitation, the obtaining of any requested declaratory ruling from the
Federal Communications Commission) and all of the items specified in Section
2.2 above are delivered to the Company. If this Warrant shall have been
exercised only in part the Company shall, within two Business Days of
delivery of such certificate or certificates, deliver to the Holder either
(i) a new warrant dated the date it is issued evidencing the rights of the
Holder to purchase the remaining Warrant Shares called for by this Warrant or
(ii) this Warrant bearing an appropriate notation of
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<PAGE>
such partial exercise. The Holder shall pay all expenses, transfer taxes and
other charges payable in connection with the preparation, issuance and
delivery of stock certificates under this Section 2.
2.4 CLASS OF SHARES ISSUED. If the Holder is a Permitted Holder,
the Holder may elect to receive shares of Class V Common Stock or shares of
Class A Common Stock upon exercise of this Warrant. If the Holder is not a
Permitted Holder, the Company shall issue to the Holder shares of Class A
Common Stock upon exercise of this Warrant.
SECTION 3. TRANSFER OF WARRANT.
3.1 RESTRICTIONS ON TRANSFER. Subject to Section 5 hereof, this
Warrant and all Warrant Shares issued hereunder may be sold, transferred,
pledged or hypothecated (collectively, "Transferred") to any third party.
Any certificate for any Warrant Shares issued hereunder shall be stamped or
otherwise imprinted with legends in substantially the form of the legends
contained on the first page hereof.
3.2 MECHANICS OF TRANSFERS. Subject to satisfaction of the
conditions set forth in Section 3.1, this Warrant and all rights hereunder
are transferable, in whole or in part, on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the office of
the Company, together with a written assignment of this Warrant duly executed
by the Holder or its agent or attorney. Upon such surrender, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument
of assignment, and this Warrant shall promptly be canceled. This Warrant, if
properly Transferred in compliance with this Section 3, may be exercised by
an assignee for the purchase of Warrant Shares without having a new Warrant
issued.
SECTION 4. ADJUSTMENT OF WARRANT SHARES; ANTI-DILUTION PROVISIONS.
If any of the following events occurs at any time hereafter prior
to the full exercise of this Warrant, then the Exercise Price and/or the
number of Warrant Shares remaining to be purchased hereunder immediately
prior to such event shall be adjusted as described below:
4.1 REDEMPTIONS AND REPURCHASES. If at any time there is a pro rata
(based upon the respective number of outstanding shares of each class)
redemption or repurchase of the Class A Common Stock, Class P Common Stock,
Class T Common Stock, and Class V Common Stock, the number of Warrant Shares
remaining to be purchased hereunder shall be decreased by a percentage equal to
the percentage of Common Stock so redeemed or repurchased.
4.2 STOCK SUBDIVISIONS OR STOCK CONSOLIDATIONS. If at any time the
outstanding shares of Class A Common Stock, Class P Common Stock, Class T Common
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Stock, and Class V Common Stock are subdivided into a greater number of
shares, whether by stock split, stock dividend or otherwise, then the
Exercise Price will be reduced proportionately and the number of Warrant
Shares remaining to be purchased hereunder, will be increased
proportionately. Conversely, if at any time the outstanding shares of Class
A Common Stock, Class P Common Stock, Class T Common Stock, and Class V
Common Stock are consolidated into a smaller number of shares, then the
Exercise Price will be increased proportionately and the number of Warrant
Shares remaining to be purchased hereunder, will be reduced proportionately.
Each adjustment to the Exercise Price and the number of Warrant Shares shall
be effective on the record date, or if there is no record date, the effective
date for such subdivision or consolidation.
4.3 CONSOLIDATION, MERGER OR SALE OF ASSETS. If the Company shall
at any time (i) consolidate with or merge into another corporation or (ii)
merge with another corporation and be the surviving corporation in such
merger, and in connection therewith all or part of the Class V Common Stock
or Class A Common Stock shall be changed into or exchanged for securities of
any other entity or cash or other property, the Holder of this Warrant will
thereafter receive, upon the exercise hereof in accordance with the terms
hereof, the securities, cash or other property to which the holder of the
number of shares of Common Stock then deliverable upon the exercise of this
Warrant would have received upon such consolidation or merger, and the
Company shall take such steps in connection with such consolidation or merger
as may be necessary to assure that the provisions thereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to any securities or
property thereafter deliverable upon the exercise of this Warrant. The
Company or the successor corporation, as the case may be, shall execute and
deliver to the Holder a supplemental Warrant so providing. A sale of all or
substantially all the assets of the Company for a consideration (apart from
the assumption of obligations) consisting primarily of securities shall be
deemed a consolidation or merger for the foregoing purposes. The provisions
of this Section 4.3 similarly shall apply to successive mergers or
consolidations or sales or other transfers.
4.4 DIVIDENDS. If the Company proposes to declare a dividend on
or make a distribution with respect to the Class V Common Stock or Class A
Common Stock, whether in cash, property or securities, the Company will
deliver written notice of such proposed event, in reasonable detail, to the
Holder not less than fifteen (15) days prior to the record date for such
dividend or distribution.
4.5 NOTICES. When any adjustments are required to be made under
this Section 4, the Company shall as promptly as practicable (i) determine
such adjustments, (ii) prepare a statement describing in reasonable detail
the method used in arriving at the adjustment and setting forth the
calculation thereof; and (iii) cause a copy of such statement to be mailed to
the Holder.
6
<PAGE>
4.6 COMPUTATIONS AND ADJUSTMENTS. Upon each computation of an
adjustment under this Section 4, the Exercise Price shall be computed to the
nearest 1/1000 cent and the number of Warrant Shares shall be calculated to
the nearest whole share (i.e., fractions of less than one-half shall be
disregarded and fractions of one-half or greater shall be treated as being
the next greater integer). However, the fractional amount shall be used in
calculating any future adjustments.
SECTION 5. SECURITIES LAWS. The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant and the Warrant Shares
which may be issued pursuant thereto have not been registered under the
Securities Act, or applicable state securities laws. The Holder of this
Warrant, by acceptance hereof, represents that it is fully informed as to the
applicable limitations upon any distribution or resale of the Warrant Shares
under the Securities Act or any applicable state securities laws and agrees
not to distribute or resell any Warrant Shares if such distribution or resale
would constitute a violation of the Securities Act or any applicable state
securities laws or would cause the issuance by the Company of the Warrant or
the Warrant Shares to be in violation of the Securities Act or any applicable
state securities laws. The Holder agrees that all certificates representing
Warrant Shares will carry an appropriate legend substantially in the form of
the first legend contained on the first page hereof. Any exercise hereof by
the Holder shall constitute a representation by the Holder that the Warrant
Shares are not being acquired with the view to, or for resale in connection
with, any distribution or public offering thereof in violation of the
Securities Act or applicable state securities laws.
SECTION 6. NO VOTING RIGHTS. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a stockholder of the
Company.
SECTION 7. RESERVATION OF WARRANT SHARES. The Company has
reserved and will keep available, out of the authorized and unissued shares
of Common Stock, the full number of shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant. Upon
issuance and delivery against payment pursuant to the terms of this Warrant,
all Warrant Shares will be validly issued, fully paid and nonassessable.
SECTION 8. LOSS, DESTRUCTION OF WARRANT. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity satisfactory to the
Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and representing the right to purchase the same aggregate number of
shares of Common Stock.
7
<PAGE>
SECTION 9. MISCELLANEOUS PROVISIONS.
9.1 AMENDMENTS. The terms of this Warrant may be amended, and the
observance of any term herein may be waived, but only with the written
consent of the Holder and the Company. If at any time this Warrant is split
into multiple Warrants, any consent to be given by the Holder with respect to
any amendment hereto shall be made by the Holders of Warrants exercisable for
a majority of the unissued Warrant Shares, provided that no amendment may
change the number of Warrant Shares or the Exercise Price without the written
consent of the Holders all Warrants.
9.2 JURISDICTION; VENUE; SERVICE OF PROCESS. The Company and the
Holder each irrevocably submits to the jurisdiction of any California State
or United States Federal court sitting in Los Angeles County in any action or
proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby, and irrevocably agrees that any such action or
proceeding may be heard and determined only in such California State or
Federal court. Each of the parties irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Each of the parties
irrevocably appoints CT Corporation System (the "PROCESS AGENT"), with an
office on the date hereof at 818 West 7th Street, Los Angeles, CA 90017 as
his or its agent to receive on behalf of him or it and his or its property
service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding. Such service may be made by
delivering a copy of such process to any of the parties in care of the
Process Agent at the Process Agent's above address, and each of the parties
irrevocably authorizes and directs the Process Agent to accept such service
on its behalf. As an alternate method of service, each of the parties
consents to the service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the mailing
or delivering of a copy of such process to such party at its address
specified in or pursuant to Section 9.3. Each of the parties agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
9.3 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon
actual receipt, and shall be delivered (a) in person, (b) by registered or
certified mail (air mail if addressed to an address outside of the country in
which mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgement
by the addressee of receipt, or (d) by facsimile or other generally accepted
means of electronic transmission (provided that a copy of any notice
delivered pursuant to this clause (d) shall also be sent pursuant to clause
(b)), addressed as follows:
8
<PAGE>
(i) If to the Company:
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Attn: Robert V. Cahill, Esq.
Telecopier: (310) 556-3568
with a copy to:
O'Melveny & Myers
1999 Avenue of the Stars, Suite 700
Los Angeles, California 90067
Attn: Donald V. Petroni, Esq.
Telecopier: (310) 246-6779
(ii) If to the Holder:
Venevision International Limited
550 Biltmore Way, 9th Floor
Coral Gables, Florida 33134
Attn: Alejandro Rivera
Telecopier: (305) 447-1389
with copies to:
Finser Corp.
550 Biltmore Way, 9th Floor
Coral Gables, Florida 33134
Attn: James G. Naro, Esq.
Telecopier: (305) 447-1389
and
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Attn: Robert O'Hara
Telecopier: (212) 530 5219
or to such other addresses as may be specified by like notice to the other
parties.
9
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name by its President or a Vice President.
Dated: October 2, 1996
---------
UNIVISION COMMUNICATIONS INC.
By: /s/ Robert Cahill
-------------------------------
Name:
Title:
10
<PAGE>
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- -------------------------------------------------------------------------------
CREDIT AGREEMENT
among
UNIVISION COMMUNICATIONS INC.
THE LENDERS PARTIES HERETO,
BANQUE PARIBAS
THE CHASE MANHATTAN BANK
as Managing Agents
and
THE CHASE MANHATTAN BANK
as Administrative Agent
Dated as of September 26, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . . 32
SECTION 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 REVOLVING LOANS AND LETTERS OF CREDIT; REVOLVING LOAN COMMITMENT
AMOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2 TERM LOANS; TERM LOAN COMMITMENT . . . . . . . . . . . . . . 37
2.3 INCREMENTAL LOAN FACILITY. . . . . . . . . . . . . . . . . . 40
2.4 ISSUANCE OF LETTERS OF CREDIT. . . . . . . . . . . . . . . . 43
2.5 OPTIONAL PREPAYMENTS.. . . . . . . . . . . . . . . . . . . . 47
2.6 MANDATORY PREPAYMENTS. . . . . . . . . . . . . . . . . . . . 47
2.7 CONVERSION AND CONTINUATION OPTIONS. . . . . . . . . . . . . 49
2.8 MINIMUM AMOUNTS OF TRANCHES. . . . . . . . . . . . . . . . . 50
2.9 INTEREST RATES AND PAYMENT DATES.. . . . . . . . . . . . . . 51
2.10 COMPUTATION OF INTEREST AND FEES.. . . . . . . . . . . . . . 52
2.11 INABILITY TO DETERMINE INTEREST RATE.. . . . . . . . . . . . 53
2.12 PRO RATA TREATMENT AND PAYMENTS. . . . . . . . . . . . . . . 53
2.13 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.14 INCREASED COSTS. . . . . . . . . . . . . . . . . . . . . . . 54
2.15 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.16 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . 57
2.17 UNUSED COMMITMENT FEES . . . . . . . . . . . . . . . . . . . 58
2.18 MITIGATION OF COSTS. . . . . . . . . . . . . . . . . . . . . 58
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 59
3.1 FINANCIAL CONDITION. . . . . . . . . . . . . . . . . . . . . 59
3.2 NO CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW . . . . . . . . . . 60
3.4 CORPORATE/PARTNERSHIP POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . 60
3.5 NO LEGAL BAR . . . . . . . . . . . . . . . . . . . . . . . . 61
3.6 NO MATERIAL LITIGATION . . . . . . . . . . . . . . . . . . . 61
3.7 OWNERSHIP OF PROPERTY; LIENS . . . . . . . . . . . . . . . . 61
3.8 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . 62
3.9 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.10 FEDERAL REGULATIONS. . . . . . . . . . . . . . . . . . . . . 63
3.11 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
3.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. . . . . . . . . . 63
3.13 MATERIAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 63
3.14 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . 64
3.15 PURPOSE OF LOANS . . . . . . . . . . . . . . . . . . . . . . 64
3.16 ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . 65
3.17 ACCURACY AND COMPLETENESS OF INFORMATION . . . . . . . . . . 66
3.18 REAL PROPERTY ASSETS . . . . . . . . . . . . . . . . . . . . 66
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3.19 PERMITS, ETC . . . . . . . . . . . . . . . . . . . . . . . . 66
3.20 PATENTS, TRADEMARKS, ETC . . . . . . . . . . . . . . . . . . 67
3.21 COPYRIGHT ACT REQUIREMENTS . . . . . . . . . . . . . . . . . 67
3.22 NATURE OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 67
3.23 FCC MATTERS; MEDIA LICENSES. . . . . . . . . . . . . . . . . 68
3.24 RANKING OF LOANS . . . . . . . . . . . . . . . . . . . . . . 68
3.25 EXECUTIVE OFFICES. . . . . . . . . . . . . . . . . . . . . . 68
3.26 INSOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.27 LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . 69
3.28 CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . 69
3.29 LEASES, LICENSES, PERMITS, SITE USE AGREEMENTS AND OTHER
OCCUPANCY AGREEMENTS. . . . . . . . . . . . . . . . . . . . 69
3.30 CORPORATE ORGANIZATION.. . . . . . . . . . . . . . . . . . . 69
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 70
4.1 CONDITIONS TO INITIAL CLOSING DATE . . . . . . . . . . . . . 70
4.2 CONDITIONS TO SECOND CLOSING DATE. . . . . . . . . . . . . . 75
4.3 CONDITIONS TO INCREMENTAL LOANS. . . . . . . . . . . . . . . 78
4.4 CONDITIONS TO EACH LOAN OR LETTER OF CREDIT. . . . . . . . . 79
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 80
5.1 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 80
5.2 CERTIFICATES; OTHER INFORMATION. . . . . . . . . . . . . . . 82
5.3 PAYMENT OF OBLIGATIONS.. . . . . . . . . . . . . . . . . . . 84
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE . . . . . . 85
5.5 MAINTENANCE OF PROPERTY; INSURANCE . . . . . . . . . . . . . 85
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS . . . 86
5.7 ENVIRONMENTAL LAWS . . . . . . . . . . . . . . . . . . . . . 87
5.8 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . 87
5.9 COMPLIANCE WITH LAWS, ETC. . . . . . . . . . . . . . . . . . 88
5.10 MEDIA LICENSES . . . . . . . . . . . . . . . . . . . . . . . 88
5.11 GUARANTIES, ETC. . . . . . . . . . . . . . . . . . . . . . . 88
5.12 LICENSE SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . 89
5.13 INTEREST RATE PROTECTION . . . . . . . . . . . . . . . . . . 89
5.14 ACQUISITION OF REAL PROPERTY IN FEE SIMPLE . . . . . . . . . 89
5.15 LEASES AND LICENSES. . . . . . . . . . . . . . . . . . . . . 90
5.16 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
5.17 ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 91
6.1 FINANCIAL CONDITION COVENANTS. . . . . . . . . . . . . . . . 91
6.2 LIMITATION ON INDEBTEDNESS . . . . . . . . . . . . . . . . . 92
6.3 LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . . . 94
6.4 LIMITATION ON FUNDAMENTAL CHANGES. . . . . . . . . . . . . . 95
6.5 LIMITATION ON SALE OF ASSETS . . . . . . . . . . . . . . . . 96
6.6 LIMITATION ON DIVIDENDS. . . . . . . . . . . . . . . . . . . 96
6.7 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. . . . . . . . 97
6.8 LIMITATION ON MODIFICATIONS OF DEBT INSTRUMENTS; REPURCHASE OF
JUNIOR SUBORDINATED NOTES; PAYMENT OF PROGRAMMING COSTS UNDER
PROGRAM COST SHARING AGREEMENT. . . . . . . . . . . . . . . 99
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6.9 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . 100
6.10 FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . 100
6.11 RESTRICTIONS AFFECTING SUBSIDIARIES. . . . . . . . . . . . . 100
6.12 LEASE OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . 100
6.13 UNFUNDED LIABILITIES . . . . . . . . . . . . . . . . . . . . 101
6.14 MANAGEMENT FEES. . . . . . . . . . . . . . . . . . . . . . . 101
6.15 MATERIAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 101
6.16 LIMITATION ON EQUITY OFFERINGS . . . . . . . . . . . . . . . 101
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . 102
SECTION 8. THE ADMINISTRATIVE AGENT AND THE MANAGING AGENTS . . . . . 106
8.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . 106
8.2 DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . . . 106
8.3 EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . . . 106
8.4 RELIANCE BY ADMINISTRATIVE AGENT AND MANAGING AGENTS . . . . 107
8.5 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 108
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT, MANAGING AGENTS AND OTHER
LENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 108
8.7 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 109
8.8 ADMINISTRATIVE AGENT AND MANAGING AGENTS IN THEIR INDIVIDUAL
CAPACITIES. . . . . . . . . . . . . . . . . . . . . . . . . 109
8.9 SUCCESSOR ADMINISTRATIVE AGENT OR MANAGING AGENTS. . . . . . 110
8.10 MANAGING AGENTS. . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 111
9.1 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . 111
9.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 112
9.3 NO WAIVER; CUMULATIVE REMEDIES . . . . . . . . . . . . . . . 114
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . 114
9.5 PAYMENT OF EXPENSES AND TAXES. . . . . . . . . . . . . . . . 114
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS;
ADDITIONAL INCREMENTAL LENDERS. . . . . . . . . . . . . . . 115
9.7 ADJUSTMENTS; SET-OFF . . . . . . . . . . . . . . . . . . . . 120
9.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 121
9.9 SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . . . 121
9.10 INTEGRATION. . . . . . . . . . . . . . . . . . . . . . . . . 121
9.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . 121
9.12 SUBMISSION TO JURISDICTION; WAIVERS; APPOINTMENT OF PROCESS
AGENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . 121
9.13 ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . 122
9.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . 122
9.15 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 122
9.16 CONFLICT OF TERMS. . . . . . . . . . . . . . . . . . . . . . 122
9.17 COPIES OF CERTIFICATES, ETC. . . . . . . . . . . . . . . . . 123
9.18 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . 123
9.19 PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . 123
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EXHIBITS
A Form of Revolving Note
B Form of Term Note
C Form of Incremental Note
D Form of Assignment and Acceptance
E Form of Joining Lender Agreement
F Form of No Default/Representation Certificate
G Form of Covenant Compliance Certificate
H Form of Continuation Notice
I Form of Letter of Credit Request
J Form of Incremental Loan Activation Notice
K Forms of Opinions of Counsel to Borrower and Guarantors
L Form of Excess Cash Flow Certificate
SCHEDULES
1 Revolving Loan Commitments
2 Term Loan Commitments
3 Lender Notice Addresses
4 Borrower Subsidiaries
5 Borrower Indebtedness
6 Borrower Liens
7 Loan Parties' Permits and Approvals
8 Loan Parties' Real Property Assets
9 Borrower Stations/Media Licenses
10 Borrower's and Subsidiaries' Executive Offices
11 Borrower Litigation/FCC Proceedings
12 Borrowers' and Subsidiaries' Investments
13 Transponder Leases
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<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 26, 1996, among UNIVISION
COMMUNICATIONS INC., a Delaware corporation (the "BORROWER"), the several banks
and other financial institutions from time to time parties to this Agreement
(the "LENDERS"), BANQUE PARIBAS, a French banking corporation ("PARIBAS"), and
THE CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"), as managing
agents for the Lenders hereunder (in such capacity, the "MANAGING AGENTS"), THE
BANK OF NEW YORK, a New York banking corporation, and NATIONSBANK OF TEXAS,
N.A., a national banking association, as co-agents for the Lenders hereunder
(in such capacity, the "CO-AGENTS") and CHASE, as administrative agent for the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower plans to issue 8,170,000 shares of its Class A Common
Stock pursuant to an initial public offering (the "IPO") on or about October 2,
1996;
WHEREAS, the Borrower has requested that the Lenders extend loans to it
prior to the consummation of the IPO for the purpose of enabling certain of its
subsidiaries to repay indebtedness, and making other expenditures, as follows:
(i) for Univision Television Group, Inc., a Delaware corporation ("UTG"), to
repay all obligations under that certain Amended and Restated Credit Agreement
dated as of February 14, 1996 (the "EXISTING CREDIT AGREEMENT") among UTG,
Paribas and Chase, as Managing Agents, and the financial institutions parties
thereto, which Existing Credit Agreement shall then be canceled, (ii) for UTG
to defease all its 11-3/4% Senior Subordinated Notes due 2001 (the "SENIOR
SUBORDINATED NOTES"), (iii) for UTG to repay all its indebtedness to The
Univision Network Limited Partnership, a Delaware limited partnership
("NETWORK"), which payments will be used by Network to make distributions to
its partners, (iv) for the Borrower to purchase partnership interests in
Network and (v) to pay fees and expenses payable in connection with the
execution of this Agreement;
WHEREAS, the Borrower has requested that the Lenders extend loans to it
upon consummation of the IPO for the purpose of enabling it and its
subsidiaries to repay indebtedness, make investments and make distributions
to certain owners, as follows: (i) for UTG to repay all its obligations to
Pack-a-Snack N.V., a Netherlands Antilles corporation ("PACK-A-SNACK") and
Grupo Televisa S.A. de C.V. ("TELEVISA"), (ii) for the Borrower to make certain
distributions to its shareholders,
<PAGE>
(iii) for Network to repay all principal and interest under that certain
promissory note dated July 1, 1996 (the "GALAVISION NOTE") in the principal
amount of $15,000,000 made by Network and payable to Univisa, Inc., a Delaware
corporation ("UNIVISA"), in connection with Network's purchase of the
Galavision division of Univisa, (iv) for the Borrower to invest in Entravision
Communications Company LLC, a Delaware limited liability company
("ENTRAVISION"), (v) for the Borrower to pay a portion of the purchase price of
the Modesto Station (as hereinafter defined) and (vi) for general corporate
purposes; and
WHEREAS, the Borrower has requested that the Lenders extend loans and make
available letters of credit to it from time to time upon and subsequent to the
consummation of the IPO for certain acquisitions, the repayment of certain
indebtedness and general corporate purposes of the Borrower and its
subsidiaries, in each case on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, 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:
"ACCOUNTANTS": Arthur Andersen LLP or such other firm of independent
certified public accountants of recognized national standing as shall be
selected by the Borrower and satisfactory to the Managing Agents.
"ACQUISITIONS": (i) the acquisition by, or investment in, any
Media/Communications Business by the Borrower or its Subsidiaries or (ii) the
entering into by the Borrower or its Subsidiaries of any Program Services
Agreement, in each case as permitted by Section 6.7(g).
"ACTIVATION DATE": the date set forth in the Activation Notice as the
effective date of the Aggregate Incremental Loan Commitment, which date must be
during the period from and including the Second Closing Date to but excluding
the Incremental Loan Commitment Termination Date.
"ACTIVATION NOTICE": a notice given by the Borrower and each Incremental
Loan Lender to the Administrative Agent, substantially in the form of
Exhibit J.
"ADDITIONAL INCREMENTAL LENDER": as defined in Section 9.6(d).
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"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person or (b) any Person who is a
director, officer, shareholder or partner (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in the preceding
clause (a). For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (i) vote securities having 10% or more
of the ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of the management and policies of such
Person whether by contract or otherwise; provided, however, that Perenchio, his
Permitted Transferees and each of their respective Affiliates shall be deemed
to be Affiliates of the Borrower and each other Loan Party.
"AFFILIATED STATIONS": the twenty full-power television stations, the
twenty-one low-power television stations and the approximately 740 cable
television systems with which Network has Affiliation Agreements and any other
Stations which hereafter enter into an Affiliation Agreement with Network.
"AFFILIATION AGREEMENTS": the Affiliation Agreements between Network and
the Affiliated Stations, as such agreements may be amended or otherwise
modified from time to time.
"AGGREGATE AVAILABLE REVOLVING LOAN COMMITMENT": the sum of the Available
Revolving Loan Commitments of each Lender.
"AGGREGATE COMMITMENT": the sum of the Aggregate Revolving Loan
Commitment, the Aggregate Term Loan Commitment and, if activated, the Aggregate
Incremental Loan Commitment.
"AGGREGATE INCREMENTAL LOAN COMMITMENT": the sum of the Incremental Loan
Commitments set forth in the Activation Notice, as the same may be adjusted
from time to time pursuant to the provisions hereof, provided that the
Aggregate Incremental Loan Commitment shall not exceed the Maximum Incremental
Loan Facility.
"AGGREGATE REVOLVING LOAN COMMITMENT": the sum of the Revolving Loan
Commitments set forth on Schedule 1, as the same may be adjusted from time to
time pursuant to the provisions hereof.
"AGGREGATE TERM LOAN COMMITMENT": the sum of the Term Loan Commitments set
forth on Schedule 2.
"AGREEMENT": this Credit Agreement, as amended, waived, supplemented or
otherwise modified from time to time.
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"ALTERNATE BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Commercial Lending Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. "PRIME COMMERCIAL LENDING
RATE" shall mean the rate of interest per annum publicly announced from time to
time by Chase as its prime commercial lending rate in effect at its principal
office in New York City. "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any
day, the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it. If, for any reason, the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including, without limitation, the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to clause (b) of the
first sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Commercial Lending Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime Commercial
Lending Rate or the Federal Funds Effective Rate, respectively.
"ALTERNATE BASE RATE LOANS": Loans the rate of interest applicable to
which is based upon the Alternate Base Rate.
"ANNUALIZED INTEREST EXPENSE": with respect to each of the
four-fiscal-quarter periods ending December 31, 1996, March 31, 1997 and June
30, 1997, Interest Expense for such four-fiscal- quarter period shall equal
Interest Expense for the period commencing on October 1, 1996 and ending on (i)
December 31, 1996, multiplied by 4, (ii) March 31, 1997, multiplied by 2 and
(iii) June 30, 1997, multiplied by 4/3, as applicable.
"APPLICABLE LENDING OFFICE": for any Lender, its offices for LIBOR Loans,
Alternate Base Rate Loans and participations in Letters of Credit, specified in
Schedule 1 or 2 or in the Assignment and Acceptance or Joining Lender Agreement
pursuant to which it became a party hereto, as the case may be, any of which
offices may, upon 10 days' prior written notice to the Administrative Agent and
the Borrower, be changed by such Lender.
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"APPLICABLE MARGIN": for each LIBOR Loan and for each Alternate Base Rate
Loan as set forth below:
Alternate
Leverage Level LIBOR Base Rate
-------------- ----- ---------
1(GREATER THAN OR EQUAL TO 5.00:1) +1.500% +.250%
2(LESS THAN 5.00:1-GREATER THAN OR EQUAL TO 4.50:1) +1.375% +.125%
3(LESS THAN 4.50:1-GREATER THAN OR EQUAL TO 4.00:1) +1.125% 0
4(LESS THAN 4.00:1-GREATER THAN OR EQUAL TO 3.50:1) +1.000% 0
5(LESS THAN 3.50:1-GREATER THAN OR EQUAL TO 3.00:1) +0.875% 0
6(LESS THAN 3.00:1) +0.750% 0
"ASSET DISPOSITION": the sale, sale and leaseback, transfer, conveyance,
exchange, long-term lease accorded sales treatment under GAAP or similar
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any of the Properties, business or
assets (other than marketable securities, including "margin stock" within the
meaning of Regulation U, liquid investments and other financial instruments
but, including, without limitation, the assignment of any lease, license or
permit relating to the Properties) of the Borrower or any of its Subsidiaries
to any Person or Persons other than to the Borrower or any of its Subsidiaries;
provided that Asset Dispositions shall not include (i) the sale in the ordinary
course of business of equipment and vehicles, the proceeds of sale of which are
used within 90 days after the sale date to refinance Indebtedness (including
Revolving Loans) incurred to purchase or to commit to purchase replacement
equipment and vehicles to be used in the ordinary course of business and (ii)
other sales of assets in the ordinary course of business which do not have a
fair market value exceeding $2,000,000 in the aggregate in any fiscal year or
$10,000,000 in the aggregate for the period from the Initial Closing Date
through the Incremental Loan Maturity Date.
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance in the form of
Exhibit D.
"AVAILABLE INCREMENTAL LOAN COMMITMENT": with respect to each Incremental
Loan Lender on the date of determination thereof, the amount by which (a) the
Incremental Loan Commitment of such Lender on such date exceeds (b) the
principal sum of such Lender's Incremental Loans outstanding.
"AVAILABLE REVOLVING LOAN COMMITMENT": with respect to each Lender having
a Revolving Loan Commitment on the date of determination thereof, the amount by
which (a) the Revolving Loan Commitment of such Lender on such date exceeds (b)
the principal sum of such Lender's (i) Revolving Loans outstanding,
(ii) Revolving Loan Commitment Percentage of the aggregate
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Letter of Credit Amount of all Letters of Credit outstanding and (iii) Revolving
Loan Commitment Percentage of the aggregate amount of unreimbursed drawings
under all Letters of Credit on such date.
"AVAILABLE TERM LOAN COMMITMENT": on the Second Closing Date, with respect
to each Lender having a Term Loan Commitment, the amount by which (a) the Term
Loan Commitment of such Lender on such date exceeds (b) the principal sum of
such Lender's Term Loans outstanding. After the Second Closing Date, the
Available Term Loan Commitment shall be reduced to zero.
"BORROWER": as defined in the preamble hereto.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on which
commercial banks in New York City or the State of California are authorized or
required by law to close and which, in the case of a LIBOR Loan, is a Eurodollar
Business Day.
"CAPITAL EXPENDITURES": for any period, collectively, for any Person, the
aggregate of all expenditures which are made during such period (whether paid in
cash or accrued as liabilities), and all contractual commitments for such
expenditures which are entered into during such period (provided that if any
such commitment is included in one fiscal year, the actual payment in a later
fiscal year shall not be included in such later fiscal year), by such Person,
for property, plant or equipment and which would be reflected as additions to
property, plant or equipment on a balance sheet of such Person prepared in
accordance with GAAP (including, without limitation, all such property held
under capital leases); provided, however, that Capital Expenditures shall
exclude (i) any expenditures which arise from Program Rights Obligations and
(ii) any expenditures permitted hereunder with respect to Transponder Leases.
"CAPITALIZED LEASE OBLIGATIONS": obligations for the payment of rent for
any real or personal property under leases or agreements to lease that, in
accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP; provided, that
"Capitalized Lease Obligations" shall not include any such obligations relating
to Transponder Leases.
"CAPITAL STOCK": 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), any and
all warrants, options or rights to purchase or any other securities convertible
into any of the foregoing.
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"CASH COLLATERAL DEPOSIT": cash deposits made by the Borrower to the
Administrative Agent, to be held by the Administrative Agent as Collateral
pursuant to the Security Agreement, for the reimbursement of drawings under
Letters of Credit.
"CASH INCOME TAXES": cash income taxes paid by the Borrower and its
consolidated Subsidiaries during the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters.
"CHANGE IN CONTROL": (a) any "person" or "group" (as such terms are used
for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(as in effect from time to time), whether or not applicable), other than
Perenchio and any Person or group of Persons that are Permitted Transferees of
Perenchio or are as of the date hereof Affiliates of Perenchio, is or becomes
the beneficial owner, directly or indirectly, of more than 50% of the total
Voting Power of the Borrower or (b) the Borrower shall cease to be the
beneficial owner, directly or indirectly, of 100% of the total Voting Power of
each Guarantor.
"CHASE": as defined in the preamble hereto.
"CODE": the Internal Revenue Code of 1986, as amended from time to time.
"COLLATERAL": all of the property (tangible or intangible) purported to be
subject to the lien or security interest purported to be created by any
mortgage, deed of trust, security agreement, pledge agreement, assignment or
other security document heretofore or hereafter executed by the Borrower as
security for all or part of the Obligations.
"COLLATERAL DOCUMENTS": the Security Agreement, all notices of security
interests in deposit accounts requested by the Administrative Agent pursuant to
the Security Agreement, UCC-1 Financing Statements and amendments thereto and
any other document encumbering the Collateral or evidencing or perfecting a
security interest therein for the benefit of the Lenders executed by the
Borrower.
"COMBINED ENTITIES": UTG, Network and their respective Subsidiaries with
regard to periods prior to consummation of the IPO. Financial calculations
relating to the Combined Entities shall give effect to eliminations in the
combination of accounts of such entities in accordance with GAAP.
"COMBINED ENTITIES LOAN AGREEMENT": the Loan Agreement between UTG and
Network, dated as of December 17, 1992, pursuant to which each of UTG and
Network have agreed to make loans, under certain conditions set forth therein,
to each other, which
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loans shall be subordinate in all respects to the Loans made by the Lenders,
as the same may be modified or amended from time to time in accordance with
the terms hereof.
"COMBINED ENTITIES LOANS": loans made pursuant to the terms of the
Combined Entities Loan Agreement.
"COMBINED NET TIME SALES": for any period, all time sales, including
barter and trade and television subscription revenue, less advertising
commissions, Special Event Revenue, music license fees, outside affiliate
compensation and taxes (other than withholding taxes) paid by Network pursuant
to Section 5.4 of the Program License Agreements and similar taxes paid by UTG,
calculated in accordance with GAAP, of the Borrower and its Subsidiaries, for
such period. Unless otherwise agreed in writing between the parties, barter and
trade sales shall be valued at the fair market value of the goods or services
received by the Borrower and its Subsidiaries.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage of
the Aggregate Commitment then constituted by such Lender's Commitments.
"COMMITMENTS": as to any Lender, its Revolving Loan Commitment, its Term
Loan Commitment and, if it is an Incremental Loan Lender, its Incremental Loan
Commitment.
"COMMONLY CONTROLLED ENTITY": as to any Person, an entity, whether or not
incorporated, which is under common control with such Person within the meaning
of Section 4001 of ERISA or is part of a group which includes such Person and
which is treated as a single employer under Section 414 of the Code.
"COMMUNICATIONS ACT": the Communications Act of 1934, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
"CONSENTS": the consents in form and substance reasonably satisfactory to
the Managing Agents, executed by the counterparties to such contracts, leases,
licenses, permits or other agreements listed on Schedule D to the Security
Agreement and the Guarantor Security Agreements.
"CONSIDERATION": with respect to any Acquisition, the aggregate
consideration, in whatever form (including, without limitation, cash payments,
the principal amount of promissory notes and Indebtedness assumed, the aggregate
amounts payable to acquire, extend and exercise any option, the aggregate amount
payable under Non-Compete Agreements and management agreements, and the fair
market value of other property delivered) paid, delivered or assumed by the
Borrower and its Subsidiaries for such Acquisition and the expenses associated
therewith,
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including all brokerage commissions, legal fees and similar expenses.
Notwithstanding anything herein to the contrary, no Acquisition involving the
assumption of debt by the Borrower or its Subsidiaries shall be permitted if
such assumption would violate the terms of this Agreement.
"CONTINUATION NOTICE": a request for continuation or conversion of a Loan
as set forth in Section 2.7, substantially in the form of Exhibit H.
"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.
"COVENANT COMPLIANCE CERTIFICATE": a certificate of the Chief Financial
Officer of the Borrower substantially in the form of Exhibit G.
"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.
"DENNEVAR B.V.": Dennevar B.V., a Dutch corporation wholly-owned
indirectly by Venevision.
"DOLLARS" and "$": lawful currency of the United States.
"DRAWING LENDER": as defined in Section 2.4(c).
"EBITDA": for any period, for the fiscal quarter most recently ended and
the immediately preceding three fiscal quarters, Net Income after eliminating
extraordinary gains and losses, PLUS (i) provisions for taxes, (ii) depreciation
and amortization (including amortization of Program Rights Payments), (iii)
Interest Expense, (iv) permitted termination payments owing by the Borrower or
its Subsidiaries resulting from early termination of a time brokerage agreement,
local marketing agreement or similar agreement, (v) payments made pursuant to
Non-Compete Agreements and (vi) other non-cash charges, all to the extent
deducted in computing Net Income, but after deducting (A) Program Rights
Payments made or scheduled to be made, (B) non-cash revenues (to the extent
included in the calculation of Net Income) and (C) principal payments for
Transponder Leases. For purposes of pro forma calculations hereunder,
calculations shall be made after giving effect to acquisitions, exchanges and
dispositions of assets during such period as if such acquisition, exchange or
disposition had occurred on the first day of such period.
"ELECTION NOTICE": as defined in Section 2.3(e).
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"ENTRAVISION": as defined in the recitals hereto.
"ENVIRONMENTAL LAWS": any and all foreign, federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or at any time hereafter in effect.
"EQUITY OFFERING": all public offerings of the Capital Stock of the
Company or any Guarantor from time to time, other than the IPO.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"ERISA AFFILIATE": as to any Person, each trade or business including such
Person, whether or not incorporated, which together with such Person would be
treated as a single employer under Section 4001(a)(14) of ERISA.
"EVENT OF DEFAULT": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"EURODOLLAR BUSINESS DAY": shall mean any day on which banks are open for
dealings in Dollar deposits in the London Interbank Market.
"EXCESS CASH FLOW": for any period, for the Borrower and its Subsidiaries
on a consolidated basis, an amount equal to EBITDA (provided that Program Rights
Payments deducted in the calculation thereof shall be limited to Program Rights
Payments actually made) for such period, LESS, during such period (in each case,
without duplication), (i) Total Debt Service, (ii) Cash Income Taxes, (iii)
Capital Expenditures (other than those made with the proceeds of a financing
covered by Section 6.3(j)), not in excess of the amount permitted by the Loan
Documents, (iv) increases (or PLUS decreases) in Net Working Investment and
(v) Restricted Payments permitted under Section 6.6(ii) and 6.6(iii).
"EXCLUDED TAXES": all taxes imposed on or by reference to the net income
of the Administrative Agent, each Managing Agent or any Lender or its Applicable
Lending Office and all franchise taxes, taxes on doing business or taxes
measured by capital or net worth imposed on any Lender or its Applicable Lending
Office, in each case, imposed:
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(i) by the jurisdiction in which the Applicable Lending Office or
other branch of such Person is located or in which such Person is organized
or has its principal or registered office;
(ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender other than a connection arising solely from this
Agreement or any transaction contemplated hereby;
(iii) by the United States or any political subdivision thereof or
therein including without limitation, branch profits taxes imposed by the
United States or similar taxes imposed by any subdivision thereof; or
(iv) by reason of the failure of any Lender to provide accurate
documentation required to be provided by such Lender pursuant to Section
2.15(b) or Section 9.6.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
"FCC": the Federal Communications Commission or any successor thereto.
"FEDERAL FUNDS EFFECTIVE RATE": as defined in the definition of "ALTERNATE
BASE RATE" contained in this Section 1.1.
"FINANCIAL STATEMENTS": as defined in Section 3.1(a).
"FIXED CHARGE COVERAGE RATIO": for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of EBITDA for the fiscal quarter most recently
ended and the immediately preceding three fiscal quarters to the sum of (i)
Total Debt Service for the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters (excluding the effect of any
redemption of Modesto Station Purchase Preferred Stock to the extent made with
the proceeds of Revolving Loans), (ii) Capital Expenditures for the fiscal
quarter most recently ended and the immediately preceding three fiscal quarters,
(iii) Cash Income Taxes for the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters and (iv) Restricted Payments
permitted under Section 6.6(iii) paid by the Borrower or any Subsidiary for the
fiscal quarter most recently ended and the immediately preceding three fiscal
quarters.
"FUNDED DEBT": the sum of (x) the outstanding principal balance of all
Capitalized Lease Obligations, (y) the aggregate Redemption Value of all
outstanding Modesto Station Purchase Preferred Stock and (z) all Indebtedness of
the Borrower and its Subsidiaries OTHER THAN (A) Indebtedness described in
clauses
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(h), (j), (k), (l), (m) and (n) of Section 6.2 and (B) the defeased
Subordinated Notes.
"GAAP": generally accepted accounting principles in the United States in
effect from time to time. If, at any time, GAAP changes in a manner which will
materially affect the calculations determining compliance by the Borrower with
any of its covenants in Section 6.1, such covenants shall continue to be
calculated in accordance with GAAP in effect prior to such changes in GAAP.
"GALAVISION": Galavision, Inc., a Delaware corporation.
"GALAVISION NOTE": as defined in the recitals hereto.
"GOVERNMENTAL AUTHORITY": any nation or government, any federal, state or
other political subdivision thereof and any federal, state or local entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds for the purchase or payment of any such primary
obligation or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lesser of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee
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Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"GUARANTIES": the guaranties made by each of the Guarantors and all other
guarantees executed by a Guarantor in favor of the Lenders or the Administrative
Agent for the benefit of the Lenders, in form and substance reasonably
satisfactory to the Majority Lenders, as the same may be amended or modified
from time to time in accordance with the terms hereof.
"GUARANTOR COLLATERAL": all of the property (tangible or intangible)
purported to be subject to the lien or security interest purported to be created
by any mortgage, deed of trust, security agreement, pledge agreement, assignment
or other security document heretofore or hereafter executed by any Guarantor as
security for all or part of the Obligations or the Guaranties.
"GUARANTOR COLLATERAL DOCUMENTS": the Guarantor Security Agreements, all
notices of security interests in deposit accounts requested by the
Administrative Agent pursuant to the Guarantor Security Agreements, Form UCC-1
Financing Statements and amendments thereto and any other document encumbering
the Guarantor Collateral or evidencing or perfecting a security interest therein
for the benefit of the Lenders executed by any Guarantor.
"GUARANTORS": (a) prior to the Second Closing Date, PTI, UTG, PTI
Holdings, Galavision, Sunshine, Sunshine L.P., Network, Network Holding, each
Subsidiary of the foregoing (other than License Subsidiaries) and all other
Persons that guarantee all or part of the Obligations prior to the Second
Closing Date and (b) on and after the Second Closing Date, UTG, PTI Holdings,
Galavision, Sunshine, Sunshine L.P., Network, each Subsidiary of the foregoing
entities referred to in this clause (b) (other than License Subsidiaries) and
all other Persons that guarantee all or part of the Obligations from time to
time.
"GUARANTOR SECURITY AGREEMENTS": the Guarantor Security Agreements, in
form and substance reasonably satisfactory to the Majority Lenders, made by each
Guarantor in favor of the Administrative Agent, for the benefit of the Lenders,
in respect of the tangible and intangible personal property of the Guarantors
encumbered thereby, as the same may be amended from time to time in accordance
with the terms hereof.
"INCREMENTAL LOAN": as defined in Section 2.3(a).
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"INCREMENTAL LOAN COMMITMENT": the commitment of each Incremental Loan
Lender to make Incremental Loans hereunder through its Applicable Lending
Office, as indicated in the Activation Notice.
"INCREMENTAL LOAN COMMITMENT PERCENTAGE": with respect to each Incremental
Loan Lender, the percentage equivalent of the ratio which such Incremental Loan
Lender's Incremental Loan Commitment bears to the Aggregate Incremental Loan
Commitment.
"INCREMENTAL LOAN COMMITMENT TERMINATION DATE": June 30, 1999 or such
earlier date as the Aggregate Incremental Loan Commitment may expire (whether by
acceleration, reduction to zero or otherwise).
"INCREMENTAL LOAN LENDER": each Lender having an Incremental Loan
Commitment and/or which shall have Incremental Loans outstanding.
"INCREMENTAL LOAN MATURITY DATE": August 31, 2004 or such earlier date on
which the Aggregate Incremental Loan Commitment shall expire (whether by
acceleration, reduction to zero or otherwise).
"INCREMENTAL LOAN REDUCTION DATES": the dates on which scheduled principal
payments of the Incremental Loans are due, as set forth in the table in Section
2.3(d).
"INCREMENTAL NOTE" and "INCREMENTAL NOTES": as defined in Section 2.3(c).
"INDEBTEDNESS": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than (i) current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices and (ii) current income taxes) or which is evidenced by a note, bond,
debenture or similar instrument, excluding Program Rights Obligations, (b) all
obligations of such Person under Capitalized Lease Obligations, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, (d) all liabilities secured by any Lien on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, (e) all obligations of such Person, whether
absolute or contingent, in respect of letters of credit opened for the account
of such Person (other than any letters of credit opened for the purpose of
facilitating the purchase of goods and services in the ordinary course of
business and having a term of not more than 360 days), (f) all obligations of
such Person under Non-Compete Agreements and Interest Rate Agreements and
(g) all Guarantee Obligations of such Person in respect of
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any indebtedness, obligations or liabilities of any other Person of the type
referred to in clauses (a) through (g) of this definition; provided that
"Indebtedness" shall not include payments (to the extent included above) to
be made by Network pursuant to the Program Cost Sharing Agreement and the
Program License Agreements or payments made to Affiliated Stations under the
Affiliation Agreements.
"INITIAL CLOSING DATE": the date on which the conditions precedent set
forth in Section 4.1 have been satisfied, but in no event later than October 15,
1996.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": as defined in Section 3.8.
"INTERCREDITOR AGREEMENT": an Intercreditor Agreement, in form and
substance reasonably satisfactory to the Majority Lenders with regard to the
Junior Subordinated Notes, the license fees payable by Network under the Program
License Agreements, the Galavision Note and Sponsor Loans, as such document may
be amended or otherwise modified from time to time in accordance with the terms
hereof.
"INTEREST EXPENSE": as of any date, for the fiscal quarter most recently
ended and the immediately preceding three fiscal quarters, (A) the sum of (i)
the amount of all interest on Funded Debt (or, with respect to clause (y) of the
definition of Funded Debt, dividends) which was paid, payable and/or accrued for
such period (without duplication of previous amounts), (ii) all commitment,
letter of credit or line of credit fees paid, payable and/or accrued for such
period (without duplication of previous amounts) to any lender in exchange for
such lender's commitment to lend or otherwise extend credit and (iii) net
amounts payable (or receivable) under all Interest Rate Agreements, LESS (B) all
interest income.
"INTEREST PAYMENT DATE": (a) as to any Alternate Base Rate Loan, the last
day of each March, June, September and December to occur while the Term Loans,
the Incremental Loans or the Revolving Loans are outstanding, (b) as to any
LIBOR Loan having an Interest Period of three months or less, the last day of
such Interest Period, (c) as to any LIBOR Loan having an Interest Period longer
than three months, each day which is at the end of each three month-period
within such Interest Period after the first day of such Interest Period and the
last day of such Interest Period and (d) for each of (a), (b) and (c) above, the
day on which the Term Loans, the Incremental Loans and the
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Revolving Loans become due and payable in full and are paid or prepaid in full.
"INTEREST PERIOD": with respect to any LIBOR Loan:
(a) initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such LIBOR Loan and ending one, two, three
or six months (or, if reasonably available to all Lenders, nine or twelve
months) thereafter, as selected by the Borrower in its notice of borrowing or
its Continuation Notice, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one, two,
three or six months (or, if reasonably available to all Lenders, nine or twelve
months) thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Eurodollar Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the date
final payment is due on the Term Loans, the Incremental Loans or the
Revolving Loans, as applicable, shall end on the date of such final
payment;
(iii) any Interest Period pertaining to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month;
and
(iv) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any LIBOR Loan during an Interest Period for the
Term Loans, the Incremental Loans or the Revolving Loans.
"INTEREST RATE AGREEMENT": any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or
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arrangement under which the Borrower is a party or a beneficiary.
"INTERNATIONAL PROGRAM RIGHTS AGREEMENT": the International Program Rights
Agreement dated as of the Second Closing Date among the Borrower, Televisa and
Venevision, as such agreement may be amended or otherwise modified from time to
time in accordance with the terms hereof.
"INVESTMENT COMPANY ACT": as defined in Section 3.12.
"JOINING LENDER AGREEMENT": a Joining Lender Agreement in the form of
Exhibit E.
"JUNIOR SUBORDINATED NOTES": collectively, (i) that certain Subordinated
Ten Year Note due December 17, 2002, dated December 17, 1992, executed by
Network Holding and payable to the order of Univision Holdings, Inc., in the
initial principal amount of $62,528,997, as replaced by those certain
Subordinated Ten Year Notes due 2002 issued by Network Holding in an aggregate
amount of $61,094,000 pursuant to an Indenture dated as of December 17, 1992
executed by Network Holding to First Trust National Association, as Trustee,
the obligations under which have been assumed by the Borrower and (ii) that
certain Subordinated Ten Year Note due December 17, 2002, dated December 17,
1992, executed by PTI Holdings and payable to the order of Univision Holdings,
Inc., in the initial principal amount of $8,871,003, as replaced by those
certain Subordinated Ten Year Notes due 2002 issued by PTI Holdings in an
aggregate amount of $10,306,000 pursuant to an Indenture dated as of December
17, 1992 executed by PTI Holdings to First Trust National Association, as
Trustee, as such notes and/or such Indentures may be amended or otherwise
modified from time to time in accordance with the terms hereof.
"LEASE EXPENSE": for any period, the aggregate minimum rental obligations
payable in respect of such period under leases of real and/or personal property
(net of income from subleases thereof), whether or not such obligations are
reflected as liabilities or commitments on a consolidated balance sheet or in
the notes thereto.
"LENDERS": as defined in the preamble hereto and Section 8.8.
"LETTER OF CREDIT AMOUNT": the stated maximum amount available to be drawn
under a particular Letter of Credit, as such amount may be reduced or
reinstated from time to time in accordance with the terms of such Letter of
Credit.
"LETTER OF CREDIT REQUEST": a request by the Borrower for the issuance of
a Letter of Credit, on the Administrative
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Agent's standard form of Standby or Performance Letter of Credit Application
and Agreement, the current form of which is attached hereto as Exhibit I,
and containing terms and conditions satisfactory to the Administrative Agent
in its sole discretion.
"LETTER OF CREDIT": as defined in Section 2.1(a).
"LEVERAGE LEVEL": if the Total Debt Ratio shall be greater than or equal
to 5.00:1, the Leverage Level shall be l; if the Total Debt Ratio shall be less
than 5.00:1 and greater than or equal to 4.50:1, the Leverage Level shall be 2;
if the Total Debt Ratio shall be less than 4.50:1 and greater than or equal to
4.00:1, the Leverage Level shall be 3; if the Total Debt Ratio shall be less
than 4.00:1 and greater than or equal to 3.50:1, the Leverage Level shall be 4;
if the Total Debt Ratio shall be less than 3.50:1 and greater than or equal to
3.00:1, the Leverage Level shall be 5; and if the Total Debt Ratio shall be
less than 3.00:1, the Leverage Level shall be 6.
"LEVERAGE LEVEL CERTIFICATE": as defined in Section 2.9(e).
"LIBOR": with respect to each day during each Interest Period pertaining
to a LIBOR Loan, the rate per annum equal to the average (rounded upward to the
nearest 1/16th of 1%) of the respective rates notified to the Administrative
Agent by each of the Reference Banks as the rate at which such Reference Bank
is offered Dollar deposits at or about 11:00 A.M., London time, two Eurodollar
Business Days prior to the beginning of such Interest Period in the London
Interbank Market for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount of
its LIBOR Loan to be outstanding during such Interest Period.
"LIBOR ADJUSTED RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
---------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR LOANS": Loans the rate of interest applicable to which is based
upon LIBOR.
"LIBOR RESERVE REQUIREMENTS": for any day as applied to a LIBOR Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed
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for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a member bank of
such Federal Reserve System. As at the Initial Closing Date, there are no
such reserve requirements.
"LICENSE FEE GUARANTIES": collectively, (i) the Guaranty dated as of the
Second Closing Date executed by the Borrower in favor of Univisa with respect
to Network's obligations under the Program License Agreement with Univisa and
(ii) the Guaranty dated as of the Second Closing Date executed by the Borrower
in favor of Dennevar B.V. with respect to Network's obligations under the
Program License Agreement with Dennevar B.V., as such Guaranties may be amended
or otherwise modified from time to time in accordance with the terms of the
Loan Documents, and which Guaranties shall be unsecured and subordinated to the
Obligations on the terms set forth in the Intercreditor Agreement.
"LICENSE SUBSIDIARIES": the Subsidiaries of the Borrower holding Media
Licenses.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any Capitalized Lease Obligation having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"LOAN": a Revolving Loan, a Term Loan or an Incremental Loan.
"LOAN DOCUMENTS": this Agreement, the Notes, any Letter of Credit Requests
that are executed by the Borrower, the Letters of Credit, the Collateral
Documents, the Intercreditor Agreement, the Guarantor Collateral Documents,
Interest Rate Agreements entered into pursuant to Section 5.13 and the
Guaranties and any other agreement executed by a Loan Party in connection
therewith and herewith including, but not limited to, UCC-1 Financing
Statements, as such agreements and documents may be amended, supplemented and
otherwise modified from time to time in accordance with the terms hereof.
"LOAN PARTIES": the Borrower, the Guarantors and their respective
Subsidiaries.
"MAJORITY INCREMENTAL LOAN LENDERS": Incremental Lenders having
Incremental Loan Commitments equal to or more than 51% of the Aggregate
Incremental Loan Commitment, or, if the
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Incremental Loan Commitments have terminated, Incremental Lenders with
outstanding Incremental Loans having an unpaid principal balance equal to or
more than 51% of the sum of the unpaid principal balance of all Incremental
Loans outstanding, excluding from such calculation Incremental Lenders which
have failed or refused to fund an Incremental Loan when required to do so.
"MAJORITY LENDERS": Lenders having Commitments equal to or more than 51%
of the Aggregate Commitment, or, if any Commitment has terminated, with respect
to such Commitment, Lenders with outstanding Loans and/or participations in
Letters of Credit (if applicable) having an unpaid principal balance equal to
or more than 51% of the sum of (i) the unpaid principal balance of all Loans
outstanding and (ii) the aggregate Letter of Credit Amount (if applicable),
excluding from such calculation Lenders which have failed or refused to fund a
Loan when required to do so.
"MAJORITY REVOLVING LOAN LENDERS": Revolving Loan Lenders having Revolving
Loan Commitments equal to or more than 51% of the Aggregate Revolving Loan
Commitment, or, if the Revolving Loan Commitments have terminated, Lenders with
outstanding Revolving Loans and/or participations in Letters of Credit having
an unpaid principal balance equal to or more than 51% of the sum of (i) the
unpaid principal balance of all Revolving Loans outstanding and (ii) the
aggregate Letter of Credit Amount, excluding from such calculation Lenders
which have failed or refused to fund a Revolving Loan when required to do so.
"MANAGEMENT FEES": all management fees payable by Network to Network
Holding prior to the occurrence of the Second Closing Date pursuant to
Network's partnership agreement.
"MANAGING AGENTS": as defined in the preamble hereto.
"MARGIN STOCK": as defined in Regulation U.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the business,
operations, property, condition or prospects (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
or any of its Subsidiaries to perform its respective obligations under the Loan
Documents, or (c) the validity or enforceability of the Loan Documents or the
rights or remedies of the Administrative Agent, the Managing Agents or the
Lenders hereunder or thereunder.
"MATERIAL AGREEMENTS": (i) the Program License Agreements, the
Participation Agreement and the International Program Rights Agreement, (ii)
prior to consummation of the IPO, the Program Cost Sharing Agreement, the
Underwriters Agreements, the Plan of
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Reorganization, the Combined Entities Loan Agreement, the Tax
Allocation Agreement and the Registration Statement and (iii) prior to the
Second Closing Date, the Sponsor Loan Documents.
"MATERIAL MEDIA LICENSES": all FCC licenses necessary to operate broadcast
television or radio stations, including all FCC broadcast auxiliary licenses,
all licenses for radio and television translators and all low-power FCC
television licenses.
"MATURITY": in respect of any Note, the date such Note shall become due
and payable, whether at stated maturity, by acceleration or otherwise.
"MAXIMUM INCREMENTAL LOAN FACILITY": $250,000,000.
"MEDIA/COMMUNICATIONS BUSINESS": the ownership and operation of radio and
television stations, cable networks, cable programming, television programming
and syndication, interactive television, direct broadcast satellite,
pay-per-view television, sports promotion, home shopping, print and on-line
publishing or broadcasting, billboards and recorded music and music
publishing; provided that to the extent any of the foregoing involve assets
located, or businesses operating, outside of the United States, aggregate
EBITDA derived from such assets or businesses shall not exceed 20% of EBITDA
(based on the most recently ended twelve month period) for the Borrower and
its Subsidiaries on a consolidated basis; and provided, further, that,
acquisition of, or investment in, recorded music and/or music publishing
shall not exceed $100,000,000 in the aggregate during the term of this
Agreement.
"MEDIA LICENSES": any franchise, license, permit, certificate, ordinance,
approval or other authorization, or any renewal or extension thereof, from any
federal, state or local government or governmental agency, department or body
that is necessary for the broadcast or other operations of the Borrower or any
of its Subsidiaries.
"MODESTO STATION": full power television station KCSO-TV in Modesto,
California.
"MODESTO STATION PURCHASE AGREEMENT": that certain Partnership Interests
Purchase Agreement dated as of September 26, 1996 between the Borrower and the
partners of Channel 19 Partners, L.P. relating to the purchase of the Modesto
Station, as in effect as of the date hereof or as it may be amended from time
to time with the consent of the Majority Lenders.
"MODESTO STATION PURCHASE PREFERRED STOCK": 12,000 shares of Borrower's
Series A Cumulative Convertible Preferred Stock having an aggregate liquidation
preference of $12,000,000 (plus
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accrued and unpaid dividends paid quarterly at a rate per annum equal to 6%)
to be issued by the Borrower in payment of a portion of the purchase price of
the Modesto Station, the terms of which shall not be amended without the
consent of the Majority Lenders.
"MULTIEMPLOYER PLAN": a plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET INCOME": for the Borrower and its Subsidiaries on a consolidated
basis, net income as determined in accordance with GAAP and in a manner
consistent with the calculation of net income as set forth in the Financial
Statements.
"NET PROCEEDS": (A) with respect to any Asset Disposition, the net amount
equal to the aggregate amount received in cash (including any cash received by
way of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so received) in
connection with such Asset Disposition MINUS the sum of (a) the reasonable
fees, commissions and other out-of-pocket expenses incurred by the Borrower or
any of its Subsidiaries in connection with such Asset Disposition (other than
amounts payable to Affiliates of the Person making such disposition), (b)
Indebtedness, other than the Loans, required to be paid as a result of such
Asset Disposition and (c) federal, state and local taxes incurred and paid in
connection with such Asset Disposition; and (B) with respect to any Equity
Offering, the net amount equal to the aggregate amount received in cash
(including any cash received by way of deferred payment pursuant to a note
receivable, other non-cash consideration or otherwise, but only as and when
such cash is so received) in connection with such Equity Offering MINUS the
reasonable fees, commissions and other out-of-pocket expenses incurred by the
Borrower in connection with such Equity Offering (other than amounts payable
to Affiliates of the Person making such Equity Offering).
"NETWORK": as defined in the recitals hereto.
"NETWORK HOLDING": The Univision Network Holding Limited Partnership, a
Delaware limited partnership.
"NET WORKING INVESTMENT": for the Borrower on a consolidated basis,
(i) current assets (excluding cash and investments permitted under Section
6.7(b)) less (ii) current liabilities (excluding the current portion of Funded
Debt).
"NON-COMPETE AGREEMENTS": all agreements pursuant to which the Borrower,
any of its Subsidiaries or any Station has agreed to make payments (whether in
cash or in kind) to another Person for the agreement of such Person not to
compete with the Borrower, such Subsidiary or such Station in a given area.
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"NON-REVOLVING LOANS": the Term Loans and the Incremental Loans.
"NOTE": a Revolving Note, a Term Note or an Incremental Note, as the case
may be, and "NOTES" shall mean the Revolving Notes and/or the Term Notes and/or
the Incremental Notes, as the case may be.
"OBLIGATIONS": the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Term Loans, the
Incremental Loans and the Revolving Loans and interest accruing on or after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding
and whether or not at a default rate) the Notes, the obligation to reimburse
drawings under Letters of Credit (including the contingent obligation to
reimburse any drawings under outstanding Letters of Credit) and all other
obligations and liabilities of the Borrower to the Administrative Agent, the
Managing Agents and the Lenders, 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, this Agreement, the Notes, the
Letters of Credit, any other Loan Document and any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees and disbursements
of counsel, and the allocated reasonable cost of internal counsel, to the
Administrative Agent, the Managing Agents or the Lenders that are required to
be paid by the Borrower pursuant to the terms of this Agreement) or otherwise.
"OCCUPANCY AGREEMENTS": as defined in Section 5.15.
"PARTICIPATION AGREEMENT": the Participation Agreement dated as of the
Second Closing Date among the Borrower, Perenchio, Televisa, Gustavo A.
Cisneros, Ricardo J. Cisneros and Venevision, as such agreement may be amended
or otherwise modified from time to time in accordance with the terms hereof.
"PACK-A-SNACK": as defined in the recitals hereto.
"PARIBAS": as defined in the preamble hereto.
"PARTICIPANT": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor thereto.
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"PCI": Perenchio Communications, Inc., a Delaware corporation (which
became Univision Communications, Inc. pursuant to a name change effected in
June 1996).
"PERENCHIO": A. Jerrold Perenchio.
"PERMITTED TRANSFEREES": (i) Perenchio's spouse and lineal descendants,
(ii) Perenchio's personal representatives and heirs, (iii) any trustee of any
trust created primarily for the benefit of any, some or all of such spouse and
lineal descendants or of any revocable trust created by Perenchio, (iv)
following the death of Perenchio, all beneficiaries under any such trust, (v)
Perenchio, in the case of a transfer from any transferee back to Perenchio and
(vi) any entity, all of the equity of which is directly or indirectly owned by
any of the foregoing which is not an Affiliate of any other Person.
"PERSON": any individual, firm, partnership, limited liability company,
joint venture, corporation, association, business enterprise trust,
unincorporated organization, government or department or agency thereof or
other entity, whether acting in an individual, fiduciary or other capacity.
"PLAN": as to any Person, any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of such Person or any
ERISA Affiliate of such Person (and any such plan no longer maintained by such
Person or any of such Person's ERISA Affiliates to which such Person or any of
such Person's ERISA Affiliates has made or was required to make any
contributions within any of the five preceding years).
"PLAN OF REORGANIZATION": the Agreement and Plan of Reorganization dated
as of September 26, 1996 relating to the transactions described in Section
3.30.
"PREFERRED STOCK DEFAULT": the occurrence and continuance of an Event of
Default described in Section 7(a), Section 7(c) (by reason of a failure to
comply with the requirements of Section 6.1) or Section 7(g).
"PRIMARY STATION": any full power television station now or hereafter
owned, leased or operated by the Borrower or any of its Subsidiaries.
"PROGRAM COST SHARING AGREEMENT": the Agreement Concerning Production and
Acquisition of Programs dated as of December 17, 1992 among Network, Univisa,
Perenchio and Venevision International, as amended by the Program Cost Sharing
Agreement Waiver, pursuant to which the parties thereto have agreed to co
finance the cost of the production or acquisition of, and exploit, specified
programs, on and subject to the terms contained therein, as such agreement may
be further amended or
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otherwise modified from time to time in accordance with the terms hereof,
the Guaranty dated as of December 17, 1992 by Televisa relating thereto, as
such Guaranty may be amended or modified from time to time in accordance
with the terms hereof, and the Guaranty dated as of December 17, 1992 by
Venevision relating thereto, as such Guaranty may be amended or modified
from time to time in accordance with the terms hereof, all of which documents
shall terminate on the Second Closing Date.
"PROGRAM COST SHARING AGREEMENT WAIVER": that certain waiver to the
Program Cost Sharing Agreement dated January 25, 1996, as modified by that
certain letter dated February 8, 1996.
"PROGRAM LICENSE AGREEMENTS": Program License Agreements each dated as of
December 17, 1992, entered into between (i) Network and Univisa and (ii)
Network and Dennevar B.V., as each has been amended and restated by those
certain Amended and Restated Program License Agreements each dated as of the
Second Closing Date, pursuant to which Univisa and Dennevar B.V. shall make
certain current and library programming available to Network, in form and
substance reasonably satisfactory to the Majority Lenders, as such agreements
may be further amended or modified from time to time in accordance with the
terms hereof, and the Guaranty by Venevision and the Guaranty by Televisa, each
dated as of December 17, 1992, as replaced by the Guaranty by Venevision and
the Guaranty by Televisa, each dated as of the Second Closing Date, each such
Guaranties in form and substance reasonably satisfactory to the Majority
Lenders, and as such Guaranties may be further amended or modified from time to
time in accordance with the terms hereof.
"PROGRAM RIGHTS OBLIGATIONS": all obligations, whether fixed or
contingent, of the Borrower and its Subsidiaries in respect of the right to
broadcast programs and films produced or supplied by any Person (other than a
Loan Party, Televisa, Venevision or their respective Affiliates pursuant to
Program License Agreements).
"PROGRAM RIGHTS PAYMENTS": for any period, the sum (determined on a
consolidated basis and without duplication) of all payments by the Borrower and
its Subsidiaries made or scheduled to be made during such period in respect of
Program Rights Obligations; provided that (a) if the payment schedule for a
Program Rights Obligation is modified at no cost (including, but not limited
to, interest costs) to the Borrower or any of its Subsidiaries, then the
payments with respect to such Program Rights Obligation shall be deemed to be
scheduled to be made pursuant to such modified schedule and (b) any down
payment on a Program Rights Obligation shall be equally allocated over the
term of the payment period for such Program Rights Obligation in an amount per
month during such payment
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period equal to the amount of such down payment divided by the
number of months during such payment period.
"PROGRAM SERVICES AGREEMENTS": any local marketing agreement, time
brokerage agreement, program services agreement or similar agreement providing
for the Borrower or any of its Subsidiaries (other than License Subsidiaries)
to program or sell advertising on all or any portion of the broadcast time of
any television or radio station.
"PROPERTIES": the collective reference to the real and personal property
owned, leased, used, occupied or operated, under license or permit, by the
Borrower, the Guarantors or any of their respective Subsidiaries.
"PTI": Perenchio Television, Inc., a Delaware corporation.
"PTI HOLDINGS": PTI Holdings, Inc., a Delaware corporation.
"PURCHASING LENDERS": as defined in Section 9.6(c).
"REDEMPTION VALUE": with respect to each share of Modesto Station Purchase
Preferred Stock, $1,000.
"REFERENCE BANKS": Chase and Paribas.
"REFERENCE BANKS RATE": a rate per annum equal to the average (rounded
upward to the nearest 1/16th of 1%) of the respective rates notified to the
Administrative Agent by each of the Reference Banks as the cost of funds at
which such Reference Bank is able to fund an amount comparable to the amount of
its LIBOR Loan to be converted to this rate, plus the Applicable Margin for
LIBOR Loans.
"REGISTER": as defined in Section 9.6(e).
"REGISTRATION STATEMENT": as defined in Section 4.1(n).
"REGULATION D": Regulation D of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REORGANIZATION": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
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"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under PBGC regulations.
"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, treaty, rule or regulation, determination or policy statement or
interpretation 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, the president, any
executive vice president, any senior vice president or any vice president of
each of the Borrower or the Guarantors, as applicable, or, with respect to
financial matters, the chief financial officer, treasurer or controller of the
Borrower or the Guarantors, as applicable.
"RESTRICTED PAYMENTS": as defined in Section 6.6.
"REVOLVING LOAN": as defined in Section 2.1(a).
"REVOLVING LOAN COMMITMENT": the commitment of each Lender listed on
Schedule 1 to make Revolving Loans and participate in Letters of Credit
hereunder through its Applicable Lending Office as set forth on Schedule 1, as
the same shall be adjusted from time to time pursuant to this Agreement.
"REVOLVING LOAN COMMITMENT EXPIRATION DATE": December 31, 2003 or such
earlier date as the Aggregate Revolving Loan Commitment shall expire (whether
by acceleration, reduction to zero or otherwise).
"REVOLVING LOAN COMMITMENT PERCENTAGE": with respect to each Revolving
Loan Lender, the percentage equivalent of the ratio which such Revolving Loan
Lender's Revolving Loan Commitment bears to the Aggregate Revolving Loan
Commitment, as such Revolving Loan Lender's Revolving Loan Commitment and the
Aggregate Revolving Loan Commitment may be adjusted from time to time pursuant
to the terms hereof.
"REVOLVING LOAN LENDER": each Lender having a Revolving Loan Commitment
and/or which shall have (i) Revolving Loans outstanding and/or
(ii) participations in Letters of Credit which are outstanding.
"REVOLVING NOTE" AND "REVOLVING NOTES": as defined in Section 2.1(c).
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"SECOND CLOSING DATE": the date on which the conditions precedent set
forth in Section 4.2 have been satisfied, but in no event later than October
15, 1996.
"SECONDARY STATION": any Station other than a Primary Station.
"SECURITY AGREEMENT": the Security Agreement in form and substance
reasonably satisfactory to the Majority Lenders, made by the Borrower in favor
of the Administrative Agent, for the benefit of the Lenders, in respect of the
tangible and intangible personal property of the Borrower described therein, as
the same may be amended from time to time in accordance with the terms hereof.
"SENIOR DEBT": Funded Debt other than Subordinated Indebtedness and
Modesto Station Purchase Preferred Stock.
"SENIOR SUBORDINATED NOTES": as defined in the recitals hereto.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, that:
(i) the present fair salable value of such Person's assets is in
excess of the total amount of the probable liability on such Person's
liabilities;
(ii) such Person is able to pay its debts as they become due; and
(iii) such Person does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all businesses in which
such Person is about to engage.
"SPECIAL EVENT REVENUE": net time sales for Special Programs broadcast by
Network on any Station.
"SPECIAL PROGRAMS": programs such as the World Cup, other sporting events,
political conventions, election coverage, parades, pageants, special variety
shows and other non-episodic and non-continuing shows broadcast by Network and
not produced by Televisa or Venevision or their respective Affiliates.
"SPONSOR LOAN DOCUMENTS": the Scheduled Loan Agreement dated as of
December 17, 1992, between UTG and Televisa, the Scheduled Loan Agreement
dated as of December 17, 1992, between UTG and Pack-A-Snack, the Additional
Loan Agreement dated as of December 17, 1992, between UTG and Televisa, the
Additional Loan
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Agreement dated as of December 17, 1992, between UTG and Pack-A-Snack, the
Televisa Scheduled Loan Note dated December 17, 1992, the Pack-A-Snack
Scheduled Loan Note dated December 17, 1992, the Scheduled Loan Guaranty
dated as of December 17, 1992 by Network and PTI Holdings in favor of
Televisa, the Scheduled Loan Guaranty dated as of December 17, 1992 of
Network and PTI Holdings in favor of Pack-A-Snack, the Televisa Additional
Loan Note dated December 17, 1992, the Pack-A-Snack Additional Loan Note
dated December 17, 1992, the Additional Loan Guaranty dated as of December
17, 1992 by Network and PTI Holdings in favor of Televisa, the Additional
Loan Guaranty dated as of December 17, 1992 by Network and PTI Holdings in
favor of Pack-A-Snack, the Back-Up Loan and Security Agreement dated as of
December 17, 1992 among Univisa, Televisa, UTG and Network and the Back-Up
Loan and Security Agreement dated as of December 17, 1992 among
Pack-A-Snack, Dennevar B.V., UTG and Network, all in form and substance
reasonably satisfactory to the Majority Lenders and as such documents may be
amended or otherwise modified from time to time in accordance with the terms
hereof, subject to the restrictions set forth in Section 6.15.
"SPONSOR LOANS": loans made to UTG pursuant to the Sponsor Loan Documents
and subordinated to Senior Debt.
"STATION": any full power television station, any low power television
station, any translator and any other television system now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries.
"SUBORDINATED INCREMENTAL INDEBTEDNESS": unsecured Indebtedness of the
Borrower in a principal amount not to exceed the difference between the
Aggregate Incremental Loan Commitment and the Maximum Incremental Loan
Facility, which Indebtedness is subordinated to the payment of the Obligations
on terms and conditions satisfactory to the Majority Lenders as evidenced by
their written consent thereto prior to the incurrence of such Indebtedness;
provided that no such Indebtedness shall be incurred unless the Lenders shall
have declined, in writing, to activate Incremental Loan Commitments in an
amount equal to the Maximum Incremental Loan Facility.
"SUBORDINATED INDEBTEDNESS": the sum of (i) the Sponsor Loans and all
other obligations of UTG and its Subsidiaries under the Sponsor Loan Documents,
(ii) the Junior Subordinated Notes, (iii) any Subordinated Incremental
Indebtedness, (iv) the License Fee Guaranties and (v) all other Indebtedness of
the Borrower and its Subsidiaries which is subordinated to the payment of the
Obligations on terms and conditions satisfactory to the Majority Lenders as
evidenced by their written consent thereto prior to the incurrence of such
Indebtedness.
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"SUBSIDIARY": as to any Person at any time of determination, 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 Subsidiaries, 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.
"SUNSHINE": Sunshine Acquisition Corp., a Delaware corporation.
"SUNSHINE L.P.": Sunshine Acquisition, L.P., a California limited
partnership.
"TAX ALLOCATION AGREEMENT": the Tax Allocation Agreement dated as of
December 17, 1992 among UTG, PTI, PTI Holdings and PCI, as such document may be
amended or otherwise modified from time to time in accordance with the terms
hereof.
"TAXES": as defined in Section 2.15(a).
"TELEVISA": as defined in the recitals hereto.
"TERMINATION EVENT": (i) a Reportable Event, (ii) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section 4042
of ERISA, (iii) the appointment by the PBGC of a trustee to administer any
Single Employer Plan or (iv) the existence of any other event or condition that
would reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment by the PBGC of a trustee to
administer, any Single Employer Plan.
"TERM LOAN": as defined in Section 2.2(a).
"TERM LOAN COMMITMENT": the commitment of each Lender listed on Schedule 2
to make a Term Loan hereunder through its Applicable Lending Office as set
forth in Schedule 2, as the same may be adjusted pursuant to the provisions
hereof.
"TERM LOAN COMMITMENT PERCENTAGE": with respect to each Term Loan Lender,
the percentage equivalent of the ratio which such Term Loan Lender's Term Loan
Commitment bears to the Aggregate Term Loan Commitment.
"TERM LOAN LENDERS": each Lender having a Term Loan Commitment and/or
which shall have Term Loans outstanding.
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"TERM LOAN MATURITY DATE": December 31, 2003 or such earlier date as
the Aggregate Term Loan Commitment shall expire (whether by acceleration,
reduction to zero or otherwise).
"TERM LOAN REDUCTION DATES": the dates on which scheduled principal
payments of the Term Loans are due, as set forth in the table in Section
2.2(d).
"TERM NOTE" AND "TERM NOTES": as defined in Section 2.2(c).
"TOTAL DEBT RATIO": for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Funded Debt outstanding at such time to
EBITDA for the fiscal quarter most recently ended and the immediately
preceding three fiscal quarters; provided that prior to the first
anniversary of the Initial Closing Date EBITDA shall be calculated as set
forth in Section 6.1(a).
"TOTAL DEBT SERVICE": as of any date, for the fiscal quarter most
recently ended and the immediately preceding three fiscal quarters, the sum
of (i) all Interest Expense and (ii) regularly scheduled principal payments
due on Funded Debt (which result in permanent reductions in availability)
(other than payments made pursuant to Section 2.5 and 2.6) or, with respect
to Modesto Station Purchase Preferred Stock, the amount paid for any
redemption thereof (excluding the effect of any redemption of Modesto
Station Purchase Preferred Stock to the extent made with the proceeds of
Revolving Loans) and (iii) principal payments on Revolving Loans due under
Section 2.1(h)(ii).
"TOTAL INTEREST COVERAGE RATIO": the ratio of EBITDA to Interest
Expense for the fiscal quarter most recently ended and the immediately
preceding three fiscal quarters; provided that prior to the first
anniversary of the Initial Closing Date EBITDA and Interest Expense shall be
calculated as set forth in Section 6.1(b).
"TRANCHE": the collective reference to LIBOR Loans the Interest Periods
with respect to all of which begin on the same date and end on the same
later date (whether or not such LIBOR Loans shall originally have been made
on the same day).
"TRANSFEREE": as defined in Section 9.6(g).
"TRANSPONDER LEASES": collectively, the long-term capital leases for
Network of satellite transponders more specifically set forth on Schedule 13,
and replacements of such leases on market terms.
"TYPE": as to any Term Loan, any Revolving Loan or any Incremental
Loan, its nature as an Alternate Base Rate Loan or a LIBOR Loan.
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"UNDERWRITERS AGREEMENTS": as defined in Section 4.1(n).
"UNIVISA": as defined in the recitals hereto.
"VENEVISION": Corporacion Venezolana de Television (Venevision) C.A., a
Venezuelan corporation.
"VENEVISION INTERNATIONAL": Venevision International, Inc., a Florida
corporation.
"VOTING POWER": the aggregate number of votes of all classes of Capital
Stock of such Person which ordinarily has voting power for the election of
directors of such Person.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Loan Document or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein, in the Notes, in any other Loan Document, and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in Section 1.1 and accounting terms partly defined
in Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(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, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) 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 LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS
2.1 REVOLVING LOANS AND LETTERS OF CREDIT; REVOLVING LOAN COMMITMENT
AMOUNTS. (a) Subject to the terms and conditions hereof, each Lender having
a Revolving Loan Commitment severally agrees to (i) make loans on a
revolving credit basis through its Applicable Lending Office to the Borrower
from time to time from and including the Initial Closing Date to but
excluding the Revolving Loan Commitment Expiration Date (each a "REVOLVING
LOAN" and, collectively, the "REVOLVING LOANS") in accordance with the
provisions of this Agreement (provided that the aggregate principal amount
of Revolving Loans made by the Revolving Loan Lenders prior to the
occurrence of the Second Closing Date shall not exceed the lesser of (x) the
Aggregate
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Revolving Loan Commitment and (y) $400,000,000 less the aggregate principal
amount of Term Loans made on the Initial Closing Date) and (ii) participate
through its Applicable Lending Office in letters of credit issued for the
account of the Borrower pursuant to Section 2.4 from time to time from and
including the Second Closing Date to but excluding the Revolving Loan
Commitment Expiration Date (each a "LETTER OF CREDIT", and collectively, the
"LETTERS OF CREDIT"); provided, however, that the sum of (A) the aggregate
principal amount of all Revolving Loans outstanding, (B) the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (C) the
aggregate amount of unreimbursed drawings under all Letters of Credit shall
not exceed the Aggregate Revolving Loan Commitment at any time; and
provided, further, that the sum of (x) the aggregate Letter of Credit Amount
of all Letters of Credit outstanding and (y) the aggregate amount of
unreimbursed drawings under all Letters of Credit shall not exceed
$50,000,000 at any time. Within the limits of each Revolving Loan Lender's
Revolving Loan Commitment, the Borrower may borrow, have Letters of Credit
issued for the Borrower's account, prepay Revolving Loans, reborrow
Revolving Loans, and have additional Letters of Credit issued for the
Borrower's account after the expiration of previously issued Letters of
Credit.
The principal amount of each Revolving Loan Lender's (A) Revolving Loan and
(B) participation in a Letter of Credit shall be in an amount equal to the
product of (i) such Revolving Loan Lender's Revolving Loan Commitment Percentage
(expressed as a fraction) and (ii) the total amount of the Revolving Loan or
Revolving Loans, or the Letter of Credit or Letters of Credit, requested;
provided that in no event shall any Revolving Loan Lender be obligated to make a
Revolving Loan or participate in a Letter of Credit if after giving effect to
such Revolving Loan or such participation the sum of such Revolving Loan
Lender's (x) Revolving Loans outstanding, (y) Revolving Loan Commitment
Percentage of the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (z) Revolving Loan Commitment Percentage of the aggregate amount
of unreimbursed drawings under all Letters of Credit would exceed its Revolving
Loan Commitment or if the amount of such requested Revolving Loan or such
Revolving Loan Lender's Revolving Loan Commitment Percentage of such Letter of
Credit is in excess of such Revolving Loan Lender's Available Revolving Loan
Commitment.
(b) Subject to Sections 2.11 and 2.13, the Revolving Loans may from time
to time be (i) LIBOR Loans, (ii) Alternate Base Rate Loans or (iii) a
combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with either Section 2.1(d) or 2.7.
Notwithstanding the foregoing, the initial Revolving Loans made on or after the
Initial Closing Date shall be made as Alternate Base Rate Loans and shall be
subject to conversion to LIBOR Loans pursuant to
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Section 2.7. Each Revolving Loan Lender may make or maintain its Revolving
Loans or participate in Letters of Credit to or for the account of the
Borrower by or through any Applicable Lending Office.
(c) The Revolving Loans made by each Revolving Loan Lender to the Borrower
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit A (a "REVOLVING NOTE"), with appropriate insertions therein as
to payee, date and principal amount, payable to the order of such Revolving Loan
Lender and representing the obligation of the Borrower to pay the aggregate
unpaid principal amount of all Revolving Loans made by such Revolving Loan
Lender to the Borrower pursuant to Section 2.1(a) or 2.4(c), with interest
thereon as prescribed in Sections 2.9 and 2.10. Each Revolving Loan Lender is
hereby authorized (but not required) to record the date and amount of each
payment or prepayment of principal of its Revolving Loans made to the Borrower,
each continuation thereof, each conversion of all or a portion thereof to
another Type and, in the case of LIBOR Loans, the length of each Interest Period
with respect thereto, in the books and records of such Revolving Loan Lender,
and any such recordation shall constitute PRIMA FACIE evidence of the accuracy
of the information so recorded. The failure of any Revolving Loan Lender to
make any such recordation or notation in the books and records of the Revolving
Loan Lender (or any error in such recordation or notation) shall not affect the
obligations of the Borrower hereunder or under the Revolving Notes. Each
Revolving Note shall (i) be dated the Initial Closing Date, (ii) provide for the
payment of interest in accordance with Sections 2.9 and 2.10 and (iii) be stated
to be payable on the Revolving Loan Commitment Expiration Date.
(d) The Borrower shall give the Administrative Agent irrevocable written
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, one Business Day prior to each proposed borrowing date
or, if all or any part of the Revolving Loans are requested to be made as LIBOR
Loans, three Eurodollar Business Days prior to each proposed borrowing date)
requesting that the Revolving Loan Lenders make the Revolving Loans on the
proposed borrowing date and specifying (i) the aggregate amount of Revolving
Loans requested to be made, (ii) subject to Section 2.1(b), whether the
Revolving Loans are to be LIBOR Loans, Alternate Base Rate Loans or a
combination thereof and (iii) if the Revolving Loans are to be entirely or
partly LIBOR Loans, the respective amounts of each such Type of Revolving Loan
and the respective lengths of the initial Interest Periods therefor. On receipt
of such notice, the Administrative Agent shall promptly notify each Revolving
Loan Lender thereof not later than 11:00 A.M., New York City time on the date of
receipt of such notice. On the proposed borrowing date, not later than 12:00
noon, New York City time, each Revolving Loan Lender shall make available to
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the Administrative Agent at its office specified in Section 9.2 the amount
of such Revolving Loan Lender's pro rata share of the aggregate borrowing
amount (as determined in accordance with the second paragraph of Section
2.1(a)) in immediately available funds. The Administrative Agent may, in
the absence of notification from any Revolving Loan Lender that such
Revolving Loan Lender has not made its pro rata share available to the
Administrative Agent, on such date, credit the account of the Borrower on
the books of such office of the Administrative Agent with the aggregate
amount of Revolving Loans.
(e) On each date set forth below, the Aggregate Revolving Loan Commitment
shall automatically reduce to the corresponding amount set forth below (if not
previously reduced to or below such amount pursuant to Section 2.1(f)):
Reduced Aggregate
Effective Date of Reduction Revolving Loan Commitment
--------------------------- -------------------------
March 31, 1999 $197,500,000
June 30, 1999 195,000,000
September 30, 1999 192,500,000
December 31, 1999 190,000,000
March 31, 2000 187,500,000
June 30, 2000 185,000,000
September 30, 2000 182,500,000
December 31, 2000 180,000,000
March 31, 2001 175,000,000
June 30, 2001 170,000,000
September 30, 2001 165,000,000
December 31, 2001 160,000,000
March 31, 2002 152,500,000
June 30, 2002 145,000,000
September 30, 2002 137,500,000
December 31, 2002 130,000,000
March 31, 2003 97,500,000
June 30, 2003 65,000,000
September 30, 2003 32,500,000
December 31, 2003 0
(f) At the Borrower's option and upon at least one Business Day's prior
irrevocable written notice to the Administrative Agent, with such notice
specifying the amount and the date of such reduction, the Borrower may
permanently reduce the Aggregate Revolving Loan Commitment in whole at any time
or in part from time to time; provided, however, that each partial reduction of
the Aggregate Revolving Loan Commitment shall be in an aggregate amount equal to
at least $5,000,000 or an integral multiple of $1,000,000. The Administrative
Agent shall promptly notify each Revolving Loan Lender (by telecopy or by
telephone) of such requested Revolving Loan Commitment reduction.
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(g) Reductions of the Aggregate Revolving Loan Commitment pursuant to this
Section 2.1 or Section 2.6 shall automatically effect a reduction of the
Revolving Loan Commitment of each Revolving Loan Lender to an amount equal to
the product of (i) the Aggregate Revolving Loan Commitment of all Revolving
Loan Lenders, as reduced pursuant to this Section 2.1 or Section 2.6 and (ii)
the Revolving Loan Commitment Percentage of such Revolving Loan Lender, in each
case determined immediately prior to such reduction of the Aggregate Revolving
Loan Commitment on such date.
(h) Upon each reduction of the Aggregate Revolving Loan Commitment, the
Borrower shall (i) pay the unused commitment fee, payable pursuant to Section
2.17, accrued on the amount of the Aggregate Revolving Loan Commitment so
reduced through the date of such reduction, (ii) prepay the amount, if any, by
which the sum of (A) the aggregate unpaid principal amount of the Revolving
Loans, (B) the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (C) the aggregate amount of unreimbursed drawings under all
Letters of Credit exceeds the amount of the Aggregate Revolving Loan Commitment
as so reduced, together with accrued interest on the amount being prepaid to
the date of such prepayment (or, with respect to outstanding Letters of Credit,
make a Cash Collateral Deposit in an amount equal to such excess to the extent
such excess is not corrected by the foregoing prepayment) and (iii) compensate
the Revolving Loan Lenders for their funding costs, if any, in accordance with
Section 2.16.
(i) Neither the Administrative Agent, the Managing Agents nor any
Revolving Loan Lender shall be responsible for the obligation or Available
Revolving Loan Commitment of any other Revolving Loan Lender hereunder, nor
will the failure of any Revolving Loan Lender to comply with the terms of this
Agreement relieve any other Revolving Loan Lender or the Borrower of its
obligations under this Agreement and the Revolving Notes. Nothing herein shall
be deemed to relieve any Revolving Loan Lender from its obligation to fulfill
its Commitments hereunder or to prejudice any rights which the Borrower may
have against any Revolving Loan Lender as a result of any default by such
Revolving Loan Lender hereunder.
(j) The Revolving Loan Commitment of each Revolving Loan Lender and the
Aggregate Revolving Loan Commitment shall terminate on the Revolving Loan
Commitment Expiration Date.
2.2 TERM LOANS; TERM LOAN COMMITMENT. (a) Subject to the terms and
conditions hereof, each Lender having a Term Loan Commitment severally agrees
to make a term loan (each, a "TERM LOAN" and, collectively, the "TERM LOANS")
to the Borrower on the Initial Closing Date and, if requested by the Borrower,
on the Second Closing Date in an aggregate principal amount equal
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to the amount of the Term Loan Commitment of such Lender; provided that the
aggregate principal amount of Term Loans made by the Term Loan Lenders on the
Initial Closing Date shall not exceed $400,000,000 less the aggregate principal
amount of Revolving Loans made on the Initial Closing Date. Term Loans repaid
may not be reborrowed.
The principal amount of each Term Loan Lender's Term Loan shall be in an
amount equal to the product of (i) such Term Loan Lender's Term Loan Commitment
Percentage (expressed as a fraction) and (ii) the total amount of the Term
Loans requested; provided that in no event shall any Term Loan Lender be
obligated to make a Term Loan if after giving effect to such Term Loan the sum
of such Term Loan Lender's Term Loans outstanding would exceed its Term Loan
Commitment or if the amount of such requested Term Loan is in excess of such
Term Loan Lender's Available Term Loan Commitment.
(b) Subject to Sections 2.11 and 2.13, the Term Loans may from time to
time be (i) LIBOR Loans, (ii) Alternate Base Rate Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Administrative Agent
in accordance with either Section 2.2(e) or 2.7. Notwithstanding the
foregoing, the initial Term Loans made on the Initial Closing Date and on the
Second Closing Date, as the case may be, shall be made as Alternate Base Rate
Loans and shall be subject to conversion to LIBOR Loans pursuant to Section
2.7. Each Term Loan Lender may make or maintain its Term Loans to the Borrower
by or through any Applicable Lending Office.
(c) The Term Loans made by each Term Loan Lender to the Borrower shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit B (a "TERM NOTE"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Term Loan Lender and
representing the obligation of the Borrower to pay the aggregate unpaid
principal amount of the Term Loan made by such Term Loan Lender to the Borrower
pursuant to Section 2.2(a), with interest thereon as prescribed in Sections 2.9
and 2.10. Each Term Loan Lender is hereby authorized (but not required) to
record the date and amount of each payment or prepayment of principal of its
Term Loan made to the Borrower, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of LIBOR Loans, the
length of each Interest Period with respect thereto, in the books and records
of such Term Loan Lender, and any such recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded. The failure of any
Term Loan Lender to make any such recordation or notation in the books and
records of the Term Loan Lender (or any error in such recordation or notation)
shall not affect the obligations of the Borrower hereunder or under the Term
Notes. Each Term Note
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shall (i) be dated the Initial Closing Date, (ii) provide for the payment of
interest in accordance with Sections 2.9 and 2.10 and (iii) be stated to be
payable in installments of principal in accordance with, and subject to the
provisions of, Section 2.2(d).
(d) On each Term Loan Reduction Date, the Borrower shall repay the
principal of the Term Notes in an aggregate amount equal to the amount set
forth below opposite such Term Loan Reduction Date:
Principal
Term Loan Reduction Date Payment
------------------------ -------
(i) March 31, June 30, September 30 $10,000,000
and December 31, 1997
(ii) March 31, June 30, September 30 12,500,000
and December 31, 1998
(iii) March 31, June 30, September 30 12,500,000
and December 31, 1999
(iv) March 31, June 30, September 30 15,000,000
and December 31, 2000
(v) March 31, June 30, September 30 17,500,000
and December 31, 2001
(vi) March 31, June 30, September 30 20,000,000
and December 31, 2002
(vii) March 31, June 30, September 30 12,500,000
and December 31, 2003
; provided, that the final installment paid shall be in an amount equal to all
amounts owed by the Borrower on the Term Notes.
All outstanding Term Loans shall be due and payable, to the extent not
previously paid in accordance with the terms hereof, on the Term Loan Maturity
Date. The aggregate amount payable to any Term Loan Lender on any Term Loan
Reduction Date shall be determined in accordance with the provisions of Section
2.12.
(e) The Borrower shall give the Administrative Agent irrevocable written
notice (which notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, one Business Day prior to the Initial Closing
Date or the Second Closing Date, as the case may be) requesting that the Term
Loan Lenders make the Term Loans on the Initial Closing Date or the Second
Closing Date, as applicable, and specifying the aggregate
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amount of Term Loans requested to be made (which amount shall not exceed the
amount permitted under Sections 2.2(a) and 3.15 (a)(i)). Upon receipt of such
notice the Administrative Agent shall promptly notify each Term Loan Lender
thereof not later than 11:00 A.M., New York City time on the date of receipt of
such notice. Not later than 12:00 noon, New York City time, on the Initial
Closing Date or the Second Closing Date, as applicable, each Term Loan Lender
shall make available to the Administrative Agent at its office specified in
Section 9.2 the amount of such Term Loan Lender's pro rata share of the
aggregate borrowing amount (as determined in accordance with the second
paragraph of Section 2.2(a)) in immediately available funds. The
Administrative Agent may, in the absence of notification from any Term Loan
Lender that such Term Loan Lender has not made its pro rata share available to
the Administrative Agent, on such date, credit the account of the Borrower on
the books of such office of the Administrative Agent with the aggregate Term
Loans.
(f) Neither the Administrative Agent nor any Term Loan Lender shall be
responsible for the obligations or Term Loan Commitment of any other Term Loan
Lender hereunder, nor will the failure of any Term Loan Lender to comply with
the terms of this Agreement relieve any other Term Loan Lender or the Borrower
of its obligations under this Agreement and the Term Notes. Nothing herein
shall be deemed to relieve any Term Loan Lender from its obligation to fulfill
its Commitments hereunder or to prejudice any rights which the Borrower may
have against any Term Loan Lender as a result of any default by such Term Loan
Lender hereunder.
(g) The Term Loan Commitment of each Lender and the Aggregate Term Loan
Commitment shall terminate on the completion of the Term Loan borrowing, if
any, on the Second Closing Date.
2.3 INCREMENTAL LOAN FACILITY. (a) The Borrower and all or certain of the
Lenders who agree in writing to participate in such facility and who are
selected by the Borrower may, with the consent of the Administrative Agent and
the Managing Agents, such consent not to be unreasonably withheld, at any one
time during the period from and including the Second Closing Date to but
excluding the Incremental Loan Commitment Termination Date, agree that such
Lenders shall become Incremental Loan Lenders by executing and delivering to
the Administrative Agent an Activation Notice specifying the respective
Incremental Loan Commitments of the Incremental Loan Lenders and the Activation
Date, and otherwise duly completed. Each Incremental Loan Lender severally
agrees, on the terms and conditions of this Agreement, to make one or more term
loans (each an "INCREMENTAL LOAN" and, collectively, the "INCREMENTAL LOANS")
to the Borrower (as requested by the Borrower) under Section 2.3(e) during the
period from and including the Activation Date to but
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excluding the Incremental Loan Commitment Termination Date in an aggregate
principal amount up to but not exceeding its Incremental Loan Commitment.
Incremental Loans that are prepaid may not be reborrowed. Nothing in this
Section 2.3(a) shall be construed to obligate any Lender to execute an
Activation Notice.
The principal amount of each Incremental Loan Lender's Incremental Loan
shall be in an amount equal to the product of (i) such Incremental Loan
Lender's Incremental Loan Commitment Percentage (expressed as a fraction) and
(ii) the total amount of the Incremental Loan or Incremental Loans requested;
provided that in no event shall any Incremental Loan Lender be obligated to
make an Incremental Loan if after giving effect to such Incremental Loan such
Incremental Loan Lender's Incremental Loans outstanding would exceed its
Incremental Loan Commitment or if the amount of such requested Incremental Loan
is in excess of such Incremental Loan Lender's Available Incremental Loan
Commitment.
(b) Subject to Sections 2.11 and 2.13, any Incremental Loans made hereunder
may from time to time be (i) LIBOR Loans, (ii) Alternate Base Rate Loans or
(iii) a combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with either Section 2.3(e) or 2.7.
Notwithstanding the foregoing, any Incremental Loans made hereunder (other than
those made pursuant to Section 2.7) shall be made as Alternate Base Rate Loans
and shall be subject to conversion to LIBOR Loans pursuant to Section 2.7.
Each Incremental Loan Lender may make or maintain its Incremental Loans to the
Borrower by or through any Applicable Lending Office.
(c) The Incremental Loans made by each Incremental Loan Lender to the
Borrower shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit C (each an "INCREMENTAL NOTE" and,
collectively, the "INCREMENTAL NOTES"), with appropriate insertions therein as
to payee and principal amount, payable to the order of such Incremental Loan
Lender and representing the obligation of the Borrower to pay the aggregate
unpaid principal amount of all Incremental Loans made by such Incremental Loan
Lender to the Borrower pursuant to Section 2.3(a), with interest thereon as
prescribed in Sections 2.9 and 2.10. Each Incremental Loan Lender is hereby
authorized (but not required) to record the date and amount of each payment or
prepayment of principal of its Incremental Loans made to the Borrower, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period with
respect thereto, in the books and records of such Incremental Loan Lender, and
any such recordation shall constitute PRIMA FACIE evidence of the accuracy of
the information so recorded. The failure of any
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Incremental Loan Lender to make any such recordation or notation in the books
and records of such Incremental Loan Lender (or any error in such recordation
or notation) shall not affect the obligations of the Borrower hereunder or
under the Incremental Notes. Each Incremental Note shall (i) be dated the date
of issuance thereof, (ii) provide for the payment of interest in accordance
with Sections 2.9 and 2.10 and (iii) be stated to be payable on the Incremental
Loan Maturity Date.
(d) On each Incremental Loan Reduction Date, the Borrower shall repay the
principal of the Incremental Notes in an aggregate amount equal to the lesser
of (A) the product of (x) the outstanding principal balance of Incremental
Loans as of the close of business on June 30, 1999 (after giving effect to any
Incremental Loan made on such date) and (y) the amount set forth in column A
below and (B) the amount set forth in column B below (or an amount equal to the
aggregate principal amount of Incremental Loans outstanding if such amount
shall be less than the lesser of the amounts set forth in (A) and (B)), in each
case as set forth below opposite such Incremental Loan Reduction Date:
Incremental Loan Reduction Date A B
------------------------------- --- ---
(i) September 30 .020 $5,000,000
and December 31, 1999
(ii) March 31, June 30, September 30 .015 3,750,000
and December 31, 2000
(iii) March 31, June 30, September 30 .025 6,250,000
and December 31, 2001
(iv) March 31, June 30, September 30 .025 6,250,000
and December 31, 2002
(v) March 31, June 30, September 30 .025 6,250,000
and December 15, 2003
(vi) March 31, June 30 and August
31, 2004 .200 50,000,000
; provided, that the final installment paid shall be in an amount equal to all
amounts owed by the Borrower on the Incremental Notes. All outstanding
Incremental Loans shall be due and payable, to the extent not previously paid
in accordance with the terms hereof, on the Incremental Loan Maturity Date.
(e) The Borrower shall give the Administrative Agent irrevocable written
notice (the "ELECTION NOTICE") (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to each
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proposed borrowing date or, if all or any part of the Incremental Loans are
requested to be made as LIBOR Loans (as permitted by Section 2.3(b)), three
Eurodollar Business Days prior to the applicable proposed borrowing date)
requesting that the Incremental Loan Lenders make Incremental Loans on the
proposed borrowing date and specifying (i) the aggregate amount of Incremental
Loans requested to be made, (ii) subject to Section 2.3(b), whether the
Incremental Loans are to be LIBOR Loans, Alternate Base Rate Loans or a
combination thereof and (iii) if the Incremental Loans are to be entirely or
partly LIBOR Loans, the respective amounts of each such Type of Incremental
Loan and the respective lengths of the initial Interest Periods therefor. On
receipt of such notice, the Administrative Agent shall promptly notify each
Incremental Loan Lender thereof not later than 11:00 A.M., New York City time,
on the date of receipt of such notice.
(f) On the proposed borrowing date, not later than 12:00 noon, New York
City time, each Incremental Loan Lender shall make available to the
Administrative Agent at its office specified in Section 9.2 the amount of such
Incremental Loan Lender's pro rata share of the aggregate borrowing amount (as
determined in accordance with the second paragraph of Section 2.3(a)) in
immediately available funds. The Administrative Agent may, in the absence of
notification from any Incremental Loan Lender that such Incremental Loan Lender
has not made its Incremental Loans available to the Administrative Agent, on
such date, credit the account of the Borrower on the books of such office of
the Administrative Agent with the aggregate amount of the requested Incremental
Loans.
(g) Neither the Administrative Agent, the Managing Agents nor any
Incremental Loan Lender shall be responsible for the obligation or Incremental
Loan Commitment of any other Incremental Loan Lender hereunder, nor will the
failure of any Incremental Loan Lender to comply with the terms of this
Agreement relieve any other Incremental Loan Lender or the Borrower of its
obligations under this Agreement and the Incremental Loan Notes. Nothing in
this subsection (g) shall be deemed to relieve any Incremental Loan Lender from
its obligation to fulfill its Incremental Loan Commitment hereunder or to
prejudice any rights which the Borrower may have against any Incremental Loan
Lender as a result of any default of such Incremental Loan Lender hereunder.
(h) The Incremental Loan Commitment of each Incremental Loan Lender and
the Aggregate Incremental Loan Commitment shall terminate on the Incremental
Loan Commitment Termination Date.
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2.4 ISSUANCE OF LETTERS OF CREDIT.
(a) The Borrower shall be entitled to request the issuance of Letters of
Credit from time to time from and including the Second Closing Date to but
excluding the date which is seven Business Days prior to the Revolving Loan
Commitment Expiration Date by giving the Administrative Agent a Letter of
Credit Request at least three (3) Business Days before the requested date of
issuance of such Letter of Credit (which shall be a Business Day). Any Letter
of Credit Request received by the Administrative Agent later than 10:00 a.m.,
New York City time, shall be deemed to have been received on the next Business
Day. Each Letter of Credit Request shall be made in writing, shall be signed
by a Responsible Officer, shall be irrevocable and shall be effective upon
receipt by the Administrative Agent. Provided that a valid Letter of Credit
Request has been received by the Administrative Agent and upon fulfillment of
the other applicable conditions set forth in Section 4.4, the Administrative
Agent will issue the requested Letter of Credit from its office specified in
Section 9.2. No Letter of Credit shall have an expiration date later than two
Business Days prior to the Revolving Loan Commitment Expiration Date.
(b) Immediately upon the issuance of each Letter of Credit, the
Administrative Agent shall be deemed to have sold and transferred to each
Revolving Loan Lender, and each Revolving Loan Lender shall be deemed to have
purchased and received from the Administrative Agent, in each case irrevocably
and without any further action by any party, an undivided interest and
participation in such Letter of Credit, each drawing thereunder and the
obligations of the Borrower under this Agreement in respect thereof in an
amount equal to the product of (i) such Revolving Loan Lender's Revolving Loan
Commitment Percentage and (ii) the maximum amount available to be drawn under
such Letter of Credit (assuming compliance with all conditions to drawing).
The Administrative Agent shall promptly advise each Revolving Loan Lender of
the issuance of each Letter of Credit, the Letter of Credit Amount of such
Letter of Credit, any change in the face amount or expiration date of such
Letter of Credit, the cancellation or other termination of such Letter of
Credit and any drawing under such Letter of Credit.
(c) The payment by the Administrative Agent of a draft drawn under any
Letter of Credit shall first be made from any Cash Collateral Deposit held by
the Administrative Agent with respect to such Letter of Credit. After any such
Cash Collateral Deposit has been applied, the payment by the Administrative
Agent of a draft drawn under any Letter of Credit shall constitute for all
purposes of this Agreement the making by the Administrative Agent in its
individual capacity as a Lender hereunder (in such capacity, the "DRAWING
LENDER") of an
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Alternate Base Rate Loan in the amount of such payment (but without any
requirement of compliance with the conditions set forth in Section 4.4). In
the event that any such Loan by the Drawing Lender resulting from a drawing
under any Letter of Credit is not repaid by the Borrower by 12:00 noon, New
York City time, on the day of payment of such drawing, the Administrative
Agent shall promptly notify each other Revolving Loan Lender. Each Revolving
Loan Lender shall, on the day of such notification (or if such notification is
not given by 3:00 p.m., New York City time, on such day, then on the next
succeeding Business Day), make an Alternate Base Rate Loan, which shall be used
to repay the applicable portion of the Alternate Base Rate Loan of the Drawing
Lender with respect to such Letter of Credit drawing, in an amount equal to the
amount of such Revolving Loan Lender's participation in such drawing for
application to repay the Drawing Lender (but without any requirement of
compliance with the applicable conditions set forth in Section 4.4) and shall
deliver to the Administrative Agent for the account of the Drawing Lender, on
the day of such notification (or if such notification is not given by 3:00
p.m., New York City time, on such day, then on the next succeeding Business
Day) and in immediately available funds, the amount of such Alternate Base Rate
Loan. In the event that any Revolving Loan Lender fails to make available to
the Administrative Agent for the account of the Drawing Lender the amount of
such Alternate Base Rate Loan, the Drawing Lender shall be entitled to recover
such amount on demand from such Revolving Loan Lender together with interest
thereon at the Federal Funds Effective Rate for each day such amount remains
outstanding.
(d) The obligations of the Borrower with respect to any Letter of Credit,
any Letter of Credit Request and any other agreement or instrument relating to
any Letter of Credit and any Alternate Base Rate Loan made under Section 2.4(c)
shall be absolute, unconditional and irrevocable and shall be paid strictly in
accordance with the terms of the aforementioned documents under all
circumstances, including the following:
(i) any lack of validity or enforceability of any Letter of Credit,
this Agreement or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right that
the Borrower may have at any time against any beneficiary or transferee of any
Letter of Credit (or any Person for whom any such beneficiary or transferee may
be acting), the Administrative Agent, any Lender (other than the defense of
payment to a Lender in accordance with the terms of this Agreement) or any
other Person, whether in connection with this Agreement, any other Loan
Document, the transactions contemplated hereby or thereby or any unrelated
transaction;
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(iii) any statement or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect, or any statement therein being untrue or inaccurate in any respect
whatsoever;
(iv) payment by the Administrative Agent under any Letter of Credit
against presentation of a draft or certificate that does not comply on its face
with the terms of such Letter of Credit;
(v) any exchange, release or nonperfection of any Collateral or other
collateral, or any release, amendment or waiver of or consent to departure from
any Guarantee, other Loan Document or other guaranty, for any of the
Obligations of the Borrower in respect of the Letters of Credit; and
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
(e) The Borrower shall pay to the Administrative Agent for the account of
the Revolving Loan Lenders with respect to each Letter of Credit issued
hereunder, for the period from and including the day such Letter of Credit is
issued to but excluding the day such Letter of Credit expires or is cancelled,
a letter of credit fee equal to the product of (i) the Applicable Margin for
LIBOR Loans PER ANNUM and (ii) the Letter of Credit Amount of such Letter of
Credit from time to time, such letter of credit fee to be payable quarterly in
arrears on the last day of each March, June, September and December and on the
expiration date or cancellation date of such Letter of Credit.
(f) The Borrower shall pay to the Administrative Agent for its own account
with respect to each Letter of Credit issued hereunder, for the period from and
including the day such Letter of Credit is issued to but excluding the day such
Letter of Credit expires, (i) a letter of credit fee equal to the product of
(A) three sixteenths of one percent (0.1875%) PER ANNUM and (B) the Letter of
Credit Amount of such Letter of Credit from time to time, such letter of credit
fee to be payable on the date such Letter of Credit is issued and on each
anniversary thereof and (ii) from time to time, such additional fees and
charges (including cable charges) as are generally associated with letters of
credit, in accordance with the Administrative Agent's standard internal charge
guidelines and the related Letter of Credit Request.
(g) The Borrower agrees to the provisions in the Letter of Credit Request
form; provided, however, that the terms of the Loan Documents shall take
precedence if there is any inconsistency between the terms of the Loan
Documents and the terms of said form.
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(h) The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Administrative Agent nor any Lender nor any
of their respective officers or directors shall be liable or responsible for
(i) the use that may be made of any Letter of Credit or any acts or omissions
of any beneficiary or transferee in connection therewith; (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement thereof, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Administrative Agent against
presentation of documents that do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to any Letter of Credit; or (iv) any other circumstance whatsoever in
making or failing to make payment under any Letter of Credit. In furtherance
and not in limitation of the foregoing, the Administrative Agent may accept any
document that appears on its face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
2.5 OPTIONAL PREPAYMENTS. The Borrower may on the last day of any
Interest Period with respect thereto, in the case of LIBOR Loans, or at any
time and from time to time, in the case of Alternate Base Rate Loans, prepay
the Loans, in whole or in part, without premium or penalty, upon at least three
Business Days' irrevocable written notice, in the case of LIBOR Loans, and upon
at least one Business Day's irrevocable written notice, in the case of
Alternate Base Rate Loans, from the Borrower to the Administrative Agent,
specifying the date and amount of prepayment and whether the prepayment is of
LIBOR Loans, Alternate Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each and whether the prepayment is
of Non-Revolving Loans or Revolving Loans, or a combination thereof, and, if a
combination thereof, the amount allocable to each; provided that any prepayment
of Non-Revolving Loans shall be applied pro rata between outstanding Term Loans
and outstanding Incremental Loans, based on the aggregate principal amounts of
Term Loans and Incremental Loans then outstanding, respectively. Upon receipt
of any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable by the Borrower on the date specified
therein, together with accrued interest to such date on the amount prepaid and
amounts payable pursuant to Section 2.16. Partial prepayments of Non-Revolving
Loans shall be applied to the installments of principal thereof, FIRST, in the
forward order of their scheduled maturities with respect to the next two
succeeding quarterly payments due under Section 2.2(d) or 2.3(d), respectively
and, THEREAFTER, pro rata with respect to all respective remaining principal
installments
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thereof. Amounts prepaid on account of the Non-Revolving Loans may
not be reborrowed. Partial prepayments of Revolving Loans shall be in an
aggregate principal amount of $1,000,000 or an integral multiple thereof and
partial prepayments of Term Loans or Incremental Loans shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000.
2.6 MANDATORY PREPAYMENTS. (a) On the day of receipt (or the ninety-first
day after receipt, in the case of Net Proceeds from Asset Dispositions
described in clause (i) of the definition of "Asset Disposition" if replacement
property is not purchased) by the Borrower or any of its Subsidiaries of any
Net Proceeds with respect to an Asset Disposition, the Borrower shall prepay
the Loans (and such prepayment shall be applied as set forth in Section 2.6(f))
and, after all Loans have been prepaid, make a Cash Collateral Deposit, in an
amount equal to 100% of such Net Proceeds. On or prior to the date of any
prepayment required by this Section 2.6(a), the Borrower agrees to provide the
Administrative Agent with calculations used by the Borrower in determining the
amount of any such prepayment.
(b) In the event that at the end of any fiscal year of the Borrower ending
after December 31, 1996 there shall exist Excess Cash Flow with respect to such
fiscal year, then on the date which is ten Business Days after the earlier to
occur of (i) the date upon which the audited financial statements of the
Borrower with respect to such fiscal year become available and (ii) the
ninetieth day after the end of such fiscal year, the Borrower shall prepay the
Loans (and such prepayment shall be applied as set forth in Section 2.6(f))
and, after all Loans have been prepaid, make a Cash Collateral Deposit, in an
amount equal to (x) if the Total Debt Ratio as of the end of such fiscal year
is greater than or equal to 4.00:1, 66 2/3% of such Excess Cash Flow or (y) if
the Total Debt Ratio is less than 4.00:1, 50% of such Excess Cash Flow. On or
prior to the date of any prepayment required by this Section 2.6(b), the
Borrower agrees to provide the Administrative Agent with the calculations,
substantially in the form of Exhibit L, used by the Borrower in determining the
amount of any such prepayment.
(c) If the Borrower or any of its Subsidiaries receives insurance proceeds
or condemnation proceeds with respect to any of its or their Properties (and
the provisions of Section 5.5(iii) are not applicable), which are not fully
applied toward the repair or replacement of such damaged or condemned Property
within 90 days of the receipt thereof, the Borrower shall, on such 90th day
prepay the Loans and, after all Loans have been prepaid, make a Cash Collateral
Deposit, in an amount equal to the amount of such proceeds not so applied (and
such prepayment shall be applied as set forth in Section 2.6(f)).
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(d) In the event that the Borrower or any of its Subsidiaries makes an
Equity Offering not all of the Net Proceeds of which are applied towards an
Acquisition permitted by Section 6.7(g), the Borrower shall, within ten
Business Days of such Equity Offering, prepay the Loans and, after all Loans
have been prepaid, make a Cash Collateral Deposit, in an amount equal to 80% of
the Net Proceeds not so applied (and such prepayment shall be applied as set
forth in Section 2.6(f)).
(e) On the day on which the Borrower or any of its Subsidiaries shall
incur Indebtedness permitted by Section 6.2(o), the Borrower shall prepay the
Loans and, after all Loans have been prepaid, make a Cash Collateral Deposit,
in an amount equal to 100% of such Indebtedness (and such prepayment shall be
applied as set forth in Section 2.6(f)); provided, however, that 50% of up to
$10,000,000 of such Indebtedness (but not, in any case, to exceed an aggregate
amount equal to $5,000,000), shall not be required hereunder to be used to
prepay the Loans and reduce the Commitments as set forth in Section 2.6(f) or
make a Cash Collateral Deposit.
(f) Each prepayment of the Loans pursuant to this Section 2.6 shall be
applied, FIRST, to the outstanding amounts of Non-Revolving Loans (on a pro
rata basis determined on the basis of the aggregate principal amounts of Term
Loans, on the one hand, and Incremental Loans, on the other hand, outstanding
at the time of such prepayment), SECOND, to the outstanding amounts of
Revolving Loans and THEREAFTER, to make a Cash Collateral Deposit. If, at any
time, the Loans are repaid in full, the Aggregate Revolving Loan Commitment
shall be permanently reduced by an amount equal to what such prepayment would
have been under this Section 2.6 if Loans had been outstanding against which to
apply such prepayment. Each prepayment applied to the Revolving Loans and each
Cash Collateral Deposit shall permanently reduce the Aggregate Revolving Loan
Commitment and the provisions of Section 2.1(g) shall be applicable. Each
prepayment of the Non-Revolving Loans shall be applied pro rata to each
remaining installment of principal of Non-Revolving Loans. Such prepaid
Non-Revolving Loans may not be reborrowed. Each prepayment shall be
accompanied by payment in full of all accrued interest and accrued commitment
fees thereon to and including the date of such prepayment, together with any
additional amounts owing pursuant to Section 2.16. Cash Collateral Deposits
held by the Administrative Agent shall be applied to reimburse drawings on
Letters of Credit in the order in which such drawings are presented to the
Administrative Agent. Upon written request of the Borrower with regard to any
Letter of Credit for which the Administrative Agent is holding a Cash
Collateral Deposit, the Administrative Agent shall release to the Borrower any
portion of such Cash Collateral Deposit not applied to reimburse drawings
thereunder upon the earlier of (i) fourteen days following expiration of such
Letter of Credit according to its
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terms and (ii) receipt by the Administrative Agent of written acknowledgement
from the beneficiary of such Letter of Credit requesting the cancellation
thereof and relinquishing all its rights thereunder, which written
acknowledgement shall be accompanied by the original of such Letter of Credit;
provided that, in either case, no Default has occurred and is continuing.
2.7 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect from
time to time to convert LIBOR Loans to Alternate Base Rate Loans, by the
Borrower giving the Administrative Agent at least two Business Days' prior
irrevocable written notice of such election pursuant to a Continuation Notice,
provided that any such conversion of LIBOR Loans may only be made on the last
day of an Interest Period with respect thereto. The Borrower may elect from
time to time to convert Alternate Base Rate Loans to LIBOR Loans by the
Borrower giving the Administrative Agent at least three Eurodollar Business
Days' prior irrevocable written notice of such election pursuant to a
Continuation Notice. Any such notice of conversion to LIBOR Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding LIBOR Loans and Alternate
Base Rate Loans may be converted as provided herein, provided that (i) any such
conversion may only be made if, after giving effect thereto, Section 2.8 shall
not have been contravened, (ii) no Term Loan or Incremental Loan may be
converted into a LIBOR Loan after the date that is one month prior to the due
date of the final installment of principal of the Term Loans or the Incremental
Loans, as applicable, (iii) no Revolving Loan may be converted into a LIBOR
Loan after the date that is one month prior to the Revolving Loan Commitment
Expiration Date and (iv) the Borrower shall not have the right to elect to
continue at the end of the applicable Interest Period, or to convert to, a
LIBOR Loan if a Default shall have occurred and be continuing.
(b) Any LIBOR Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving notice
to the Administrative Agent, in accordance with the applicable provisions of
the term "Interest Period" set forth in Section 1.1, of the length of the next
Interest Period to be applicable to such LIBOR Loan, provided that no LIBOR
Loan may be continued as such (i) if, after giving effect thereto, Section 2.8
would be contravened, (ii) after the date that is one month prior to the due
date of the final installment of principal of the Term Loans or the Incremental
Loans, as applicable, (iii) after the date that is one month prior to the
Revolving Loan Commitment Expiration Date or (iv) if a Default shall have
occurred and be continuing and provided, further, that if the Borrower shall
fail to give any required notice as described above in this Section or if such
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continuation is not permitted pursuant to the preceding proviso, such Loans
shall be automatically converted to Alternate Base Rate Loans on the last day
of such then-expiring Interest Period.
2.8 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Tranche (except Loans made pursuant to Section 2.4(c)) shall be
equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and, in
any case, there shall not be more than 12 Tranches.
2.9 INTEREST RATES AND PAYMENT DATES. (a) Each LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the LIBOR Adjusted Rate plus the Applicable Margin.
(b) Each Alternate Base Rate Loan shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or any
interest payable on the Loans shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all amounts outstanding shall bear
interest at a rate per annum which is the rate described in paragraph (b) of
this Section plus 2% from the date of such non-payment until such amount is
paid in full (after as well as before judgment).
(ii) If any Default (other than a Default described in clause (i) of
this Section 2.9(c)) shall have occurred and be continuing, all amounts
outstanding shall bear interest at a rate per annum which is the rate described
in paragraph (b) of this Section plus 1% from the date which is 45 days after
the occurrence of such Default until such Default is no longer continuing
(after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable on demand.
(e) For purposes of determining the Applicable Margin for all Loans,
interest rates on the Loans shall be calculated on the basis of the Total Debt
Ratio set forth in the most recent certificate of a Responsible Officer of the
Borrower delivered pursuant to Section 5.2(a)(i) (a "LEVERAGE LEVEL
CERTIFICATE"). For accrued and unpaid interest only (no changes being made for
interest payments previously made), changes in interest rates on the Loans
attributable to changes in the Applicable Margin
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caused by changes in the applicable Leverage Level shall be calculated upon the
delivery of a Leverage Level Certificate and such change shall be effective (y)
in the case of an Alternate Base Rate Loan, from the first day subsequent to
the last day covered by the Leverage Level Certificate and (z) in the case of a
LIBOR Loan, from the first day of the Interest Period applicable to such LIBOR
Loans subsequent to the last day covered by the Leverage Level Certificate.
If, for any reason, the Borrower shall fail to deliver a Leverage Level
Certificate when due in accordance with Section 5.2(a)(i), and such failure
shall continue for a period of twenty days, the Leverage Level shall be deemed
to be Level 1, retroactive to the date on which the Borrower should have
delivered such Leverage Level Certificate and shall continue until a Leverage
Level Certificate indicating a different Leverage Level is delivered to the
Administrative Agent.
2.10 COMPUTATION OF INTEREST AND FEES. (a) Interest on Alternate Base Rate
Loans (other than Alternate Base Rate Loans based on the Federal Funds
Effective Rate) shall be calculated on the basis of a 365- (or 366-, as the
case may be), day year for the actual days elapsed and interest on LIBOR Loans,
unused commitment fees and all other Obligations of the Borrower shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a LIBOR Adjusted Rate. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate or
the LIBOR Reserve Requirements shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate is
announced or such change in the LIBOR Reserve Requirements becomes effective,
as the case may be. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error.
(c) If any Reference Bank's Commitment shall terminate or all of its Loans
and participations in Letters of Credit shall be assigned for any reason
whatsoever, such Reference Bank shall thereupon cease to be a Reference Bank,
and if, as a result of the foregoing, there would only be one Reference Bank
remaining, the Administrative Agent and the Managing Agents (after consultation
with the Borrower and the Lenders) shall, by notice to the Borrower and the
Lenders, designate another Lender reasonably acceptable to the Borrower as a
Reference Bank so that there shall at all times be at least two Reference
Banks.
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(d) Each Reference Bank shall use its best efforts to furnish quotations
of rates to the Administrative Agent as contemplated hereby. If any of the
Reference Banks shall be unable or shall otherwise fail to supply such rates to
the Administrative Agent upon its request, the rate of interest shall be
determined on the basis of the quotations of the remaining Reference Banks or
Reference Bank.
2.11 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower absent manifest error) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Adjusted Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the Majority
Lenders that the LIBOR Adjusted Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (x) any LIBOR Loans requested to be made on the first day of such
Interest Period shall accrue interest at the Reference Banks Rate, (y) Loans
that were to have been converted on the first day of such Interest Period to
LIBOR Loans shall be converted to Loans accruing interest at the Reference
Banks Rate or continued as Alternate Base Rate Loans, as the Borrower shall
select and (z) any outstanding LIBOR Loans shall be converted, on the first day
of such Interest Period, to Loans accruing interest at the Reference Banks Rate
or to Alternate Base Rate Loans, as the Borrower shall select. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Loans
shall be made or continued as such, nor shall the Borrower have the right to
convert Alternate Base Rate Loans to LIBOR Loans.
2.12 PRO RATA TREATMENT AND PAYMENTS. Each borrowing by the Borrower from
the Lenders hereunder and any reduction of the Commitments of the Lenders (in
the case of the Aggregate Term Loan Commitment and the Aggregate Revolving Loan
Commitment) shall be made pro rata according to the respective Commitment
Percentages of the applicable Lenders. Subject to the application provisions
of Sections 2.5 and 2.6, each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding principal and interest
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amounts of such Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder and under the Notes, whether
on account of principal, interest, fees 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 Administrative Agent, for the account of the
applicable Lenders, at the Administrative Agent's office specified in Section
9.2, in Dollars and in immediately available funds. The Administrative Agent
shall distribute such payments to the applicable Lenders promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on
the LIBOR Loans) 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. If any payment on a LIBOR Loan becomes
due and payable on a day other than a Eurodollar Business Day, the maturity
thereof shall be extended to the next succeeding Eurodollar Business Day (and
interest shall continue to accrue thereon at the applicable rate) unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Eurodollar Business Day.
2.13 ILLEGALITY. Notwithstanding any other provision herein, if any change
after the date of execution hereof in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender or
Applicable Lending Office to make or maintain LIBOR Loans as contemplated by
this Agreement, (a) the commitment of such Lender hereunder to make LIBOR
Loans, continue LIBOR Loans as such and convert Alternate Base Rate Loans to
LIBOR Loans shall forthwith be suspended during such period of illegality and
(b) the Loans of such Lender or Applicable Lending Office then outstanding as
LIBOR Loans, if any, shall be converted automatically to Alternate Base Rate
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a LIBOR Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.16. To the extent that a Lender's LIBOR Loans have been converted to
Alternate Base Rate Loans pursuant to this Section 2.13, all payments and
prepayments of principal that otherwise would be applied to such Lender's LIBOR
Loans shall be applied instead to its Alternate Base Rate Loans.
2.14 INCREASED COSTS. (a) In the event that any change after the date of
execution hereof in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having
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the force of law but, if not having the force of law, generally applicable to
and complied with by banks and financial institutions of the same general type
as such Lender in the relevant jurisdiction) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirements against assets held by,
letters of credit or guarantees issued by, deposits or other liabilities
in or for the account of, advances, loans or other extensions of credit
by, or any other acquisition of funds by, any office of such Lender or
Applicable Lending Office which is not otherwise included in the
determination of the LIBOR Adjusted Rate hereunder; or
(ii) shall impose on such Lender or Applicable Lending Office any
other condition;
and the result of any of the foregoing is to increase the cost to the
Administrative Agent of issuing or maintaining any Letter of Credit by an
amount which the Administrative Agent deems to be material, or to such Lender
or Applicable Lending Office, by an amount which such Lender deems to be
material, of making, converting into, continuing or maintaining LIBOR Loans, or
purchasing or maintaining any participation in a Letter of Credit, or to reduce
any amount receivable hereunder in respect thereof then, in any such case, the
Borrower shall immediately pay to the Administrative Agent, for its own account
or on behalf of such Lender or Applicable Lending Office, as applicable, upon
the demand of the Administrative Agent for itself or at the request of such
Lender, as applicable, any additional amounts necessary to compensate such
Lender or the Administrative Agent, as applicable, for such increased cost or
reduced amount receivable. If the Administrative Agent, any Lender or any
Applicable Lending Office becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower, through the
Administrative Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by the Administrative Agent or such Lender or Applicable
Lending Office, through the Administrative Agent, to the Borrower shall be
conclusive evidence of the accuracy of the information so recorded, absent
manifest error. This covenant shall survive the termination of this Agreement,
expiration of the Letters of Credit and the payment of the Notes and all other
amounts payable hereunder.
(b) If, after the date of this Agreement, the introduction of or any
change in any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change in the interpretation or administration thereof by any
Governmental
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Authority charged with the interpretation or administration thereof, affects
the amount of capital required or expected to be maintained by any Lender or
any corporation controlling any Lender, and such Lender (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) determines that the amount of capital maintained by such
Lender or such corporation which is attributable to or based upon the Loans,
the Letters of Credit, the Commitments or this Agreement must be increased as a
consequence of such introduction or change by an amount deemed by such Lender
to be material, then, upon demand of the Administrative Agent at the request of
such Lender, the Borrower shall immediately pay to the Administrative Agent on
behalf of such Lender, additional amounts sufficient to compensate such Lender
or such corporation for the increased costs to such Lender or corporation of
such increased capital. Any such demand shall be accompanied by a certificate
of such Lender setting forth in reasonable detail the computation of any such
increased costs, which certificate shall be conclusive, absent manifest error.
This obligation of the Borrower under this Section 2.14(b) shall survive
repayment of the Loans, expiration of the Letters of Credit and payment of all
other amounts hereunder in full and the termination of this Agreement.
2.15 TAXES. (a) All payments made by the Borrower in respect of the
Obligations shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority or any political subdivision or taxing authority thereof
or therein, other than Excluded Taxes (all such non-Excluded Taxes being
hereinafter called "TAXES"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent, any Managing Agent or any Lender
in respect of the Obligations, the amounts so payable to the Administrative
Agent, such Managing Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent, such Managing Agent or such
Lender (after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. The Administrative Agent, a Managing Agent or a Lender, as the case may
be, shall deliver to the Borrower a certificate setting forth the amount of
such Taxes, the calculation of such Taxes and an explanation of the requirement
therefor, all in reasonable detail and such certificate shall be conclusive,
absent manifest error. Whenever any Taxes are payable by the Borrower, as
promptly as possible thereafter, the Borrower shall send to the Administrative
Agent, for its own account or for the account of such Managing Agent or such
Lender, as the case may be, a copy of an original official receipt received by
the Borrower showing payment thereof or such other evidence of payment
reasonably
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satisfactory to the Administrative Agent. If the Borrower fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent, the Managing
Agents and the Lenders for any incremental taxes, interest or penalties (and
related reasonable fees and expenses of counsel) that may become payable by the
Administrative Agent, the Managing Agents or any Lender as a result of any such
failure. The agreements in this Section shall survive the termination of this
Agreement, the expiration of the Letters of Credit and the payment of the Notes
and all other amounts payable hereunder.
(b) Each Lender that is not organized under the laws of the United States
of America or a state thereof agrees that it will deliver to the Borrower and
the Administrative Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Lender also agrees to deliver to the Borrower and the
Administrative Agent two further copies of the said Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms or other manner or certification, as
the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower and the Administrative
Agent, and such extensions or renewals thereof as may reasonably be requested by
the Borrower or the Administrative Agent, unless in any such case an event
beyond the control of such Lender (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advised the Borrower and the
Administrative Agent. Each such Lender shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(c) The Borrower shall not be required to pay any additional amounts to
any Person in respect of United States withholding tax pursuant to Section
2.15(a) if the obligation to pay such additional amounts would not have arisen
but for a failure by such Person to comply with the requirements of Section
2.15(b) (including the accuracy of the certificate described in the final
sentence thereof).
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2.16 INDEMNITY. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from and to pay each Lender within 5 days of such Lender's
demand the amount of any liability, loss or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained (including reasonable fees and
expenses of counsel) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in payment when due of the principal amount of or
interest on any LIBOR Loan, (b) default by the Borrower in making a borrowing
of, conversion into or continuation of LIBOR Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making by the Borrower of a prepayment or conversion of
LIBOR Loans on a day which is not the last day of an Interest Period with
respect thereto. A Lender's certificate as to such liability, loss or expense
shall be deemed conclusive, absent manifest error. This covenant shall survive
the termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
2.17 UNUSED COMMITMENT FEES. The Borrower agrees to pay (i) to the
Revolving Loan Lenders an unused commitment fee to be shared pro rata among the
Revolving Loan Lenders with respect to the Revolving Loan Commitments for the
period from and including the Initial Closing Date to but excluding the
Revolving Loan Commitment Expiration Date, computed at the rate of 3/8% of the
average daily aggregate amount of the unused Aggregate Revolving Loan Commitment
from time to time in effect, to be payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Loan Commitment
Expiration Date, commencing on the first such date to occur after the Initial
Closing Date and (ii) in the event that the Incremental Loan facility set forth
in Section 2.3 is activated, to the Incremental Loan Lenders an unused
commitment fee to be shared pro rata among the Incremental Loan Lenders with
respect to the Incremental Loan Commitments for the period from and including
the Activation Date to but excluding the Incremental Loan Commitment Termination
Date, computed at the rate of 3/8% of the average daily aggregate amount of the
unused Aggregate Incremental Loan Commitment from the time to time in effect, to
be payable quarterly in arrears on the last day of each March, June, September
and December and on the Incremental Loan Commitment Termination Date, commencing
on the first such date to occur after the Activation Date.
2.18 MITIGATION OF COSTS. If any Lender, by changing its Applicable
Lending Office or taking any other reasonable action, so long as making such
change or taking such other action is not, in the good faith judgment of such
Lender, disadvantageous
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to it in any financial, regulatory or other respect, can mitigate any adverse
effect on the Borrower under Section 2.11, 2.13, 2.14, or 2.15, such Lender
shall take such action.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the Loans
and participate in the Letters of Credit, and to induce the Administrative Agent
to issue the Letters of Credit, the Borrower hereby represents and warrants to
the Administrative Agent, the Managing Agents and each Lender that:
3.1 FINANCIAL CONDITION. (a) The respective audited consolidated balance
sheets of PCI and Network Holding as at December 31, 1995, and the related
respective audited consolidated statements of operations, changes in
stockholders' deficit (in the case of PCI), changes in partners' equity (in the
case of Network Holding) and statements of cash flows for the fiscal year ended
on such date, certified by the Accountants and to the best of its knowledge by a
Responsible Officer of each of PCI and Network Holding, respectively, copies of
which have heretofore been furnished to each Lender, present fairly the
respective consolidated financial condition of PCI and Network Holding as at
such date in all material respects, the respective consolidated results of their
operations, PCI's consolidated changes in stockholders' deficit, Network
Holdings' changes in partners' equity and their respective consolidated cash
flows for the fiscal year then ended in all material respects. The unaudited
consolidated balance sheets of each of the Borrower, UTG and Network Holding as
at June 30, 1996 and the related respective unaudited consolidated statements of
operation and cash flows for the six-month period ended on such date, certified
to the best of its knowledge by a Responsible Officer of each of the Borrower,
UTG and Network Holding, respectively, copies of which have heretofore been
furnished to each Lender, present fairly the respective consolidated financial
condition of such entities as at such date in all material respects, and the
respective consolidated results of their operations and their respective
consolidated cash flows for the six-month period then ended. All such financial
statements (the "FINANCIAL STATEMENTS"), including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such Accountants or
Responsible Officers, as the case may be, and as disclosed therein and for the
absence of notes). None of the Borrower, UTG or Network Holding, each on a
consolidated basis, had, at the date of the most recent balance sheet referred
to above, any material Guarantee Obligation, contingent liability or liability
for taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in
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the foregoing statements or in the notes thereto and which is material in
relation to the respective consolidated financial condition of such entities
at such date.
(b) The PRO FORMA consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1995, and the related consolidated statements
of income and of cash flows for the fiscal year ended on such date, and the
PRO FORMA balance sheet of the Borrower and its Subsidiaries as at June 30,
1996, and the related consolidated statements of income and cash flows for
the six-month period ended as such date, copies of which have heretofore been
furnished to each Lender, present fairly, in the opinion of the Borrower, the
PRO FORMA consolidated financial condition of the Borrower and its
Subsidiaries as at such dates, assuming that the Loans had been made, the IPO
had been consummated (with the resulting gross proceeds thereof being
$163,400,000) and the reorganization referred to in Section 3.30(b) had been
completed immediately prior to December 31, 1995.
3.2 NO CHANGE. Since June 30, 1996 there has been no event or condition
resulting in a Material Adverse Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Loan Parties (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate or partnership power (as
applicable) and authority, and the legal right, to own and operate its
Properties, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and in which it proposes to be engaged
after the Initial Closing Date, (c) is duly qualified as a foreign entity and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to comply thereunder could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and (d) is
in compliance with all Requirements of Law and Contractual Obligations except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.4 CORPORATE/PARTNERSHIP POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Loan Parties has the corporate or partnership power and authority
(as applicable), and the legal right, to make, deliver and perform the Loan
Documents to which it is or will be a party and to obtain extensions of credit
hereunder and to consummate the IPO on the terms set forth in the Registration
Statement (in the case of the Borrower) and has taken all necessary corporate
and partnership action to authorize (i) in the case of the Borrower, the
borrowings and other extensions of credit on the terms and
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conditions of this Agreement and the Notes and the consummation of the IPO on
the terms set forth in the Registration Statement and (ii) the execution,
delivery and performance of the Loan Documents to which it is or will be a
party. Except as set forth on Schedule 7, no consent or authorization of,
filing with or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the borrowings and other
extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement, the Notes or the other Loan
Documents or in connection with the consummation of the IPO. This Agreement
has been, and each of the Notes and the other Loan Documents to which it is
or will be a party will be, duly executed and delivered on behalf of each
relevant Loan Party. This Agreement constitutes, and each of the Notes and
the other Loan Documents when executed and delivered will constitute, a
legal, valid and binding obligation of each applicable Loan Party enforceable
against such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the Notes, the Material Agreements and the other Loan Documents, the
borrowings and other extensions of credit hereunder and the use of the proceeds
thereof and the consummation of the IPO will not violate any Requirement of Law
or Contractual Obligations of the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, except pursuant to the Loan Documents or except as
otherwise permitted pursuant to Section 6.3, which Lien could reasonably be
expected to have a Material Adverse Effect.
3.6 NO MATERIAL LITIGATION. Except as set forth in Schedule 11, 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 any of its Subsidiaries or against any
of its or their respective properties or revenues, (a) on the Initial Closing
Date or the Second Closing Date, as applicable, with respect to this Agreement,
the Notes or the other Loan Documents or any of the transactions contemplated
hereby or thereby, including the IPO or (b) which could reasonably be expected
to have a Material Adverse Effect.
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3.7 OWNERSHIP OF PROPERTY; LIENS. To the Borrower's knowledge, each of the
Borrower and the Guarantors and their respective Subsidiaries shall, on the
Initial Closing Date and on the Second Closing Date, as applicable, have
(i) with respect to real property interests, good record and marketable title in
fee simple to, a valid leasehold interest in or rights as a permittee or
licensee to and (ii) with respect to personal property interests, good title to,
a valid leasehold interest in or rights as a permittee or licensee to all such
personal property which is material to its business, except for those the
failure of which to have good title could not reasonably be expected to have a
Material Adverse Effect, and none of such property is subject to any Lien except
as permitted by Section 6.3.
3.8 INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all trademarks, trade names, patents and copyrights
necessary for the conduct of its business as currently conducted except for
those the failure to own or license which could not reasonably be expected to
have a Material Adverse Effect (the "INTELLECTUAL PROPERTY"). To the Borrower's
knowledge, no claim which could reasonably be expected to have a Material
Adverse Effect has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. To the Borrower's knowledge, the use of
such Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect, nor, to the Borrower's knowledge, do the use by other Persons of
such Intellectual Property infringe on the rights of the Borrower and its
Subsidiaries, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
3.9 TAXES. (a) Each of the Borrower and its Subsidiaries has filed or
caused to be filed all material tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on 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 not yet delinquent or the
amount or validity 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 or its Subsidiaries, as the
case may be); and to the knowledge of Borrower, no tax Lien has been filed, and
no claim is being asserted with respect to any such tax, fee or other charge
which could reasonably be expected to have a Material Adverse Effect.
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(b) There are no Taxes imposed on the Borrower or its Subsidiaries by any
political subdivision or taxing authority due or payable either on or by virtue
of the execution and delivery by the Borrower, the Administrative Agent, the
Managing Agents or the Lenders of this Agreement or any other Loan Document to
which the Borrower or any other Loan Party is a party or on any payment to be
made by the Borrower pursuant hereto or thereto.
3.10 FEDERAL REGULATIONS. No Letter of Credit and no part of the proceeds
of any Loans are intended to be or will be used, directly or indirectly, for any
purpose which violates the provisions of the Regulations of the Board of
Governors of the Federal Reserve System. If requested by any Lender, any
Managing Agent or the Administrative Agent, and in any event upon consummation
of any Acquisition involving the purchase of stock by the Borrower or any
Subsidiary, the Borrower will furnish to the Administrative Agent, the Managing
Agents and each Lender a statement to the foregoing effect in conformity with
the requirements of Form U-1 referred to in Regulation U.
3.11 ERISA. No Reportable Event has occurred during the five-year period
prior to the date on which this representation is made with respect to any Plan
which has or would likely result in a Material Adverse Effect. Each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code. The present value of all accrued benefits under all Single Employer
Plans maintained by the Borrower or any Commonly Controlled Entity (based on
those assumptions used to fund the Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made, exceed
the value of the assets of such Plans by an aggregate amount greater than
$1,000,000. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan which has or would
likely result in a Material Adverse Effect. The present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower and
each Commonly Controlled Entity for post retirement benefits (excluding benefits
required by Section 4980B of the Code) to be profited to their current and
former employees under Plans which are welfare benefit plans (as defined in
Section 3(a) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount which has a Material Adverse
Effect.
3.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. None of the Loan Parties
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT").
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3.13 MATERIAL AGREEMENTS. Each of the Material Agreements to which the
Borrower or any other Loan Party is a party is a legal, valid and binding
obligation of the parties thereto enforceable against such parties in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law); and neither
the Borrower nor any other Loan Party is in breach or violation of or in default
under any Material Agreement in any material respect which would individually or
in the aggregate have a Material Adverse Effect. Each of the Lenders, the
Managing Agents and the Administrative Agent has received a complete and correct
copy of each of the Material Agreements and the Junior Subordinated Notes
(including in each case all exhibits, schedules and disclosure letters referred
to therein or delivered pursuant thereto, if any) and all amendments thereto and
other side letters or agreements affecting the terms thereof. As of the Initial
Closing Date and the Second Closing Date, as applicable, neither the Borrower
nor any of its Subsidiaries is party to any Program Services Agreement.
3.14 SUBSIDIARIES. The Subsidiaries listed on Schedule 4 constitute all of
the direct and indirect Subsidiaries of the Borrower.
3.15 PURPOSE OF LOANS.
(a) (i) Prior to the Second Closing Date proceeds of the Term Loans and/or
Revolving Loans shall be used only as follows: (A) approximately $165,000,000
to make advances to UTG to be used by UTG to repay all obligations under the
Existing Credit Agreement, which Existing Credit Agreement shall then be
canceled, (B) approximately $73,000,000 to make advances to UTG to be used by
UTG to defease the Senior Subordinated Notes, (C) approximately $27,000,000 to
make advances to UTG to be used by UTG to repay all its indebtedness to Network,
(D) approximately $73,000,000 for the Borrower to purchase partnership interests
in Network and (E) to pay fees and expenses payable in connection with the
execution of this Agreement.
(ii) Upon the Second Closing Date, the proceeds of the Term Loans
and/or Revolving Loans and/or Letters of Credit shall be used as follows:
FIRST, (A) approximately $149,000,000 to make advances to UTG to be used by UTG
to repay all of its obligations as Sponsor Loans to Pack-a-Snack and Televisa,
(B) approximately $131,000,000 to make distributions to the Borrower's
shareholders, (C) approximately $15,400,000 to make advances to UTG to repay all
principal and interest under the Galavision Note, (D) approximately $10,000,000
for the Borrower
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to invest in Entravision, (E) $24,200,000 to apply towards the purchase price
of the Modesto Station and (F) for general corporate purposes, THEN as set
forth in Section 3.15(c).
(b) The proceeds of the Incremental Loans shall be used only as follows:
(i) subject to Section 6.8, to repurchase its Junior Subordinated Notes and/or
for the repurchase by PTI Holdings of its Junior Subordinated Notes and (ii) for
Acquisitions permitted under this Agreement.
(c) The proceeds of the Revolving Loans shall be used as follows: (i) as
set forth in Section 3.15(a), (ii) subject to Section 6.8, to repurchase its
Junior Subordinated Notes and/or for the repurchase by PTI Holdings of its
Junior Subordinated Notes, (iii) Acquisitions permitted under this Agreement and
(iv) for general corporate purposes.
3.16 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 8, to the
Borrower's knowledge after reasonable inquiry:
(a) The Properties and all operations at the Properties are in compliance
in all material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties, or violation of any
Environmental Law with respect to the Properties or the business conducted at
the Properties which involves a matter or matters which has caused or are
reasonably likely to cause a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the business conducted at the Properties
which involves a matter or matters which has caused or are reasonably likely to
cause a Material Adverse Effect, nor does the Borrower have knowledge or reason
to believe that any such notice will be received or is being threatened except
insofar as such notice or threatened notice, or any aggregation thereof, does
not involve a matter or matters that is or are reasonably likely to cause a
Material Adverse Effect.
(c) No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is named as a
party with respect to the Properties or the business conducted at the Properties
which involves a matter or matters which has caused or are reasonably likely to
cause a Material Adverse Effect, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
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with respect to the Properties or such business except insofar as such
proceeding, action, decree, order or other requirement, or any aggregation
thereof, is not reasonably likely to cause a Material Adverse Effect.
3.17 ACCURACY AND COMPLETENESS OF INFORMATION. The documents furnished and
the statements made in writing to the Lenders by the Borrower in connection with
the negotiation, preparation or execution of this Agreement or any of the other
Loan Documents taken as a whole do not contain any untrue statement of fact
material to the creditworthiness of the Borrower or omit to state any such
material fact necessary in order to make the statements contained therein not
misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to the
Lenders prior to the date hereof. The projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made and as of
the Initial Closing Date and the Second Closing Date, as applicable, it being
recognized that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results.
3.18 REAL PROPERTY ASSETS. Schedule 8 sets forth all real property that,
as of the Initial Closing Date and the Second Closing Date, as applicable, will
be acquired, owned, leased, occupied, used, controlled, managed or operated by
the Borrower, any Guarantor or any of their respective Subsidiaries and each
Primary Station; provided, however, that this representation and warranty shall
not be breached unless the failure to list (or the incorrect listing of) a
Property on Schedule 8 would reasonably be expected to cause a Material Adverse
Effect.
3.19 PERMITS, ETC. Except as set forth on Schedule 7, each Loan Party has
all permits, licenses, authorizations and approvals required for it lawfully to
acquire, own, lease, control, manage or operate each Primary Station currently
owned, leased, controlled, managed or operated by such Loan Party (including,
without limitation, all Media Licenses) except for such permits, licenses,
authorizations or approvals required for the lawful ownership, lease, control,
management or operation of a Primary Station, the failure to obtain or maintain
which will not have a Material Adverse Effect. Each such Primary Station is in
compliance in all material respects with all such permits, licenses,
authorizations and approvals. Each Loan Party has duly and timely filed all
reports and documents required by the Communications Act with respect to the
ownership, lease, management or operation of each Primary Station owned by such
Loan Party, except for such reports or documents the failure to file which will
not have a Material Adverse Effect. No
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condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization or approval required for the lawful ownership, lease, control,
management or operation of a Primary Station, and, except as set forth in
Schedule 11, there is no claim that any thereof is not in full force and
effect, except for such of the immediately preceding matters which are not
likely or reasonably likely to cause a Material Adverse Effect. Except as set
forth in Schedule 11 and except for such of the immediately preceding matters
which are not likely or reasonably likely to cause a Material Adverse Effect,
there are (i) no judgments, decrees or orders issued or to the Borrower's
knowledge threatened by the FCC with respect to the Borrower, any Subsidiary
or any of the Primary Stations, (ii) no complaints, petitions, filings or
other proceedings pending or to the Borrower's knowledge threatened before
the FCC (other than rule making of general applicability to the broadcast
industry) with respect to the Borrower, any Subsidiary or any of the Primary
Stations and (iii) no events that have occurred that could result in the
imposition of any financial penalty by the FCC upon the Borrower, any
Subsidiary or any of the Primary Stations.
3.20 PATENTS, TRADEMARKS, ETC. Schedules A, B and C to the Guarantor
Security Agreements executed by UTG, Galavision and Network, respectively,
accurately and completely list all material patents, trademarks, service marks,
trade names and copyrights owned by or licensed to any Loan Party (other than
rights relating to film rights, software program rights and copyrights with
respect to the content of news and other programs broadcast by a Station) on the
Initial Closing Date and the Second Closing Date, as applicable, that are
necessary in the operation of any Primary Station.
3.21 COPYRIGHT ACT REQUIREMENTS. Each Loan Party that owns, leases,
manages or operates a Primary Station has recorded or deposited with and paid
to the United States Copyright Office, the Registrar of Copyrights, the
Copyright Royalty Tribunal, the Patent and Trademark Office, the American
Society of Composers, Authors and Publishers, Broadcast Music, Inc. and/or
any other licensors of copyrighted materials, all notices, statements of
account, royalty fees and other documents and instruments required under the
terms and conditions of any patent, trademark, service mark, trade name and
copyright used in the operation of a Primary Station and/or the Copyright Act
of 1976, as amended from time to time, and the rules and regulations
promulgated thereunder and, except as disclosed in writing to the
Administrative Agent, is not liable to any Person for copyright infringement
under any law, rule, regulation, contract or license as a result of its
business operation, all except to the extent that non-compliance with the
preceding
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requirements would not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
3.22 NATURE OF BUSINESS. Neither the Borrower nor any of its Subsidiaries
is engaged in any material business other than the ownership and operation of
Spanish-language television networks, cable networks, stations and translators,
the acquisition, financing, production and exploitation of programming, the
ownership of stock of or other interests in companies that own and operate such
facilities and, after the Second Closing Date, any Media/Communications
Business.
3.23 FCC MATTERS; MEDIA LICENSES. The Borrower and its Subsidiaries are in
all material respects in compliance with the Communications Act, including,
without limitation, the rules, regulations and published policies of the FCC
relating to the transmission of television signals, all except to the extent
that non-compliance with the preceding requirements would not, in the aggregate,
be reasonably expected to have a Material Adverse Effect. Each Station owned by
the Borrower or any of its Subsidiaries on the Initial Closing Date and the
Second Closing Date, as applicable, is set forth on Schedule 9. All Material
Media Licenses owned by the Borrower or its Subsidiaries are held in License
Subsidiaries other than the low power license for KUVN-LP, Fort Worth, Texas,
with respect to which an application for transfer to a License Subsidiary has
been made to the FCC and is expected to be approved in the ordinary course.
3.24 RANKING OF LOANS. This Agreement and the other Loan Documents to
which the Borrower is a party, when executed, and the Loans, when borrowed are
and will be the direct and general obligations of the Borrower. The Borrower's
obligations hereunder and thereunder rank and will rank at least PARI PASSU in
priority of payment with all other Senior Debt.
3.25 EXECUTIVE OFFICES. The current location of the Borrower's and each of
its Subsidiaries' executive office and principal place of business as of the
Initial Closing Date or the Second Closing Date, as applicable, is as set forth
on Schedule 10.
3.26 INSOLVENCY. (a) After giving effect to the funding of the Term Loans
to be funded on the Initial Closing Date, the Revolving Loans, the existence of
the Junior Subordinated Notes and the payment of all estimated legal, investment
banking, underwriting, accounting and other fees related hereto and thereto, the
Borrower and each other Loan Party will be Solvent as of and on the Initial
Closing Date.
(b) After giving effect to the funding of the Term Loans on the Initial
Closing Date and the Second Closing Date, the
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funding of any Incremental Loans to be funded on the Second Closing Date, the
funding of any Revolving Loans to be funded on the Second Closing Date, the
aggregate Letter of Credit Amount of any Letters of Credit to be issued on
the Second Closing Date, and the payment of all estimated legal, investment
banking, underwriting, accounting and other fees related hereto, thereto and
to the IPO, the Borrower and each other Loan Party will be Solvent as of and
on the Second Closing Date.
3.27 LABOR MATTERS. As of the Initial Closing Date and the Second Closing
Date, as applicable, there are no strikes or other labor disputes against the
Borrower or any of its Subsidiaries pending or, to the Borrower's knowledge,
threatened against any Loan Party.
3.28 CONDEMNATION. To the Borrower's knowledge and except as set forth in
Schedule 8, no taking of any of the Properties or any part thereof through
eminent domain, conveyance in lieu thereof, condemnation or similar proceeding
is pending or, to the knowledge of the Borrower, threatened by any Governmental
Authority which would reasonably be expected to have a Material Adverse Effect.
3.29 LEASES, LICENSES, PERMITS, SITE USE AGREEMENTS AND OTHER OCCUPANCY
AGREEMENTS. To the Borrower's knowledge and except as set forth on Schedule 8,
any and all leases, licenses, permits, site use agreements and any other type of
occupancy permit to which the Borrower, any Guarantor or any of their respective
Subsidiaries is a party are in full force and effect with no material defaults
existing thereunder which individually or in the aggregate would have a Material
Adverse Effect.
3.30 CORPORATE ORGANIZATION. (a) On the Initial Closing Date, (i) the
Borrower will own 80.11% of PTI Holdings, (ii) PTI Holdings will own 100% of
PTI, (iii) PTI will own 100% of UTG, (iv) PTI owns .01% of each of the License
Subsidiaries set forth in Part 2 of Schedule 4, (v) UTG will own 99.99% of each
of the License Subsidiaries set forth in Part 2 of Schedule 4, (vi) Sunshine
Acquisition owns 4.75% of Sunshine L.P., (vii) Sunshine L.P. owns 48.745% of
Network Holding, (viii) Network Holding owns 99.99% of Network and (ix) Network
owns 100% of Galavision.
(b) On the Second Closing Date, (i) the Borrower will own 100% of PTI
Holdings, Galavision and Sunshine Acquisition and 95.25% of Sunshine L.P.,
(ii) PTI Holdings will own 100% of UTG, (iii) PTI Holdings will own .01% of the
License Subsidiaries set forth in Part 2 of Schedule 4, (iv) UTG will own 99.99%
of the License Subsidiaries set forth in Part 2 of Schedule 4, (v) the Borrower
owns 71.85% of Network, (vi) Sunshine L.P. will own 28.15% of Network,
(vii) Sunshine Acquisition owns 4.75% of Sunshine L.P., (viii) PTI will be
merged into PTI Holdings and
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(ix) Network Holding will be liquidated and its assets distributed to the
Borrower and Sunshine L.P..
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL CLOSING DATE. The agreement of each Lender to
make the Term Loans and/or Revolving Loans requested to be made by it on the
Initial Closing Date is subject to the satisfaction, immediately prior to or
concurrently with the making of such Loans on the Initial Closing Date (except
as otherwise expressly provided hereunder), of the following conditions
precedent:
(a) CREDIT AGREEMENT. The Administrative Agent shall have received this
Agreement, executed and delivered by an officer of the Borrower as of the
Initial Closing Date, with a counterpart for each Lender, and such officer shall
be covered by an incumbency certificate which shall have been executed and
delivered to the Administrative Agent.
(b) OTHER LOAN DOCUMENTS. The Administrative Agent shall have received
the Term Notes, the Revolving Notes, the Guaranties, the Guarantor Collateral
Documents, the Collateral Documents, the Intercreditor Agreement and all UCC-1
Financing Statements and other agreements or instruments required to create or
perfect a security interest in the Collateral and the Guarantor Collateral
encumbered in connection herewith, in each case executed and delivered by an
officer of the relevant Loan Party with a counterpart for each Lender, and such
officer shall be covered by an incumbency certificate which shall have been
executed and delivered to the Administrative Agent.
(c) INCUMBENCY CERTIFICATES. The Administrative Agent shall have
received, with an executed counterpart for each Lender, an incumbency
certificate of the Borrower and the Guarantors, in each case dated the Initial
Closing Date, executed by one of its Responsible Officers or its Secretary or
Assistant Secretary or its general partner, as applicable.
(d) CORPORATE/PARTNERSHIP PROCEEDINGS. The Administrative Agent shall
have received, with a counterpart for each Lender, a copy of the resolutions of
the Board of Directors of each of the corporate Loan Parties and a copy of the
partnership authorization of each partner of each of the partnership Loan
Parties, each dated as of the Initial Closing Date authorizing (i) in the case
of the Borrower, the IPO, (ii) execution, delivery and performance of the Loan
Documents to which it is or will be a party and (iii) the borrowings
contemplated hereunder (in the case of the Borrower), in each case certified by
the Secretary or an Assistant Secretary or a general partner, as applicable, of
such Loan Party as of the Initial Closing Date, which certificate states that
the resolutions and partnership
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authorizations thereby certified have not been amended, modified, revoked or
rescinded and are in full force and effect.
(e) ORGANIZATIONAL DOCUMENTS. The Administrative Agent shall have
received, with a counterpart for each Lender, copies of the certificate of
incorporation and by-laws of each corporate Loan Party and copies of all
partnership agreements of each partnership Loan Party, certified as of the
Initial Closing Date as complete and correct copies thereof by the Secretary or
an Assistant Secretary of such corporate Loan Party and a general partner of
each partnership Loan Party.
(f) FEES AND COSTS. The Managing Agents and the Administrative Agent
shall have received payment of all fees, costs, expenses and taxes accrued and
unpaid and otherwise due and payable on or before the Initial Closing Date by
the Borrower in connection with this Agreement.
(g) LEGAL OPINIONS. The Administrative Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of O'Melveny & Myers, counsel to the
Borrower and the Guarantors, substantially in the form of Exhibit K and
reasonably acceptable to the Majority Lenders;
(ii) the executed legal opinion of O'Melveny & Myers, FCC counsel to
the Borrower and the Guarantors, in form and substance reasonably
satisfactory to the Majority Lenders; and
(iii) such other legal opinions as the Managing Agents may reasonably
request.
(h) MATERIAL AGREEMENTS. The Administrative Agent shall have received,
with a counterpart for each Lender, copies of the Galavision Note; each of the
Material Agreements; the Modesto Station Purchase Agreement and all other
documents setting forth the terms of, effecting, or otherwise relating thereto;
and each of the other contracts listed in Schedule D to the Security Agreement
and each Guarantor Security Agreement, in form and substance satisfactory to the
Managing Agents, and each of the documents evidencing the Junior Subordinated
Notes, all as certified as true and correct by the Borrower and all in form and
substance satisfactory to the Majority Lenders, all of which Material Agreements
(other than the Underwriters Agreements and the Registration Statement) and the
Modesto Station Purchase Agreement shall have been assigned by the applicable
Loan Parties to the Lenders as collateral under the Loan Documents.
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(i) RECORDING. The Administrative Agent shall have received as of the
Initial Closing Date evidence of the recording, or of the provision acceptable
to the Administrative Agent for the recording, of each document reasonably
necessary to be recorded in such office or offices as may be necessary or, in
the reasonable opinion of the Administrative Agent, desirable to perfect each
Lien purported to be created thereby or to otherwise protect the rights of the
Administrative Agent and the Lenders thereunder and evidence of the filing, or
of provision acceptable to the Administrative Agent for the filing, of
appropriate financing statements on Form UCC-1 naming the Administrative Agent,
for the benefit of the Lenders, as secured party, duly executed by each debtor
under the Security Agreement or a Guarantor Security Agreement, in such office
or offices as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the security interests purported to
be created by any of the Collateral Documents or the Guarantor Collateral
Documents.
(j) LIEN SEARCHES. The Administrative Agent shall have received (i)
certified copies of requests for information from all relevant jurisdictions,
listing all effective financing statements which name the Borrower or any
Guarantor, as debtor, together with copies of such financing statements, none of
which, except for Liens permitted by Section 6.3 or as otherwise agreed to in
writing by the Managing Agents, shall cover any of the Collateral and the
Guarantor Collateral and (ii) official searches of the United States Copyright
Office and the United States Patent and Trademark Office, in form and substance
reasonably satisfactory to the Managing Agents.
(k) STOCK CERTIFICATES. The Administrative Agent shall have received
original stock certificates representing all outstanding shares of stock of PTI
Holdings, PTI, UTG, Galavision, Sunshine, each of their respective Subsidiaries
and each corporate License Subsidiary pledged to the Administrative Agent
pursuant to the Collateral Documents or the Guarantor Collateral Documents
(which shall be delivered to, and subject to the satisfaction of, the
Administrative Agent), together with an undated stock power for each of such
certificates, duly executed in blank by an authorized officer of the pledgor.
(l) GOOD STANDING CERTIFICATES. The Administrative Agent shall have
received a certificate, dated a recent date, of the Secretary of State of the
States of Delaware, California and, unless otherwise waived by the Managing
Agents, each other jurisdiction where a Loan Party is required to be qualified
to do business under such jurisdiction's law, certifying as to the existence and
good standing of, and the payment of taxes by, each Loan Party in such state and
listing all charter documents of such Loan Party on file with such officials.
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(m) TAX AND LEGAL STRUCTURE; LITIGATION. The Lenders shall have reviewed,
and be reasonably satisfied with, (i) the state and federal tax assumptions of
the Borrower and each Subsidiary, (ii) the ownership, capital, organizational
and legal structure of the Borrower and its Subsidiaries and (iii) the nature
and status of any litigation affecting the Borrower and its Subsidiaries and/or
this Agreement and any other Loan Document and the transactions contemplated
hereby, including the IPO.
(n) IPO. The Administrative Agent shall have received with regard to the
IPO (i) copies of binding agreements with underwriters (collectively, the
"UNDERWRITERS AGREEMENTS") to effect an initial public offering of the
Borrower's capital stock yielding net proceeds of at least $125,000,000 and
(ii) a copy of the Form S-1 Registration Statement (the "REGISTRATION
STATEMENT") relating thereto and evidence that such Registration Statement has
been filed with the Securities and Exchange Commission, in each case certified
as true and correct by the Borrower.
(o) EXISTING INDEBTEDNESS. The Administrative Agent shall have received
evidence reasonably satisfactory to it of (i) full repayment of all existing
Indebtedness of UTG under the Existing Credit Agreement, (ii) defeasance of the
Senior Subordinated Notes and (iii) repayment of the Borrower's Indebtedness to
Network referred to in Section 3.15(a)(i)(C).
(p) NO DEFAULT/REPRESENTATIONS. No Default shall have occurred and be
continuing on the Initial Closing Date or would occur after giving effect to the
Loans requested to be made on the Initial Closing Date or after giving effect to
the consummation of the purchase of the Modesto Station in accordance with the
terms of the Modesto Station Purchase Agreement and the representations and
warranties contained in this Agreement and each other Loan Document and
certificate or other writing delivered to the Lenders in satisfaction of the
conditions set forth in this Section 4.1 prior to or on the Initial Closing Date
shall be correct in all material respects on and as of the Initial Closing Date,
and the Administrative Agent shall have received a certificate of the Borrower
to such effect in the form of Exhibit F, dated as of the Initial Closing Date
and executed by a Responsible Officer of the Borrower.
(q) NO PROHIBITIONS. No statute, rule, regulation, order, decree or
preliminary or permanent injunction of any court or administrative agency or, to
the best knowledge of the Borrower, any such action threatened by any Person,
shall be in effect that prohibits the Lenders from consummating the transactions
contemplated by this Agreement or any other Loan Document or prohibits the IPO.
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(r) SOLVENCY CERTIFICATE. The Administrative Agent shall have received
for distribution to the Lenders a certificate of the Chief Financial Officer of
the Borrower to the effect that each Loan Party is Solvent after giving effect
to the funding of the Term Loans and the Revolving Loans, if any, on the Initial
Closing Date hereunder, the existence of the Junior Subordinated Notes, the
Sponsor Loans and the Galavision Note, the execution and delivery of the
Guaranties, the making of all Restricted Payments which are to be made prior to
consummation of the IPO, and the payment of all estimated legal, investment
banking, accounting, underwriting and other fees related hereto and thereto.
(s) INSURANCE POLICIES. The Administrative Agent shall have received
evidence that the insurance policies provided for in Section 5.5 and in the
other Loan Documents are in full force and effect, certified by the insurance
broker therefor, together with appropriate evidence showing the Administrative
Agent as an additional named insured or loss payee, as appropriate, for the
benefit of the Lenders, all in form and substance reasonably satisfactory to the
Administrative Agent.
(t) OPERATIONAL CONSENTS. The Administrative Agent shall have received
evidence, in form and substance reasonably satisfactory to the Administrative
Agent that (i) the Borrower and its Subsidiaries have obtained all FCC consents
and licenses required by law or necessary for the operation of the Borrower and
its Subsidiaries and (ii) the Borrower and its Subsidiaries have obtained all
other consents and licenses required by law or necessary for the operation of
the Borrower and its Subsidiaries, the failure of which to obtain would have a
Material Adverse Effect.
(u) FINANCIAL CERTIFICATES. The Administrative Agent shall have received
the following certificates, in each case signed by a Responsible Officer of the
Borrower and in form, substance and detail acceptable to the Managing Agents:
(i) A certificate indicating that after giving effect to the
transactions contemplated to occur on (A) the Initial Closing Date and
(B) the Second Closing Date, PRO FORMA EBITDA for the Borrower and its
Subsidiaries on a consolidated basis for the four fiscal quarter period
ending immediately prior to the Initial Closing Date and the Second Closing
Date, respectively, is at least $115,000,000;
(ii) A certificate indicating that after giving effect to the
transactions contemplated to occur (A) on the Initial Closing Date and
(B) on the Second Closing Date, PRO FORMA Funded Debt (excluding the
aggregate Redemption Value of all outstanding Modesto Station Purchase
Preferred
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Stock) for the Borrower and its Subsidiaries on a consolidated basis
will not exceed $600,000,000 on and as of the Initial Closing Date
and the Second Closing Date, respectively;
(iii) A certificate indicating that the Financial Statements accurately
reflect the financial condition and performance of the Borrower and its
Subsidiaries for fiscal year 1995 in accordance with GAAP consistently
applied;
(iv) A certificate setting forth actual EBITDA of the Borrower and
each of its Subsidiaries for fiscal year 1995, and further certifying that
such actual EBITDA for fiscal year 1995 is accurately calculated; and
(v) A Covenant Compliance Certificate showing compliance with the
covenants referred to therein, on a PRO FORMA basis, as of the Initial
Closing Date and the Second Closing Date, respectively, and assuming that
the acquisition of the Modesto Station has been consummated in accordance
with the terms of the Modesto Station Purchase Agreement.
(v) NON-FOREIGN ENTITY; TAX IDENTIFICATION NUMBER. The Administrative
Agent shall have received, reviewed and approved a certificate from the Borrower
and each Subsidiary regarding such entity's domestic status, which certificate
shall also include such entity's tax identification number.
(w) ADDITIONAL PROCEEDINGS. The Administrative Agent shall have received
such other approvals, opinions and documents as any Lender, through the
Administrative Agent, may reasonably request and all legal matters incident to
the making of such Loans shall be reasonably satisfactory to the Administrative
Agent and the Managing Agents.
4.2 CONDITIONS TO SECOND CLOSING DATE. The agreement of each Lender to
make any Term Loans and any Revolving Loans requested to be made by it on the
Second Closing Date, and participate in any Letters of Credit issued on the
Second Closing Date, and the agreement of the Administrative Agent to issue any
Letter of Credit requested to be issued on the Second Closing Date are subject
to the satisfaction, immediately prior to or concurrently with the making of
such Loans and the issuance of such Letter(s) of Credit and the effectiveness of
such Commitment on the Second Closing Date (except as otherwise expressly
provided hereunder), of the following conditions precedent:
(a) INITIAL CLOSING DATE. The Initial Closing Date shall have occurred.
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(b) LOAN DOCUMENTS. The Administrative Agent shall have received such
amendments or supplements to the Loan Documents and the formation documents of
the Loan Parties, or recordings or filings with respect thereto, as may be
necessary to accurately reflect the legal and ownership structure of the
Borrower and its Subsidiaries as of the Second Closing Date or effect or confirm
the Lenders' perfected security interests in the Collateral and in the Guarantor
Collateral, in each case executed and delivered by an officer of the relevant
Loan Party with a counterpart for each Lender.
(c) OMNIBUS CERTIFICATE. The Administrative Agent shall have received an
Omnibus Certificate of each Loan Party, with an executed counterpart for each
Lender, dated the Second Closing Date, stating that (i) the certificate of
incorporation and by-laws, or partnership agreement, as the case may be, of such
Loan Party, its resolutions or partnership authorization, as the case may be,
and its incumbency certificate in each case delivered to the Administrative
Agent on the Initial Closing Date remain true and correct and in full force and
effect with no amendments thereto (or, if amended, attaching copies of such
amendments), (ii) the copies of the Material Agreements, the other contracts
referred to in Schedule D to the Security Agreement and each of the Guarantor
Security Agreements and the Indentures pursuant to which the Junior Subordinated
Notes were issued on the Initial Closing Date remain true and correct and in
full force and effect with no amendments thereto (other than Material Agreements
which cease to be included in the definition of "Material Agreements" on the
Second Closing Date) and such Material Agreements constitute all Material
Agreements of such Loan Party, (iii) no change has occurred with respect to the
insurance program of such Loan Party since information with respect thereto was
delivered to the Administrative Agent in connection with the Initial Closing
Date and (iv) no change in such Loan Party's financial condition or otherwise
has occurred which would make any financial certificate delivered to the
Administrative Agent in connection with the Initial Closing Date incorrect or
misleading.
(d) COSTS. The Managing Agents and the Administrative Agent shall have
received payment of all costs, expenses and taxes accrued and unpaid and
otherwise due and payable on or before the Second Closing Date by the Borrower
pursuant to this Agreement.
(e) LEGAL OPINIONS. The Administrative Agent shall have received, with a
counterpart for each Lender, the following:
(i) a letter of O'Melveny & Myers, counsel to the Borrower and the
Guarantors, downdating the opinions provided by such firm on the Initial
Closing Date and addressing such other matters arising with regard to the
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Second Closing Date as the Managing Agents may reasonably request; and
(ii) such other legal opinions as the Managing Agents may reasonably
request.
(f) STOCK CERTIFICATES. The Administrative Agent shall have received
original stock certificates representing all outstanding shares of stock of PTI
Holdings, UTG, Galavision, Sunshine and each corporate License Subsidiary
pledged to the Administrative Agent pursuant to the Collateral Documents or the
Guarantor Collateral Documents (which shall be delivered to, and subject to the
satisfaction of, the Administrative Agent), together with an undated stock power
for each of such certificates, duly executed in blank by an authorized officer
of the pledgor.
(g) IPO. The Administrative Agent shall have received evidence reasonably
satisfactory to the Managing Agents that the IPO has been consummated and the
Borrower shall have received net proceeds of at least $125,000,000 in connection
therewith.
(h) EXISTING INDEBTEDNESS. The Administrative Agent shall have received
evidence reasonably satisfactory to it of full repayment of all Sponsor Loans
and cancellation of the Sponsor Loan Documents, the Combined Entities Loan
Agreement, the Program Cost Sharing Agreement and the Galavision Note.
(i) NO DEFAULT/REPRESENTATIONS. No Default shall have occurred and be
continuing on the Second Closing Date or would occur after giving effect to the
Loans requested to be made and any Letters of Credit requested to be issued on
the Second Closing Date or after giving effect to the consummation of the
purchase of the Modesto Station in accordance with the terms of the Modesto
Station Purchase Agreement and the representations and warranties contained in
this Agreement and each other Loan Document and certificate or other writing
delivered to the Lenders in satisfaction of the conditions set forth in
Section 4.1 or this Section 4.2 prior to or on the Second Closing Date shall be
correct in all material respects on and as of the Second Closing Date, and the
Administrative Agent shall have received a certificate of the Borrower to such
effect in the form of Exhibit F, dated as of the Second Closing Date and
executed by a Responsible Officer of the Borrower.
(j) NO PROHIBITIONS. No statute, rule, regulation, order, decree or
preliminary or permanent injunction of any court or administrative agency or, to
the best knowledge of the Borrower, any such action threatened by any Person,
shall be in effect that prohibits the Lenders from consummating the transactions
contemplated by this Agreement or any other Loan Document or prohibits the IPO.
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(k) SOLVENCY CERTIFICATE. The Administrative Agent shall have received
for distribution to the Lenders a certificate of the Chief Financial Officer of
the Borrower to the effect that each Loan Party is Solvent after giving effect
to the funding of any Term Loans or Revolving Loans or issuances of any Letter
of Credit on the Second Closing Date, the existence of the Junior Subordinated
Notes, the execution and delivery of the Guaranties, the making of all
Restricted Payments to be made on the Second Closing Date, the consummation of
the IPO and the payment of all estimated legal, investment banking, accounting,
underwriting and other fees related hereto and thereto.
(l) SPONSOR LOANS. The applicable lenders under the Sponsor Loan
Documents shall have made the Sponsor Loans in an amount equal to 15% of
Combined Net Time Sales at the times and on the dates specified in the Sponsor
Loan Documents.
(m) ADDITIONAL PROCEEDINGS. The Administrative Agent shall have received
such other approvals, opinions and documents as any Lender, through the
Administrative Agent, may reasonably request and all legal matters incident to
the making of such Loans and the issuance of any Letters of Credit shall be
reasonably satisfactory to the Administrative Agent and the Managing Agents.
4.3 CONDITIONS TO INCREMENTAL LOANS. The Incremental Lenders'
consideration of a request for the initial Incremental Loans shall be subject to
the following, in each case to the satisfaction of the Administrative Agent, the
Managing Agents and the Incremental Lenders:
(a) INITIAL CLOSING DATE AND SECOND CLOSING DATE. The Initial Closing
Date and the Second Closing Date shall have occurred.
(b) INCREMENTAL NOTES. The Administrative Agent shall have received, for
each Incremental Lender, an Incremental Note duly executed by the Borrower in
favor of such Lender in a principal amount equal to such Incremental Lender's
Incremental Loan Commitment.
(c) INCUMBENCY CERTIFICATE. The Administrative Agent shall have received,
with an executed counterpart for each Incremental Lender, an incumbency
certificate of the Borrower dated as of the date of such initial borrowing,
executed by one of its Responsible Officers or its Secretary or Assistant
Secretary.
(d) CORPORATE PROCEEDINGS. The Administrative Agent shall have received,
with an executed counterpart for each Incremental Lender, a copy of the
resolutions of the board of directors of the Borrower dated as of the date of
such initial borrowing authorizing the borrowing
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of Incremental Loans pursuant to the Incremental Loan Commitments and
certified by the Secretary or an Assistant Secretary of the Borrower, which
certificate states that such resolutions have not been amended, modified,
revoked or rescinded and are in full force and effect.
(e) NO DEFAULT/REPRESENTATIONS. No Default shall have occurred and be
continuing on the date of such initial borrowing or would occur after giving
effect to the Incremental Loans proposed to be made on the date of such
borrowing and the representations and warranties contained in this Agreement and
each other Loan Document and certificate or other writing delivered to the
Incremental Lenders in satisfaction of the conditions set forth in this Section
4.3 prior to or on the date of such initial borrowing shall be correct in all
material respects on and as of the date of such initial borrowing and the
Administrative Agent shall have received a Covenant Compliance Certificate dated
as of the date of such initial borrowing.
(f) FORM U-1. If required or requested under Section 3.10, a Form U-1 for
each of the Administrative Agent, the Managing Agents and each Lender.
(g) PRO FORMA COVENANT COMPLIANCE CERTIFICATE. The Managing Agents shall
have received a Covenant Compliance Certificate showing compliance with the
covenants referred to therein, on a PRO FORMA basis, as of the Incremental Loan
borrowing date.
(h) ADDITIONAL PROCEEDINGS. The Administrative Agent shall have received
such other approvals, opinions and documents as any Incremental Lender, through
the Administrative Agent, may reasonably request and all legal matters incident
to the making of such Incremental Loans shall be reasonably satisfactory to the
Administrative Agent, the Managing Agents and each Incremental Lender.
4.4 CONDITIONS TO EACH LOAN OR LETTER OF CREDIT. The agreement of each
Lender to make each Loan and to participate in each Letter of Credit, and the
agreement of the Administrative Agent to issue each Letter of Credit, requested
to be made, issued or participated in by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan or the
issuance or participation in such Letter of Credit, of the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The following statements
shall be true and the Borrower's acceptance of the proceeds of such Loan or its
delivery of an executed Letter of Credit Request shall be deemed to be a
representation and warranty of the Borrower on the date of such Loan or as of
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the date of issuance of such Letter of Credit, as applicable, that:
(i) The representations and warranties contained in this Agreement
and in each other Loan Document and certificate or other writing delivered
to the Lenders prior to, on or after the Initial Closing Date pursuant
hereto and on or prior to the date for such Loan or the issuance of such
Letter of Credit are correct on and as of such date in all material
respects as though made on and as of such date except to the extent that
such representations and warranties expressly relate to an earlier date;
and
(ii) No Default has occurred and is continuing or would result from
the making of the Loan to be made on such date or the issuance of such
Letter of Credit as of such date.
(b) LEGALITY. The making of such Loan or the issuance of such Letter of
Credit, as applicable, shall not contravene any law, rule or regulation
applicable to any Lender or the Borrower or any other Loan Party.
(c) BORROWING NOTICE/LETTER OF CREDIT REQUEST. The Administrative Agent
shall have received a borrowing notice or Letter of Credit Request, as
applicable, pursuant to the provisions of this Agreement from the Borrower.
(d) APPROVALS. With respect to a borrowing in connection with an
Acquisition of television or radio stations, the Administrative Agent shall have
received copies of all FCC and regulatory approvals and licenses necessary in
connection with any such Acquisition and all shareholder approvals necessary in
connection with any such Acquisition.
(e) COLLATERAL DOCUMENTATION. With respect to a borrowing in connection
with an Acquisition, the Administrative Agent shall have received, reviewed and
approved all documents reasonably necessary to insure that the Lenders have a
first priority security interest in, and assignment of, all material real
property and all other assets and interests acquired, including consents of
third parties if reasonably requested by the Managing Agents.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Initial Closing Date, so
long as any Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender, the Administrative Agent or
the Managing Agents hereunder, or any Letter of Credit remains outstanding:
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5.1 FINANCIAL STATEMENTS. The Borrower shall furnish to the Managing
Agents (for distribution to each Lender):
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the consolidated and consolidating
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated and consolidating statements of
operations and retained earnings, stockholders' equity and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, audited without a "going concern" or like qualification or
exception, or other qualification arising out of the scope of the audit, by the
Accountants, accompanied by a certificate of a Responsible Officer of the
Borrower substantially in the form of Exhibit L setting forth the calculation of
Excess Cash Flow for such fiscal year;
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated and consolidating statements of operations,
retained earnings, stockholders' equity and of cash flows of the Borrower and
its consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer of
the Borrower as being fairly stated in all material respects (subject to normal
year-end audit adjustments);
(c) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a certificate from the Accountants verifying
compliance by the Borrower and its Subsidiaries on a consolidated basis with
each financial covenant set forth in Section 6.1 and, based on their review of
the financial reports of the Borrower and its Subsidiaries on a consolidated
basis, an opinion of the Accountants that no Default shall have occurred under
any Loan Document; provided, that the Accountants shall not be required, as a
result of delivering such opinion, to undertake any special investigation in
addition to their normal audit examination; and
(d) as soon as available, but in any event within 45 days after the end of
each fiscal quarter of the Borrower, financial reports, consistent with the
relevant Loan Parties' internal reporting practices as in effect on the Initial
Closing Date, relating to the operations of each Primary Station as at the end
of such quarter and the portion of the fiscal year through the end of such
quarter, certified by a Responsible Officer of such
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Loan Party as being fairly stated in all material respects (subject to normal
year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by the Accountants or Responsible Officer, as the
case may be, and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. The Borrower shall:
(a) furnish to the Managing Agents (for distribution to each Lender)
concurrently with the delivery of the financial statements referred to in
Sections 5.1(a) and 5.1(b), a certificate of a Responsible Officer of the
Borrower stating that, (i) to the best of such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants (including calculations substantially in the form of Exhibit G
regarding all financial covenants) and other agreements, and satisfied every
condition, contained in this Agreement and in the Notes and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default
except as specified in such certificate and (ii) to the best of such Responsible
Officer's knowledge, no Default has occurred and the Loan Parties are in
compliance with their respective covenants in the Loan Documents to which they
are a party;
(b) at least once during each fiscal year of the Borrower, convene a bank
meeting among the Lenders upon reasonable notice to the Lenders, or attend such
a meeting convened by the Managing Agents, and present cash flow projections for
the forthcoming year and a report discussing the views of the Borrower
concerning the recent performance and near and intermediate term prospects of
(i) the businesses in which the Borrower and its Subsidiaries are principally
engaged and (ii) trends concerning assets under management, advisory fees,
competition and strategic initiatives by the Borrower and its Subsidiaries;
(c) furnish to the Managing Agents (for distribution to each Lender)
within five days after the same are filed, copies of all financial statements
and reports which the Borrower or any Subsidiary may make to, or file with, the
Securities and Exchange Commission or any successor or analogous Governmental
Authority;
(d) furnish to the Managing Agents (for distribution to each Lender)
promptly but, in any event, within 5 Business Days, after receipt thereof,
copies of all financial reports
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(including, without limitation, management letters), if any, submitted to the
Borrower or any of its Subsidiaries by the Accountants in connection with any
annual or interim audit of the books thereof;
(e) furnish to the Managing Agents (for distribution to each Lender) as
soon as available and in any event not later than January 31 of each year,
commencing with the fiscal year ending on December 31, 1997, a copy of the
annual operating budgets for the Borrower and its Subsidiaries for such fiscal
year, detailed by quarter and a copy of the three-year annual operating budgets
for the Borrower and its Subsidiaries for such three-year period;
(f) furnish to the Managing Agents (for distribution to each Lender) as
soon as possible and in any event within five days after the occurrence of a
Default or, in the good faith determination of a Responsible Officer of the
Borrower, a Material Adverse Effect, the written statement by a Responsible
Officer of the Borrower, setting forth the details of such Default or Material
Adverse Effect and the action which the Borrower proposes to take with respect
thereto;
(g) furnish to the Managing Agents (for distribution to each Lender)
promptly but, in any event, within 5 Business Days, after the same become
available, copies of all statements, reports and other information which the
Borrower or any of its Subsidiaries sends to any holders, as holders, of its
Indebtedness or its securities;
(h) furnish to the Managing Agents (for distribution to each Lender) (A)
as soon as possible and in any event within 30 days after the Borrower knows or
has reason to know that any Termination Event with respect to any Plan has
occurred, a statement of a Responsible Officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower proposes to take
with respect thereto, (B) promptly and in any event within ten Business Days
after receipt thereof by the Borrower or any of its ERISA Affiliates from the
PBGC, copies of each notice received by the Borrower or any of its ERISA
Affiliates of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan, (C) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Single Employer Plan maintained for or covering employees of the
Borrower or any of its Subsidiaries if the present value of the accrued benefits
under the Plan exceeds its assets by an amount in excess of $1,000,000 and (D)
promptly and in any event within fifteen Business Days after receipt thereof by
the Borrower or any of its ERISA Affiliates from a sponsor of a Multiemployer
Plan or
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from the PBGC, a copy of each notice received by the Borrower or any of its
ERISA Affiliates concerning the imposition or amount of withdrawal liability
under Section 4202 of ERISA or indicating that such Multiemployer Plan may
enter reorganization status under Section 4241 of ERISA;
(i) furnish to the Managing Agents (for distribution to each Lender)
promptly after the commencement thereof, but in any event not later than five
Business Days after service of process with respect thereto on, or the obtaining
of knowledge by, the Borrower or any of its Subsidiaries, notice of each action,
suit or proceeding before any court or governmental authority or other
regulatory body or any arbitrator as to which there is a reasonable possibility
of a determination that would have a Material Adverse Effect;
(j) furnish to the Managing Agents (for distribution to each Lender)
promptly after the sending or filing thereof, but in any event not later than
ten Business Days following such sending or filing, copies of (A) all Ownership
Reports on FCC Form 323 (or any similar form which may be adopted by the FCC
from time to time) and any supplements thereto, and (B) all statements, reports
and other information filed by or on behalf of the Borrower or any of its
Subsidiaries with the FCC if such statement, report or other information
indicates a material change in the condition, financial or otherwise, or
operations of the Borrower or any of its Subsidiaries;
(k) furnish to the Managing Agents (for distribution to each Lender)
promptly upon receipt thereof, but in any event not later than five Business
Days following such receipt, copies of all notices and other communications that
the Borrower or any of its Subsidiaries shall have received from the FCC with
respect to any FCC hearing, order or dispute (A) directly concerning the
Borrower, any of its Subsidiaries, any Station or any Media License or (B) that
may have a Material Adverse Effect;
(l) furnish to the Managing Agents (for distribution to each Lender) no
later than 10 days prior to the formation or acquisition of any Subsidiary of
the Borrower or a Subsidiary of a Subsidiary, a supplement to Schedule 4,
setting forth the information with respect to each such Subsidiary reasonably
required by the Majority Lenders;
(m) furnish to the Managing Agents (for distribution to each Lender) no
later than 30 days prior to the acquisition of a Media License or Primary
Station by the Borrower or any Subsidiary, a supplement to Schedule 9, setting
forth the information with respect to each Primary Station or Media License
reasonably required by the Majority Lenders; and
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(n) furnish to the Managing Agents (for distribution to each Lender)
promptly such additional financial and other information as any Lender, through
the Administrative Agent, may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of
its Subsidiaries to, 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 failure to so satisfy such obligations would
not have a Material Adverse Effect or 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.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The Borrower shall,
and shall cause each of its Subsidiaries to, continue to engage in business of
the same general type as conducted by the Borrower and its Subsidiaries as of
the Initial Closing Date and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
registrations, licenses, privileges and franchises necessary or desirable in the
normal conduct of its business, except to the extent that a failure to maintain
such rights, registrations, licenses, privileges and franchises would not have a
Material Adverse Effect or except as otherwise permitted pursuant to Section
6.5, and comply with all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith would not, in the aggregate, have
a Material Adverse Effect. The Borrower shall effect the corporate restructure
detailed in Section 3.30(b) within four Business Days following the Initial
Closing Date.
5.5 MAINTENANCE OF PROPERTY; INSURANCE. The Borrower shall, and shall
cause each of its Subsidiaries to, keep all Property useful or necessary in its
business in good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies or
associations insurance on such of its Property in at least such amounts and
against such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried. All such policies of insurance on the property of the Borrower and the
Subsidiaries shall contain an endorsement, in form and substance reasonably
satisfactory to the Administrative Agent in its sole discretion, showing the
Administrative Agent, on behalf of the Lenders, as additional insured or loss
payee, as appropriate, or as its interests appear. Such endorsement, or an
independent instrument furnished to the Administrative Agent, shall provide that
the insurance companies will endeavor to give
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the Administrative Agent at least 30 days' prior written notice before any
such policy or policies of insurance shall be altered or canceled. All
policies of insurance required to be maintained under this Agreement shall be
in customary form and with insurers recognized as adequate by the
Administrative Agent and all such policies shall be in such amounts as shall
be customary for similar companies in the same or similar business in the
same geographical area. The Borrower and its Subsidiaries shall deliver to
the Administrative Agent insurance certificates certified by the Borrower's
or such Subsidiary's insurance brokers, as to the existence and effectiveness
of each policy of insurance and evidence of payment of all premiums then due
and payable therefor. In addition, the Borrower shall notify the
Administrative Agent promptly of any occurrence causing a material loss of
any insured Property and the estimated (or actual, if available) amount of
such loss. Further, the Borrower and its Subsidiaries shall maintain all
insurance required under the other Loan Documents.
(i) Each policy for liability insurance shall provide for all losses
to be paid on behalf of the Administrative Agent and the Borrower or its
Subsidiary (as the case may be), as their respective interests may appear, and
each policy for property damage insurance shall, to the extent applicable to
equipment and inventory, provide for all losses (except for losses of less than
$1,000,000 per occurrence, which may be paid directly to the Borrower or such
Subsidiary (as applicable)) to be paid directly to the Administrative Agent.
(ii) Reimbursement under any liability insurance maintained by the
Borrower or its Subsidiaries pursuant to this Section 5.5 may be paid directly
to the Person who shall have incurred liability covered by such insurance. In
the case of any loss involving damage to equipment or inventory as to which
clause (iii) of this Section 5.5 is not applicable, the Borrower will make or
cause to be made the necessary repairs to or replacements of such equipment or
inventory, and any proceeds of insurance maintained by the Borrower or its
Subsidiaries pursuant to this Section 5.5 shall be paid by the Administrative
Agent to the Borrower, upon presentation of invoices and other evidence of
obligations, as reimbursement for the costs of such repairs or replacements.
(iii) Upon the occurrence and during the continuance of a Default,
all insurance proceeds in respect of such equipment or inventory shall be paid
to the Administrative Agent and applied in repayment of the Loans on a pro rata
basis. Any repayment of Revolving Loans shall also result in a reduction of the
Revolving Loan Commitments by such amount.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall, and shall cause each of its
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Subsidiaries to, keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall
be made of all material dealings and transactions in relation to its business
and activities; and upon reasonable notice and at such reasonable times
during usual business hours, permit representatives of any Lender to visit
and inspect any of its properties and examine and make abstracts from any of
its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its Accountants (as
long as a member of senior management of the Borrower is present during such
discussion).
5.7 ENVIRONMENTAL LAWS. The Borrower shall, and shall cause each of its
Subsidiaries to:
(a) Comply with, and ensure compliance by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to do so could not be reasonably expected to have a Material
Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings; and
(c) Defend, indemnify and hold harmless the Administrative Agent, the
Managing Agents and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower or any of its
Subsidiaries, or the Borrower's or any of its Subsidiaries' interest in
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party seeking indemnification
therefor. This indemnity shall continue in full
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force and effect regardless of the termination of this Agreement.
5.8 USE OF PROCEEDS. The Borrower will use, and cause its Subsidiaries to
use, the proceeds of the Loans as set forth in Section 3.15 and in compliance
with Section 3.10. The Borrower will not use any Letter of Credit in
contravention of Section 3.10.
5.9 COMPLIANCE WITH LAWS, ETC. Except as set forth in Section 5.7 relating
specifically to Environmental Laws, the Borrower shall comply, and shall cause
each of its Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders except where noncompliance would not
reasonably be expected to have a Material Adverse Effect, such compliance to
include, without limitation (i) paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its Properties and (ii) paying all lawful
claims which if unpaid might become a Lien upon any of its Properties; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required
to pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as (A) the validity or applicability
thereof is being contested in good faith by appropriate proceedings or the
failure to pay such tax, assessment, charge, levy or claim would not have a
Material Adverse Effect and (B) the Borrower or such Subsidiary shall, to the
extent required by GAAP, have set aside on its books adequate reserves with
respect thereto.
5.10 MEDIA LICENSES. The Borrower will obtain, maintain and preserve, and
cause each of its Subsidiaries to obtain, maintain and preserve, all Media
Licenses, including without limitation, by filing with the FCC (i) those of the
Loan Documents required to be filed under the FCC's rules and regulations within
30 days after the Initial Closing Date and the Second Closing Date, as
applicable, and (ii) all reports (including Ownership Reports on Form 323) and
other documents required to be filed by the Communications Act in connection
with the transactions contemplated hereby and maintaining public records and
files in accordance with the Communications Act and the rules and regulations of
the FCC, except for such Media Licenses in respect of the Primary Stations the
failure of which to obtain, maintain or preserve will not have a Material
Adverse Effect.
5.11 GUARANTIES, ETC. The Borrower will cause each of its Subsidiaries
hereafter formed or acquired (except the License Subsidiaries) to execute and
deliver to the Administrative Agent promptly upon the formation or acquisition
thereof (i) a Guarantee in form and substance satisfactory to the Majority
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Lenders, guaranteeing the Obligations, (ii) a Guarantor Security Agreement, in
form and substance satisfactory to the Majority Lenders, granting to the
Administrative Agent, for the benefit of the Lenders, a security interest in the
tangible and intangible personal property of such Subsidiary, together with
appropriate Lien searches requested by the Administrative Agent indicating the
Lenders' first priority (except for Liens or other security interests permitted
under Section 6.3 which have priority by operation of law and except for any
PARI PASSU Lien permitted by Section 6.3(l)) Lien on such personal property and
(iii) UCC-1 Financing Statements, duly executed by such Subsidiary, in form and
substance reasonably satisfactory to the Managing Agents and, in connection with
such deliveries, cause to be delivered to the Administrative Agent (A) the stock
certificates representing the issued and outstanding shares of stock of such
Subsidiaries, together with undated stock powers executed in blank, (B) a
favorable written opinion of counsel reasonably satisfactory to the Managing
Agents as to such matters relating thereto as any Lender through the
Administrative Agent may reasonably request, in form and substance reasonably
satisfactory to the Managing Agents and (C) such other agreements, instruments,
approvals or other documents as any Lender through the Administrative Agent may
reasonably request.
5.12 LICENSE SUBSIDIARIES. The Borrower will cause (i) all Material Media
Licenses owned by the Borrower or its Subsidiaries on the Initial Closing Date
(other than the low power license for KUVN-LP, Dallas, Texas, with respect to
which an application for transfer to a License Subsidiary has been made to the
FCC and is expected to be approved in the ordinary course), and (ii) all Media
Licenses acquired by the Borrower or its Subsidiaries on or after the Initial
Closing Date, to be held in License Subsidiaries at all times.
5.13 INTEREST RATE PROTECTION. (a) As soon as possible, and in any case
within 45 days after the Initial Closing Date, the Borrower shall enter into
Interest Rate Agreements, each in form and substance reasonably satisfactory to
the Managing Agents, covering a minimum of 50% of the outstanding Term Loans and
Revolving Loans for a minimum period of two years at a maximum blended average
all-in rate of 8.5%.
(b) As soon as possible, and in any case within 15 days after receipt of a
written request from the Administrative Agent, the Borrower shall enter into
Interest Rate Agreements with respect to 50% of the outstanding Incremental
Loans which are not subject to Interest Rate Agreements for a minimum period of
two years at such rate as shall be reasonably acceptable to the Managing Agents.
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5.14 ACQUISITION OF REAL PROPERTY IN FEE SIMPLE. The Borrower and its
Subsidiaries shall submit to the Managing Agents for their prior approval any
documents relating to any fee simple real property interest to be acquired by
the Borrower or any of its Subsidiaries having a purchase price (together with
the assumption of Indebtedness or purchase money Indebtedness relating thereto)
in excess of $10,000,000. Each such document shall be subject to the approval
of the Managing Agents, which approval shall not be unreasonably withheld or
delayed. In the event the Managing Agents fail to respond within 10 Business
Days following receipt of such document, then such document shall be deemed
approved. The Managing Agents may request that any fee simple real property
interest having a purchase price in excess of $10,000,000 shall become part of
the Collateral or the Guarantor Collateral and the Borrower and its Subsidiaries
shall provide or cause to be provided any and all information relating to such
real property interest and any and all Collateral Documents or Guarantor
Collateral Documents and other documents to be executed in connection therewith
requested by the Managing Agents and provide the Managing Agents with title
insurance as a condition to approval.
5.15 LEASES AND LICENSES. The Borrower shall or shall cause its
Subsidiaries to perform and carry out all of the provisions of all of the
leases, licenses, permits and any other occupancy agreements relating to real
property or real property interests (the "OCCUPANCY AGREEMENTS") to be performed
by the Borrower or any of its Subsidiaries and shall appear in and defend any
action in which the validity of any of the Occupancy Agreements relating to any
real property or real property interests is at issue and shall commence and
maintain any action or proceeding necessary to establish or maintain the
validity of any of such Occupancy Agreements and to enforce the provisions
thereof.
5.16 NOTICES. The Borrower will provide, and will cause its Subsidiaries
to provide to the Managing Agents, within 5 days following receipt by the
Borrower or such Subsidiary, copies of all notices received by the Borrower or
such Subsidiary (i) under any Material Agreement, relating to any default, any
claimed force majeure or any other material provision thereof and (ii) from the
Internal Revenue Service or other taxing authority relating to any dispute
regarding deductions, audits or any other material matter which, if adversely
determined against the Borrower or such Subsidiary, would have a Material
Adverse Effect.
5.17 ACCOUNTS. The Borrower shall maintain, and shall cause its
Subsidiaries to maintain, a cash management system reasonably satisfactory to
the Managing Agents and will cause all operating and checking accounts (except
for (i) payroll accounts and other local Station accounts and petty cash
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accounts and (ii) certain accounts with Citibank, N.A. until December 31, 1996)
designated by the Managing Agents to be maintained with the Administrative
Agent, a Managing Agent or a Lender and, as of the Initial Closing Date, all
accounts of the Borrower and each Subsidiary shall be pledged in favor of the
Administrative Agent, for the benefit of the Lenders, pursuant to the Security
Agreement or a Guarantor Security Agreement, as applicable.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Initial Closing Date, so
long as any Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender, the Managing Agents or the
Administrative Agent hereunder, or any Letter of Credit remains outstanding:
6.1 FINANCIAL CONDITION COVENANTS. The Borrower shall not:
(a) MAXIMUM TOTAL DEBT RATIO. Permit the Total Debt Ratio at any time
(provided that EBITDA shall be calculated as of the end of the last fiscal
quarter for which financial statements under Section 5.1(b) shall have been
required to be delivered, unless a covenant compliance certificate together with
financial statements for the relevant period shall have been delivered to the
Lenders for a more recent period, in which case EBITDA set forth therein shall
be used for calculating this ratio) of the Borrower and its Subsidiaries on a
consolidated basis to exceed the following levels for the periods indicated:
PERIOD RATIO
------ -----
Initial Closing Date to and including
December 30, 1997 5.50:1
December 31, 1997 to and including
December 30, 1998 5.25:1
December 31, 1998 to and including
December 30, 1999 4.75:1
December 31, 1999 to and including
December 30, 2000 4.25:1
December 31, 2000 and thereafter 4.00:1
; provided that, prior to the first anniversary of the Initial Closing Date
EBITDA, as used in the Total Debt Ratio, will be calculated on a PRO FORMA
basis giving effect to the following adjustments (as so adjusted, "PRO FORMA
EBITDA"): (x) EBITDA will be calculated for the Combined Entities for the
fiscal
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quarter most recently ended and the immediately preceding three fiscal
quarters and (y) accrued management fees shall be added to the extent such
fees reduced Net Income.
(b) MINIMUM TOTAL INTEREST COVERAGE RATIO. Permit the Total Interest
Coverage Ratio as of the end of any fiscal quarter of the Borrower and its
Subsidiaries to be less than the following levels for the periods indicated:
PERIOD RATIO
------ -----
Initial Closing Date to and including
December 30, 1996 2.00:1
December 31, 1996 to and including
December 30, 1997 2.20:1
December 31, 1997 to and including
December 30, 1998 2.40:1
December 31, 1998 and thereafter 2.60:1
; provided that, prior to the first anniversary of the Initial Closing Date,
(i) EBITDA, as used in Total Interest Coverage Ratio will be Pro Forma EBITDA
and (ii) Interest Expense, as used in Total Interest Coverage Ratio, will be
Annualized Interest Expense.
(c) MINIMUM FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio as of the end of any fiscal quarter of the Borrower and its Subsidiaries
to be less than 1.10:1; provided that, prior to the first anniversary of the
Initial Closing Date (i) EBITDA, as used in the Fixed Charge Coverage Ratio will
be Pro Forma EBITDA, (ii) Capital Expenditures and Cash Income Taxes will be
calculated for the Combined Entities for the fiscal quarter most recently ended
and the immediately preceding three fiscal quarters, (iii) Restricted Payments
will be calculated for the Combined Entities for the fiscal quarter most
recently ended and the immediately preceding three fiscal quarters and (iv)
Interest Expense, as used in the calculation of Fixed Charge Coverage Ratio,
will be Annualized Interest Expense.
6.2 LIMITATION ON INDEBTEDNESS. The Borrower shall not create, incur,
assume or suffer to exist any Indebtedness, and shall not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness,
except for:
(a) Indebtedness created hereunder and under the Notes;
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(b) Indebtedness of the Borrower or any of its Subsidiaries secured by
Liens permitted with respect to the Borrower or its Subsidiaries by Section 6.3;
(c) Subordinated Incremental Indebtedness of the Borrower;
(d) Indebtedness of the Borrower (other than Indebtedness referred to in
Section 6.2(a)) approved in advance by the Majority Lenders, in an aggregate
principal amount not exceeding $20,000,000 at any time outstanding in favor of
any Lender or Lenders, which Indebtedness shall be secured on a PARI PASSU basis
with the Loans;
(e) unsecured Indebtedness of the Borrower in an aggregate principal
amount not exceeding $100,000,000 at any time outstanding;
(f) Indebtedness of the Borrower outstanding on the Initial Closing Date
and listed on Schedule 5 or reflected in the pro forma financial statements
referred to in Section 3.1(b);
(g) Indebtedness of a Person which becomes a Subsidiary after the date
hereof, provided that (i) such Indebtedness existed at the time such Person
became a Subsidiary and was not created in anticipation thereof and
(ii) immediately after giving effect to the acquisition of such Person by the
Borrower or any existing Subsidiary no Default shall have occurred and be
continuing;
(h) unsecured Indebtedness of any Subsidiary owing to the Borrower or any
other Subsidiary or secured Indebtedness of any Subsidiary owing to the Borrower
or any Guarantor or any Indebtedness of the Borrower to any Subsidiary of any
Guarantor;
(i) the License Fee Guaranties; the Senior Subordinated Notes (which shall
be defeased on the Initial Closing Date); the Junior Subordinated Notes, in
amounts in existence on the Initial Closing Date; and, until the Second Closing
Date, the Galavision Note;
(j) prior to the Second Closing Date, the Sponsor Loans and Indebtedness
under the Program Cost Sharing Agreement;
(k) Indebtedness (i) under any Interest Rate Agreement required pursuant
to Section 5.13, (ii) evidenced by performance bonds or letters of credit issued
in the ordinary course of business or reimbursement obligations in respect
thereof, (iii) evidenced by a letter of credit facility related to insurance
associated with claims for work-related injuries or (iv) for bank overdrafts
incurred in the ordinary course of business that are promptly repaid;
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(l) trade credit incurred to acquire goods, supplies, services and
incurred in the ordinary and normal course of business;
(m) Lease Expenses which the Borrower or its Subsidiaries are not
prohibited from incurring pursuant to Section 6.12;
(n) all deferred taxes (where such deferral is otherwise permitted under
the terms of this Agreement and under applicable law); and
(o) Indebtedness of the Borrower not to exceed in aggregate amount
$20,000,000 secured by any purchase money Lien incurred in connection with the
acquisition (after the Initial Closing Date) by the Borrower of real or personal
property (provided, that the mandatory prepayment of the Loans required by
Section 2.6(e) shall have been made);
Notwithstanding the foregoing, the License Subsidiaries shall not be permitted,
under any circumstances, to create, incur, assume or suffer to exist any
Indebtedness.
6.3 LIMITATION ON LIENS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens created hereunder or under any of the other Loan Documents;
(b) Liens existing on any Property at the time of its acquisition after
the date hereof not created in anticipation of such acquisition and limited
solely to the Property acquired;
(c) Liens arising pursuant to any order of attachment, distraint or
similar legal process arising in connection with court proceedings so long as
the execution or other enforcement thereof is effectively stayed and claims
secured thereby are being contested in good faith by appropriate proceedings;
(d) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
(e) Liens created by operation of law not securing the payment of
Indebtedness for money borrowed or guaranteed, including carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 45
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days or which are being contested in good faith by appropriate proceedings;
(f) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(g) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, would not
cause a Material Adverse Effect;
(i) Liens on the Borrower's assets in existence on the Initial Closing
Date listed on Schedule 6 or described in the pro forma financial statements
referred to in Section 3.1(b) or in any notes thereto, securing Indebtedness
permitted by Section 6.2(f), provided that no such Lien is spread to cover any
additional Property after the Initial Closing Date and that the amount of
Indebtedness secured thereby is not increased;
(j) Liens securing Indebtedness of the Borrower permitted by
Section 6.2(o) incurred to finance the acquisition of fixed or capital assets,
provided that (i) such Liens shall be created substantially simultaneously with
the acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any Property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased
and (iv) the principal amount of Indebtedness secured by any such Lien shall at
no time exceed the purchase price of such Property;
(k) Liens on the Property or assets of a Person which becomes a Subsidiary
after the date hereof securing Indebtedness permitted by Section 6.2(g),
provided that (i) such Liens existed at the time such Person became a Subsidiary
and were not created in anticipation thereof, (ii) any such Lien is not spread
to cover any property or assets of such Person after the time such Person
becomes a Subsidiary and (iii) the amount of Indebtedness secured thereby is not
increased;
(l) Liens on Property or assets securing Indebtedness permitted under
Section 6.2(d); and
(m) Liens on Property or assets securing leases permitted pursuant to
Section 6.12.
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Notwithstanding the foregoing, the License Subsidiaries shall not be
permitted, under any circumstances, to incur any consensual Liens or Liens
securing the payment of Indebtedness for money borrowed or guaranteed.
6.4 LIMITATION ON FUNDAMENTAL CHANGES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, except, so long as no Default or Event of Default has occurred and is
continuing or would result therefrom:
(a) that the Borrower and its Subsidiaries may effect the corporate
reorganization described in Section 3.30 on or prior to the Second Closing Date;
and
(b) that, upon at least 15 days' prior notice to the Managing Agents,
any Subsidiary of the Borrower may merge into the Borrower or into any other
wholly-owned Subsidiary of the Borrower, provided that the obligations of the
merging entity are assumed by the Borrower or such wholly-owned Subsidiary,
as applicable.
Notwithstanding the foregoing, the License Subsidiaries shall not merge,
consolidate, amalgamate or liquidate, wind up or dissolve or convey, sell,
lease, assign (except pursuant to the Loan Documents), transfer or otherwise
dispose of, all or substantially all of their respective property or assets.
6.5 LIMITATION ON SALE OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any Asset Disposition, unless the
Borrower makes the mandatory prepayment, if any, required in connection
therewith pursuant to Section 2.6 and unless such Asset Disposition shall be for
fair market value. Fair market value shall be determined by the Board of
Directors of the Borrower or its management committee, in the case of Asset
Dispositions relating to assets having a book value of $10,000,000 or less, and
by an independent appraisal firm reasonably satisfactory to the Majority
Lenders, in the case of Asset Dispositions relating to assets having a book
value over $10,000,000. In any case, the Borrower may not sell, and will not
permit any of its Subsidiaries to sell, any Primary Station or the stock or
partnership interests of any License Subsidiary.
6.6 LIMITATION ON DIVIDENDS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower or its
Subsidiaries) on, or make any payment on account of, or set
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apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or its Subsidiaries or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding (except only such dividends, payments or other amounts payable to
the Borrower or a wholly-owned Subsidiary of the Borrower), and (b) if a
partnership, make any distribution with respect to the ownership interests
therein, or, in either case, any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations
of the Borrower or any Subsidiary (except distributions to the Borrower or
any wholly-owned Subsidiary of the Borrower) (such declarations, payments,
setting apart, purchases, redemptions, defeasance, retirements, acquisitions
and distributions being herein called "RESTRICTED PAYMENTS"), except for:
(i) Restricted Payments in an aggregate amount not exceeding $250,000,000
made by the Borrower and/or its Subsidiaries on the Initial Closing Date
and/or the Second Closing Date in connection with the transactions
contemplated hereby;
(ii) Restricted Payments paid by the Borrower to PTI Holdings for the
repurchase of its Junior Subordinated Note in accordance with Sections 3.15
and 6.8;
(iii) such other Restricted Payments as the Borrower or its Subsidiaries
may elect to make, provided that (x) the Total Debt Ratio as of the date of the
most recent quarterly or annual financial statements delivered pursuant to
Section 5.1 after giving effect to the making of such Restricted Payment is less
than 3.50:1, (y) no Default has occurred and is continuing or would result from
the making of such Restricted Payment, and (z) the Borrower is in compliance
with the Fixed Charge Coverage Ratio (calculated on a basis so as to include
such Restricted Payments as a fixed charge) as of the date thereof; and
(iv) Restricted Payments paid by the Borrower to (A) redeem or repurchase
the Modesto Station Purchase Preferred Stock in an aggregate amount not
exceeding the Redemption Value thereof plus accrued and unpaid dividends and (B)
pay regularly scheduled and accrued and unpaid dividends on the Modesto Station
Purchase Preferred Stock; provided that at the time that such Restricted Payment
is made no Preferred Stock Default shall have occurred and be continuing or
would result from the making of such Restricted Payment.
Notwithstanding anything herein to the contrary, neither the Borrower nor its
Subsidiaries shall make or permit Restricted Payments (i) in excess of
$100,000,000 prior to the Second Closing Date or (ii) in excess of $250,000,000
(LESS Restricted
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Payments made pursuant to clause (i)) on the Second Closing Date.
6.7 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in (any of the foregoing, an
"INVESTMENT"), any Person, except for:
(a) the Borrower's ownership interest in its Subsidiaries and certain
Subsidiaries' ownership interests in certain other Subsidiaries, in each case on
or prior to the Second Closing Date and as set forth in Section 3.30;
(b) investments in marketable securities, liquid investments and other
financial instruments that are acquired for investment purposes and that have a
value which may be readily established and which are investment grade, including
any such investment that may be readily sold or otherwise liquidated;
(c) extensions of trade credit in the ordinary course of business;
(d) advances to employees of the Borrower or its Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business;
(e) investments constituting non-cash consideration received in connection
with an Asset Disposition, provided that such non-cash consideration shall not
exceed 15% of the aggregate consideration received for such Asset Disposition;
and provided further that the aggregate amount of any such non-cash
consideration with respect to all Asset Dispositions shall not exceed $5,000,000
at any one time outstanding;
(f) investments in existence as of the Initial Closing Date, as set forth
on Schedule 12;
(g) Acquisitions; provided that (i) the aggregate Consideration with
respect to any Acquisition shall not exceed the sum of (A) the Net Proceeds of
any Equity Offerings available for such purpose, (B) 25% of Excess Cash Flow not
required for the mandatory repayment described in Section 2.6(b) and otherwise
available for such purpose, (C) the Aggregate Available Revolving Loan
Commitment at such time LESS $25,000,000 and (D) the Aggregate Incremental Loan
Commitment LESS the aggregate principal amount of Incremental Loans, if any,
made hereunder (regardless of whether such Incremental Loans have been repaid or
are outstanding); (ii) no Default has
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occurred and is continuing or would result from the consummation of such
Acquisition (and the Borrower shall have delivered a Covenant Compliance
Certificate showing PRO FORMA calculations assuming such Acquisition had been
consummated to the Administrative Agent); (iii) the Acquisition (if of a
radio or television station), has received (except as set forth below with
regard to the Modesto Station) final FCC approval and evidence thereof
satisfactory to the Administrative Agent has been provided to the
Administrative Agent; (iv) the Administrative Agent shall have received,
reviewed and approved (such approval not to be unreasonably withheld) the
form of all documents setting forth the terms of, effecting or otherwise
relating to, such Acquisition; (v) the Borrower shall be in compliance with
the Total Debt Ratio on a PRO FORMA basis assuming such Acquisition had been
consummated; and (vi) the Administrative Agent shall have received, reviewed
and approved all documents (the "ACQUISITION SECURITY DOCUMENTS") reasonably
requested by the Administrative Agent to insure that the Lenders have a first
priority security interest in, and assignment of, any Program Services
Agreements and all material real property and all other assets and interests
acquired, including consents of third parties if reasonably requested by the
Managing Agents; provided further that, notwithstanding the foregoing, in the
event that (x) the Second Closing Date has occurred, (y) the purchase of the
Modesto Station has been provided for pursuant to the escrow terms
contemplated by the Modesto Station Purchase Agreement and (z) the
Administrative Agent has received (A) evidence that preliminary FCC approval
has been obtained with respect to such purchase and (B) all Acquisition
Security Documents requested by the Administrative Agent in connection
therewith, THEN the acquisition of the Modesto Station may be consummated in
accordance with the terms of the Modesto Station Purchase Agreement;
(h) investments permitted under Section 6.2(h);
(i) investments not otherwise referred to in this Section 6.7 in an
aggregate amount not to exceed $50,000,000 during the term of this Agreement,
provided that no such investment shall be permitted if at the time of the making
thereof a Default has occurred and is continuing or would result from the making
of such investment; and
(j) investments in Entravision permitted by Section 3.15(a)(ii)(D).
Notwithstanding the foregoing, the License Subsidiaries shall not be permitted,
under any circumstances, to make any investments.
6.8 LIMITATION ON MODIFICATIONS OF DEBT INSTRUMENTS; REPURCHASE OF JUNIOR
SUBORDINATED NOTES; PAYMENT OF PROGRAMMING
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COSTS UNDER PROGRAM COST SHARING AGREEMENT. (a) The Borrower shall not, and
shall not permit any Subsidiary to, amend the subordination provisions of the
Subordinated Indebtedness or any guarantee thereof.
(b) Notwithstanding anything to the contrary contained herein, the Borrower
shall not repurchase, or permit PTI Holdings to repurchase, any Junior
Subordinated Note if the aggregate purchase price paid for the Junior
Subordinated Notes would exceed the accreted value thereof or if any Default has
occurred and is continuing, or would result from such repurchase.
(c) Notwithstanding any other provision in this Section to the contrary,
UTG may, with respect to the payment of programming costs due from Univisa or
Venevision pursuant to the Program Cost Sharing Agreement, in the absence of any
Default, permit the outstanding principal balance of the Sponsor Loans to be
reduced in an amount equal to, and in lieu of, such cash payments, in accordance
with the terms of the Program Cost Sharing Agreement Waiver.
6.9 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate or any Subsidiary less than
wholly-owned, directly or indirectly, by the Borrower, unless such
transaction (i) is otherwise permitted under this Agreement or (ii) is in the
ordinary course of the Borrower's or such Subsidiary's business and is upon
terms no less favorable to the Borrower or such Subsidiary, as the case may
be, than it would obtain in a comparable arm's length transaction with a
Person not an Affiliate or (iii) is pursuant to any Material Agreement.
6.10 FISCAL YEAR. The Borrower shall not permit the fiscal year of the
Borrower or any of its consolidated Subsidiaries to end on a day other than
December 31, except with the consent of the Majority Lenders (which consent
shall not be unreasonably withheld and which consent may be conditioned upon
adjusting the covenants in a manner to give each of the parties hereto
substantially the same protection and benefits as were in effect prior to any
such change in the fiscal year of the Borrower or any of its consolidated
Subsidiaries).
6.11 RESTRICTIONS AFFECTING SUBSIDIARIES. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into, or suffer to exist, any
agreement (other than this Agreement) with any Person other than the Lenders
which prohibits or limits the ability of any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to the Borrower or any
other Subsidiary, (b) make loans or
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advances to the Borrower or any other Subsidiary or (c) transfer any of its
properties or assets to the Borrower or any other Subsidiary.
6.12 LEASE OBLIGATIONS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, sell, assign or otherwise transfer any of its
Properties, rights or assets (whether now owned or hereafter acquired) to any
Person and thereafter directly or indirectly lease back the same or similar
property.
6.13 UNFUNDED LIABILITIES. The Borrower shall not permit unfunded
liabilities for any and all Plans maintained for or covering employees of the
Borrower or any Subsidiary to exceed $5,000,000 at any time.
6.14 MANAGEMENT FEES. The Borrower shall not, and shall not permit any of
its Subsidiaries to, pay any management fees for services rendered other than
(i) management fees to Persons not Affiliates for services rendered and incurred
in an arm's length transaction and in the ordinary course of the Borrower's or
such Subsidiaries' business, (ii) management fees payable by Subsidiaries of the
Borrower to the Borrower or a wholly-owned Subsidiary of the Borrower and (iii)
accrued Management Fees to be paid on the Second Closing Date.
6.15 MATERIAL AGREEMENTS. The Borrower shall not, and shall not permit any
of its Subsidiaries or any other Loan Party to, enter into or permit (i) any
termination of the Material Agreements (except as such agreements may terminate
in accordance with their terms and except for such agreements which cease to be
included in the definition of "Material Agreements" upon the occurrence of the
Second Closing Date), (ii) any modification or amendment of any provision of any
Material Agreement, which modification or amendment would have a Material
Adverse Effect, (iii) any modification or amendment of any Sponsor Loan
Document, (iv) any modification or amendment of (a) the Program Cost Sharing
Agreement (other than the Program Cost Sharing Agreement Waiver) which would
change the terms of any payment thereunder, which would be adverse to the
Lenders or which would be material or (b) the Program License Agreements which
would change the terms of any payment thereunder, which would decrease the
availability of programming thereunder, which would be adverse to the Lenders or
which would be material or (v)any other modification or amendment of any
provision of any Material Agreement (provided, that the Borrower shall give the
Managing Agents (who shall, in turn, promptly notify the Lenders), at least 10
days' prior notice of all such proposed modifications and amendments under this
clause (v) and if the Majority Lenders do not vote to disapprove such proposed
modification or amendments within such 10-day notice period, the Lenders shall
be deemed to have approved such proposed modifications or amendments). Further,
the Sponsor Loans shall
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not be converted, under any circumstances, as currently
provided in Section 4 of the Televisa Scheduled Loan Note and the Venevision
Scheduled Loan Note, each dated as of December 15, 1992 (which are both Sponsor
Loan Documents).
6.16 LIMITATION ON EQUITY OFFERINGS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, consummate, agree to consummate, or enter
into any underwriting agreement or similar agreement for any Equity Offering of
the Capital Stock of the Borrower or any Subsidiary, except for (i) Equity
Offerings in which 100% of the Net Proceeds thereof are used for Acquisitions
permitted by Section 6.7(g), (ii) Equity Offerings in which 80% of the Net
Proceeds thereof are used to make the prepayment required by Section 2.6(d);
provided that the Borrower or any Subsidiary may use less than 100% of the Net
Proceeds of an Equity Offering for an Acquisition permitted by Section 6.7(g) if
80% of that portion of such Net Proceeds not used for an Acquisition are used to
make the prepayment required by Section 2.6(d) and (iii) the issuance or
conversion of the Modesto Station Purchase Preferred Stock in accordance with
the terms of the Modesto Station Purchase Agreement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal on any Note when due or
the Borrower shall fail to pay any interest on any Note within two Business Days
after any such interest becomes due in accordance with the terms thereof and
hereof or the Borrower shall fail to pay any other amount payable hereunder
within five Business Days after any such other amount becomes due; or
(b) Any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Section 5.2(f), 5.3, 5.4, 5.8, 5.9, 5.10, 5.12, 5.13, or
any provision of Section 6; or
(d) Any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or the other Loan Documents (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after the
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earlier of (i) notice thereof from the Administrative Agent to the Borrower
and (ii) actual knowledge thereof by a senior officer of such Loan Party or
any provision of any Loan Document shall at any time for any reason be
declared null and void, or the validity or enforceability of any Loan
Document shall at any time be contested by any Loan Party, or a proceeding
shall be commenced by any Loan Party, or by any Governmental Authority or
other Person having jurisdiction over any Loan Party, seeking to establish
the invalidity or unenforceability thereof, or any Loan Party shall deny that
it has any liability or obligation purported to be created under any Loan
Document; or
(e) Any Guarantee shall cease, for any reason, to be in full force and
effect; or
(f) The Borrower or any other Loan Party shall (i) default in any payment
of principal or interest, regardless of the amount, due in respect of any (A)
Indebtedness (other than the Notes) issued under an indenture or other
agreement, if the original principal amount of Indebtedness covered by such
indenture or agreement is $5,000,000 or greater or (B) any Guarantee Obligation
with respect to an amount of $5,000,000 or greater, beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, whether or not such default has been waived by
the holders of such Indebtedness or Guarantee Obligation; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Guarantee Obligation to become payable or
such Indebtedness to be required to be defeased or purchased; or
(g) (i) The Borrower or any other Loan Party 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 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 or other similar official
for it or for all or any substantial part of its
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assets, or the Borrower or any other Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any other Loan Party 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, unstayed or unbonded for a period of
60 days; or (iii) there shall be commenced against the Borrower or any other
Loan Party 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, stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any other Loan Party 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 or any other Loan Party
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due or there shall be a general
assignment for the benefit of creditors; or
(h) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee would reasonably be
expected to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA (other than a standard termination) or (v) the Borrower or any Commonly
Controlled Entity would reasonably be expected to incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan; and in each case regarding clauses (i) through (v) above,
such event or condition, together with all other such events or conditions, if
any, would reasonably be expected to subject the Borrower or any other Loan
Party to any tax, penalty or other liabilities in the aggregate to exceed
$5,000,000; or
(i) One or more judgments or decrees shall be entered against the Borrower
or any other Loan Party involving in the aggregate a liability (not paid or
fully covered by insurance) of $5,000,000 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 in any event
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five days before the date of any sale pursuant to such judgment or decree or
any non-monetary judgment or order shall be entered against the Borrower or
any other Loan Party that is reasonably likely to have a Material Adverse
Effect and either (i) enforcement proceedings shall have been commenced by
any Person upon such judgment which has not been stayed pending appeal or
(ii) there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(j) There shall occur any default in the material observance or material
performance of any Material Agreement or any such Material Agreement shall
terminate or otherwise no longer be in full force and effect; or
(k) Any Media License required for the lawful ownership, lease, control,
use, operation, management or maintenance of a Primary Station shall be
canceled, terminated, rescinded, annulled, revoked, suspended or limited, or
amended or otherwise modified in any material adverse respect, or shall fail to
be renewed for any reason whatsoever; or any such Media License, the loss of
which would have a Material Adverse Effect, shall no longer be in full force and
effect; or the grant of any such Media License, the loss of which would have a
Material Adverse Effect, shall have been stayed, vacated or reversed, or
modified in any material adverse respect, by judicial or administrative
proceedings; or
(l) Any material provision of any Loan Document, after delivery thereof
pursuant to the provisions hereof, shall, for any reason other than an act or
omission by the Administrative Agent, cease to be valid or enforceable in
accordance with its terms and such cessation shall have a Material Adverse
Effect, or any security interest created under any Loan Document shall for any
reason other than an act or omission by the Administrative Agent, cease to be a
valid and perfected first priority (except for any PARI PASSU Liens permitted by
Section 6.3(l) and any Lien or security interests permitted under any of the
Loan Documents, which have priority by operation of law) security interest or
Lien (except as otherwise stated or permitted herein or therein) in any material
portion of the Collateral, the Guarantor Collateral or the property purported to
be covered thereby; or
(m) A Change in Control shall have occurred;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above, automatically the Commitments to the Borrower and the
commitment to issue Letters of Credit shall immediately terminate and the Loans
made to the Borrower hereunder (with accrued interest thereon) and all other
Obligations shall immediately become due and payable, and (B) if
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such event is any other Event of Default, with the consent of the Majority
Lenders, the Administrative Agent may, or upon the request of the Majority
Lenders, the Administrative Agent shall, take any or all of the following
actions: (i) by notice to the Borrower declare the Commitments to the
Borrower and the commitment to issue Letters of Credit to be terminated
forthwith, whereupon such Commitments and the commitment to issue Letters of
Credit shall immediately terminate; and (ii) by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
Obligations under this Agreement and the Notes to be due and payable
forthwith, whereupon (x) the same shall immediately become due and payable
and (y) to the extent any Letters of Credit are then outstanding, the
Borrower shall make a Cash Collateral Deposit in an amount equal to the
aggregate Letter of Credit Amount. In all cases, with the consent of the
Majority Lenders, the Administrative Agent may enforce any or all of the
Liens and security interests and other rights and remedies created pursuant
to any Loan Document or available at law or in equity. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.
SECTION 8. THE ADMINISTRATIVE AGENT AND THE MANAGING AGENTS
8.1 APPOINTMENT. Each Lender hereby irrevocably designates and appoints
Chase as Administrative Agent and Chase and Paribas as the Managing Agents of
such Lender under this Agreement and the other Loan Documents, and each such
Lender irrevocably authorizes Chase, as the Administrative Agent, and Chase and
Paribas, as the Managing Agents, for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent or the Managing Agents, as the case may be, by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, neither the Administrative Agent nor
the Managing Agents shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent or the Managing Agents in such
respective capacities.
8.2 DELEGATION OF DUTIES. The Administrative Agent and the Managing Agents
may execute any of their respective duties under this Agreement and the other
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of
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counsel concerning all matters pertaining to such duties. Neither
the Administrative Agent nor the Managing Agents shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent, the Managing
Agents nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower, any Subsidiary or any Guarantor or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent or the Managing Agents under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or for any failure of the Borrower, any
Subsidiary or any Guarantor to perform its obligations hereunder or thereunder.
Neither the Administrative Agent nor the Managing Agents shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower, any Subsidiary or any Guarantor.
8.4 RELIANCE BY ADMINISTRATIVE AGENT AND MANAGING AGENTS. The
Administrative Agent and the Managing Agents shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
any of them to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), the Accountants and
independent accountants and other experts selected by the Administrative Agent
or the Managing Agents. The Administrative Agent and the Managing Agents may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent or the
Managing Agents shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders or all Lenders, as it
deems appropriate, or it shall first be
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indemnified to its satisfaction by the Lenders against any and all liability
and expense (except those incurred solely as a result of the Administrative
Agent's or any Managing Agent's gross negligence or willful misconduct) which
may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent and the Managing Agents shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the Notes and the other Loan Documents in accordance with a
request of the Majority Lenders or all Lenders, as may be required, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
8.5 NOTICE OF DEFAULT. Neither the Administrative Agent nor the Managing
Agents shall be deemed to have knowledge or notice of the occurrence of any
Default hereunder unless the Administrative Agent has received notice from a
Lender or any Loan Party referring to this Agreement, describing such Default
and stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Managing Agents and the Lenders. The Administrative Agent
shall take such action with respect to such Default as shall be reasonably
directed by the Majority Lenders or all Lenders as appropriate; provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interests of the Lenders or as the Administrative
Agent shall believe necessary to protect the Lenders' interests in the
Collateral or the Guarantor Collateral.
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT, MANAGING AGENTS AND OTHER
LENDERS. Each Lender expressly acknowledges that none of the Administrative
Agent, the Managing Agents or any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Administrative Agent or the Managing
Agents hereafter taken, including any review of the affairs of the Borrower, any
Subsidiary or the Guarantors, shall be deemed to constitute any representation
or warranty by the Administrative Agent or the Managing Agents to any Lender.
Each Lender represents to the Administrative Agent and the Managing Agents that
it has, independently and without reliance upon the Administrative Agent or the
Managing Agents or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower, any Subsidiary and the Guarantors and made its
own decision to make its Loans, and participate in Letters of Credit, hereunder
and enter into
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this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or the Managing Agents or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower, its Subsidiaries and the
Guarantors. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent or the
Managing Agents hereunder, the Administrative Agent and the Managing Agents
shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Borrower, any Subsidiary or any Guarantor which may come into the possession
of the Administrative Agent or the Managing Agents or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the Administrative
Agent and the Managing Agents in their respective capacities as such (to the
extent not reimbursed by or on behalf of the Borrower, the Subsidiaries or the
Guarantors and without limiting the obligation of such Persons to do so),
ratably according to the respective amounts of their Commitments, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs (including, without limitation, the allocated
reasonable cost of internal counsel), expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Administrative Agent or the Managing Agents, in their respective
capacities as Administrative Agent and Managing Agents, but not as Lenders
hereunder, in any way relating to or arising out of this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent or the Managing Agents under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent's or the Managing Agents' gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Notes and all other amounts payable hereunder and the
expiration of the Letters of Credit.
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8.8 ADMINISTRATIVE AGENT AND MANAGING AGENTS IN THEIR INDIVIDUAL
CAPACITIES. The Administrative Agent, each Managing Agent and their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower, any Subsidiary and the Guarantors as though
the Administrative Agent and such Managing Agent were not the Administrative
Agent and a Managing Agent, respectively, hereunder and under the other Loan
Documents. With respect to the Administrative Agent or any Managing Agent the
Loans made or renewed and the Letters of Credit issued or participated in by the
Administrative Agent or such Managing Agent, as applicable, and any Note issued
to any of the Administrative Agent or the Managing Agents, as the case may be,
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent or a Managing Agent, as the case may be, and the terms
"Lender" and "Lenders" shall include the Administrative Agent and the Managing
Agents in their individual capacities.
8.9 SUCCESSOR ADMINISTRATIVE AGENT OR MANAGING AGENTS. The Administrative
Agent or any Managing Agent may resign as Administrative Agent or Managing
Agent, respectively, upon 30 days' notice to the Lenders and the Lenders having
Commitments equal to or more than 51% of the Aggregate Commitment and, at any
time Loans or Letters of Credit are outstanding, Lenders with outstanding Loans
(or outstanding Letter of Credit participations) having an unpaid principal
balance (plus, with respect to Letters of Credit, having participations therein
representing available undrawn balances or unreimbursed drawings) equal to more
than 51% of all Loans, undrawn balances and unreimbursed drawings outstanding
(excluding from such calculation Lenders which have failed or refused to fund a
Loan or participate in a Letter of Credit when required to do so) may at any
time remove the Administrative Agent or either or both of the Managing Agents.
If the Administrative Agent or any Managing Agent shall be removed or shall
resign as Administrative Agent or Managing Agent under this Agreement and the
other Loan Documents, then the Majority Lenders shall appoint from among the
Lenders a successor administrative agent or managing agent, as the case may be,
for the Lenders, which successor administrative agent or managing agent, as the
case may be, shall be approved by the Borrower (which consent shall not be
unreasonably withheld or delayed and which shall not be required if an Event of
Default under Section 7.1(a) shall have occurred and is continuing), whereupon
such successor administrative agent or managing agent, as the case may be, shall
succeed to the rights, powers and duties of the Administrative Agent and the
Managing Agent and the term "Administrative Agent" or "Managing Agent" shall
mean such successor administrative agent or managing agent, as the case may be,
effective upon its appointment, and the former
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Administrative Agent's or Managing Agent's rights, powers and duties as
Administrative Agent or Managing Agent, as the case may be, shall be
terminated, without any other or further act or deed on the part of such
former Administrative Agent or Managing Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Administrative
Agent's or Managing Agent's removal or resignation as Administrative Agent or
Managing Agent, the provisions of this Section shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent or Managing Agent, as the case may be, under this Agreement and the
other Loan Documents. Further, if the Administrative Agent or any Managing
Agent no longer has any Loans, Letter of Credit participations or Commitments
hereunder, the Administrative Agent or such Managing Agent shall immediately
resign and shall be replaced, and have the benefits, as set forth in this
Section 8.9. In addition, after the replacement of an Administrative Agent
hereunder, the retiring Administrative Agent shall remain a party hereto and
shall continue to have all the rights and obligations of an Administrative
Agent under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional
Letters of Credit.
8.10 MANAGING AGENTS; CO-AGENTS. Without limiting any provision contained
in this Section 8, none of the Lenders identified in this Agreement as a
"Managing Agent" or a "Co-Agent" shall have, except as and to the limited extent
expressly provided herein, any obligation, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any Note, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. With the
prior written consent of the Majority Lenders and the Borrower (and, in the case
of any Loan Document other than this Agreement, the relevant Loan Party), the
Borrower may, from time to time, enter into written amendments, supplements or
modifications hereto and to the Notes and the other Loan Documents for the
purposes of adding any provisions to this Agreement or the Notes or the other
Loan Documents or changing in any manner the rights of the Lenders, the Borrower
or any other Loan Party hereunder or thereunder or waiving, on such terms and
conditions as may be specified in such instrument, any of the requirements of
this Agreement or the Notes or the other Loan Documents or any Default and its
consequences; provided, however, that no such
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waiver and no such amendment, supplement or modification shall (i) (a) reduce
the amount or extend the maturity of any Note or any installment due thereon,
or reduce the rate or extend the time of payment of interest thereon, or
reduce the amount or extend the time of payment of any fee, indemnity or
reimbursement payable to any Lender hereunder, or change the amount or
maturity of any Lender's Commitment, or amend, modify or waive any provision
of Section 2.5 or 2.6(f), in each case without the written consent of the
Lender affected thereby; or (b) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in or otherwise modify the
definition of Majority Lenders, or consent to the assignment or transfer by
any Loan Party of any of its rights and obligations under this Agreement and
the other Loan Documents (except as permitted under Section 6.4); or (c)
release any Loan Party from any liability under its respective Loan
Documents; or (d) release any material portion of the Collateral or any
material portion of the Guarantor Collateral, except for any Asset
Disposition or release of Lien permitted by this Agreement or any other Loan
Document; or (e) amend, modify or waive, directly or indirectly, any of the
provisions of Section 2.1(i), 2.2(f), 2.3(g), or 2.12; or (f) amend, modify
or waive, directly or indirectly, any provision of this Agreement requiring
the consent or approval or notification of all Lenders; or (g) amend, modify
or waive, directly or indirectly, any of the provisions of Sections 1, 2 or 3
of the Guaranties, in each case set forth in clauses (i)(b) through (i)(g)
above without the written consent of all the Lenders; or (ii) amend, modify
or waive any provision of Section 4.4 with respect to the making of a
Revolving Loan, or reduce the percentage specified in, or otherwise modify
the definition of, Majority Revolving Loan Lenders, without the written
consent of the Majority Revolving Loan Lenders; or (iii) amend, modify or
waive any provision of Section 4.3 or 4.4 with respect to the making of an
Incremental Loan, or reduce the percentage specified in, or otherwise modify
the determination of, Majority Incremental Loan Lenders, without the written
consent of the Majority Incremental Loan Lenders; or (iv) amend, modify or
waive any provision of Section 8 without the written consent of the then
Administrative Agent and the then Managing Agents, or any provision affecting
the rights and duties of the Administrative Agent as the issuer of Letters of
Credit without the consent of the then Administrative Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the other Loan
Parties, the Lenders, the Administrative Agent, the Managing Agents and all
future holders of the Notes. In the case of any waiver, the Borrower, the
other Loan Parties or the Lenders, the Managing Agents and the Administrative
Agent, shall be restored to their former position and rights hereunder and
under the outstanding Notes and any other Loan Documents, and any Default
waived shall be deemed to be cured and not continuing; but no such waiver
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shall extend to any subsequent or other Default, or impair any right
consequent thereon.
9.2 NOTICES. All notices, requests and demands or other communications 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 by hand, or 3 days
after being deposited in the United States mail, certified and postage prepaid
and return receipt requested, or, in the case of telecopy notice, when received,
in each case addressed as follows in the case of the Borrower, the Managing
Agents and the Administrative Agent, and as set forth in Schedule 3, or in the
Assignment and Acceptance pursuant to which a Person becomes a party hereto, in
the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower: Univision Communications Inc.
c/o Chartwell Partners
1999 Avenue of the Stars
Suite 3050
Los Angeles, California 90067
Attention: Robert V. Cahill
Telecopy: (310) 556-3568
with a copy to:
Univision Network
605 Third Avenue
New York, New York 10058
Attention: Andrew W. Hobson
Chase, as The Chase Manhattan Bank
Administrative Agent 1 Chase Manhattan Plaza
and a Managing Agent: 4th Floor
New York, New York 10081
Attention: Stephen P. Mumblow
Telecopy: (212) 552-4905
with a copy to:
Agent Bank Services Group
140 East 45th Street, 29th Floor
New York, New York 10017
Attention: Janet Belden
Telecopy: (212) 622-0002
Paribas, as Banque Paribas
a Managing Agent: 101 California Street, Suite 3150
San Francisco, California 94111
Attention: Linda L. Aleshire
Telecopy: (415) 398-4240
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provided that any notice, request or demand to or upon the Administrative Agent,
the Managing Agents or the Lenders pursuant to Section 2.1, 2.2, 2.4, 2.5, 2.7,
2.11 and 2.14 or any notice to the Borrower pursuant to Section 7 shall not be
effective until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, any Managing Agent or any
Lender, any right, remedy, power or privilege hereunder 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.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder 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 Notes (but shall not be deemed to be
restated unless otherwise expressly provided for).
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Managing Agents for all their
reasonable costs and out-of-pocket expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent and the Managing Agents, (b) after the
occurrence and during the continuance of a Default, to pay or reimburse each
Managing Agent, each Co-Agent, the Administrative Agent and each Lender, for all
its reasonable costs and out-of-pocket expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the Notes, the
other Loan Documents and any such other documents or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceeding, including, without limitation, reasonable legal fees and
disbursements of counsel to the Administrative Agent, the Managing Agents, the
Co-Agents and each Lender and the allocated reasonable cost of internal counsel
to the Managing Agents, the Administrative Agent, the Co-Agents and each Lender,
(c) to pay, and indemnify and hold harmless each Lender, each Managing Agent and
the Administrative Agent from, any and all recording and filing fees and any and
all liabilities with respect to, or
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resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the
Notes, the other Loan Documents and any such other documents and (d) to pay,
and indemnify and hold harmless each Lender, each Managing Agent and the
Administrative Agent from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs
(including, without limitation, the allocated reasonable cost of internal
counsel and the reasonable legal fees and disbursements of outside counsel to
the Lenders, the Managing Agents and the Administrative Agent), expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents, the IPO or the use of the proceeds of the
Loans or the Letters of Credit and any such other documents (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"), provided, that the
Borrower shall have no obligation hereunder to the Administrative Agent, any
Managing Agent or any Lender with respect to indemnified liabilities arising
from (i) the gross negligence or willful misconduct of the Administrative
Agent, such Managing Agent, such Co-Agent or such Lender or their agents or
attorneys-in-fact, (ii) legal proceedings commenced against the
Administrative Agent, any Managing Agent or any Lender by any security holder
or creditor thereof arising out of and based upon rights afforded any such
security holder or creditor solely in its capacity as such or (iii) legal
proceedings commenced against any Lender, the Administrative Agent or any
Managing Agent by any other Managing Agent or Lender or the Administrative
Agent with respect to fee arrangements and other payment obligations between
the Administrative Agent, the Managing Agents and the Lenders. The
agreements in this Section shall survive repayment of the Notes and all other
amounts payable hereunder. The Administrative Agent, the Managing Agents and
the Lenders agree to provide reasonable details and supporting information
concerning any costs and expenses required to be paid by the Borrower
pursuant to the terms hereof.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS; ADDITIONAL
INCREMENTAL LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Managing Agents, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns, except that
the Borrower may not assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written
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consent of each Lender except as permitted pursuant to Section 6.4.
(b) Any Lender may, in the ordinary course of its commercial banking or
finance business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("PARTICIPANTS") participating interests in any
Loan owing to such Lender, any Letter of Credit participated in by such Lender,
any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents; provided
that the holder of any such participation, other than an Affiliate of such
Lender, shall not be entitled to require such Lender to take or omit to take any
action hereunder except action directly affecting the extension of the maturity
of any portion of the principal amount of a Loan or Commitment, the expiration
of a Letter of Credit or any portion of interest or fees related thereto
allocated to such participation or a reduction of the principal amount or
principal payment amount of or the rate of interest payable on the Loans or any
fees related thereto or reduction of the amount to be reimbursed under any
Letter of Credit, or a release of any Loan Party or any substantial portion of
the Collateral or any increase in participation amounts. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note and
the participant in any such Letter of Credit for all purposes under this
Agreement and the other Loan Documents, and the Borrower, the Managing Agents
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note, provided
that such Participant shall only be entitled to such right of setoff if it shall
have agreed in the agreement pursuant to which it shall have acquired its
participating interest to share with the Lenders the proceeds thereof as
provided in Section 9.7. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 2.11, 2.12, 2.14, 2.15, 2.16 and 9.5
with respect to its participation in the Commitments and the Loans and the
Letters of Credit outstanding from time to time; provided, that no Participant
shall be entitled to receive any greater amount pursuant to such Sections than
the transferor
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Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to any of its
Affiliates or to any Lender, any Affiliate thereof or to one or more additional
lenders or financial institutions, which additional lenders shall be subject to
the consent of the Borrower, such consent not to be unreasonably withheld and
not to be required if a Default has occurred and is continuing ("PURCHASING
LENDERS") all or any part of its rights and obligations under this Agreement,
the Notes and the other Loan Documents pursuant to an Assignment and Acceptance
substantially in the form of Exhibit D, executed by such Purchasing Lender and
such transferor Lender and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined in (d) below), provided,
that any such sale must result in the Purchasing Lender having at least
$5,000,000 in aggregate amount of obligations under this Agreement, the Notes
and the other Loan Documents. Upon such execution, delivery, acceptance and
recording, from and after the transfer effective date determined pursuant to
such Assignment and Acceptance, (x) the Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the transferor Lender thereunder shall, to the extent of such
assigned portion and as provided in such Assignment and Acceptance, be released
from its obligations under this Agreement and the other Loan Documents (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of a transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement, the Notes and the other Loan Documents.
On or prior to the transfer effective date determined pursuant to such
Assignment and Acceptance, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a new Note or Notes to the order of such Purchasing Lender in an amount
equal to the Commitments assumed by it pursuant to such Assignment and
Acceptance (or, with regard to the transfer of Incremental Loans, the portion of
such Loans transferred), and if the transferor Lender has retained a Commitment
hereunder (or Incremental Loans hereunder), new Notes to the order of the
transferor Lender in an amount equal to the Commitments (or such
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Incremental Loans) retained by it hereunder. Such new Notes shall be dated
the Closing Date (or, with respect to Incremental Loans, the original
issuance date thereof) and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be
returned by the Administrative Agent to the Borrower marked "canceled."
(d) At the request of the Borrower, one or more additional lenders or
financial institutions approved by the Managing Agents, such approval not to the
unreasonably withheld ("ADDITIONAL INCREMENTAL LENDERS") shall become
Incremental Lenders hereunder pursuant to a Joining Lender Agreement
substantially in the form of Exhibit E, executed by such Additional Incremental
Lender and the Borrower and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined in (e) below), provided,
that (i) any such Additional Incremental Lender must have an Incremental Loan
Commitment of at least $5,000,000, and (ii) such Additional Incremental Lender's
Incremental Loan Commitment will not cause the Maximum Incremental Loan Facility
to be exceeded. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Joining Lender
Agreement, the Additional Incremental Lender thereunder shall be a party hereto
and shall have the rights and obligations of an Incremental Loan Lender
hereunder with an Incremental Loan Commitment as set forth therein. Such
Joining Lender Agreement shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Additional
Incremental Lender and the resulting adjustment of Incremental Loan Commitment
Percentages. On or prior to the effective date determined pursuant to such
Joining Lender Agreement, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent an Incremental Loan Note to the order of
such Additional Incremental Lender in an amount equal to the Incremental Loan
Commitment of such Lender as set forth in the Joining Lender Agreement. Such
Incremental Loan Note shall be dated the issuance date thereof.
(e) The Administrative Agent shall maintain at its address referred to in
Section 9.2 a copy of each Assignment and Acceptance and each Joining Lender
Agreement delivered to it and a register (the "REGISTER") for the recordation of
the names and addresses of the Lenders and the Commitments of, and principal
amount of the Loans owing to, and, if applicable, the Letters of Credit
participated in by, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent, the Managing Agents and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loans and the
participant in the Letters of Credit, if applicable, recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any
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reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by a
transferor Lender and Purchasing Lender (and, in the case of a Purchasing Lender
that is not then a Lender or an Affiliate thereof, by the Borrower and the
Administrative Agent) or a Joining Lender Agreement executed by an Additional
Incremental Lender and the Borrower, together with payment to the Administrative
Agent (except in the case of a Lender assigning to its Affiliate) of a
registration and processing fee of $2,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance or Joining Lender Agreement, as
the case may be, and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(g) The Borrower authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a "TRANSFEREE") and any prospective Transferee any and
all financial information in such Lender's possession concerning the Borrower
and its Subsidiaries and its Affiliates which has been delivered to such Lender
by or on behalf of the Borrower pursuant to this Agreement or any other Loan
Document or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Subsidiaries and its Affiliates prior to becoming a party to this Agreement;
provided that such Transferee or prospective Transferee agrees to maintain the
confidentiality of such information in accordance with the provisions of
Section 9.18.
(h) If, pursuant to this Section, any interest in this Agreement, any
Letter of Credit or any Note is transferred to any Transferee, or a Joining
Lender Agreement is executed by any Additional Incremental Lender which is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the transferor Lender shall cause such Transferee, or the
Borrower shall cause such Additional Incremental Lender, concurrently with the
effectiveness of such transfer or Joining Lender Agreement, (i) to represent to
the transferor Lender or the Administrative Agent (as applicable) (for the
benefit of the transferor Lender, the Administrative Agent, the Managing Agents
and the Borrower) that under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent, the Managing Agents, the
Borrower, if applicable, or the transferor Lender with respect to any payments
to be made to such Transferee or Additional Incremental Lender in respect of the
Loans or, if applicable, the Letters of Credit, (ii) to furnish to the
transferor Lender or the Administrative Agent (as applicable) (and, in the case
of any Purchasing Lender registered in the Register, the Administrative Agent
and the
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Borrower) either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Transferee or Additional Incremental
Lender claims entitlement to complete exemption from U.S. federal withholding
tax on all interest payments hereunder) and (iii) to agree (for the benefit
of the transferor Lender, if applicable, the Administrative Agent, the
Managing Agents and the Borrower) to provide the transferor Lender or the
Administrative Agent (as applicable) (and, in the case of any Purchasing
Lender registered in the Register, the Administrative Agent and the Borrower)
a new Form 4224 or Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and
completed by such Transferee or Additional Incremental Lender, and to comply
from time to time with all applicable U.S. laws and regulations with regard
to such withholding tax exemption.
(i) Nothing herein shall prohibit any Lender from pledging or assigning
any of its rights under its Note, or, if applicable, its participation in any
Letter of Credit, to any Federal Reserve Bank in accordance with applicable law.
9.7 ADJUSTMENTS; SET-OFF.
(a) If any Lender (a "BENEFITTED LENDER") shall at any time receive any
payment of all or part of its Loans, its participations in Letters of Credit, or
interest thereon, or fees, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, its participations in Letters of Credit,
or interest thereon, or fees, such benefitted Lender shall purchase for cash
from the other Lenders such portion of each such other Lender's Loans,
participations in Letters of Credit, or fees, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loan or its participations in Letters
of Credit may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
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(b) In addition to any rights and remedies of the Lenders provided by law,
with the prior consent of the Majority Lenders, each Lender shall have the
right, exercisable upon the occurrence and during the continuance of an Event of
Default and acceleration of the Obligations pursuant to Section 7, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set-off and appropriate and apply
against any such Obligations any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof or bank controlling such Lender to or for
the credit or the account of the Borrower. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
9.8 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. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
9.9 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.
9.10 INTEGRATION. This Agreement represents the entire agreement of the
Borrower, the Administrative Agent, the Managing Agents and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Managing Agents
or any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW RULES).
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9.12 SUBMISSION TO JURISDICTION; WAIVERS; APPOINTMENT OF PROCESS AGENT.
(a) The Borrower to the extent permitted by applicable law, hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the States of California and New York, the courts of the United States of
America for the Central District of California and the Southern District of
New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding in any such court was brought in an inconvenient court
and agrees not to plead or claim the same; and
(iii) agrees that nothing herein shall affect the right to effect
service of process in any manner permitted by law or shall limit the right
to sue in any other jurisdiction.
9.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Administrative Agent, any Managing Agent nor any Lender
has any fiduciary relationship to the Borrower solely by virtue of any of the
Loan Documents, and the relationship pursuant to the Loan Documents between the
Administrative Agent, the Managing Agents and the Lenders, on one hand, and the
Borrower on the other hand, is solely that of creditor and debtor; and
(c) no joint venture exists among the Lenders or among the Borrower and
the Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
MANAGING AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.15 HEADINGS. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
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9.16 CONFLICT OF TERMS. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
9.17 COPIES OF CERTIFICATES, ETC. Whenever the Borrower is required to
deliver notices, certificates, opinions, statements or other information
hereunder to the Administrative Agent or to the Managing Agents for delivery to
any Lender, it shall do so in such number of copies as the Administrative Agent
or the Managing Agents shall reasonably specify (provided, that if, for any
reason, the Administrative Agent or the Managing Agents do not deliver such
notices, certificates, opinions, statements or other information to any Lender,
the Borrower shall deliver such items to such Lender upon the request of such
Lender). Whenever the Administrative Agent or the Managing Agents receives from
any Loan Party notices, certificates, opinions, statements or other information
hereunder or under any other Loan Document for delivery to the Lenders, the
Administrative Agent or the Managing Agents shall promptly deliver such items to
each Lender, unless the Borrower is required by the terms hereof to deliver such
items to such Lender itself.
9.18 CONFIDENTIALITY. The Lenders shall take normal and reasonable
precautions to maintain the confidentiality of all non-public information
obtained pursuant to the requirements of this Agreement which has been
identified as such by any Loan Party but may, in any event, make disclosures
(i) reasonably required by any bona fide transferee, assignee or participant in
connection with the contemplated transfer or assignment of any of the
Commitments or Loans or participations therein or participations in Letters of
Credit or (ii) as required or requested by any governmental agency or
representative thereof or as required pursuant to legal process or (iii) to its
attorneys and accountants or (iv) as required by law or (v) in connection with
litigation involving any Lender; provided that (a) such transferee, assignee or
participant agrees to comply with the provisions of this Section 9.18 unless
specifically prohibited by applicable law or court order, (b) each Lender shall
use its best efforts to notify the Borrower of any requirement or request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of such Lender by such governmental agency) and
any requirement pursuant to legal process of or for disclosure of such
information (other than in connection with litigation between any Loan Party and
any Lender) and (c) in no event shall any Lender be obligated or
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required to return any materials furnished by the Borrower and its
Subsidiaries.
9.19 PUBLICITY. The Managing Agents shall have the right to review and
approve (such approval not to be unreasonably withheld or delayed), in advance,
any public announcements (in any form) and any filings describing or quoting
from the credit arrangements reflected in this Agreement and the other Loan
Documents, provided, however, that the Borrower (i) shall be permitted to file
copies of any Loan Document with the SEC, the FCC or any other governmental
agency as required by law and (ii) shall also be permitted to disclose
information concerning the Loan Documents if the Borrower's attorneys reasonably
believe that such disclosure is required by law.
-123-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Los Angeles, California by their proper and duly
authorized officers as of the day and year first above written.
UNIVISION COMMUNICATIONS INC.
By /s/ Robert V. Cahill
-------------------------
Name: Robert V. Cahill
Title: Vice President
THE CHASE MANHATTAN BANK,
as Administrative Agent, as
a Managing Agent and as a Lender
By /s/ Marian N. Schulman
-------------------------
Name: Marian N. Schulman
Title: Attorney-in-fact
BANQUE PARIBAS, as a Managing Agent
and as a Lender
By /s/ Lee S. Buckner
-------------------------
Name: Lee S. Buckner
Title: Group Vice President
By /s/ Linda L. Aleshire
-------------------------
Name: Linda L. Aleshire
Title: Vice President
THE BANK OF NEW YORK, as a
Co-Agent and as a Lender
By /s/ Brendan T. Nedzi
-------------------------
Name: Brendan T. Nedzi
Title: Vice President
-125-
<PAGE>
NATIONSBANK OF TEXAS, N.A.,
as a Co-Agent and as a Lender
By /s/ [illegible]
_________________________
Name: [illegible]
Title: SVP
ABN AMRO BANK N.V.,
as a Lender
By_________________________
Name:
Title:
BANK OF AMERICA ILLINOIS,
as a Lender
By /s/ Amy S. Trapp
_________________________
Name: Amy S. Trapp
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as a Lender
By /s/ Robert F. Milford
_________________________
Name: Robert F. Milford
Title: Managing Director
BANK OF HAWAII,
as a Lender
By /s/ J. Bryan Scearce
_________________________
Name: J. Bryan Scearce
Title: Vice President
-126-
<PAGE>
ABN AMRO North America Inc.
as agent for ABN AMRO BANK N.V.
By /s/ Richard Lavina
_________________________
Name: Richard Lavina
Title: Group Vice President
By /s/ Deborah Day Orozco
_________________________
Name: Deborah Day Orozco
Title: Vice President
<PAGE>
BANK OF IRELAND,
as a Lender
By /s/ Roger M. Burns
_________________________
Name: Roger M. Burns
Title: Vice President
BANK OF MONTREAL,
as a Lender
By /s/ Yvonne Bos
_________________________
Name: Yvonne Bos
Title: Senior Vice President
BANK OF NOVA SCOTIA,
as a Lender
By /s/ [illegible]
---------------------------
Name: [illegible]
Title: Authorized Signatory
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
as a Lender
By /s/ Peter Karl Harris
---------------------------
Name: PETER KARL HARRIS
Title: VICE PRESIDENT
By /s/ Jean Y. Richard
---------------------------
Name: JEAN Y. RICHARD
Title: SVP - DEPUTY GENERAL MANAGER - USA
<PAGE>
BANQUE NATIONALE DE PARIS,
as a Lender
By /s/ Katherine Wolfe
___________________________
Name: Katherine Wolfe
Title: Vice President
By /s/ Charles H. Day
___________________________
Name: Charles H. Day
Title: Assistant Vice President
CIBC, INC.,
as a Lender
By /s/ [illegible]
_______________________________
Name: [illegible]
Title: Director, CIBC Wood Gundy
Securities Corp., as agent
CORESTATES BANK, N.A.
By /s/ [illegible]
__________________________
Name: [illegible]
Title: Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE,
as a Lender
By /s/ John McCloskey
___________________________
Name: John McCloskey
Title: Vice President
CREDIT LYONNAIS
By /s/ Mark D. Thorsheim
___________________________
Name: Mark D. Thorsheim
Title: Vice President
-128-
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Seiji Imai
_________________________
Name: Seiji Imai
Title: Vice President
FIRST HAWAIIAN BANK
By /s/ Kathryn A. Plumb
_________________________
Name: Kathryn A. Plumb
Title: Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By /s/ Mark M. Harden
_________________________
Name: Mark M. Harden
Title: Vice President
FLEET BANK, N.A.
as a Lender
By /s/ Garrat Komjathy
_________________________
Name: Garrat Komjathy
Title: Vice President
THE FUJI BANK, LIMITED,
as a Lender
By /s/ Teui Teramoto
_________________________
Name: Teui Teramoto
Title: Vice President & Manager
-129-
<PAGE>
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY,
as a Lender
By /s/ Takihida Akiyama
_________________________
Name: Takihida Akiyama
Title: Joint General Manager
LTCB TRUST COMPANY, as a Lender
By /s/ Mr. Satoru Otsubo
_________________________
Name: Mr. Satoru Otsubo
Title: Executive Vice President
MELLON BANK, N.A.,
as a Lender
By /s/ John T. Krunefuss
_________________________
Name: John T. Krunefuss
Title: AVP
THE NIPPON CREDIT BANK, LTD.,
as a Lender
By /s/ David C. Carrington
_________________________
Name: David C. Carrington
Title: Vice President and Manager
PNC BANK, NATIONAL ASSOCIATION, as a
Lender
By /s/ Tom Partridge
_________________________
Name: Tom Partridge
Title: Assistant Vice President
-130-
<PAGE>
ROYAL BANK OF CANADA,
as a Lender
By /s/ Eduardo Salazar
_________________________
Name: Eduardo Salazar
Title: Senior Manager
THE SANWA BANK, LIMITED,
as a Lender
By /s/ Paul Uudicke
_________________________
Name: Paul Uudicke
Title: Assistant Vice President
SOCIETE GENERALE,
as a Lender
By /s/ Mark Vigil
_________________________
Name: MARK VIGIL
Title: VICE PRESIDENT
TCW Asset Management Company
as Attorney-in-Fact for THE SUMITOMO BANK, LTD.,
United Companies Life Insurance Company as a Lender
By /s/ Justin L. Driscoll By
_______________________ _________________________
Justin L. Driscoll Name:
Vice President Title:
TCW Asset Management Company Crescent/MACH I Partners, L.P.,
as Attorney-in-Fact for by: TCW Asset Management Company
Integon Life Insurance Corporation Its Investment Manager
By /s/ Justin L. Driscoll By /s/ Justin L. Driscoll
_______________________ _________________________
Justin L. Driscoll Justin L. Driscoll
Vice President Vice President
-131-
THE SUMITOMO BANK, LTD.,
as a Lender
By_________________________
Name:
Title:
TRUST COMPANY BANK,
as a Lender
By_________________________
Name:
Title:
-131-
<PAGE>
ROYAL BANK OF CANADA,
as a Lender
By_________________________
Name:
Title:
THE SANWA BANK, LIMITED,
as a Lender
By_________________________
Name:
Title:
SOCIETE GENERALE,
as a Lender
By_________________________
Name:
Title:
THE SUMITOMO BANK, LTD.,
as a Lender
By /s/ [illegible]
_________________________
Name: [illegible]
Title: GENERAL MANAGER
TRUST COMPANY BANK,
as a Lender
By_________________________
Name:
Title:
-131-
<PAGE>
ROYAL BANK OF CANADA,
as a Lender
By_________________________
Name:
Title:
THE SANWA BANK, LIMITED,
as a Lender
By_________________________
Name:
Title:
SOCIETE GENERALE,
as a Lender
By_________________________
Name:
Title:
<PAGE>
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By /s/ Bill D. Gooch
________________________________
Name: BILL D. GOOCH
Title: VICE PRESIDENT
-132-
<PAGE>
EXHIBIT A
TO CREDIT
AGREEMENT
FORM OF REVOLVING NOTE
Los Angeles, California
________________, 1996
$____________
FOR VALUE RECEIVED, the undersigned, UNIVISION COMMUNICATIONS INC., a
Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to
the order of _______________________________ (the "Lender"), in lawful money of
the United States and in immediately available funds, the aggregate unpaid
principal amount of all Revolving Loans made by the Lender to the undersigned
pursuant to Sections 2.1 and/or 2.4(c) of the Credit Agreement (as hereinafter
defined), on the Revolving Loan Commitment Expiration Date (as defined in the
Credit Agreement) and on such other dates as are required under the Credit
Agreement. Such payment shall be made for the account of the Lender at the
office of The Chase Manhattan Bank located at 1 Chase Manhattan Plaza, New York,
New York 10081 or at such other office as the holder of this Revolving Note may
notify the undersigned and as agreed to by The Chase Manhattan Bank. The
undersigned further agrees to pay interest in like money at such office or such
other office on the unpaid principal amount hereof from time to time from the
date hereof at the rates per annum and on the dates specified in Sections 2.9
and 2.10 of the Credit Agreement until paid in full (both before and after
judgment to the extent permitted by law).
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement dated as of September 26, 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
undersigned and the Lender, the other Lenders parties thereto, The Chase
Manhattan Bank and Banque Paribas, as Managing Agents, and The Chase
Manhattan Bank, as Administrative Agent, is entitled to the benefits thereof
and of the other Loan Documents and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Capitalized terms used
herein which are defined in the Credit Agreement shall have such meanings
unless otherwise defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Revolving Note shall become, or may be
-1-
<PAGE>
declared to be, immediately due and payable, all as provided therein.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES).
UNIVISION COMMUNICATIONS INC.
By:___________________________
Name:_________________________
Title:________________________
-2-
<PAGE>
EXHIBIT B
TO CREDIT
AGREEMENT
FORM OF TERM NOTE
Los Angeles, California
$__________________ ____________, 1996
FOR VALUE RECEIVED, the undersigned, UNIVISION COMMUNICATIONS INC., a
Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to
the order of _____________________________ (the "Lender"), in lawful money of
the United States and in immediately available funds, the aggregate unpaid
principal amount of the Term Loans made by the Lender to the undersigned
pursuant to Section 2.2 of the Credit Agreement (as hereinafter defined), in
installments and in amounts in accordance with, and subject to, the provisions
of Section 2.2(d) of the Credit Agreement. Such payment shall be made for the
account of the Lender at the office of The Chase Manhattan Bank located at 1
Chase Manhattan Plaza, New York, New York 10081 or at such other office as the
holder of this Term Note may notify the undersigned and as agreed to by The
Chase Manhattan Bank. The undersigned further agrees to pay interest in like
money at such office or such other office on the unpaid principal amount hereof
from time to time from the date hereof at the rates per annum and on the dates
specified in Sections 2.9 and 2.10 of the Credit Agreement until paid in full
(both before and after judgment to the extent permitted by law).
This Term Note is one of the Term Notes referred to in the Credit
Agreement dated as of September 26, 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
undersigned, the Lender, the other Lenders parties thereto, The Chase
Manhattan Bank and Banque Paribas, as Managing Agents and The Chase Manhattan
Bank, as Administrative Agent, is entitled to the benefits thereof and of the
other Loan Documents and is subject to optional and mandatory prepayment in
whole or in part as provided therein. Capitalized terms used herein which are
defined in the Credit Agreement shall have such meanings unless otherwise
defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Term Note shall become, or may be declared to be, immediately due and
payable, all as provided therein.
-1-
<PAGE>
THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS
CHOICE OF LAW RULES).
UNIVISION COMMUNICATIONS INC.
By:_____________________________
Name:___________________________
Title:__________________________
-2-
<PAGE>
EXHIBIT C
TO CREDIT
AGREEMENT
FORM OF INCREMENTAL NOTE
____________, California
$__________________ ____________, 1996
FOR VALUE RECEIVED, the undersigned, UNIVISION COMMUNICATIONS INC., a
Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to
the order of _____________________________ (the "Lender"), in lawful money of
the United States and in immediately available funds, the aggregate unpaid
principal amount of Incremental Loans made by the Lender to the undersigned
pursuant to Section 2.3 of the Credit Agreement (as hereinafter defined), in
installments and in amounts in accordance with, and subject to, the provisions
of Section 2.3(d) of the Credit Agreement. Such payment shall be made for the
account of the Lender at the office of The Chase Manhattan Bank located at 1
Chase Manhattan Plaza, New York, New York 10081 or at such other office as the
holder of this Incremental Note may notify the undersigned and as agreed to by
The Chase Manhattan Bank. The undersigned further agrees to pay interest in
like money at such office or such other office on the unpaid principal amount
hereof from time to time from the date hereof at the rates per annum and on the
dates specified in Sections 2.9 and 2.10 of the Credit Agreement until paid in
full (both before and after judgment to the extent permitted by law).
This Incremental Note is one of the Incremental Notes referred to in the
Credit Agreement dated as of September 26, 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
undersigned, the Lender, the other Lenders parties thereto, The Chase Manhattan
Bank and Banque Paribas, as Managing Agents and The Chase Manhattan Bank, as
Administrative Agent, is entitled to the benefits thereof and of the other Loan
Documents and is subject to optional and mandatory prepayment in whole or in
part as provided therein. Capitalized terms used herein which are defined in
the Credit Agreement shall have such meanings unless otherwise defined herein or
unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Incremental Note shall become, or may
-1-
<PAGE>
be declared to be, immediately due and payable, all as provided therein.
THIS INCREMENTAL NOTE SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES).
UNIVISION COMMUNICATIONS INC.
By:_____________________________
Name:___________________________
Title:__________________________
-2-
<PAGE>
EXHIBIT D
TO CREDIT
AGREEMENT
ASSIGNMENT AND ACCEPTANCE
Date: _____________________
Reference is made to that certain Credit Agreement dated as of September
26, 1996 (as it may be amended, modified or supplemented from time to time, the
"CREDIT AGREEMENT"), by and among UNIVISION COMMUNICATIONS INC., a Delaware
corporation (the "BORROWER"), the Lenders (as defined in the Credit Agreement),
THE CHASE MANHATTAN BANK, a New York banking corporation, as a managing agent
and BANQUE PARIBAS, a French banking corporation, as a managing agent
(collectively, the "MANAGING AGENTS") and THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent (the "AGENT"). Terms defined and
the rules of interpretation contained in the Credit Agreement have the same
meanings and application herein.
_________________ (the "ASSIGNOR") is a Lender under the Credit
Agreement and agrees with _________________________ (the "ASSIGNEE") as
follows:
I. As of the Effective Date (as defined below), the Assignor
hereby sells and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, [a _____% interest in and to] all of the
Assignor's rights and obligations under the Credit Agreement and the other
Loan Documents (which assignment will result in the Assignee having (i) a
Term Loan Commitment Percentage of ___% and a Revolving Loan Commitment
Percentage of ___% [and an Incremental Loan Commitment Percentage of ___%(1)]
and (ii) a Term Loan Commitment of $_____________ and a Revolving Loan
Commitment of $_____________ [and an Incremental Loan Commitment of
$_________ (2)]) in respect of (a) the Assignor's Commitments as in effect
on the Effective Date (as set forth in the Schedule attached hereto and without
giving effect to other assignments thereof which have become or will be
effective as of the Effective Date), (b) the Loans owing to the Assignor on
the Effective Date (as set forth in the Schedule attached hereto and without
giving effect to other assignment s thereof which
- ------------------------------
(1) Delete as inapplicable.
(2) Delete as inapplicable.
<PAGE>
have become or will be effective as of the Effective Date), (c) the
Assignor's participat ions in Letters of Credit (as set forth in the Schedule
attached hereto and without giving effect to other assignment s thereof which
have become or will be effective as of the Effective Date) and (d) all
amounts payable to the Assignor under the Loan Documents, including the
Assignor's Notes. The Assignee hereby appoints and authorizes the Agent and
the Managing Agents, as applicable, to exercise such powers as are delegated
to the Agent and the Managing Agents, respectively, by Section 8 of the
Credit Agreement and by the other Loan Documents.
2. The Assignor (i) represents and warrants that as of the
Effective Date its Commitments, Commitment Percentages, participations in
Letters of Credit and Loans (without giving effect to other assignments
thereof which have become or will be effective as of the Effective Date or
any funding or repayment on the Effective Date) are as set forth in the
Schedule attached hereto; (ii) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (iii) represents and
warrants that it has full power and authority and has taken all action
necessary to execute and deliver this Assignment and any and all other
documents required or permitted to be executed or delivered by it in
connection herewith and to fulfill its obligations under, and to consummate
the transactions contemplated by, this Assignment, and no governmental
authorizations or other authorizations are required in connection therewith;
(iv) represents and warrants that this Assignment constitutes the legal,
valid and binding obligation of the Assignor; (v) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document
or any other instrument or document furnished pursuant thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant thereto; and (vi) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower, any
Guarantor or any other Loan Party, or the performance or observance by the
Borrower, any Guarantor or any other Loan Party, as the case may be, of any
of their obligations under the Loan Documents or any other instrument or
document furnished thereto.
3. The Assignee (i) confirms that it has received copies of such
of the Loan Documents and other documents delivered pursuant to Section 4 of
the Credit Agreement as it has requested, together with a copy of the most
recent financial statements of the Borrower received by the Agent pursuant to
Section 5.1 of the Credit Agreement, and such other documents and information
as it has deemed appropriate to make its own
<PAGE>
credit analysis and decision to enter into this Assignment; (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Loan Documents; (iii) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender;
(iv) specifies as its Applicable Lending Offices the offices set forth
beneath its name on the signature pages hereof; [(3)(v) represents and
warrants, for the benefit of the Assignor, the Agent, the Managing Agents
and the Borrower, that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Managing Agents, the Borrower or
the Assignor with respect to any payments to be made to Assignee with respect
to the Loans; (vi) attaches either U.S. Internal Revenue Service Form 4224 or
U.S. Internal Revenue Service From 1001 certifying as to the Assignee's
entitlement to claim complete exemption from United States withholding taxes
with respect to all payments to be made to the Assignee under the Credit
Agreement (and the Notes held by it); (vii) agrees, for the benefit of the
Assignor, the Agent, the Managing Agents and the Borrower, that it will
provide to the Assignor (and, in the event the Assignee becomes a Lender
registered in the Register, the Agent and the Borrower) a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously delivered
form and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by Assignee, and that
it will comply from time to time with all applicable U.S. laws and
regulations with regard to such withholding tax exemption;] (viii) represents
and warrants that it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment, and any and all other
documents required or permitted to be executed or delivered by it in
connection with this Assignment and to fulfill its obligations under, and to
consummate the transactions contemplated by, this Assignment, and no
governmental authorizations or other authorizations are required in
connection therewith; and (ix) represents and warrants that this Assignment
constitutes the legal, valid and binding obligation of the Assignee.
4. The effective date for this Assignment shall be
_________________ (the "EFFECTIVE DATE"). Following the execution of this
Assignment, it will be delivered to the Agent for acceptance and recording by
the Agent and, if applicable, for acceptance by the Borrower.
- --------------------
(3) Bracketed provisions to be included if Assignee is organized under the
laws of any jurisdiction other than the United States or any state thereof.
-3-
<PAGE>
5. Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment, shall have the rights and obligations of a
Lender thereunder and under the other Loan Documents and (ii) the Assignor
shall, to the extent provided in this Assignment, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
Loan Documents.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement
and the other Loan Documents in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the
other Loan Documents for periods prior to the Effective Date, as the case may
be, directly between themselves.
7. Concurrently with the execution of this Assignment, the
Assignor shall execute two counterpart original Requests for Registration, in
the form of Exhibit A to this Assignment, to be forwarded to Agent. The
Assignor and the Assignee further agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment,
and the Assignor specifically agrees to cause the delivery of (i) two
original counterparts of this Assignment and (ii) the Requests for
Registration, to the Agent for the purpose of registration of the Assignee as
a "Lender" pursuant to Section 9.6 of the Credit Agreement.
-4-
<PAGE>
8. This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York.
________________________________,
as Assignor
By: ____________________________
Name: __________________________
Title: _________________________
________________________________,
as Assignee
By: ____________________________
Name:___________________________
Title: _________________________
APPLICABLE LENDING OFFICES:
LIBOR LOANS
Address:
________________________________
________________________________
________________________________
ALTERNATE BASE RATE LOANS
Address:
________________________________
________________________________
________________________________
ADDRESS FOR NOTICES:
________________________________
________________________________
________________________________
Telephone No.: ________________
Telecopier No.: ________________
Attention: _____________________
-5-
<PAGE>
[Consented to as of the _____
day of ____________, ____.
UNIVISION COMMUNICATIONS INC.
By: _______________________
Name: _____________________
Title: ____________________(4)]
- --------------------------
(4) To be included if required by Section 9.6(c).
<PAGE>
SCHEDULE
ASSIGNOR'S COMMITMENTS
Term Loan Commitment $_______________
Revolving Loan Commitment $_______________
[Incremental Loan Commitment $_______________](5)
ASSIGNOR'S COMMITMENT PERCENTAGES
Term Loan Commitment Percentage _____%
Revolving Loan Commitment Percentage _____%
[Incremental Loan Commitment Percentage _____%](6)
ASSIGNOR'S LOANS
Term Loans $_______________
Revolving Loans $_______________
[Incremental Loans $_______________](7)
Assignor's Participations in
Letters of Credit $_______________
- --------------------------
(5) Delete as inapplicable.
(6) Delete as inapplicable.
(7) Delete as inapplicable.
<PAGE>
EXHIBIT A TO
ASSIGNMENT AND ACCEPTANCE
REQUEST FOR REGISTRATION
TO: THE CHASE MANHATTAN BANK, as Agent
THIS REQUEST FOR REGISTRATION is made as of the date of the enclosed
Assignment and Acceptance with reference to that certain Credit Agreement,
dated as of September 26, 1996, among the Lenders (as defined therein), The
Chase Manhattan Bank, as a managing agent, Banque Paribas, as a managing
agent, The Chase Manhattan Bank, as administrative agent (the "AGENT"), and
Univision Communications Inc., a Delaware corporation (as amended from time
to time, the "CREDIT AGREEMENT"). Terms defined and the rules of
interpretation contained in the Credit Agreement have the same meanings and
application herein.
The Assignor and Assignee described below hereby request that Agent
register the Assignee as a Lender pursuant to Section 9.6 of the Credit
Agreement effective as of the Effective Date described in the enclosed
Assignment and Acceptance and, in connection with this request, certify to
Agent that the enclosed Assignment and Acceptance sets forth the correct
Commitments and Commitment Percentages of the Assignee.
Enclosed with this Request are (i) the registering and processing fee of
$2,500 payable to the Agent pursuant to Section 9.6 of the Credit Agreement,
(ii) two counterpart originals of the Assignment and Acceptance and (iii) the
original [Term Note, Revolving Note [and Incremental Note(8)]] of Borrower in
favor of the Assignor in the principal amounts of $__________ and $__________
[and $__________], respectively. The Assignor and Assignee hereby jointly
request that Agent cause Borrower to issue, pursuant to Section 9.6(c) of the
Credit Agreement, (i) a replacement [Term Note, Revolving Note [and Incremental
Note(10)]], dated as of the same date as the original notes being replaced, in
favor of Assignor in the principal amounts of the balance of its Commitments
(after giving effect to the Assignment) of [$____________, $___________,
[and $____________],] respectively, and (ii) a new [Term Note, Revolving Note
[and Incremental Note(10)]], dated as
- ---------------------------
(8) Delete as inapplicable.
(9) Delete as inapplicable.
(10) Delete as inapplicable.
<PAGE>
of the date of the notes referred to in the immediately preceding clause, in
favor of the Assignee in the principal amounts of the Assignee's Commitments of
[$____________, $_____________, [and $___________],] respectively.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this Request
for Registration by their duly authorized officers as of this ______ day of
________________, ____.
"Assignor"
____________________________
By: ________________________
Name: ______________________
Title: _____________________
"Assignee"
____________________________
By: ________________________
Name: ______________________
Title: _____________________
_______________________________________________________________________________
CONFIRMATION OF REGISTRATION BY AGENT
TO: The Assignor and Assignee referred to in the above Request
for Registration
The Agent referred to below hereby certifies that it has registered the
Assignee as a Lender under the Credit Agreement, effective as of the
Effective Date described above, with the Commitments and Commitment
Percentages set forth for the Assignee in the Assignment and Acceptance and
has adjusted the registered Commitments and Commitment Percentages of the
-2-
<PAGE>
Assignor to reflect the assignment effected by such Assignment and Acceptance.
THE CHASE MANHATTAN BANK, as Agent
By: ________________________
Name: ______________________
Title: _____________________
-3-
<PAGE>
EXHIBIT E
TO CREDIT
AGREEMENT
JOINING LENDER AGREEMENT
Date: _____________________
Reference is made to that certain Credit Agreement dated as of
September 26, 1996 (as it may be amended, modified or supplemented from time to
time, the "CREDIT AGREEMENT"), by and among UNIVISION COMMUNICATIONS INC., a
Delaware corporation (the "BORROWER"), the Lenders (as defined in the Credit
Agreement), THE CHASE MANHATTAN BANK, a New York banking corporation, as a
managing agent and BANQUE PARIBAS, a French banking corporation, as a managing
agent (collectively, the "MANAGING AGENTS") and THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent (the "AGENT"). Terms defined
and the rules of interpretation contained in the Credit Agreement have the same
meanings and application herein.
_________________ (the "ADDITIONAL INCREMENTAL LENDER") refers to that
certain Activation Notice (the "ACTIVATION NOTICE") dated as of even date
herewith delivered by the Borrower, the Additional Incremental Lender and the
other parties thereto, if any, in connection herewith. The Additional
Incremental Lender desires to become an Incremental Loan Lender under the
Credit Agreement and accordingly agrees as follows:
1. As of the Effective Date (as defined below), the Additional
Incremental Lender commits to make Incremental Loans to the Borrower on the
terms and conditions set forth in the Credit Agreement in a maximum amount not
to exceed $______________.
2. The Additional Incremental Lender hereby appoints and
authorizes the Agent and the Managing Agents, as applicable, to exercise such
powers as are delegated to the Agent and the Managing Agents, respectively, by
Section 8 of the Credit Agreement and by the other Loan Documents.
3. The Additional Incremental Lender (i) confirms that it has
received copies of such of the Loan Documents and other documents delivered
pursuant to Section 4 of the Credit Agreement as it has requested, together with
a copy of the most recent financial statements of the Borrower received by the
Agent pursuant to Section 5.1 of the Credit Agreement, and such
<PAGE>
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement; (ii) agrees that
it will, independently and without reliance upon the Agent or any Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents; (iii) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as an Incremental Loan
Lender; (iv) specifies as its Applicable Lending Offices the offices set
forth beneath its name on the signature pages hereof; [(1) (v) represents
and warrants, for the benefit of the Agent, the Managing Agents and the
Borrower, that under applicable law and treaties no taxes will
be required to be withheld by the Agent, the Managing Agents or the Borrower
with respect to any payments to be made to Additional Incremental Lender with
respect to the Incremental Loans; (vi) attaches either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service From 1001 certifying as to
the Additional Incremental Lender's entitlement to claim complete exemption from
United States withholding taxes with respect to all payments to be made to the
Additional Incremental Lender under the Credit Agreement (and the Incremental
Notes held by it); (vii) agrees, for the benefit of the Agent, the Managing
Agents and the Borrower, that it will provide to the Agent and the Borrower
on the Effective Date a Form 4224 or Form 1001 and, upon the expiration or
obsolescence of any such forms, new forms and/or comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by the Additional Incremental Lender, and that it will
comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption;] (viii) represents and warrants that
it has full power and authority, and has taken all action necessary, to execute
and deliver this Agreement, and any and all other documents required or
permitted to be executed or delivered by it in connection with this Agreement
and to fulfill its obligations under, and to consummate the transactions
contemplated by, this Agreement, and no governmental authorizations or other
authorizations are required in connection therewith; and (ix) represents and
warrants that this Agreement constitutes the legal, valid and binding obligation
of the Additional Incremental Lender.
4. The effective date for this Agreement shall be _________________
(the "EFFECTIVE DATE"). Following the execution of this Agreement, it will
be delivered to the Agent for acceptance and recording by the Agent.
- --------------------------
(1) Bracketed provisions to be included if Additional Incremental Lender is
organized under the laws of any jurisdiction other than the United States or
any state thereof.
<PAGE>
5. Upon such acceptance and recording, as of the Effective Date, the
Additional Incremental Lender shall be a party to the Credit Agreement and,
to the extent provided in this Agreement, shall have the rights and
obligations of an Incremental Loan Lender thereunder and under the other Loan
Documents.
6. Concurrently with the execution of this Agreement, The
Additional Incremental Lender and the Borrower shall execute two counterpart
original Requests for Registration, in the form of Exhibit A to this Agreement,
to be forwarded to Agent. The Additional Incremental Lender further agrees to
execute and deliver such other instruments, and take such other actions, as the
Agent may reasonably request in connection with the transactions contemplated by
this Agreement.
-3-
<PAGE>
7. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
____________________________________,
as the Additional Incremental Lender
By:__________________________________
Name: _______________________________
Title: ______________________________
APPLICABLE LENDING OFFICES:
LIBOR LOANS
Address:
_____________________________________
_____________________________________
ALTERNATE BASE RATE LOANS
Address:
_____________________________________
_____________________________________
ADDRESS FOR NOTICES:
_____________________________________
_____________________________________
Telephone No.: _____________________
Telecopier No.: _____________________
Attention: __________________________
-4-
<PAGE>
As of this ___ day of _____________________, the undersigned hereby agrees to
the terms of this Agreement and requests that the Additional Incremental Lender
be accepted as an Incremental Loan Lender under the Credit Agreement.
UNIVISION COMMUNICATIONS INC.
By:_________________________________
Name: ______________________________
Title: _____________________________
-5-
<PAGE>
EXHIBIT A TO
JOINING LENDER AGREEMENT
REQUEST FOR REGISTRATION
TO: THE CHASE MANHATTAN BANK, as Agent
THIS REQUEST FOR REGISTRATION is made as of the date of the enclosed
Joining Lender Agreement with reference to that certain Credit Agreement,
dated as of September 26, 1996, among the Lenders (as defined therein), The
Chase Manhattan Bank, as a managing agent, Banque Paribas, as a managing
agent, The Chase Manhattan Bank, as administrative agent (the "AGENT"), and
Univision Communications Inc., a Delaware corporation (the "BORROWER") (as
amended from time to time, the "CREDIT AGREEMENT"). Terms defined and the
rules of interpretation contained in the Credit Agreement have the same
meanings and application herein.
The Borrower and the Additional Incremental Lender described below
hereby request that Agent register the Additional Incremental Lender as an
Incremental Loan Lender pursuant to Section 9.6(d) of the Credit Agreement
effective as of the Effective Date described in the enclosed Joining Lender
Agreement and, in connection with this request, certify to Agent that, as of
the Effective Date, (i) the Commitment of the Additional Incremental Lender
will be $_________________ and (ii) the Incremental Loan Commitment
Percentage of the Additional Incremental Lender (after giving effect to any
other Incremental Loan Lenders executing Joining Lender Agreements in
connection with the Activation Notice) will be ___%.
Enclosed with this Request are (i) the registering and processing fee of
$2,500 payable to the Agent pursuant to Section 9.6 of the Credit Agreement
and (ii) two counterpart originals of the Joining Lender Agreement. The
Borrower hereby agrees to issue, pursuant to Section 9.6(d) of the Credit
Agreement, an Incremental Loan Note dated as of the Effective Date, in favor
of the Additional Incremental Lender in the
-6-
<PAGE>
principal amount of the Additional Incremental Lender's Incremental Loan
Commitment of $___________________.
IN WITNESS WHEREOF, the Borrower and the Additional Incremental Lender
have executed this Request for Registration by their duly authorized officers
as of this ______ day of ________________, ____.
"Additional Incremental Lender"
______________________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
UNIVISION COMMUNICATIONS INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
_______________________________________________________________________________
CONFIRMATION OF REGISTRATION BY AGENT
TO: The Borrower and the Additional Incremental Lender referred
referred to in the above Request for Registration
The Agent referred to below hereby certifies that it has registered the
Additional Incremental Lender as an Incremental Loan Lender under the Credit
Agreement, effective as of the Effective Date described above, with the
Incremental Loan Commitment and Incremental Loan Commitment Percentage set
forth for the Additional Incremental Lender in the above Request for
Registration.
THE CHASE MANHATTAN BANK,
as Agent
By: ________________________
Name: ______________________
Title: _____________________
-7-
<PAGE>
EXHIBIT F
TO CREDIT
AGREEMENT
FORM OF NO DEFAULT/REPRESENTATION CERTIFICATE
__________________________ the ______________ of Univision
Communications Inc., a Delaware corporation (the "BORROWER") hereby certifies
in connection with the Credit Agreement dated as of September 26, 1996 among
The Chase Manhattan Bank, a New York banking corporation ("CHASE"), as
administrative agent, Banque Paribas, a French banking corporation, as a
managing agent, Chase, as a managing agent, the financial institutions
parties thereto and the Borrower (such Credit Agreement, as it may be
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT"),
as of the date set forth below, that:
(i) the representations and warranties contained in the Credit Agreement
and in each other Loan Document and each certificate or other writing
delivered to the Lenders prior to, on or after the Initial Closing Date (as
defined in the Credit Agreement) pursuant to the Credit Agreement and on or
prior to the date of [the Loan] [the issuance of the Letter of Credit] (as
defined in the Credit Agreement) requested in connection herewith, are true
and correct on and as of the date of [the making of such Loan]
[the issuance of such Letter of Credit] in all material respects as though
made on and as of such date except to the extent that such representations
and warranties expressly relate to an earlier date; and
(ii) no Default (as defined in the Credit Agreement) has occurred or is
continuing or would result from [the making of the Loan] [the issuance of such
Letter of Credit] requested in connection herewith.
IN WITNESS WHEREOF, I HAVE HEREUNTO SIGNED MY NAME AS OF THIS ____ DAY
OF ________________, ____:
________________________________
Name:
Title:
<PAGE>
EXHIBIT G
TO CREDIT
AGREEMENT
FORM OF COVENANT COMPLIANCE CERTIFICATE
The undersigned, _________________________, the _________________________
of Univision Communications Inc., a Delaware corporation (the "Borrower") refers
to that certain Credit Agreement dated as of September 26, 1996, among The
Chase Manhattan Bank, a New York banking corporation ("Chase"), as
administrative agent, Banque Paribas, a French banking corporation, as a
managing agent, Chase, as a managing agent, the financial institutions parties
thereto and Univision Communications Inc. (such Credit Agreement, as it may be
amended, modified or supplemented from time to time, the "Credit Agreement";
capitalized terms used herein and not defined shall have the meanings assigned
to them in the Credit Agreement), and certifies as to the accuracy of the
following figures for the period ending ___________, ____:
1. MAXIMUM TOTAL DEBT RATIO
a. Funded Debt for Borrower and Subsidiaries
A. Capitalized Lease
Obligations $_____________
B. Aggregate Redemption
Value of Modesto
Station Preferred
Stock $_____________
C. Indebtedness (other than
the defeased Subordinated
Notes and Indebtedness
described in clauses (h),
(j), (k), (l), (m) and
(n) of Section 6.2 of
the Credit Agreement $_____________
D. A + B + C $_____________
<PAGE>
b. EBITDA
for Borrower and Subsidiaries
A. Net Income (after eliminating
extraordinary gains and losses) $_____________
B. provision for taxes $_____________
C. depreciation and amortization $_____________
D. Interest Expense
(i) interest (dividends)
on Funded Debt $_____________
(ii) commitment, L/C and
line of credit fees $_____________
(iii) net amounts payable
(or receivable)
under Interest
Rate Agreements $_____________
(iv) interest income $_____________
(v) (i) + (ii) + [or -]
(iii) - (iv) $_____________
E. termination payments $_____________
F. other non-cash changes $_____________
G. Program Rights Payments
actually made or scheduled
to be made. $_____________
H. non-cash revenues $_____________
I. principal payments for
Transponder Leases $_____________
J. A + B + C + D + E + F - G - H
- I $_____________
c. Ratio of (a) to (b): _____ to 1
2. MINIMUM TOTAL INTEREST COVERAGE RATIO
a. EBITDA (see
1(b)(K) above) $_____________
-2-
<PAGE>
b. Interest Expense (see 1(b)(D)(v)
above) $_____________
c. Ratio of (a) to (b): _____ to 1
3. MINIMUM FIXED CHARGE COVERAGE RATIO
a. EBITDA (see
1(b)(K) above) $____________
b. Total Debt Service/Capital
Expenditures/Cash Income Taxes/
Restricted Payments $____________
(i) Total Debt Service
A. Interest Expense
(see 1(b)(D)(v)
above) $____________
B. regularly scheduled
principal payments on
Funded Debt
(which result
in permanent reduction
in availability) (see
Modesto Station
provisions) $____________
C. principal payments on
Revolving Loans due under
Section 2.1(h)(ii) of
the Credit Agreement $____________
D. A + B + C $____________
(ii) Capital Expenditures made or
committed to be made by
Borrower
and its Subsidiaries
(including property held
under capital leases but
excluding expenditures
arising from Program
Rights Obligations and
expenditures under
Transponder Leases) $____________
(iii) Cash Income Taxes $____________
(iv) Restricted Payments permitted
under Section 6.6 (iii) of
-3-
<PAGE>
the Credit Agreement $____________
(v) (i)(D) + (ii) +
(iii) + (iv) $____________
c. Ratio of (a) to (b): _____ to 1
4. LIMITATION ON INDEBTEDNESS--APPROVED
AMOUNTS SECURED ON PARI PASSU BASIS
a. outstanding Indebtedness of
Borrower approved under Section 6.2(d)
of the Credit Agreement (cannot
exceed $20,000,000) $_____________
5. LIMITATION ON INDEBTEDNESS--APPROVED
AMOUNTS UNSECURED
a. outstanding Indebtedness of
Borrower approved under Section 6.2(e)
of the Credit Agreement (cannot
exceed $100,000,000) $_____________
6. LIMITATION ON INDEBTEDNESS--SECURED BY
PURCHASE MONEY LIENS
a. outstanding Indebtedness of
Borrower permitted under Section 6.2(o)
of the Credit Agreement (cannot
exceed $20,000,000) $_____________
7. LIMITATION ON INVESTMENTS
a. Investments made pursuant to
Section 6.7(i) of the Credit
Agreement (cannot exceed
$50,000,000 during term of
Agreement) $_____________
8. LIMITATION ON UNFUNDED LIABILITIES
a. unfunded liabilities of Plans
of Borrower and Subsidiaries
(cannot exceed $5,000,000) $_____________
-4-
<PAGE>
IN WITNESS WHEREOF, I HAVE HEREUNTO SIGNED MY NAME, AS THE
____________________ OF UNIVISION COMMUNICATIONS INC., AS OF THIS ____ DAY OF
______________, 19__:
_____________________________
Name: _______________________
Title: ______________________
-5-
<PAGE>
EXHIBIT H
TO CREDIT
AGREEMENT
FORM OF CONTINUATION NOTICE
Date: _________________
To: The Chase Manhattan Bank,
as Administrative Agent
Media & Communications Group
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Stephen P. Mumblow
Re: Univision Communications Inc.
We refer to that certain Credit Agreement dated as of September 26, 1996
among The Chase Manhattan Bank, as administrative agent and a managing agent,
Banque Paribas, as a managing agent, the financial institutions parties
thereto and Univision Communications Inc. (such Credit Agreement, as amended,
modified or supplemented from time to time, the "Credit Agreement").
Capitalized terms used herein and not defined have the meanings assigned to
them in the Credit Agreement.
[Pursuant to Section 2.7(a) of the Credit Agreement, the undersigned
elects to convert the following LIBOR Loans to Alternate Base Rate Loans at
the end of the current Interest Period for such LIBOR Loans:
LIBOR LOAN AMOUNT LAST DAY OF CURRENT INTEREST PERIOD
1.
2.
3. [and so on] ]
[Pursuant to Section 2.7(a) of the Credit Agreement, the undersigned
elects to convert Alternate Base Rate Loans in the aggregate amount of
$__________ to LIBOR Loan(s) as follows:
DESIRED DATE LENGTH OF
LIBOR LOAN AMOUNT OF CONVERSION INTEREST PERIOD
- ----------------- ------------- ---------------
1.
2.
3. [and so on] ]
<PAGE>
[Pursuant to Section 2.7(b) of the Credit Agreement, the undersigned
elects to continue the Interest Periods with respect to the following LIBOR
Loans for the following additional Interest Period:
LAST DAY OF CURRENT LENGTH OF CONTINUED
LIBOR LOAN AMOUNT INTEREST PERIOD INTEREST PERIOD
- ----------------- ------------------- -------------------
1.
2.
3. [and so on]
]
Sincerely,
UNIVISION COMMUNICATIONS INC.
By: _____________________________
Name: ____________________________
Title: ___________________________
-2-
<PAGE>
EXHIBIT I TO
CREDIT AGREEMENT
[LOGO]
STANDBY OR PERFORMANCE LETTER OF CREDIT
APPLICATION AND AGREEMENT
This Agreement consists of three parts. The first part is an Application
for a Standby or Performance Letter of Credit in which the Applicant(s) sets
forth the terms of the Letter of Credit that it (they) has (have) asked us to
Issue. The second part, which will apply in the event we issue the Letter of
Credit, sets forth the Terms and Conditions that govern the relationship
between the Applicant(s) and us. Among other things, it covers the
obligation of the Applicant(s) to reimburse us, the security provided for
their obligations, that upon the occurrence of certain events the Applicant(s)
will deliver additional security for its (their) obligations and defines the
rights of, and remedies available to, us under various circumstances. The
third part is an Authorization of the Account Party, if the Account Party is
not also the Order Party, under which the Account Party agrees to be bound by
this Agreement.
Part I: Application for Standby or Performance Letter of Credit
TO: THE CHASE MANHATTAN BANK,
Letter of Credit Division
4 Chase Metro Tech Center
Brooklyn, New York 11245
("Issuer")
The undersigned hereby request(s) that you issue your irrevocable letter of
credit by:
/ / Airmail / / Teletransmission (Specify means _________) / / Courier Service
(If none specified, Issuer may choose)
IN FAVOR OF: TO BE ADVISED THROUGH: / / CHECK BOX IF ALSO
TO BE CONFIRMED BY
ADVISING BANK
- ----------------------- ------------------------
- ----------------------- ------------------------
- ----------------------- ------------------------
- ----------------------- ------------------------
- ----------------------- ------------------------
("Beneficiary")
By order of
-------------------------------------
("Order Party")
For account of
----------------------------------
("Account Party")
Up to an aggregate amount of
--------------------
Available by (complete A or B, NOT both):
A. / / Drafts at sight on the Issuer payable at the Issuer's counters
accompanied by:
B. / / Tested Telex Demand to the Issuer stating:
EXPIRATION DATE:
Drafts and documents must be dated and presented to, or Tested Telex Demand
received by, the Issuer not later than .
---------------------
/ / Credit to contain "Evergreen" clause with no less than days notice of
---
non-renewal to the Beneficiary.
/ / Partial drawings prohibited
Unless otherwise stated herein, the negotiating/paying bank (if any) is
authorized to send all documents to you in one airmail or counter service, if
available.
/ / Special instructions: Specify below. If additional space is needed,
include additional sheets. These sheets form an integral part of this
Application.
<PAGE>
5. AMENDMENT, CHANGE, MODIFICATION, NO WAIVER. No amendment, change,
modification or waiver to which the Bank has consented shall be deemed to
mean that the Bank will consent or has consented to any other or subsequent
request to amend, change modify or waive a term of the Credit. The Bank shall
not be deemed to have amended, changed or modified any term hereof or to have
waived any of its rights hereunder, unless the Bank or its authorized agent
shall have consented to such amendment, change or modification in writing or
signed such waiver.
6. U.C.P.; AGREEMENTS AND ACKNOWLEDGMENTS.
A. THE UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice
shall be binding on the Applicant and the Bank except to the extent it is
otherwise expressly agreed.
B. OTHER AGREEMENTS AND ACKNOWLEDGMENTS.
It is also agreed that:
(1) user(s) of the Credit shall not be deemed agents of the Bank;
(2) none of the Bank, its affiliates, subsidiaries or its
correspondents shall be responsible for, and the obligation of the
Applicant to pay the Bank under Section 2 hereof shall not be
affected by (i) any act, error, neglect, default, omission,
insolvency or failure in business of any of its correspondents or
(ii) the form, validity, accuracy, sufficiency, legal effect or
genuineness of any instrument or other document presented under
the Credit;
(3) any action, inaction or omission on the part of the Bank or any of
its affiliates, subsidiaries or correspondents under or in
connection with the Credit or the related instruments, documents
or property. If in good faith, shall be binding upon the
Applicant and shall not place the Bank or any such affiliate,
subsidiary or correspondent under any liability to the Applicant
or affect in any way whatsoever the Applicant's obligation to pay
the Bank under Section 2 hereof and in no event shall the Bank or
any such affiliate, subsidiary or correspondent be liable for any
special or consequential damages;
(4) the Applicant will promptly examine: (i) the copy of the Credit
(and of any amendments thereof) sent to it by the Bank; and (ii)
all instruments and documents delivered to it from time to time,
and, in the event of any claim of noncompliance with Applicant's
instructions or other irregularity, the Applicant will immediately
notify the Bank thereof in writing, the Applicant being
conclusively deemed to have waived any such claim against the Bank
and any of its affiliates, subsidiaries and correspondents unless
notice is given as aforesaid;
(5) if the Credit states any condition (whether for information or
otherwise) without specifying the document to be presented to
determine compliance therewith, the Bank may (but shall not be
obligated to) treat such condition as not stated and disregard it
for purposes of determining compliance with the terms of the
Credit; and
(6) the Bank shall have no obligation to notify the Applicant of
discrepancies in any instruments or other documents presented
under the Credit and any such notification or request for a waiver
of such discrepancies shall not constitute a waiver of such
discrepancies by the Bank nor an agreement to notify or seek a
waiver of any future discrepancies.
7. INSTRUCTIONS; NO LIABILITY. Instructions whether given orally (in person
or by telephone), in writing (by teletransmission or other means) or by
electronic means may be honored by the Bank when received from anyone
purporting to be authorized to give such instructions for the Applicant. Each
oral instruction shall be confirmed in writing by the person giving such
instruction, or other authorized officer, but the Bank's responsibility with
respect to any instruction shall not be effected by its failure to receive,
or the content of, such confirmation. The Bank shall have no responsibility
to notify Applicant of any discrepancies between Applicant's oral
instructions and its written confirmation, and in the event of any such
discrepancy, the oral instructions shall govern. The Bank shall be fully
protected in, and shall incur no liability to the Applicant for, acting upon
any oral, written or electronic instructions which the Bank in good faith
believes to have been given by any authorized person, and in no event shall
the Bank be liable for special, indirect or consequential damages. The Bank
may, at its option, use any means of verifying any instructions received by
it. The Bank also may, at its option, use any means of verifying any
instructions received by it. The Bank also may, at its option, refuse to act
on any instruction or any part thereof, without incurring any responsibility
for any loss, liability or expense arising out of such refusal.
8. INDEMNIFICATION. The Applicant agrees to indemnify and hold harmless the
Bank, each affiliate and subsidiary of the Bank, and the correspondents of
any of them, against any and all claims, losses, liabilities, damages, costs,
penalties and fines, including reasonable counsel fees and allocated costs of
internal counsel, howsoever arising from or in connection with the Credit,
including, without limitation, any such claim, liability, damage, cost
liability or fine arising out of any transfer, sale, delivery, surrender or
endorsement of any document at any time(s) held by the Bank or any of its
affiliates or subsidiaries, or held for the account of any of them by any
correspondent of any of them, or arising out of any action, suit or
proceeding for injunctive or other judicial or administrative relief or any
other judicial or governmental order and affecting, directly or indirectly,
the Bank or such affiliate, subsidiary or correspondent.
9. LICENSES. The Applicant will procure promptly any necessary import, export
or other licenses in connection with the Credit and any property shipped
thereunder, and will comply with all foreign and domestic governmental
regulations in regard to the shipment of such property or the financing
thereof and will furnish the Bank on its demand, with evidence thereof.
10. PLEDGE AND ASSIGNMENT OF SECURITY.
A. PLEDGE AND GRANT OF SECURITY INTERESTS. As security for the payment or
performance of (i) any and all of the Applicant's obligations and/or
liabilities to the Bank under this Agreement (including the contingent
obligation under paragraph 11 to pay or deliver to the Bank the maximum
amount available under the Credit whether or not a drawing, claim or demand
for payment has been made under the Credit) and (ii) all other obligations
and/or liabilities of the Applicant to the Bank, absolute or contingent, due
or to become due, or which are now or may at any time(s) hereafter be owing
by the Applicant to the Bank, the Applicant hereby:
(1) pledges and/or grants to the Bank a continuing lien upon and
assignment of all right, title and interest of the Applicant in and to the
balance of every deposit account, now or at any time hereafter existing of
the Applicant with any office of the Bank or any affiliate or subsidiary
thereof, wherever located, and any other claims of the Applicant against
any office of the Bank or any affiliate or subsidiary thereof, and in
and to all money, instruments, securities, documents, chattel paper,
demands, precious metals, funds, and all claims and demands and rights and
interest therein of the Applicant, and in and to all evidences thereof,
which have been or at any time shall be delivered to or otherwise come
into the possession, custody or control of any office of the Bank or any
affiliate or subsidiary thereof, or into the possession, custody or
control of any affiliate, agent or correspondent of any such entity for
any purpose, whether or not for the express purpose of being used by any
such entity as collateral security or for safekeeping and the Bank shall
be deemed to have possession, custody or control of all such property
actually in transit to, or set apart
<PAGE>
5. AMENDMENT, CHANGE, MODIFICATION, NO WAIVER. No amendment, change,
modification or waiver to which the Bank has consented shall be deemed to
mean that the Bank will consent or has consented to any other or subsequent
request to amend, change, modify, or waive a term of the Credit. The Bank
shall not be deemed to have amended, changed or modified any term hereof nor
to have waived any of its rights hereunder, unless the Bank or its authorized
agent shall have consented to such amendment, change or modification in
writing or signed such waiver.
6. U.C.P; AGREEMENTS AND ACKNOWLEDGMENTS.
A. THE UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice
shall be binding on the Applicant and the Bank except to the extent it is
otherwise expressly agreed.
B. OTHER AGREEMENTS AND ACKNOWLEDGMENTS.
It is also agreed that:
(1) user(s) of the Credit shall not be deemed agents of the Bank:
(2) none of the Bank, its affiliates, subsidiaries or its
correspondents shall be responsible for, and the obligation of the
Applicant to pay the Bank under Section 2 hereof shall not be
affected by, (i) any act, error, neglect, default, omission,
insolvency or failure in business of any of its correspondents or
(ii) the form, validity, accuracy, sufficiency, legal effect or
genuineness of any instrument or other document presented under the
Credit;
(3) any action, inaction or omission on the part of the Bank or any
of its affiliates, subsidiaries or correspondents under or in
connection with the Credit or the related instruments, documents or
property, if in good faith, shall be binding upon the Applicant and
shall not place the Bank or any such affiliate, subsidiary or
correspondent under any liability to the Applicant or affect in any
way whatsoever the Applicant's obligation to pay the Bank under
Section 2 hereof and in no event shall the Bank or any such
affiliate, subsidiary or correspondent be liable for any special or
consequential damages;
(4) the Applicant will promptly examine: (i) the copy of the Credit
(and of any amendments thereof) sent to it by the Bank and (ii) all
instruments and documents delivered to it from time to time, and, in
the event of any claim of noncompliance with Applicant's
instructions or other irregularity, the Applicant will immediately
notify the Bank thereof in writing, the Applicant being conclusively
deemed to have waived any such claim against the Bank and any of
its affiliates, subsidiaries and correspondents unless notice is
given as aforesaid;
(5) if the Credit states any condition (whether for information or
otherwise) without specifying the document to be presented to
determine compliance therewith, the Bank may (but shall not be
obligated to) treat such condition as not stated and disregard it
for purposes of determining compliance with the terms of the
Credit; and
(6) the Bank shall have no obligation to notify the Applicant of
discrepancies in any instruments or other documents presented
under the Credit and any such notification or request for a waiver
of such discrepancies shall not constitute a waiver of such
discrepancies by the Bank nor an agreement to notify or seek a
waiver of any future discrepancies.
7. INSTRUCTIONS; NO LIABILITY. Instructions, whether given orally (in person
or by telephone), in writing (by teletransmission or other means) or by
electronic means may be honored by the Bank when received from anyone
purporting to be authorized to give such instructions for the Applicant. Each
oral instruction shall be confirmed in writing by the person giving such
instruction, or other authorized officer, but the Bank's responsibility with
respect to any instruction shall not be affected by its failure to receive,
or the content of, such confirmation. The Bank shall have no responsibility
to notify Applicant of any discrepancies between Applicant's oral
instructions and its written confirmation, and in the event of any such
discrepancy, the oral instructions shall govern. The bank shall be fully
protected in, and shall incur no liability to the Applicant for, acting upon
any oral, written or electronic instructions which the Bank in good faith
believes to have been given by any authorized person, and in no event shall
the Bank be liable for special, indirect or consequential damages. The Bank
may, at its option, use any means of verifying any instructions received by
it. The Bank also may, at its option, refuse to act on any instruction or any
part thereof, without incurring any responsibility for any loss, liability or
expense arising out of such refusal.
8. INDEMNIFICATION. The Applicant agrees to indemnify and hold harmless the
Bank, each affiliate and subsidiary of the Bank, and the correspondents of
any of them, against any and all claims, losses, liabilities, damages, costs,
penalties and fines, including reasonable counsel fees and allocated costs of
internal counsel, howsoever arising from or in connection with the Credit,
including, without limitation, any such claim, liability, damage, cost
liability or fine arising out of any transfer, sale, delivery, surrender or
endorsement of any document or any form(s) held by the Bank or any of its
affiliates or subsidiaries, or held for the account of any of them by any
correspondent of any of them, or arising out of any action, suit or
proceeding for injunctive or other judicial or administrative order or any
judicial or governmental order and affecting, directly or indirectly, the
Bank or such affiliate, subsidiary or correspondent.
9. LICENSES. The Applicant will procure promptly any necessary import, export
or other licenses in connection with the Credit and any property shipped
thereunder, and will comply with all foreign and domestic governmental
regulations in regard to the shipment of such property or the financing
thereof and will furnish the Bank on its demand, with evidence thereof.
10. PLEDGE AND ASSIGNMENT OF SECURITY.
A. PLEDGE AND GRANT OF SECURITY INTERESTS. As security for the
payment or performance of (i) any and all of the Applicant's obligations
and/or liabilities to the Bank under this Agreement (including the contingent
obligation under paragraph 11 to pay or deliver to the Bank the maximum
amount available under the Credit whether or not a drawing, claim or demand
for payment has been made under the Credit) and (ii) all other obligations
and/or liabilities of the Applicant to the Bank, absolute or contingent, due
or to become due, or which are now or may at any time(s) hereafter be owing
by the Applicant to the Bank, the Applicant hereby:
(1) pledges and/or grants to the Bank a continuing lien upon and
assignment of all right, title and interest of the Applicant in and to the
balance of every deposit account, now or at any time hereafter existing, of
the Applicant with any office of the Bank or any affiliate or subsidiary
thereof, wherever located, and any other claims of the Applicant against any
office of the Bank or any affiliate or subsidiary thereof, and in and to all
money, instruments, securities, documents, chattel paper, demands, precious
metals, funds, and all claims and demands and rights and interest therein of
the Applicant, and in and to all evidences thereof, which have been or at any
time shall be delivered to or otherwise come into the possession, custody or
control of any office of the Bank or any affiliate or subsidiary thereof, or
into the possession, custody or control of any affiliate, agent or
correspondent of any such entity for any purpose, whether or not for the
express purpose of being used by any such entity as collateral security or
for safekeeping and the Bank shall be deemed to have possession, custody or
control of all such property actually in transit to, or set apart
<PAGE>
for it or any of its affiliates or subsidiaries (or any of their agents,
correspondents or others acting in their behalf), it being understood that
the receipt at any time by such entities (or any of their agents,
correspondents, or others acting in their behalf), of other security of
whatever nature, including cash, shall not be deemed a waiver of any of the
Bank's rights or powers hereunder. The Applicant agrees that such affiliates
or subsidiaries shall be agent(s) of the Bank for the purpose of perfecting a
security interest in any such deposit accounts or other property; and
(2) pledges and/or grants to the Bank security interest in any and all
property the Applicant holds as security for the obligations of any party
related to the Credit, and further, subordinates its right to payment from
such property and the proceeds thereof to the rights of the Bank, until the
Bank is paid in full, and agrees that it will hold in trust for and promptly
deliver to the Bank any payment received from such property or proceeds.
B. ADDITIONAL RIGHTS OF THE BANK. The Bank is authorized to take any
action necessary to protect its rights in the security provided hereunder
(whether or not a drawing, claim or demand for payment has been made under
the Credit) including but not limited to segregating all or any part of the
balance of any deposit account referred to in paragraph 10(A) or other
security to be applied to the Applicant's obligations to the Bank as provided
in paragraph 11.
11. EVENTS OF DEFAULT; OBLIGATIONS; REMEDIES. Upon the occurrence of any of
the events described in this paragraph 11 (whether or not a drawing, claim or
demand for payment has been made under the Credit) the Applicant agrees that
(A) any and all obligations and liabilities of the Applicant to the Bank,
matured or unmatured, absolute or contingent, whether now existing or
hereafter incurred (including the obligations hereunder), shall be due and
payable forthwith without notice or demand and (B) the Bank may (i) charge,
debit and/or setoff against any account of the Applicant maintained at any
office of the Bank or at any subsidiary or affiliate of the Bank (now or in
the future, whether general or special, time or demand, matured or unmatured)
for the maximum amount available under the Credit and also for any and all
other obligations and liabilities of the Applicant (and for those of each of
its subsidiaries and affiliates) to the Bank hereunder or otherwise, matured
or unmatured, absolute or contingent, whether now existing or hereafter
incurred, (ii) demand that the Applicant, and the Applicant shall upon such
demand, deliver, transfer or assign to the Bank cash or other property of a
value and character satisfactory to the Bank (together with executed
financing statements in such form as the Bank may reasonably require) as
security for all such obligations and liabilities and/or (iii) liquidate any
or all of the property pledged, assigned and/or in which the Bank has been
granted a security interest, and in each case, the Bank shall hold such
amounts, proceeds and collateral as security for (or at the Bank's option,
make payment in satisfaction of) the Applicant's (and such subsidiaries' and
affiliates') obligations and liabilities, matured or unmatured, absolute or
contingent, whether now existing or hereafter incurred, hereunder or
otherwise to the Bank;
(1) if there shall occur any material adverse change in the condition
(financial or otherwise), business, operations or prospects of the Applicant
or any Third Party;
(2) if any statement made, or any information or report furnished to, the
Bank, in connection with this Agreement contained any misstatement of a
material fact or omitted to state a material fact or any fact necessary to
make any statement contained therein not materially misleading;
(3) the death or dissolution of the Applicant or any Third Party;
(4) if any obligation and/or liability of the Applicant or any Third Party
shall not be paid or performed when due, or any default or event of default
(as such is defined under any agreement for the payment of money to which the
Applicant or a Third Party is a party) remains uncured after the cure period
provided in the related agreement has elapsed; or
(5) if the Applicant or a Third Party shall become insolvent (however such
insolvency may be evidenced or defined) or generally not be able to pay its
debts as they become due, or make a general assignment for the benefit of
creditors, or if the Applicant or a Third Party shall suspend the transaction
of its usual business or be expelled or suspended from any exchange, or if an
application is made by any judgment creditor of the Applicant or a Third
Party for an order directing the Bank to pay over money or to deliver other
property, or if a petition in bankruptcy shall be filed by or against the
Applicant or a Third Party, or if a petition shall be filed by or against
the Applicant or any proceeding shall instituted by or against the Applicant
or a Third Party for any relief under any bankruptcy or insolvency laws or
any law relating to the relief of debtors, readjustment or indebtedness,
reorganization, composition or extensions, or if any governmental authority,
or any court at the insistance of any governmental authority, shall take
possession of any substantial part of the property of the Applicant or a
Third Party or shall assume control over the affairs or operations of the
Applicant or a Third Party, or if a receiver or custodian shall be appointed
of, or a lien or order of attachment or garnishment shall be issued or made
against, any of the property or assets of the Applicant or a Third Party or
the Applicant or a Third Party shall represent that any of the foregoing has
occurred or will occur;
(6) If a temporary restraining order, injunction (preliminary or permanent)
or any similar order is issued in connection with the Credit or any
instrument or document relating thereto which order may apply, directly or
indirectly, to the Bank; or
(7) the Bank shall in good faith deem itself insecure at any time.
12. CONTINUING RIGHTS AND OBLIGATIONS. The Bank's rights and liens hereunder
shall continue unimpaired, and the Applicant shall be and remain obligated in
accordance with the terms and provisions hereof, notwithstanding the release
and/or substitution of any property which may be held as security hereunder
at any time, or of any rights or interest therein or the release of any
Third Party. No delay, extension of time, renewal, compromise or other
indulgence which may occur or be granted by the Bank shall impair the Bank's
rights or liens hereunder.
13. PARTNERSHIP APPLICANTS; MULTIPLE APPLICANTS, ETC. If the Applicant is a
partnership, its obligation hereunder shall continue in force, and apply,
notwithstanding any change in the membership of such partnership, however
arising, or the release of any partner from liability. If more than one entity
and/or person signs this Agreement whether as Order Party or Account Party,
(i) each of them shall be jointly and severally liable hereunder and all the
terms and provisions regarding liabilities, obligations and property of such
entities and/or person shall apply to any liabilities, obligations, and
property of any and all of them and (ii) each of them hereby agrees that,
without notice to or further consent by the other, the liability of any
Applicant hereunder may from time to time, in whole or in part, be renewed,
extended, modified, released or reduced by the Bank without affecting or
releasing in any way the liability of the other Applicant. The Applicant waives
any defense whatsoever which might constitute a defense available to, or
discharge of, a security or a guarantor.
14. JURISDICTION AND VENUE; SERVICE OF PROCESS; APPOINTMENT OF AGENT; WAIVER;
COMMENCEMENT OF ACTION. The Applicant hereby consents to the nonexclusive
jurisdiction over the person of the the Applicant of any court of record of
the State in which the branch of the Bank to which this Agreement is
address is located or of the United States District Court for the
appropriate District of such State and agrees that such court shall be a
proper forum for any action or suit brought by the Bank. Service of process
in any action or suit arising out of or in connection with this Agreement or
the Credit may be made upon the Applicant by mailing a copy of the summons to
the Applicant either at the address set forth in the Application or at the
Applicant's last address appearing in the Bank's records. In addition, if the
Applicant is organized or incorporated in a jurisdiction outside the United
States of America, the Applicant designates the Consul General or equivalent
official of the country of incorporation of the Applicant as the true and
lawful agent and attorney-in-
<PAGE>
fact of the Applicant for receipt of the summons, writs and notices in
connection with any such action or suit. No litigation in respect of any
matter arising under or in connection with the Credit or this Agreement may
be brought by the Applicant against the Bank unless such litigation shall be
commenced in a court of competent jurisdiction in the City of New York,
State of New York, within one (1) year after (i) the expiration date of the
Credit or (ii) the alleged breach shall have purportedly occurred, whichever
is earlier.
The Applicant also waives:
(1) the right to trial by jury in the event of any litigation to which
the Bank and the Applicant are parties in respect of any matter arising
under or in respect of the Credit or this Agreement, whether or not such
litigation has been commenced in respect of the Credit (including, but
not limited to, this Agreement) and whether or not other persons are also
parties thereto;
(2) the right to interpose any claim, setoff, or counterclaim, of any
nature or description and any defense based upon the statute of
limitations, laches, waiver, estoppel, or setoff, howsoever described;
(3) any immunity it or its property may now or hereafter have from suit,
jurisdiction, attachment (whether prior to judgement or in aid of
execution), execution or other legal process;
(4) any claim against the Bank for consequential or special damages; and
(5) notice of acceptance of this Agreement.
15. ASSIGNMENT AND APPLICABLE LAW. This Agreement may not be assigned by
the Applicant without the prior written consent of the Bank. The Bank may
assign or sell participations in all or any part of the Credit or this
Agreement to another entity and the Bank may disseminate credit information
relating to the Applicant in connection with any proposed participation. This
Agreement and all rights, obligations and liabilities arising hereunder shall
be binding upon and inure to the benefit of the Bank and the Applicant and
their respective successors and permitted assigns and shall be governed by,
and construed in accordance with, the internal laws of the jurisdiction in
which the branch of the Bank to which this Agreement is addressed is located,
without reference to that jurisdiction's principles of conflicts
of law, and to the extent that there is any conflict between such laws and
the Uniform Customs and Practice, the Uniform Customs and Practice shall
control.
Demand Deposit A/C#
------------------
THE TERMS AND CONDITIONS SET FORTH
ABOVE HAVE BEEN READ AND ARE HEREBY
ACCEPTED AND MADE APPLICABLE TO
THIS AGREEMENT AND THE CREDIT.
WE WARRANT THAT NO SHIPMENT OR PAYMENT TO
BE MADE IN CONNECTION WITH THIS AGREEMENT
IS IN VIOLATION OF UNITED STATES TRADE
CURRENCY CONTROL OR OTHER REGULATIONS. WE --------------------------------
FURTHER WARRANT THAT THE AGREEMENT BELOW (Order Party)
HAS BEEN DULY AND VALIDLY EXECUTED BY OR
ON BEHALF OF THE ACCOUNT PARTY.
--------------------------------
(Address)
--------------------------------
(Authorized Signature) (Title)
--------------------------------
(Date)
<PAGE>
- ---------------------------------------------------------------------
(The following is to be executed if the Order Party is not also the Account
Party)
Part III.
AUTHORIZATION AND AGREEMENT OF ADDITIONAL PARTY
NAMED AS ACCOUNT PARTY
To: ISSUER
We join in the request to you to issue the Credit, naming us as Account Party
and, in consideration thereof, we irrevocably agree (i) that the above
Applicant (the Order Party) has sole right to give instructions and make
agreements with respect to the Application, the Credit and the disposition of
documents and we have no right or claim against you or your correspondent in
respect of any matter arising in connection with any of the foregoing, and
(ii) to be bound by all the terms of this Agreement. The Order Party is
authorized to assign or transfer to you all or any part of any security held
by the Order Party for our obligations arising in connection with this
transaction and, upon any such assignment or transfer, you will be vested
with all powers and rights in respect of the security transferred or assigned
to you and you may enforce your rights under this Agreement against us or our
property in accordance with the terms of this Agreement.
-------------------------------------
(Name)
-------------------------------------
(Address)
-------------------------------------
(Authorized Signature) (Title)
-------------------------------------
(Date)
- -------------------------------------------------------------------------------
FOR BANK USE ONLY
L.C.# Collateral Type #
Comp. Cus# Comm.
L.C.O.# Approval
<PAGE>
EXHIBIT J
TO CREDIT
AGREEMENT
FORM OF INCREMENTAL LOAN ACTIVATION NOTICE
Date: ___________________
To: The Chase Manhattan Bank,
as Administrative Agent
Media & Communications Group
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Stephen P. Mumblow
Re: Univision Communications Inc.
We refer to that certain Credit Agreement dated as of September 26, 1996
among The Chase Manhattan Bank, as administrative agent and as a managing
agent, Banque Paribas, as a managing agent, the financial institutions
parties thereto and Univision Communications Inc. (the "BORROWER"). (Such
Credit Agreement, as amended, modified or supplemented from time to time, the
"CREDIT AGREEMENT"). Capitalized terms used herein and not defined have the
meanings assigned to them in the Credit Agreement.
This notice is the Activation Notice referred to in the Credit Agreement,
and the Borrower and each of the Lenders signatory hereto (the "INCREMENTAL
LOAN LENDERS") hereby notify you that:
1. The Activation Date is ________________.
2. The Incremental Loan Commitment of each Incremental
Loan Lender is set forth opposite such Incremental
Loan Lender's name on the signature pages hereof under
the caption "Incremental Loan Commitment".
3. The Incremental Loan Commitment Percentage of each
Incremental Loan Lender is set forth opposite such
Incremental Loan Lender's name on the signature
-1-
<PAGE>
pages hereof under the caption "Incremental Loan Commitment
Percentage.
UNIVISION COMMUNICATIONS INC.
By: _________________________
Name: _______________________
Title: ______________________
Incremental Loan
Commitment: $______ [NAME OF INCREMENTAL LOAN LENDER]
Incremental Loan Commitment
Percentage: ___% By: _________________________
Name: _______________________
Title: ______________________
CONSENTED TO:
THE CHASE MANHATTAN BANK,
as a Managing Agent and as
Administrative Agent
By: ________________________
Name: ______________________
Title: _____________________
BANQUE PARIBAS, as a
Managing Agent
By: ________________________
Name: ______________________
Title: _____________________
<PAGE>
EXHIBIT K
TO CREDIT
AGREEMENT
September 30th 1 9 9 6
884,097-014
LA1-714924.V3
To the Administrative Agent,
the Managing Agents and the Lenders
referred to below
Re: UNIVISION COMMUNICATIONS INC.
Ladies and Gentlemen:
We have acted as counsel to Univision Communications Inc., a Delaware
corporation (the "Borrower"), Univision Television Group, Inc., a Delaware
corporation ("UTG"), PTI Holdings, Inc., a Delaware corporation ("PTI
Holdings"), Perenchio Television, Inc., a Delaware corporation ("PTI"), The
Univision Network Limited Partnership, a Delaware limited partnership
("Network"), The Univision Network Holding Limited Partnership, a Delaware
limited partnership ("Network Holding"), Galavision Inc., a Delaware
corporation ("Galavision"), Sunshine Acquisition Corp., a California
corporation ("Sunshine") and Sunshine Acquisition, L.P., a California limited
partnership ("Sunshine L.P.") (collectively, the "Loan Parties") in
connection with the making of loans (the "Loans") by the Lenders (as defined
below) to the Borrower pursuant to, and the transactions related to, the
Credit Agreement dated as of September 26, 1996 (the "Credit Agreement")
among the Borrower, The Chase Manhattan Bank, a New York banking corporation
("Chase"), as administrative agent (in such capacity, the "Administrative
Agent"), Banque Paribas, a French banking corporation ("Paribas"), as a
managing agent, and Chase, as a managing agent (collectively, the "Managing
Agents") and Chase, Paribas and the other financial institutions party
thereto as lenders (collectively, the "Lenders"). This opinion is being
delivered to you pursuant to Section 4.1(g)(i) of the Credit Agreement. All
capitalized terms used and not defined herein have the same meanings herein
as set forth in the Credit Agreement.
In our capacity as such counsel, we have examined, among other things,
originals, or copies identified to our satisfaction as being true copies, of
such records, documents and other instruments of the Loan Parties, the books
and records of each of the entities whose stock or partnership interests
constitute "Pledged Shares" or "Pledged Partnership Interests"
<PAGE>
Page 2 - Administrative Agent, Managing Agent and Lenders - September __, 1996
as defined in paragraphs 8 and 9 below, certificates of public officials and
officers of the Loan Parties, and other documents as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
These records, documents and instruments included the following:
(i) the Credit Agreement,
(ii) the Revolving Notes and the Term Notes,
(iii) the Guarantees made by each of UTG, PTI Holdings, PTI,
Network, Network Holdings, Galavision, Sunshine and
Sunshine L.P.,
(iv) the Security Agreement,
(v) the Guarantor Security Agreements made by each of UTG, PTI
Holdings, PTI, Network, Network Holdings, Galavision,
Sunshine and Sunshine L.P.,
(vi) the Intercreditor Agreement,
(vii) the Program Cost Sharing Agreement,
(viii) the Program License Agreements,
(ix) the Sponsor Loan Documents,
(x) the Combined Entities Loan Agreement and
(xi) the Tax Allocation Agreement.
The documents described in (i) through (vi) above are hereinafter
collectively referred to as the "Loan Documents." The documents described in
(iv) and (v) above are also hereinafter sometimes collectively referred to as
the "Collateral Documents." The documents described in (i) through (xi)
above are hereinafter referred to as the "Transaction Documents."
On the basis of such examination and our consideration of such questions
of law as we have deemed relevant in the circumstances, and subject to the
assumptions, limitations, qualifications and exceptions set forth herein, we
are of the opinion that:
1. The Borrower has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
the corporate power and authority to carry on its business as described in
the Transaction Documents, to
<PAGE>
Page 3 - Administrative Agent, Managing Agent and Lenders - September __, 1996
own, lease and operate its properties as described in the Transaction
Documents, and to execute, deliver and perform its obligations under the
Transaction Documents to which it is a party.
2. Each of UTG, PTI Holdings, PTI, Sunshine and Galavision has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its state of incorporation, in each case with the corporate power
and authority to carry on its business as described in the Transaction
Documents, to own, lease and operate its properties as described in the
Transaction Documents, and to execute, deliver and perform its obligations
under the Transaction Documents to which it is a party.
3. Each of Network, Network Holding and Sunshine L.P. has been duly
formed and is validly existing as a limited partnership in good standing
under the laws of its state of formation, in each case with the power and
authority required to conduct its business as described in the Transaction
Documents, to own, lease and operate its properties as described in the
Transaction Documents, and to execute, deliver and perform its obligations
under the Transaction Documents to which it is a party.
4. The Borrower has duly authorized, executed and delivered each of the
Transaction Documents to which it is a party, and each such Transaction
Document is a legally valid and binding agreement or instrument of the
Borrower enforceable against it in accordance with its terms.
5. Each of PTI, Network, Network Holding, Galavision, Sunshine and
Sunshine L.P. has duly authorized, executed and delivered each of the
Transaction Documents to which it is a party, each such Transaction Document
is a legally valid and binding agreement or instrument of PTI, Network,
Network Holding, Galavision, Sunshine and Sunshine L.P., as the case may be,
enforceable against each of them in accordance with its terms.
6. The execution and delivery by the Loan Parties of the Transaction
Documents (to the extent to which each of them is a party thereto) and their
performance thereof on or before the date hereof did not and does not (i)
violate any Requirements of Law or (ii) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) or
require consent under, or result in the creation or imposition of any lien,
charge or encumbrance upon any material property or assets of the Loan
Parties, taken as a whole, pursuant to the terms of any material agreement or
instrument known to us to which any Loan Party is a party or by which any of
their respective properties or assets may be bound, except for liens created
pursuant to the Collateral Documents and except for conflicts and defaults
under certain agreements which prohibit the grant of the security interests
contemplated by the Collateral Documents.
<PAGE>
Page 4 - Administrative Agent, Managing Agent and Lenders - September __, 1996
7. No consents or approvals of, authorizations by, or registrations,
declarations, waivers or filings with any federal, New York or California
Governmental Authority which have not been obtained or made are required
(i) in connection with the execution, delivery and performance
on or before the date hereof by any Loan Party of any Transaction Document;
(ii) for the grant or the perfection by any Loan Party pursuant
to any Transaction Document of any security interest purported to be
created thereby; or
(iii) for the exercise by the Administrative Agent, the Managing
Agents or any Lender of any of their rights and remedies under any
Transaction Document,
except for (A) the filing of the Financing Statements in the Filing Offices
and (B) the recording of the Security Agreement and the Guarantor Security
Agreements in the U.S. Copyright Office and the U.S. Patent and Trademark
Office.
8. The Pledged Shares described on Schedule F to the Security Agreement
(the "Borrower Pledged Shares") constitute 80.11% of the shares of PTI
Holdings. The Pledged Shares described on Schedule F of the Guarantor
Security Agreement of PTI (the "PTI Pledged Shares") constitute 100% of the
shares of capital stock of UTG. The Pledged Shares described on Schedule F
of the Guarantor Security Agreement of Network (the "Network Pledged Shares";
together with the Borrower Pledged Shares and the PTI Pledged Shares, the
"Pledged Shares") constitute 100% of the shares of capital stock of
Galavision. The Pledged Shares have been duly authorized and validly issued,
and are fully paid and nonassessable. The delivery to, and the continued
possession by, the Administrative Agent in the State of California or in the
State of New York, on behalf of the Lenders, of the certificates representing
the Pledged Shares creates in favor of the Administrative Agent on behalf of
the Lenders a valid and perfected security interest in the Pledged Shares, as
security for the obligations purported to be secured by the Security
Agreement and the Guarantor Security Agreements. Such security interests are
prior to any other security interests in the Pledged Shares other than liens
on securities referred to in Section 8321(2) of the California Uniform
Commercial Code or Section 8-321(2) of the New York Uniform Commercial Code,
as the case may be, which may be perfected for a period of 21 days (but only
for so long as such interest remains perfected pursuant to Section 8321 of
the California Uniform Commercial Code or Section 8-321 of the New York
Uniform Commercial Code, as the case may be) after a transfer pursuant to
Section 8313(1)(a) of the California Uniform Commercial Code or Section
8-313(1)(i) of the New York Uniform Commercial Code, as the case may be,
without any further action. We have no knowledge of any such liens. No
filings, registrations or recordings are required in order to perfect the
security interests in the Pledged Shares under the Security Agreement and the
Guarantor Security Agreements.
<PAGE>
Page 5 - Administrative Agent, Managing Agent and Lenders - September __, 1996
9. The Pledged Partnership Interests described on Schedule F to the
Guarantor Security Agreement executed by Network Holding (the "Pledged
Partnership Interests") constitute 99.99% of the Pledged Partnership
Interests of Network. The execution and delivery of such Guarantor Security
Agreement creates in favor of the Administrative Agent on behalf of the
Lenders a valid security interest in the Pledged Partnership Interests, as
security for the obligations purported to be secured by such Guarantor
Security Agreement. Upon the filing of the financing statements naming
Network Holding as debtor with the Secretaries of State of the States of
California, Delaware and Florida referred to in the next succeeding
paragraph, the security interest in the Pledged Partnership Interests will,
subject to the assumptions and qualifications in the next succeeding
paragraph, be perfected.
10. We have examined the financing statements (the "Financing
Statements") to be filed in the filing offices listed on Appendix I hereto
(the "Filing Offices"). Upon the filing of the Financing Statements in the
Filing Offices, assuming that the representations made by the relevant Loan
Party in the relevant Security Agreement or Guarantor Security Agreement with
respect to the location of its Collateral (as defined in the relevant
Collateral Document), its place of business and its chief executive office
are and remain true and correct, the security interests granted by it to the
Administrative Agent for the benefit of the Lenders under the relevant
Collateral Document in and to such Collateral will constitute security
interests therein to the extent that security interests in such Collateral
may be perfected by filing a financing statement under Article 9 of the
Uniform Commercial Code ("UCC") as presently in effect in the states in which
the Filing Offices are located (the "Collateral States"). Except for the
filing of periodic continuation statements, it is not necessary under the UCC
to re-record, re-register or refile a UCC-1 financing statement, or to
record, register or file any other or additional documents, instruments or
statements in order to maintain perfection of the security interests in any
such Collateral granted in favor of the Administrative Agent, except that
additional financing statements may be required to be filed if the relevant
Loan Party changes its name, identity or corporate structure so as to make
the relevant Financing Statements seriously misleading (unless new
appropriate financing statements indicating the new name, identity or
corporate structure are duly filed), the location of its chief executive
office or chief place of business or the states in which any of the
Collateral is located.
11. The grant of the security interest in the Pledged Partnership
Interests and the grant of the security interest in the Collateral (as
defined in the Guarantor Security Agreement executed by Network Holding), do
not require the consent of any other partner in the partnerships in which
such interests are granted.
12. To our knowledge, there is no pending or threatened action, suit or
proceeding affecting any Loan Party before any federal, New York or
California Governmental Authority or arbitrator (except as set forth in
Schedule 13 to the Credit Agreement, Schedule 5 of the Guarantee executed by
Network and Schedule 1 to each of the Guarantees
<PAGE>
Page 6 - Administrative Agent, Managing Agent and Lenders - September __, 1996
executed by PTI, respectively) which may materially adversely affect the
operations or condition, financial or otherwise, of the Loan Parties taken as
a whole or the ability of any Loan Party to perform its obligations under any
Loan Document.
13. None of the Borrower, UTG, PTI Holdings, PTI, Network Holding,
Network, Galavision, Sunshine or Sunshine L.P. is, an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Our opinions in paragraphs 4 and 5 above as to the enforceability of the
Transaction Documents is subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting
creditors' rights generally, (b) general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and
fair dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether considered in a proceeding in equity
or at law and (c) public policy considerations or court decisions which may
limit the rights of parties to obtain indemnification. We further advise you
that certain provisions of the Collateral Documents are or may be
unenforceable in whole or in part, but the inclusion of such provisions does
not affect the validity of any of the remaining provisions of the Loan
Documents and such limitations and unenforceability do not make the rights
and remedies provided in or contemplated by the Loan Documents inadequate for
the practical realization of the rights and benefits afforded thereby. We
express no opinion as to the enforceability of provisions in the Collateral
Documents purporting to prohibit transfers to the extent they include
transfers described in Section 9-311 of the UCC.
We have not been requested to render an opinion and, with your
permission, we express no opinion as to the effect on the Transaction
Documents of any applicable laws relating to fraudulent conveyances or
transfers. We understand you have received a certificate of the Chief
Financial Officer of the Borrower relating to certain factual matters which
may be relevant to such laws.
Our opinions herein as to all matters relating to the Communications Act
of 1934 and proceedings before the Federal Communications Commission are
subject to our separate opinion of even date herewith addressed to you
covering such matters.
We express no opinion with respect to the validity, creation or
perfection of the security interests granted to the Administrative Agent
pursuant to the Collateral Documents on any Collateral to the extent such
Collateral includes or may include "know-how," patents, copyrights, trademarks,
trade-names or the like. We further express no opinion as to Collateral (a)
which is an accession to, or commingled or processed with other goods to the
extent that a security interest therein is limited by Section 9-314 or 9-315 of
the UCC of each Collateral State or (b) which consists or may consist of items
which are subject
<PAGE>
Page 7 - Administrative Agent, Managing Agent and Lenders - September __, 1996
to a certificate of title statute of any jurisdiction or a document of title.
As used in this paragraph and hereinafter in this opinion, "Collateral"
refers collectively to Collateral as defined in each of the Collateral
Documents.
We express no opinion as to Collateral which consists or may consist of
items which are subject to a statute, regulation or treaty of the United
States of America which provides for a national or international registration
or a national or international certificate of title for the perfection of a
security interest therein or which specifies a place of filing different from
the place specified in the UCC of each Collateral State for filing to perfect
such security interest.
In rendering the opinions in paragraphs 8, 9 and 10, we have assumed (a)
that each Loan Party has, or will have as of the relevant times, rights in
the Collateral in which it has granted a security interest to the
Administrative Agent within the meaning of Section 9-203(1)(c) of the UCC of
each Collateral State, (b) that "value" has been given within the meaning of
9-203(1)(b) of the UCC of each Collateral State, (c) that none of the
Collateral arises out of any transaction described in Section 9-104 of the
UCC of any Collateral State, (d) that the Collateral does not include real
property, fixtures, farm products, consumer goods, or crops, timber, minerals
or the like (including oil and gas) or accounts resulting from the sale of an
interest in minerals or the like (including oil and gas), (e) the sufficiency
and adequacy for purposes of the UCC of any Collateral State of the signature
of the secured party and the description of the Collateral in the Collateral
Documents and the Financing Statements, and (f) that no agreements or
understanding existing between the Managing Agents, the Administrative Agent
or any Lender, on the one hand, and any Loan Party or third parties, on the
other hand, that would modify, release or terminate the security interests
granted to the Administrative Agent on behalf of the Lenders pursuant to the
Collateral Documents. We advise you that security interests in any
Collateral constituting goods is subject to the rights of buyers described in
Section 9-307 of the UCC of any Collateral State. We also advise you that a
security interest in accounts and general intangibles will be subject to the
rights of account debtors. We also call your attention to the fact that
under certain circumstances described in Section 9-306 of the UCC of any
Collateral State the right of a secured party to enforce its security
interests in proceeds of Collateral may be limited.
Except as expressly set forth in paragraphs 8 and 9, we express no
opinion with respect to the existence, condition, location or ownership of
the Collateral or the priority of any liens thereon or security interests
therein.
Insofar as the Security Documents create security interests in
after-acquired property, such security interests will be subject to Sections
547 and 552 of the Bankruptcy Code.
To the extent that the obligations of any Loan Party may be dependent
upon such matters, we assume for purposes of this opinion that the
Transaction Documents to which
<PAGE>
Page 8 - Administrative Agent, Managing Agent and Lenders - September __, 1996
they are party have been duly authorized, executed and delivered by all
parties thereto other than the Loan Parties and are enforceable against such
other parties in accordance with their respective terms subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors' rights generally and general principles of
equity. We are not expressing any opinion as to the effect of compliance by
the Managing Agents, the Administrative Agent and the Lenders with any state
or federal laws or regulations applicable to the transactions contemplated by
the Loan Documents because of the nature of the Managing Agents', the
Administrative Agent's or any such Lender's business.
Any statement in this opinion that is qualified by any phrase that
includes the works "know," "known," "knowledge," or similar words is limited
to the actual present knowledge of those attorneys in our firm who have given
substantive attention to the representation described in the introductory
paragraph of this opinion and the other transactions described in the
Transaction Documents and does not include any knowledge of any other
attorneys within our firm or any constructive or imputed notice of any
matters or items of information (except that, with respect to paragraph 12,
it includes the actual present knowledge of other attorneys in the firm as to
matters to which they have given substantive attention as counsel for the
Loan Parties in the form of legal consultation and, where appropriate, legal
representation in the past 12 months). We have not undertaken any
independent investigation (outside of our representation of the Loan Parties
in connection with the transactions described in the Transaction Documents)
to determine the accuracy of any such statement; and no inference as to our
knowledge of any matters bearing on the accuracy of any such statement should
be drawn from the fact of our representation of the Loan Parties in
connection with this opinion or in other matters.
In our examination, we have assumed the genuineness of all signatures
(except for those of the Loan Parties), the authenticity of all agreements,
instruments, corporate records, certificates and other documents submitted to
us as originals, and the conformity to authentic originals of all agreements,
instruments, records, certificates and other documents submitted to us as
certified, conformed, or photostatic copies. As to questions of fact
material to the opinions hereinafter expressed, we have relied upon
representations of the Loan Parties made in the Transaction Documents and of
their respective officers or of public officials.
We are members of the Bars of the State of California and New York.
Except as otherwise specifically set forth in this paragraph, in this opinion
we express no opinion as to the laws of any jurisdiction other than the laws
of the States of California and New York, the General Corporation Law and
Revised Uniform Limited Partnership Act of the State of Delaware, and the
federal laws of the United States of America (other than laws specifically
related to the FCC and regulations promulgated by the FCC which are covered
by our separate opinion to you referred to above). Our opinions rendered in
paragraphs 6 and 7 are based upon our review only of those statutes, rules
and regulations which, in our experience, are normally applicable to
transactions contemplated by the Transaction Documents. Our
<PAGE>
Page 9 - Administrative Agent, Managing Agent and Lenders - September __, 1996
opinions in paragraph 6 and 7 above exclude matters arising under the federal
and state securities laws. Our opinions in paragraphs 9 and 10 above with
respect to the States of Arizona, Connecticut, Delaware, Florida, Illinois,
Michigan, New Jersey, New Mexico, Pennsylvania and Texas and the District of
Columbia are based solely upon a review of the provisions of Sections 9-103,
9-203, 9-302, 9-303, 9-304, 9-305, 9-306, 9-311, 9-401, 9-402 and 9-403 of
the UCC as currently in effect in such states or jurisdictions, as reported
in Uniform Laws Annotated, Uniform Commercial Code (1981 and Supp. 1996).
This opinion is rendered only to you and is solely for your
benefit in connection with the above transactions. This opinion may not be
relied upon by you for any other purpose, or relied upon by any other person,
firm or corporation for any purpose, without our prior written consent.
Respectfully submitted,
<PAGE>
APPENDIX I
FINANCING STATEMENTS
<TABLE>
<CAPTION>
DEBTOR FILING OFFICE
------ -------------
<S> <C>
Company 1. Secretary of State of State of California
UTG 1. Secretary of State of State of New Jersey
2. Secretary of State of State of New York
3. City Registrar of New York County, New York
4. Secretary of State of State of Florida
5. Secretary of State of State of Texas
6. Secretary of State of State of New Mexico
7. Secretary of State of State of California
8. Secretary of State of State of Illinois
9. Secretary of State of State of Michigan
10. Recorder's Office of District of Columbia
11. Secretary of State of State of Pennsylvania
12. Recorder's Office of Philadelphia County, Pennsylvania
13. Secretary of State of State of Connecticut
14. Secretary of State of State of Arizona
PTI Holdings 1. Secretary of State of State of California
i
<PAGE>
Network 1. Secretary of State of State of Florida
2. Secretary of State of State of New Jersey
3. Secretary of State of State of California
4. Secretary of State of State of Texas
5. Secretary of State of State of New York
6. Recorder's Office of New York County, New York
7. Secretary of State of State of Illinois
8. Secretary of State of State of Michigan
9. Recorder's Office of District of Columbia
Galavision 1. Secretary of State of State of California
2. Secretary of State of State of Florida
PTI 1. Secretary of State of State of California
Network Holding 1. Secretary of State of State of California
2. Secretary of State of the State of Delaware
3. Secretary of State of the State of Florida
</TABLE>
ii
<PAGE>
September
30th
1 9 9 6
884,097-014
DCI-259408.V2
To the Administrative Agent,
the Managing Agents and the Lenders
referred to below
Re: UNIVISION COMMUNICATION INC.
Ladies and Gentlemen:
We have acted as special communications counsel to Univision
Communications Inc., a Delaware corporation (the "Borrower") and its
affiliated corporations and partnerships in connection with the making of
loans (the "Loans") by the Lenders (as defined below) to the Borrower
pursuant to, and the transactions related to, the Credit Agreement dated as
of September 26, 1996 (the "Credit Agreement") among the Borrower, The Chase
Manhattan Bank, a New York banking corporation ("Chase"), as administrative
agent (in such capacity, the "Administrative Agent"), Banque Paribas, a
French banking corporation ("Paribas"), as a managing agent, and Chase, as a
managing agent (collectively, the "Managing Agents") and Chase, Paribas and
the other financial institutions party thereto as lenders (collectively, the
"Lenders") and in connection with the initial public offering of the common
stock of the Borrower and certain reorganization transactions involving the
Borrower and such affiliated corporations and partnerships referred to in
Section 3.30 of the Credit Agreement (the "Reorganization"). This opinion is
being delivered to you pursuant to Section 4.1(g)(ii) of the Credit
Agreement. All capitalized terms used and not defined herein have the same
meanings herein as set forth in the Credit Agreement.
In our capacity as such counsel, we have examined originals or copies
of records routinely available for public inspection in the Washington, D.C.
offices of the FCC, the Loan Documents, the attached certificates of officers
and other representatives of the Loan Parties (the "Certificates"), and such
other documents as in our judgment are necessary or appropriate to enable us
to render this opinion.
<PAGE>
Page 2 - Administrative Agent, Managing Agent and Lenders - September __, 1996
In rendering this opinion, we have assumed (i) the genuineness of all
signatures on documents submitted to us (other than the Borrower), (ii) the
legal capacity of natural persons, (iii) the authenticity and completeness of
all documents submitted to us as originals, (iv) the conformity with original
documents of all documents submitted to us as certified, conformed or
photostatic copies or facsimiles; (v) the authority of the person or persons
who executed any such documents on behalf of any person (including, without
limitation, any entity or governmental agency) and (vi) as to any such
person, we have assumed that such person has all the requisite power and
authority and has fulfilled all necessary procedures to take and adopt the
actions, or to enter into the agreements, set forth in such documents
executed by such person or on behalf of such person and to effect the actions
or transactions contemplated thereby.
We have not, except as specifically identified above,
undertaken any independent review or investigation of factual or other
matters relating to the Loan Parties or any of the Stations or of any other
matters, and we have made no inspection of the assets, properties, businesses
or operations of the Loan Parties, including, without limitation, the
facilities of the Stations. We have relied, as to factual matters, without
independent investigation, upon the representations, warranties and
certifications made by the Borrower pursuant to the Credit Agreement and the
Certificates. We also have relied upon pertinent statements and
representations of members of the staff of the FCC regarding certain factual
matters.
We also have assumed and relied, without independent inquiry
or verification by us, upon the accuracy and completeness of all information
located in the publicly available files of the FCC in Washington, D.C., which
we examined during the two weeks immediately preceding the Initial Closing
Date. In rendering this opinion, we have assumed the absence of changes in
such files since our examination of them. We have not examined or
investigated the records which may be available in any other office or branch
of the FCC. You should be aware that certain of the records of the FCC are
public as a matter of law (for example, under the federal Freedom of
Information Act). Such records, however, may not have been included in the
files routinely available for public inspection at the times we examined
those files in connection with rendering this opinion. Accordingly, we
express no opinion regarding the completeness of the FCC files at the time we
reviewed them. Furthermore, there may be records of matters pending at the
FCC that were not available for inspection by the public as a matter of law
and that we therefore did not examine. This opinion is given, and all
statements herein are made, in the context of the foregoing.
We have not examined the records of any governmental body
other than the FCC, and we have not searched the docket files of any court,
in connection with this opinion. We express no opinion regarding technical
or engineering matters.
This opinion is limited to the Communications Act and the
rules, regulations and generally available written and published policies of
the FCC (the "FCC Rules") as of the
<PAGE>
Page 3 - Administrative Agent, Managing Agent and Lenders - September , 1996
date of this opinion, all as applicable to the Loan Parties in connection
with the transactions being consummated on the date hereof pursuant to the
Credit Agreement, the Reorganization and the IPO. We assume no
responsibility to advise you of any future changes in the Communications Act
or the FCC Rules or the impact of any such changes on this opinion.
On the basis of such examination and our consideration of such
questions of law as we have deemed relevant in the circumstances, and subject
to the limitations and qualifications set forth herein, we are of the opinion
that:
1. The Subsidiaries of the Borrower identified on Schedule I hereto
hold the FCC licenses, permits and authorizations specified on such Schedule
I (the "FCC Licenses").
2. The FCC Licenses are in full force and effect.
3. The FCC Licenses include all material FCC licenses, permits and
authorizations necessary for the Borrower's respective Subsidiaries
identified on Schedule I hereto to operate television broadcast stations of
the type indicated on the respective channels in the communities listed on
such Schedule I.
4. The FCC has granted the Borrower's application on FCC Form 316
filed pursuant to 47 C.F.R. Section 73.3540(f) (1995) in connection with the
Reorganization and the IPO (the "Application") and thereby has consented to
the changes in ownership interests in the Borrower effected by the
Reorganization and the IPO.
5. The FCC's consent is in full force and effect. Such consent
constitutes all necessary material consents, approvals and authorizations
required under the Communications Act for the Reorganization and the IPO to
occur.
6. Based solely upon a review of the records in the public
reference rooms of the FCC available for inspection during the two weeks
immediately preceding the Initial Closing, appropriate files of this firm,
the Certificates, and an inquiry of lawyers in this firm who have substantial
responsibility for the Borrower's legal matters handled by this firm, we
confirm that: (A) there is no proceeding (including any rulemaking
proceeding), complaint or investigation against the Borrower or any of its
Subsidiaries or in respect of the Station licenses or any of the FCC Licenses
pending or threatened before the FCC (including any pending judicial review
of such an action by the FCC) with respect to which the outcome, if
determined adversely to the Borrower or any of its Subsidiaries, would have a
material adverse effect on the operations of the Borrower and its
Subsidiaries (except for proceedings affecting the television industry
generally to which neither the Borrower nor any of its Subsidiaries is a
specific party); and (B) neither the Borrower nor any of its Subsidiaries has
been the subject of any final adverse order, decree or ruling of the FCC
(including any
<PAGE>
Page 4 - Administrative Agent, Managing Agent and Lenders - September , 1996
notice of forfeiture that has been paid) since the last renewal of the FCC
Licenses which had a material adverse effect on the operations of the
Borrower and its Subsidiaries.
7. The Borrower has confirmed to us that, to the best of its
knowledge, upon consummation of the Reorganization and the IPO, the only
equity interests in the Borrower that will be owned or voted, directly or
indirectly, by aliens, entities organized under the laws of foreign
governments, or the representatives of either (within the meaning of the
Communications Act and the rules, regulations, written policies and decisions
of the FCC) will be (A) those shares of Class T Common Stock directly or
indirectly owned by Univisa, Inc. and Univisa Broadcasting, L.P. and (B)
those shares of Class V Common Stock directly or indirectly owned by
Venevision International, Ltd., Dennevar B.V., Bravo Enterprises, Inc. and
Tisdell International Management Ltd. Based upon such confirmation and the
approval of the Application by the FCC, upon consummation of the
Reorganization and the IPO, the Borrower will comply with Section 310(b) of
the Communications Act with respect to the collective equity interests in the
Borrower owned or voted, directly or indirectly, by aliens, entities
organized under the laws of foreign governments, or the representatives of
either.
This is the separate opinion as to FCC matters referred to in our
opinion of even date herewith as to the Credit Agreement and related matters
delivered pursuant to Section 4.1(g)(i) of the Credit Agreement. This
opinion is specifically limited only to the matters covered hereby.
Additionally, this opinion is based upon a review of those provisions of the
Communications Act and the FCC Rules that, in our experience, are normally
applicable to entities conducting television broadcast operations similar to
those conducted by the Stations.
This opinion is rendered only to you and is solely for your benefit
in connection with the above transactions. This opinion may not be relied
upon by you for any other purpose, and shall not be quoted in whole or in
part, or otherwise be referred to, nor be filed with or otherwise furnished
to, or relied upon by, any other person, firm, corporation or governmental
agency for any purpose, without in each instance our prior written consent.
Respectfully submitted,
<PAGE>
[Second Closing Date]
1 9 9 6
884,097-014
LA1-716575.V3
To the Administrative Agent,
the Managing Agents and the Lenders
referred to below
Re: UNIVISION COMMUNICATIONS INC.
----------------------------
Ladies and Gentlemen:
Reference is made to our opinion dated September 30, 1996 addressed
to you and delivered to you in connection with the transactions consummated
on the "Initial Closing Date" under the Credit Agreement referred to below
(the "Initial Closing Date Opinion"). We have acted as counsel to Univision
Communications Inc., a Delaware corporation (the "Borrower"), Univision
Television Group, Inc., a Delaware corporation ("UTG"), PTI Holdings, Inc., a
Delaware corporation ("PTI Holdings"), Perenchio Television, Inc., a Delaware
corporation ("PTI"), The Univision Network Limited Partnership, a Delaware
limited partnership ("Network"), The Univision Network Holding Limited
Partnership, a Delaware limited partnership ("Network Holding"), Galavision
Inc., a Delaware corporation ("Galavision"), Sunshine Acquisition Corp., a
California corporation ("Sunshine") and Sunshine Acquisition, L.P., a
California limited partnership ("Sunshine L.P.") (collectively, the "Loan
Parties") in connection with the making of loans (the "Loans") by the Lenders
(as defined below) to the Borrower pursuant to, and the transactions related
to, the Credit Agreement dated as of September 26, 1996 (the "Credit
Agreement") among the Borrower, The Chase Manhattan Bank, a New York banking
corporation ("Chase"), as administrative agent (in such capacity, the
"Administrative Agent"), Banque Paribas, a French banking corporation
("Paribas"), as a managing agent, and Chase, as a managing agent
(collectively, the "Managing Agents") and Chase, Paribas and the other
financial institutions party thereto as lenders (collectively, the
"Lenders"). This opinion is being delivered to you pursuant to Section
4.2(e)(i) of the Credit Agreement in connection with the transactions
consummated and to be consummated on the "Second Closing Date". All
capitalized terms used and not defined herein have the same meanings herein
as set forth in the Credit Agreement.
<PAGE>
Page 2 - Administrative Agent, Managing Agent and Lenders - September , 1996
In our capacity as such counsel, we have examined, among other
things, originals, or copies identified to our satisfaction as being true
copies, of such records, documents and other instruments of the Loan Parties,
certificates of public officials and officers of the Loan Parties, and other
documents as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below. These records, documents and
instruments included those listed in the Initial Closing Date Opinion and
certificates of Loan Parties dated as of this date. For purposes of this
opinion:
"Loan Documents" does not include the Guarantee and the Guarantor
Security Agreement executed and delivered by Network Holding on the
Initial Closing Date;
"Collateral Documents" does not include the Guarantor Security
Agreement executed and delivered by Network Holding on the Initial
Closing Date;
"Program License Agreements" gives effect to the effectiveness on
the Second Closing Date of provisions contained in the Amended and
Restated Program License Agreements each dated as of October 2, 1996
effective on this date;
"PTI" means PTI Holdings, the surviving corporation of the merger
of PTI into PTI Holdings; and
"Transaction Documents" does not include the Program Cost Sharing
Agreement, the Sponsor Loan Documents, the Combined Entities Loan
Agreement and the Tax Allocation Agreement.
On the basis of such examination and our consideration of such
questions of law as we have deemed relevant in the circumstances, and subject
to the assumption, limitations, qualifications and exceptions set forth
herein, we are of the opinion that:
1. The IPO has been consummated and the Borrower has issued and sold
9,395,500 shares of its Class A Common Stock. All such shares have been
validly issued, fully paid and non-assessable.
2. In accordance with the Plan of Reorganization, (a) the Borrower is
the owner of 100% of the outstanding capital stock of PTI, Galavision and
Sunshine Acquisition and 95.25% of the limited partnership interest of
Sunshine L.P., (b) Network Holdings has been liquidated and its assets
distributed to the Borrower and Sunshine L.P. so that the Borrower is the
owner of 71.85% of the limited partnership interest of Network and Sunshine
Acquisition is the owner of 28.15% of the limited partnership interest of
Network, (c) Sunshine Acquisition is the owner of 4.75% of the limited
partnership interest of Sunshine L.P. and (d) Perenchio Television, Inc. has
been merged into PTI Holdings.
<PAGE>
Page 3 - Administrative Agent, Managing Agent and Lenders - September , 1996
3. We hereby confirm our opinions set forth in paragraphs 1, 2, 4, 6, 7
and 12 of the Initial Closing Date Opinion with the same effect as though
such opinions were given as of this date except that "PTI" (as used therein)
has merged into "PTI Holdings" (as used therein) and the separate corporate
existence of "PTI" has terminated and "PTI Holdings" is the surviving
corporation.
4. We hereby confirm our opinions set forth in paragraphs 3, 5 and 13
of the Initial Closing Date after deleting references to "Network Holdings"
contained therein with the same effect as though such opinions were given as
of this date.
5. The Pledged Shares described on Schedule F to the Security Agreement
(the "Borrower Pledged Shares") constitute 100% of the shares of PTI
Holdings, Galavision and Sunshine Acquisition. The Guarantor Security
Agreement of PTI has been assumed by PTI Holdings and the Pledged Shares
described on Schedule F thereof (the "PTI Holdings Pledged Shares"; together
with the Borrower Pledged Shares, the "Pledged Shares") constitute 100% of
the shares of capital stock of UTG. The Pledged Shares have been duly
authorized and validly issued, and are fully paid and nonassessable. The
delivery to, and the continued possession by, the Administrative Agent in the
State of California or in the State of New York, on behalf of the Lenders, of
the certificates representing the Pledged Shares creates in favor of the
Administrative Agent on behalf of the Lenders a valid and perfected security
interest in the Pledged Shares, as security for the obligations purported to
be secured by the Security Agreement and the Guarantor Security Agreements.
Such security interests are prior to any other security interests in the
Pledged Shares other than liens on securities referred to in Section 8321(2)
of the California Uniform Commercial Code or Section 8-321(2) of the New York
Uniform Commercial Code, as the case may be, which may be perfected for a
period of 21 days (but only for so long as such interest remains perfected
pursuant to Section 8321 of the California Uniform Commercial Code or Section
8-321 of the New York Uniform Commercial Code, as the case may be) after a
transfer pursuant to Section 8313(1)(a) of the California Uniform Commercial
Code or Section 8-313(1)(i) of the New York Uniform Commercial Code, as the
case may be, without any further action. We have no knowledge of any such
liens. No filings, registrations or recordings are required in order to
perfect the security interests in the Pledged Shares under the Security
Agreement and the Guarantor Security Agreements.
6. The Pledged Partnership Interests described on Schedule F to the
Security Agreement (the "Borrower Pledged Partnership Interests") constitute
71.85% of the Pledged Partnership Interests of Network and 95.25% of the
Pledged Partnership Interests of Sunshine L.P. The Pledged Partnership
Interests described on Schedule F to the Guarantor Security Agreement
executed by Sunshine L.P. (the "Sunshine L.P. Pledged Partnership Interests",
together with the Borrower Pledged Partnership Interests, the "Pledged
Partnership Interests") constitute 28.15% of the Pledged Partnership
Interests of Network. The execution and delivery of the Security Agreement
and such Guarantor Security Agreement creates in favor of the Administrative
Agent on behalf of the Lenders a valid security interest in the Pledged
Partnership Interests, as security for the obligations purported to be
secured by the Security Agreement and such Guarantor Security Agreements.
<PAGE>
PAGE 4 - ADMINISTRATIVE AGENT, MANAGING AGENT AND LENDERS - SEPTEMBER __, 1996
Upon the filing of the financing statements naming the Borrower and Sunshine
L.P. as debtors with the Secretaries of State of the States of California,
Delaware and Florida referred to in the next succeeding paragraph, the
security interest in the Pledged Partnership Interests will, subject to the
assumptions and qualifications in the next succeeding paragraph, be perfected.
7. We have examined the financing statements (the "Financing
Statements") to be filed in the filing offices listed on Appendix I hereto
(the "Filing Offices"). Upon the filing of the Financing Statements in the
Filing Offices, assuming that the representations made by the relevant Loan
Party in the relevant Security Agreement or Guarantor Security Agreement with
respect to the location of its Collateral (as defined in the relevant
Collateral Document), its place of business and its chief executive office
are and remain true and correct, the security interests granted by it to the
Administrative Agent for the benefit of the Lenders under the relevant
Collateral Document in and to such Collateral will constitute security
interests therein to the extent that security interests in such Collateral
may be perfected by filing a financing statement under Article 9 of the
Uniform Commercial Code ("UCC") as presently in effect in the states in which
the Filing Offices are located (the "Collateral States"). Except for the
filing of periodic continuation statements, it is not necessary under the UCC
to re-record, re-register or refile a UCC-1 financing statement, or to
record, register or file any other or additional documents, instruments or
statements in order to maintain perfection of the security interests in any
such Collateral granted in favor of the Administrative Agent, except that
additional financing statements may be required to be filed if the relevant
Loan Party changes its name, identity or corporate structure so as to make
the relevant Financing Statements seriously misleading (unless new
appropriate financing statements indicating the new name, identity or
corporate structure are duly filed), the location of its chief executive
office or chief place of business or the states in which any of the
Collateral is located.
8. The grant of the security interest in the Pledged Partnership
Interests does not require the consent of any other partner of Network.
The foregoing opinions are subject to each of the assumptions,
limitations, qualifications and exceptions set forth in the Initial Closing
Date Opinion.
<PAGE>
PAGE 5 - ADMINISTRATIVE AGENT, MANAGING AGENT AND LENDERS - SEPTEMBER __, 1996
This opinion is rendered only to you and is solely for your benefit in
connection with the above transactions. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Respectfully submitted,
<PAGE>
EXHIBIT L
TO CREDIT
AGREEMENT
FORM OF EXCESS CASH FLOW CERTIFICATE
The undersigned, _________________________, the
_________________________ of Univision Communications Inc., a Delaware
corporation (the "Borrower"), refers to that certain Credit Agreement dated
as of September 26, 1996, among The Chase Manhattan Bank, a New York banking
corporation ("Chase"), as administrative agent, Banque Paribas, a French
banking corporation, as a managing agent, Chase, as a managing agent, the
financial institutions parties thereto and the Borrower (such Credit
Agreement, as it may be amended, modified or supplemented from time to time,
the "Credit Agreement"; capitalized terms used herein and not defined shall
have the meanings assigned to them in the Credit Agreement) and certifies as
to the accuracy of the following:
Excess Cash Flow for the Borrower and its Subsidiaries on a consolidated
basis for the fiscal year ending December 31, ____________ is $_____________,
calculated as follows:
1. EBITDA
a. Net Income (after eliminating
extraordinary gains and losses) $_________
b. provision for taxes $_________
c. depreciation and amortization $_________
d. Interest Expense
(i) interest (dividends)
on Funded Debt $_________
(ii) commitment, L/C and line
of credit fees $_________
(iii) net amounts payable (or
receivable) under Interest
Rate Agreements $_________
(iv) interest income $_________
(v) (i) + (ii) + [or -]
(iii) - (iv) $_________
e. termination payments $_________
f. other non-cash charges $_________
<PAGE>
g. Program Rights Payments actually
made. $_________
h. non-cash revenues $_________
i. principal payments for
Transponder Leases $_________
j. a + b + c + d + e + f - g - h
- i $_________
2. Total Debt Service
a. Interest Expense (from 1(d) above) $_________
b. regularly scheduled principal
payments on Funded Debt (see
Modesto Station provisions) $_________
c. principal payments on Revolving
Loans due under Section 2.1(h)(ii)
of the Credit Agreement $_________
d. a + b + c $_________
3. Cash Income Taxes $_________
4. Capital Expenditures (not made with a
financing permitted by Section 6.3(j)
of the Credit Agreement) $_________
5. increase [or decrease] in Net Working
Investment $_________
6. Restricted Payments permitted under
Section 6.6(iii) of the Credit Agreement $_________
7. 1 - 2 - 3 - 4 + [or -] 5 - 6 $_________
IN WITNESS WHEREOF, I HAVE HEREUNTO SIGNED MY NAME, AS THE
____________________ OF UNIVISION COMMUNICATIONS INC., AS OF THIS ____ DAY OF
____________, ___:
_____________________________
Name: _______________________
Title: ______________________
-2-
<PAGE>
SCHEDULE 1
TO CREDIT
AGREEMENT
Revolving Loan Lenders
and
Revolving Loan Commitments
REVOLVING APPLICABLE LENDING
LOAN COMMITMENT LENDER OFFICE
- --------------- ------ ------------------
$11,186,440.68 The Chase Manhattan Bank One Chase Manhattan Plaza
New York, N.Y. 10081
$11,186,440.68 Banque Paribas 2029 Century Park East
Suite 3900
Los Angeles, CA 90067
$7,457,627.12 The Bank of New York One Wall Street
New York, New York 10286
$7,457,627.12 Nationsbank of Texas, N.A. 901 Main St.
Dallas, Texas 75211
$6,779,661.02 ABN Amro Bank N.V. 500 Park Avenue
New York, New York 10017
$6,779,661.02 The First National 100 Federal Street
Bank of Boston Boston, MA 02110
$6,779,661.02 Bank of Montreal 430 Park Avenue
New York, New York 10022
$6,779,661.02 CIBC, Inc. 425 Lexington Avenue
New York, New York 10017
$6,779,661.02 First Union National 301 South College Street
Bank of North Carolina Charlotte, NC 28288
$6,779,661.02 Fleet Bank, N.A. 175 Water St., 28th Fl.
New York, New York 10038
$6,779,661.02 Union Bank of 445 South Figueroa St.
California, N.A. Los Angeles, CA 90071
<PAGE>
$6,271,186.44 Bank of America Illinois 335 Madison Avenue
New York, NY 10017
$6,271,186.44 Bank of Hawaii 130 Merchant Street
20th Floor
Honolulu, Hawaii 96813
$6,271,186.44 Banque Nationale de Paris 180 Montgomery Street
San Francisco, CA 94104
$6,271,186.44 Corestates Bank, N.A. 1339 Chestnut Street
Philadelphia, PA 19107
$6,271,186.44 Caisse Nationale de 520 Madison Avenue
Credit Agricole New York, NY 10022
$6,271,186.44 The Fuji Bank, Limited Two World Trade Center
New York, NY 10048
$6,271,186.44 Mellon Bank, N.A. 1 Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258-0001
$6,271,186.44 The Nippon Credit 245 Park Avenue
Bank, Ltd. New York, NY 10167
$6,271,186.44 Royal Bank of Canada Financial Square
23rd Floor
New York, NY 10005-3531
$6,271,186.44 Societe Generale 1221 Avenue of the Americas
New York, NY 10020
$5,084,745.76 Bank of Nova Scotia One Liberty Plaza
165 Broadway
New York, NY
$5,084,745.76 Credit Lyonnais 1301 Avenue of the Americas
New York, NY 10019
$5,084,745.76 The Dai-Ichi Kangyo 1 World Trade Center
Bank, Ltd. Suite 4911
New York, NY 10048
$5,084,745.76 First Hawaiian Bank 1132 Bishop Street
19th Floor
Honolulu, Hawaii 96813
-2-
<PAGE>
$5,084,745.76 The Industrial Bank 350 S. Grand Avenue
of Japan, Limited Suite 1500
Los Angeles, CA 90071
$5,084,745.76 LTCB Trust Company 165 Broadway, 49th Floor
New York, NY 10006
$5,084,745.76 PNC Bank, National Broad & Chestnut Streets
Association (100 South Broad Street)
Philadelphia, Pennsylvania 19101
$5,084,745.76 The Sanwa Bank, Limited 55 East 52nd Street
New York Branch New York, New York 10055
$5,084,745.76 The Sumitomo Bank, Ltd. 777 South Figueroa Street
Suite 2600
Los Angeles, California 90017
$3,389,830.51 Bank of Ireland 640 Fifth Avenue
New York, NY 10019
$3,389,830.51 Banque Francaise du 645 Fifth Avenue
Commerce Exterieur New York, New York 10022
-3-
<PAGE>
SCHEDULE 2
TO CREDIT
AGREEMENT
Term Loan Lenders
and
Term Loan Commitments
TERM APPLICABLE LENDING
LOAN COMMITMENT LENDER OFFICE
- --------------- ------ ------------------
$21,813,559.32 The Chase Manhattan One Chase Manhattan
Bank Plaza
New York, N.Y. 10081
$21,813,559.32 Banque Paribas 2029 Century Park East
Suite 3900
Los Angeles, CA 90067
$14,542,372.88 The Bank of New York One Wall Street
New York, New York 10286
$14,542,372.88 Nationsbank of 901 Main St.
Texas, N.A. Dallas, Texas 75211
$13,220,338.98 ABN Amro Bank N.V. 500 Park Avenue
New York, New York 10017
$13,220,338.98 The First National 100 Federal Street
Bank of Boston Boston, MA 02110
$13,220,338.98 Bank of Montreal 430 Park Avenue
New York, New York 10022
$13,220,338.98 CIBC, Inc. 425 Lexington Avenue
New York, New York 10017
$13,220,338.98 First Union National 301 South College Street
Bank of North Charlotte, NC 28288
Carolina
$13,220,338.98 Fleet Bank, N.A. 175 Water St., 28th Fl.
New York, New York 10038
$13,220,338.98 Union Bank of 445 South Figueroa St.
California, N.A. Los Angeles, CA 90071
<PAGE>
$12,228,813.56 Bank of America 335 Madison Avenue
Illinois New York, NY 10017
$12,228,813.56 Bank of Hawaii 130 Merchant Street
20th Floor
Honolulu, Hawaii 96813
$12,228,813.56 Banque Nationale de 180 Montgomery Street
Paris San Francisco, CA 94104
$12,228,813.56 Corestates Bank, 1339 Chestnut Street
N.A. Philadelphia, PA 19107
$12,228,813.56 Caisse Nationale de 520 Madison Avenue
Credit Agricole New York, NY 10022
$12,228,813.56 The Fuji Bank, Two World Trade Center
Limited New York, NY 10048
$12,228,813.56 Mellon Bank, N.A. 1 Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258-0001
$12,228,813.56 The Nippon Credit 245 Park Avenue
Bank, Ltd. New York, NY 10167
$12,228,813.56 Royal Bank of Canada Financial Square
23rd Floor
New York, NY 10005-3531
$12,228,813.56 Societe Generale 1221 Avenue of the
Americas
New York, NY 10020
$9,915,254.24 Bank of Nova Scotia One Liberty Plaza
165 Broadway
New York, NY
$9,915,254.24 Credit Lyonnais 1301 Avenue of the
Americas
New York, NY 10019
$9,915,254.24 The Dai-Ichi Kangyo 1 World Trade Center
Bank, Ltd. Suite 4911
New York, NY 10048
$9,915,254.24 First Hawaiian Bank 1132 Bishop Street
19th Floor
Honolulu, Hawaii 96813
-2-
<PAGE>
$9,915,254.24 The Industrial Bank 350 S. Grand Avenue
of Japan, Limited Suite 1500
Los Angeles, CA 90071
$9,915,254.24 LTCB Trust Company 165 Broadway, 49th Floor
New York, NY 10006
$9,915,254.24 PNC Bank, National Broad & Chestnut
Association Streets (100 South Broad Street)
Philadelphia,
Pennsylvania 19101
$9,915,254.24 The Sanwa Bank, New York Branch
Limited 55 East 52nd Street
New York, New York 10055
$9,915,254.24 The Sumitomo Bank, Ltd. 777 South Figueroa Street
Suite 2600
Los Angeles, California 90017
$7,000,000.00 Crescent/MACH I TCW Asset Management
Partners, L.P. Company
200 Park Avenue
Suite 2200
New York, NY 10166-0228
$6,610,169.49 Bank of Ireland 640 Fifth Avenue
New York, NY 10019
$6,610,169.49 Banque Francaise du 645 Fifth Avenue
Commerce Exterieur New York, New York 10022
$1,500,000.00 Integon Life Conning & Company
Insurance Corporation CityPlace II
185 Asylum Street
Hartford, Connecticut
06103
$1,500,000.00 United Companies Life 8545 United Plaza Blvd.
Insurance Company Baton Rouge, LA 70809
-3-
<PAGE>
SCHEDULE 3
TO CREDIT
AGREEMENT
LENDER NOTICE ADDRESSES
THE CHASE MANHATTAN BANK
1 Chase Manhattan Plaza, 4th Floor
New York, NY 10081
Attention: Mr. Stephen P. Mumblow Fax: (212) 552-4905
with a copy to:
The Chase Manhattan Bank, N.A.
Agency and Bank Services Group
140 East 45th Street, 29th Floor
New York, New York 10017
Ms. Janet Beldon Fax: (212) 622-0002
BANQUE PARIBAS
2029 Century Park East, Suite 3900
Los Angeles, California 90067
Attention: Ms. Linda L. Aleshire Fax: (310) 556-8759
ABN AMRO BANK N.V.
500 Park Avenue (10022)
New York, New York 10017
Attention: Mr. Mark Gronich Fax: (212) 446-4203
BANK OF AMERICA ILLINOIS
335 Madison Avenue
New York, New York 10017
Attention: Ms. Laura Calhoun Fax: (212) 503-7173
BANK OF HAWAII
130 Merchant Street, 20th Floor
Honolulu, Hawaii 96813
Attention: Mr. J. Bryan Scearce Fax: (808) 537-8301
<PAGE>
BANK OF IRELAND
640 Fifth Avenue
New York, New York 10019
Attention: Mr. Randolph M. Ross Fax: (212) 586-7752
BANK OF MONTREAL
430 Park Avenue
New York, New York 10022
Attention: Mr. Andrew Moore Fax: (212) 605-1621/1648
THE BANK OF NEW YORK
One Wall Street, 16th Floor
New York, New York 10286
Attention: Mr. Brendan T. Nedzi Fax: (212) 635-8595
BANK OF NOVA SCOTIA
One Liberty Plaza
165 Broadway
New York, New York 10006
Attention: Ms. Margot Bright Fax: (212) 225-5091
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
645 Fifth Avenue
New York, New York 10022
Attention: Mr. Peter Karl Harris Fax: (212) 872-5045
BANQUE NATIONALE DE PARIS
180 Montgomery Street
San Francisco, California 94104
Attention: Ms. Judy Dowling Fax: (415) 391-3390
CIBC, INC.
425 Lexington Avenue
New York, New York 10017
Attention: Ms. Susan Hanna Fax: (212) 856-3558
<PAGE>
CAISSE NATIONALE DE CREDIT AGRICOLE
520 Madison Avenue
New York, New York 10022
Attention: Mr. John McCloskey Fax: (212) 418-2228
CORESTATES BANK, N.A.
1339 Chestnut Street
Philadelphia, Pennsylvania 19107
Attention: Mr. Edward Kittrell Fax: (215) 786-7721
CREDIT LYONNAIS
1301 Avenue of the Americas
New York, New York 10019
Attention: Mr. Mark Thorsheim Fax: (212) 261-3288
CRESCENT/MACH I PARTNERS, L.P.
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, New York 10166-0228
Attention: Mr. Mark L. Gold Fax: (212) 297-4159
Mr. Justin Driscoll
with copy to:
Crescent/MACH I Partners, L.P.
c/o State Street Bank & Trust Co.
Two International Place
Boston, MA 02110
Attention: Ms. Jackie Sweeney Fax: (617) 664-5366
THE DAI-ICHI KANGYO BANK, LTD.
One World Trade Center, Suite 4911
New York, New York 10048
Attention: Mr. Dean Murdock Fax: (212) 912-1879
with a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Mark Broude, Esq. Fax: (212) 583-5955
Attention: Lawrence Goldberg, Esq. Fax: (212) 593-5955
-3-
<PAGE>
FIRST HAWAIIAN BANK
1132 Bishop Street, 19th Floor
Honolulu, Hawaii 96813
Attention: Mr. William Schink Fax: (808) 525-8973
THE FIRST NATIONAL BANK OF BOSTON
100 Federal Street
Boston, Massachusetts 02110
Attention: Mr. Daniel Kortick Fax: (617) 434-3401
FIRST UNION NATIONAL BANK
of North Carolina
301 South College Street
Charlotte, North Carolina 28288
Attention: Mr. James Wood Fax: (704) 374-4092
with a copy to:
Kennedy Covington Lobdell & Hickman LLP
NationsBank Corporate Center
100 No. Tryon Street, Suite 4200
Charlotte, North Carolina 28202
Attention: Michael Flynn, Esq.
FLEET BANK, N.A.
175 Water Street, 28th Floor
New York, New York 10038
Attention: Mr. Garret Komjathy Fax: (212) 602-2663
THE FUJI BANK, LIMITED
Two World Trade Center, 79-81 Floors
New York, New York 10048
Attention: Ms. Anne Dorsey Fax: (212) 912-0516
THE INDUSTRIAL BANK OF JAPAN, LIMITED
350 So. Grand Avenue, Suite 1500
Los Angeles, California 90071
Attention: Mr. Steven Savoldelli Fax: (213) 488-9840
-4-
<PAGE>
INTEGON LIFE INSURANCE CORPORATION
Conning & Company
CityPlace II
185 Asylum Street
Hartford, Connecticut 06103
Attention: Ms. Laurie Ereshena Fax: (860) 520-1202
and
PennCorp Financial, Inc.
Attention: Mr. Arthur Evans Fax: (212) 758-5442
with copy to:
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, New York 10166-0228
Attention: Mr. Mark L. Gold Fax: (212) 297-4159
Mr. Justin Driscoll
LTCB TRUST COMPANY
165 Broadway, 49th Floor
New York, New York 10006
Attention: Mr. Tetsuya Fukunaga Fax: (212) 608-2371
MELLON BANK, N.A.
1 Mellon Bank Center, Suite 4440
500 Grant Street
Pittsburgh, Pennsylvania 15258-0001
Attention: Mr. John T. Kranefuss Fax: (412) 234-6375
NATIONSBANK OF TEXAS, N.A.
901 Main Street
Dallas, Texas 75211
Attention: Mr. Doug Stuart Fax: (214) 508-9390
THE NIPPON CREDIT BANK, LTD. (NEW YORK)
245 Park Avenue
New York, New York 10167
Attention: Mr. David Carrington Fax: (212) 490-3895
-5-
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
Broad & Chestnut Streets
(100 South Broad Street)
Philadelphia, Pennsylvania 19101
Attention: Mr. Thomas Partridge Fax: (215) 585-6680
ROYAL BANK OF CANADA
Financial Square, 23rd Floor
New York, New York 10005-3531
Attention: Ms. Barbara Meijer Fax: (212) 428-6460
THE SANWA BANK, LIMITED
New York Branch
55 East 52nd Street
New York, New York 10055
Attention: Mr. Paul Judicke Fax: (212) 754-1304
SOCIETE GENERALE
1221 Avenue of the Americas
New York, New York 10020
Attention: Mr. David Sawyer Fax: (212) 278-6240
with a copy to:
Orrick, Herrington & Sutcliffe
777 South Figueroa Street, Suite 3200
Los Angeles, California 90017-5832
Attention: Alan Benjamin, Esq. Fax: (213) 612-2499
THE SUMITOMO BANK, LTD. (LOS ANGELES)
777 South Figueroa Street, Suite 2600
Los Angeles, California 90017
Attention: Mr. Mark Krikorian Fax: (213) 623-6832
UNION BANK OF CALIFORNIA, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Attention: Mr. William Gooch Fax: (213) 236-5747
-6-
<PAGE>
UNITED COMPANIES LIFE INSURANCE COMPANY
8545 United Plaza Blvd.
Baton Rouge, LA 70809
Attention: Mr. Andrew Davidson Fax: (504) 922-4214
Ms. Vicky Read
and
PennCorp Financial, Inc.
Attention: Mr. Arthur Evans Fax: (212) 758-5442
with copy to:
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, New York 10166-0228
Attention: Mark L. Gold Fax: (212) 297-4159
Justin Driscoll
-7-
<PAGE>
SCHEDULE 4
BORROWER SUBSIDIARIES
PART 1. ALL SUBSIDIARIES.
PTI Holdings, Inc., a Delaware corporation
Perenchio Television, Inc., a Delaware corporation
Univision Television Group, Inc., a Delaware corporation
Galavision, Inc., a Delaware corporation
Sunshine Acquisition Corp., a California corporation
Sunshine Acquisition, L.P., a California limited partnership
The Univision Network Holding Limited Partnership, a Delaware limited
partnership
The Univision Network Limited Partnership, a Delaware limited partnership
KWEX License Partnership, G.P., a California general partnership
KUVN License Partnership, G.P., a California general partnership
KLUZ License Partnership, G.P., a California general partnership
KMEX License Partnership, G.P., a California general partnership
KDTV License Partnership, G.P., a California general partnership
KFTV License Partnership, G.P., a California general partnership
KTVW License Partnership, G.P., a California general partnership
KXLN License Partnership, G.P., a California general partnership
WGBO License Partnership, G.P., a California general partnership
WXTV License Partnership, G.P., a California general partnership
WLTV License Partnership, G.P., a California general partnership
PART 2. LICENSE SUBSIDIARIES.
On the Initial Closing Date and the Second Closing Date, PTI owns
.01% of each of the License Subsidiaries set forth below and UTG owns 99.99%
of each of the License Subsidiaries set forth below.
KWEX License Partnership, G.P., a California general partnership
KUVN License Partnership, G.P., a California general partnership
KLUZ License Partnership, G.P., a California general partnership
KMEX License Partnership, G.P., a California general partnership
KDTV License Partnership, G.P., a California general partnership
KFTV License Partnership, G.P., a California general partnership
KTVW License Partnership, G.P., a California general partnership
KXLN License Partnership, G.P., a California general partnership
WGBO License Partnership, G.P., a California general partnership
WXTV License Partnership, G.P., a California general partnership
WLTV License Partnership, G.P., a California general partnership
SCHEDULE 4 - 1
<PAGE>
SCHEDULE 5
BORROWER INDEBTEDNESS
1. Univision Station Group, Inc. Promissory Note dated July 1, 1991, for
leasehold improvements at 2200 Palou Avenue, San Francisco, California, in
the principal amount of $200,000. Current balance of $118,000.
2. Univision Television Group, Inc. Promissory Note dated March 15, 1995 and
payable to Worldvision Enterprises, Inc. for program rights in the
principal amount of $950,000. Payments begin in November 1996 for 36
months at $26,388 per month.
SCHEDULE 5 - 1
<PAGE>
SCHEDULE 6
BORROWER LIENS
1. Liens securing the Existing Credit Agreement which will be released on the
Initial Closing Date.
SCHEDULE 6 - 1
<PAGE>
SCHEDULE 7
LOAN PARTIES' PERMITS AND APPROVALS
None.
SCHEDULE 7-1
<PAGE>
SCHEDULE 8
LOAN PARTIES' REAL PROPERTY ASSETS
See attached.
SCHEDULE 8-1
<PAGE>
SCHEDULE 8
LOAN PARTIES' REAL PROPERTY ASSETS(1)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (Section 3.16)
OCCUPYING
PROPERTY
- -----------------------------------------------------------------------------------------
<S> <C> <C>
NW 41st Street The Univision M/H noted that Sellers store fuel oil in an
Miami, Florida Network Limited above-ground tank.
Partnership
[O'M&M Property No. 55A]
Note: Fee
- -----------------------------------------------------------------------------------------
The Gasser Property The Univision M/H noted that Sellers store fuel oil in an
Network Limited above-ground tank.
[O'M&M Property No. 55B] Partnership
Note: Fee
- -----------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------
CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
(Section 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 AND 3.32)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
<S> <C> <C>
NW 41st Street
Miami, Florida
[O'M&M Property No. 55A]
Note: Fee
- -----------------------------------------------------------------------------------------
The Gasser Property Commonwealth Land Title Company (the "Title
Company") has noted a cloud on the title for
[O'M&M Property No. 55B] this Property, but Sellers are attempting to
obtain an indemnity from their own title
company that may allow the Title Company to
insure the title to this Property.
- -----------------------------------------------------------------------------------------
</TABLE>
- ---------------------------------
(1) Defined terms not otherwise defined herein shall have the meaning given
such terms in the Credit Agreement.
"M/H" shall mean Motaran/Hart.
"O'M&M" shall mean O'Melvany & Myers.
"PM&B" shall mean Pillsbury, Madison & Butro.
1
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (Section 3.16)
OCCUPYING
PROPERTY
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
27632 El Lazo Road The Univision Sellers removed a 280 gallon diesel underground
Laguna Niguel Network Limited storage tank ("UST") in December 1991.
California, 92677 Partnership
[O'M&M Property No. 1A]
[Sellers' File No. 5209]
Note: Lease
- ---------------------------------------------------------------------------------------------
[27632 El Lazo Road The Univision Sellers removed a 280 gallon diesel UST in
Laguna Niguel, Network Limited December 1991.
California, 92677 Partnership
[O'M&M Property No. 1B]
Note: Lease
- ---------------------------------------------------------------------------------------------
9200 Sunset Blvd. The Univision M/H recommended testing for asbestos-containing
Los Angeles, CA Network Limited materials ("ACN's") prior to any remodeling.
Partnership
[O' M&M Property No. 4]
[Sellers' File No. 5214]
Note: Lease
- ---------------------------------------------------------------------------------------------
CIGNA TOWER The Univision M/H recommended testing for ACM's prior to any
600 East Las Colinas Network Limited remodeling.
Blvd., (3rd Floor) Partnership
Irving, TX 75039
[O'M&M Property No. 5]
[Sellers' File No. 5219]
Note: Lease
- ---------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
(Section 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 AND 3.32)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
27632 El Lazo Road According to Selllers, these premises are
Laguna Niguel vacant and Sellers are currently trying to
California, 92677 sell them.
[O'M&M Property No. 1A]
[Sellers' File No. 5209]
Note: Lease
- ---------------------------------------------------------------------------------------------
[27632 El Lazo Road According to Sellers, these premises are
Laguna Niguel, vacant and Sellers are currently trying to
California, 92677 sell them.
[O'M&M Property No. 1B]
Note: Lease
- ---------------------------------------------------------------------------------------------
9200 Sunset Blvd. Sellers informed O&M that they will
Los Angeles, CA consolidate all of their network employees,
located at 9200 Sunset to the Howard Hughes
[O' M&M Property No. 4] Center during the second quarter of 1993.
[Sellers' File No. 5214] According to Sellers, this lease expires on
Note: Lease October 31, 1993 and will not be renewed.
- ---------------------------------------------------------------------------------------------
CIGNA TOWER According to Sellers, this lease expires on
600 East Las Colinas June 30, 1993.
Blvd., (3rd Floor)
Irving, TX 75039
[O'M&M Property No. 5]
[Sellers' File No. 5219]
Note: Lease
- ---------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PROBLEMS OR OTHER NOTEWORTHY
ITEMS ASSOCIATED WITH LEASES,
NAME OF LOAN LICENSES, PERMITS, SITE USE
PARTY ENTITY AGREEMENTS, OTHER OCCUPANCY
PROPERTY OCCUPYING ENVIRONMENTAL CONDEMNATION AGREEMENTS AND OWNED PROPERTY
ADDRESS PROPERTY MATTERS (Section 3.16) (Section 3.31) (Sections 3.7, 3.20 AND 3.32)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2030 Main Street The Univision None noted by M/H.
Irvine, CA 92714 Network Limited
Partnership
[O'M&M Property No. 10]
[Sellers' File No. 5229]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------------------
North Pier Unit #2 The Univision None noted by M/H.
Floor 3 Network Limited
401-455 E. Illinois St. Partnership
Chicago, IL 60611
[O'M&M Property No. 19]
[Sellers' File No. 5241]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------------------
Unit Number M1-01 The Univision M/H did not review this According to Sellers,
421 West 28 St. Network Limited Property. this lease expires
Hialeah, Florida 33010 Partnership June 30, 1993.
[O'M&M Property No. 44A] [Univision, Inc.,
d/b/a Univision
Note: Lease Productions, Inc.]
- -------------------------------------------------------------------------------------------------------------------------------
Unit Number I1-01 The Univision None noted by M/H.
441 West 28 St. Network Limited
Hialeah, Florida 33010 Partnership
[O'M&M Property No. 44B]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PROBLEMS OR OTHER NOTEWORTHY
ITEMS ASSOCIATED WITH LEASES,
NAME OF LOAN LICENSES, PERMITS, SITE USE
PARTY ENTITY AGREEMENTS, OTHER OCCUPANCY
PROPERTY OCCUPYING ENVIRONMENTAL CONDEMNATION AGREEMENTS AND OWNED PROPERTY
ADDRESS PROPERTY MATTERS (Section 3.16) (Section 3.31) (Sections 3.7, 3.20 AND 3.32)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arts Mini-Storage The Univision M/H noted that there is a According to Sellers, these
Arts Mini-Storage Network Limited car dealership on an adjacent premises are occupied pursuant
Rentals Partnership property, which may have a to a month-to-month tenancy.
3690 S. State Rd. 7 service department and a UST
Miramar, FL 33023 which would impact this Property. The Landlord changed the name
on the executed Estoppel from
[O'M&M Property No. 46] Aetna Life Insurance Company
to Art's Mini-Storage, Inc.
Note: Lease
- -------------------------------------------------------------------------------------------------------------------------------
605 Third Avenue The Univision None noted by M/H.
New York, NY 10158 Network Limited
Partnership
[O'M&M Property No. 11]
[Sellers' File No. 5230]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------------------
6th Floor The Univision M/H recommended testing for Sellers informed O'M&M that they
400 No. Capitol St., N.W. Network Limited ACM's prior to any remodeling. will not renew this sublease.
Washington, DC Partnership Sellers are trying to finalize a
new lease agreement for facilities
[According to local office [Originally located at 1140 Connecticut Avenue.
of Sellers, address could Univision Spanish
be 444, same building] International According to Sellers, this lease
Network] expires on January 31, 1993
[O'M&M Property No. 2] and will not be renewed.
[Sellers' File No. 5211]
Note: Sublease
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PROBLEMS OR OTHER NOTEWORTHY
ITEMS ASSOCIATED WITH LEASES,
NAME OF LOAN LICENSES, PERMITS, SITE USE
PARTY ENTITY AGREEMENTS, OTHER OCCUPANCY
PROPERTY OCCUPYING ENVIRONMENTAL CONDEMNATION AGREEMENTS AND OWNED PROPERTY
ADDRESS PROPERTY MATTERS (Section 3.16) (Section 3.31) (Sections 3.7, 3.20 AND 3.32)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
30700 Telegraph Road, The Univision M/H recommended testing for The Landlord changed the rent
Suite 3640 Network Limited ACM's prior to any remodeling. from $1,246.60 to $1,271.43
Birmingham, MI 48010 Partnership on the executed Estoppel,
qualified the statements about
[O'M&M Property No. 3] [Originally hazardous materials to the
Univision Spanish best of its knowledge, and
[Sellers' File No. 5212] International qualified the section on
Network] the assignment of the Landlord's
Note: Lease interest by referencing a first
mortgage placed on the
Landlord's interest.
- -------------------------------------------------------------------------------------------------------------------------------
710 Marquis Drive Univision Television M/H observed suspect ACM's
Garland, Dallas County, TX Group, Inc. in the building which appeared
to be in good condition. M/H
[O'M&M Property No. 17] recommended testing these materials
for ACM's prior to any remodeling
[Sellers' File No. 5238] or demolition activities. M/H
also noted a leaking UST
Note: Fee (LUST) near this Property.
- -------------------------------------------------------------------------------------------------------------------------------
411 E. Durango, San Univision Television M/H observed suspect ACM's in the
Antonio, Bexar County, Group, Inc. building which appeared to be in
TX 78204 good to fair condition. M/H
[Originally Spanish recommended testing for ACM's prior
[O'M&M Property No. 16] International to any remodeling or demolition
Communications activities. M/H also noted two
[Sellers' File No. 5236] Corporation] LUSTs within 1/4 mile of this Property.
Sellers have informed O'M&M that this
Note: Fee Property was utilized as a former
municipal landfill, closed for a
number of years with no action by
either local or state government to
investigate the landfill.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3239 West Ashland Avenue Univision Television M/H noted in particular the following
Fresno, California Group, Inc. four matters:
[O'M&M Property No. 53] [Originally Spanish 1. ACM's were observed in the building, and M/H
International recommended testing for ACM's prior to any remodeling or
Note: Fee Communications demolition activities;
Corporation] 2. a UST was removed from this Property in 1989;
3. prior agricultural use of this Property creates a
potential for impact from agricultural chemicals; and
4. a concrete pad and a dispenser pad are located
partially on this Property, and partially on an adjacent
property, indicating that a UST may be present. M/H
recommended various testing to determine whether a UST is or
was present on the Property and, if so, whether the soil may
have been affected. M/H noted that such testing could cost
$5,000-$10,000 and, if a problem is revealed by such
testing, then a typical gasoline station remediation may
cost $100,000-$250,000. O'M&M has asked M/H to compare the
potential remediation costs, if any, for this Property to
such a gasoline station remediation.
- -------------------------------------------------------------------------------------------------------------------
8515 East Lacey Blvd. Univision Television M/H observed suspect ACM's in good condition in
Hanford, California Group, Inc. the building. M/H recommended testing for ACM's prior to
any remodeling or demolition.
[O'M&M Property No. 54] [Originally Spanish
International
Note: Fee Communications
Corporation]
- -------------------------------------------------------------------------------------------------------------------
316 Martinez Street Univision Television M/H noted three LUSTs near this Property, which
San Antonio, Texas Group, Inc. may impact this Property.
[O'M&M Property No. 58] [Originally Spanish
International
Note: Fee Communications
Corporation]
- -------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------
<C> <C>
CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
(Section 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY.
(SECTIONS 3.7, 3.20 AND 3.32)
- ----------------------------------------------
- ----------------------------------------------
- ----------------------------------------------
- ----------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
23754 S. US Highway 281 Univision Television None noted by M/H.
San Antonio, Texas Group, Inc.
(Woodridge)
[O'M&M Property No. 57] [Originally Spanish
International
Note: Fee Broadcasting
Corporation]
- -------------------------------------------------------------------------------------------------------------------
1530 Old Oakland Rd. Univision Television M/H observed suspect ACM's in good condition in the
San Jose, CA 95112 Group, Inc. building. M/H recommended testing these materials prior to
any remodeling or demolition.
[O'M&M Property No. 7]
[Sellers' File No. 5222]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------
2200-2210-2222 Univision Television M/H observed suspect ACM's in good condition in the
Palou Ave. Group, Inc. building. M/H recommended testing these materials prior to
San Francisco, CA any remodeling or demolition. M/H also noted four LUST
sites within 1/4 mile of this Property, and concluded that
[O'M&M Property No. 8] the LUSTs could impact this Property.
[Sellers' File No. 5223]
Note: Lease
- -------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<C> <C>
CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
(SECTION 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY.
(SECTIONS 3.7, 3.20 AND 3.32)
- -----------------------------------------------------------------------------
Title to this Property is held by Spanish
International Broadcasting Corporation, apparently a
predecessor-in-interest to Spanish International
Communications Corporation, which is the predecessor-in-
interest to Univision Station Group, Inc. Sellers are
attempting to verify how Spanish International
Communications Corporation acquired Spanish International
Broadcasting Corporation. Until Sellers verify the method
of acquisition, title to this Property is unclear and it may
not be possible to transfer this Property prior to the
Closing. This Property is a vacant lot.
- -----------------------------------------------------------------------------
According to Sellers, this
lease expires October 27, 1992.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Empire State Building Univision Television None noted by M/H.
350 Fifth Avenue Group, Inc.
Borough of Manhattan, in
the City of New York (TV
antenna on the 105th
Floor)
[O'M&M Property No. 13]
[Sellers' File No. 5232]
Note: Lease
- ------------------------------------------------------------------------------------------------------------------
Master Lease Univision Television See O'M&M Property No. 14B.
Monument Peak - Mission Group, Inc.
Peak Regional Preserve,
Alameda County, CA [KDTV]
[O'M&M Property No. 14A]
[Seller's File No. 5233]
Note: This is the master
lease for the property
listed as O'M&M Property
No. 14B.
- ------------------------------------------------------------------------------------------------------------------
Sublease Univision Television M/H recommended testing for ACM's prior to any remodeling.
Monument Peak - Mission Group, Inc.
Peak Regional Preserve,
Alameda County, CA [KDTV]
[O'M&M Property No. 14B]
[Sellers' File No. 5233]
Note: Sublease
- ------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<C> <C>
CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
(SECTION 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY.
(SECTIONS 3.7, 3.20 AND 3.32)
- -----------------------------------------------------------------------------
The landlord has requested a fee to
consent to the transfer, which O'M&M is discussing
with Sellers.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
According to Sellers, this sublease expires in 1994.
- -----------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADRESS PARTY ENTITY MATTERS (Section 3, 16) (Section 3, 16) ITEMS ASSOCIATED WITH LEASES,
OCCUPYING LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ------------------------------------------------------------------------------------------------------------------------------------
Meadow Lakes, CA Univision Television M/H observed suspect ACM's in good to The Landlord changed the
(transmitter site lease) Group, Inc. fair condition in the building. M/H current monthly rent from
recommended testing these materials $650.00 to $742.32 on the
[O'M&M Property No. 15] prior to any remodeling. M/H also executed Estoppel.
noted an above-ground diesel tank and
[Sellers' File No. 5235] recommended certain record-keeping,
and construction of secondary
Note: Lease containment at a cost that M/H
estimated at $2,000-$5,000.
- ------------------------------------------------------------------------------------------------------------------------------------
6255 Sunset Blvd. Univision Television M/H noted that Sellers were notified Sellers informed O'M&M that
Suite 1600 Group, Inc. by the landlord of the presence of the lease will expire
Los Angeles, CA asbestos in ceiling materials. December 31, 1992 and will not
be renewed, and that Sellers
[O'M&M Property No. 20] intend to move all of their
employees located at 6255
[Sellers' File No. 5242] Sunset to the Howard Hughes
Center.
Note: Sublease
- ------------------------------------------------------------------------------------------------------------------------------------
649 N. Bronson Avenue. Univision Television M/H observed suspect ACM's in good to Sellers informed O'M&M that
City of Los Angeles Group, Inc. fair condition in the building. M/H they expect to move all of
County of Los Angeles recommended testing these materials their personnel to the Howard
State of California priorto any remodeling. M/H also Hughes Center in late March of
noted a former LUST on this Property 1993.
[O'M&M Property No. 21A] and a potentially-contaminated site
near this Property which has the According to Sellers, this
[Sellers' File No. 5244] potential to affect this Property. lease expires April 30, 1993.
O'M&M has furnished PMS, under cover Paramount Pictures, the
Note: Lease of letter dated November 12, 1992, landlord for this Property,
certain documentation pertaining to informed Seller by letter
these environmental matters. dated December 2, 1992 that
(i) $4,273.88 is owing in
delinquent taxes, (ii)
Paramount has requested
executed copies of Lease
Cancellation and Amendment
Agreements from Seller, (iii)
Paramount would like to know
when Sellers will remove
certain satellite dishes
pursuant to a $240,000 removal
payment by Paramount to
Sellers, and (iv) whether
Sellers intend to vacate the
Property prior to the lease
expiration.
- ------------------------------------------------------------------------------------------------------------------------------------
9
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADRESS PARTY ENTITY MATTERS (Section 3, 16) (Section 3, 16) ITEMS ASSOCIATED WITH LEASES,
OCCUPYING LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ------------------------------------------------------------------------------------------------------------------------------------
721-723 N. Bronson Ave. Univision Television M/H observed suspect ACM's in good to Sellers informed O'M&M that
City of Los Angeles Group, Inc. fair condition in the building. M/H they expect to move all of
County of Los Angeles recommended testing these materials their personnel to the Howard
State of California prior to any remodeling. M/H also Hughes Center in late March of
noted a former LUST on this Property 1993.
[O'M&M Property No. 21B] and a potentially-contaminated site
near this Property which has the According to Sellers, this
[Sellers' File No. 5244] potential to affect this Property. lease expires April 30, 1993.
O'M&M has furnished PMS, Paramount Pictures, the
Note: Lease under cover of letter dated landlord for this Property,
November 12, 1992, certain informed Seller by letter
documentation pertaining to these dated December 2, 1992 that
environmental matters. (i) $4,273.88 is owing in
delinquent taxes, (ii)
Paramount has requested
executed copies of Lease
Cancellation and Amendment
Agreements from Seller, (iii)
Paramount would like to know
when Sellers will remove
certain satellite dishes
pursuant to a $240,000 removal
payment by Paramount to
Sellers, and (iv) whether
Sellers intend to vacate the
Property prior to the lease
expiration.
- ------------------------------------------------------------------------------------------------------------------------------------
Breckenridge Univision Television None noted by M/H. Sellers informed O'M&M that a
Mountain Transmitter Group, Inc. new license agreement to
replace the current informal
[O'M&M Property No. 22] agreement will be signed
before December 15, 1992.
[Sellers' File No. 5245] However, the licensor for this
Property informed O'M&M that
Note: License he is not sure whether a new
license agreement will be
executed before December 15,
1992 and that the current
informal agreement is a
month-to-month tenancy.
- ------------------------------------------------------------------------------------------------------------------------------------
2725-F Broadbent Parkway, Univision Television M/H recommended testing for possible
NE, Albuquerque, New Group, Inc. ACM's prior to any remodeling. M/H
Mexico 87196 also noted the potential for an
impact upon this Property from
[O'M&M Property No. 23] possible UST's at an adjacent
automobile racing facility.
[Sellers' File No. 5246]
Note: Lease
- ------------------------------------------------------------------------------------------------------------------------------------
10
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADRESS PARTY ENTITY MATTERS (Section 3, 16) (Section 3, 16) ITEMS ASSOCIATED WITH LEASES,
OCCUPYING LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ------------------------------------------------------------------------------------------------------------------------------------
Oat Mountain Tower Univision Television M/H noted that this Property could be According to Sellers, this
Los Angeles, CA Group, Inc. affected by nearby oil wells and license expires on December
oil/gas pipelines. 31, 1992, but the license
[O'M&M Property No. 24] indicates it is self-renewing
from year-to-year.
[Sellers' File No. 5247]
The landlord for this Property
Note: License noted on the executed Estoppel
that the monthly rent will
increase to $525.00 beginning
on January 1, 1993 and will
be payable annually in advance
on that date. In addition,
such landlord changed the
termination date of the
license from December 31,
1992, to December 31, 1993.
- ------------------------------------------------------------------------------------------------------------------------------------
6701 Center Drive West Univision Television M/H noted prior environmental reports The landlord for this Property
Suite 1500, Lobby Level, Group, Inc. and other information which indicate a informed O'M&M that several
6th, 15th and 16th Floors UST and soil and groundwater problems lease issues, including the
Los Angeles, CA 90045 at this Property. current amount of rent, has
not been resolved with Sellers
[O'M&M Property No. 25] and that he is currently
discussing these matters with
[Sellers' File No. 5249] Sellers.
Note: Lease
- ------------------------------------------------------------------------------------------------------------------------------------
8432/8434 N.W. 56th St. Univision Television None noted by M/H. According to Sellers, this
Miami, Dade County, FL Group, Inc. lease may have expired on
October 1, 1992.
[O'M&M Property No. 27]
[Sellers' File No. 5253]
Note: Lease
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sandia Crest Electronic Univision Television M/H was informed that since 1988, approx. six 55-
Site - New Mexico - Group, Inc. gallon drums of glycol (anti-freeze) and waste
Television Transmitter have been dumped on the ground at this Property.
Facility - Channels 41 M/H recommended soil sampling which M/H estimated
and 48 will cost $2,000-$6,000. If such sampling shows
that the soil was impacted, M/H estimated that
[O'M&M Property No. 32] remediation costs could range from $25,000-
$35,000.
[Sellers' File No. 5258]
Note: Permit
- ----------------------------------------------------------------------------------------------------------------
Saddle Peak Univision Television None noted by M/H.
Los Angeles, CA Group, Inc.
[O'M&M Property No. 36]
[Sellers' File No. 5264]
Note: License
- ----------------------------------------------------------------------------------------------------------------
One Biscayne Bldg. Univision Television None noted by M/H.
Miami, Florida Group, Inc.
[O'M&M Property No. 37] [d/b/a WLTV -
Channel 23]
[Sellers' File No. 5265]
Note: License
- ----------------------------------------------------------------------------------------------------------------
PROPERTY CONDEMNATION PROBLEMS OR OTHER NOTEWORTH
ADDRESS (SECTION 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(SECTIONS 3.7, 3.20 AND 3.32)
- ----------------------------------------------------------------------------------------------------------------
Sandia Crest Electronic The grantor for this permit informed O'M&M
Site - New Mexico - that the permit is still issued in the name
Television Transmitter of Olivarez Television Company. In order to
Facility - Channels 41 transfer the permit to Station Group and
and 48 ultimately to Television Group, the grantor
has requested certain corporate documents
[O'M&M Property No. 32] and information from Olivarez Television
Company and Station Group. It is also
[Sellers' File No. 5258] unclear whether this permit has expired.
Sellers informed such grantor that this
Note: Permit information is not necessary (as, according
to Sellers, the transfer was a permitted
stock transfer) and Sellers and O'M&M are
currently awaiting the reply of such
grantor.
- ----------------------------------------------------------------------------------------------------------------
Saddle Peak According to Sellers, this license expires
Los Angeles, CA on December 31, 1992, but the license
indicates that it is self-renewing from
[O'M&M Property No. 36] year-to-year.
[Sellers' File No. 5264] The grantor for this permit noted on the
executed Estoppel that the current monthly
Note: License rent will increase to $525.00 beginning on
January 1, 1993 and will be payable annually
in advance on that date. In addition, such
grantor changed the termination date of the
license from December 31, 1992 to December
31, 1993.
- ----------------------------------------------------------------------------------------------------------------
One Biscayne Bldg. According to Sellers, these premises are
Miami, Florida occupied pursuant to a month-to-month
tenancy.
[O'M&M Property No. 37]
The grantor for this permit noted on the
[Sellers' File No. 5265] executed Estoppel that the current monthly
rent is $750.00, that there is no security
Note: License deposit and that the license commenced on
September 1, 1991 and is currently occupied
pursuant to a month-to-month tenancy.
- ----------------------------------------------------------------------------------------------------------------
12
<PAGE>
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- ----------------------------------------------------------------------------------------------------------------
Warehouse Univision Television None noted by M/H.
9808 N.W. 80th Avenue - Group, Inc.
Bay 10-M
Hialeah Gardens [WLTV - Channel 23]
Dade County, FL
[O'M&M Property No. 38]
[Sellers' File No. 5266]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
Archway Storage Univision Television None noted by M/H.
Archway Self Storage Group, Inc.
Rentals
4995 N.W. 79th Avenue [WLTV - Channel 23]
Miami, FL 83166
[O'M&M Property No. 45]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
6844-6846 Laguna Drive Univision Television None noted by M/H.
Miami, Dade County, FL Group, Inc.
[O'M&M Property No. 47]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
PROPERTY CONDEMNATION PROBLEMS OR OTHER NOTEWORTH
ADDRESS (SECTION 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(SECTIONS 3.7, 3.20 AND 3.32)
- ----------------------------------------------------------------------------------------------------------------
Warehouse The landlord for this Property informed
9808 N.W. 80th Avenue - O'M&M that the lease expired on September
Bay 10-M 30, 1992 and is currently occupied pursuant
Hialeah Gardens to a month-to-month tenancy; the landlord
Dade County, FL sent Sellers a new lease, but Sellers have
not executed it.
[O'M&M Property No. 38]
According to Sellers, this lease may have
[Sellers' File No. 5266] expired on September 30, 1992.
Note: Lease The landlord changed the monthly rent from
$429.30 to $431.33 and changed the security
deposit from $858.60 to $810.00 on the
executed Estoppel. In addition, such
landlord noted that the lease terminated on
September 30, 1992 and that this Property is
currently occupied pursuant to a month-to-
month tenancy.
- ----------------------------------------------------------------------------------------------------------------
Archway Storage According to Sellers, this Property is
Archway Self Storage occupied pursuant to a month-to-month
Rentals tenancy.
4995 N.W. 79th Avenue
Miami, FL 83166 The landlord for this Property added a tax
of 6.5% to the monthly rent on the executed
[O'M&M Property No. 45] Estoppel, as well as noted that this
Property is occupied pursuant to a month-to-
Note: Lease month tenancy.
- ----------------------------------------------------------------------------------------------------------------
6844-6846 Laguna Drive Sellers informed O'M&M that this lease was a
Miami, Dade County, FL month-to-month tenancy, but expired November
of 1992 and Sellers are in the process of
[O'M&M Property No. 47] negotiating for an additional three months
to include the months of December of 1992
Note: Lease and January and February of 1993.
- ----------------------------------------------------------------------------------------------------------------
13
<PAGE>
PROPERTY NAME OF LOAN ENVIRONMENTAL
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16)
OCCUPYING
PROPERTY
- ----------------------------------------------------------------------------------------------------------------
KFTV Sales Office Univision Television None noted by M/H.
1430 Truxton Ave., Group, Inc.
Suite 850
Bakersfield, California [d/b/a KAB - Channel
39]
[O'M&M Property No. 49]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
Bullion Mountain, Univision Television None noted by M/H.
Mariposa County California Group, Inc.
[O'M&M Property No. 51]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
Modesto, Stanislaus Univision Television M/H noted that groundwater in the vicinity could
County, California Group, Inc. be, affected by farm chemical applications at
nearby vineyards.
[O'M&M Property No. 52]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
695 N.W. 199th St. Univision Television M/H observed suspect ACM's in poor and damaged
Miami, Florida Group, Inc. conditions.
[O'M&M Property No. 9] [Originally Spanish
International
[Sellers' File No. 5225] Communications
Corporation]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
PROPERTY CONDEMNATION PROBLEMS OR OTHER NOTEWORTH
ADDRESS (SECTION 3.31) ITEMS ASSOCIATED WITH LEASES,
LICENSES, PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(SECTIONS 3.7, 3.20 AND 3.32)
- ----------------------------------------------------------------------------------------------------------------
KFTV Sales Office According to Sellers, this lease expires
1430 Truxton Ave., August 31, 1993.
Suite 850
Bakersfield, California
[O'M&M Property No. 49]
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
Bullion Mountain, Sellers informed O'M&M that Sellers occupy
Mariposa County California this Property rent free, pursuant to an oral
agreement with Sainte Limited, under which
[O'M&M Property No. 51] Sainte Limited pays rent to Mt. Bullion
Properties, and in exchange Sainte Limited
Note: Lease gets use of Sellers' signal.
It is unclear when this lease expires.
- ----------------------------------------------------------------------------------------------------------------
Modesto, Stanislaus KMEX informed O'M&M that Sellers occupy this
County, California Property rent free pursuant to an oral
agreement whereby Sainte Limited utilizes
[O'M&M Property No. 52] Sellers' equipment without charge.
Note: Lease
- ----------------------------------------------------------------------------------------------------------------
695 N.W. 199th St. Sellers are negotiating this lease with the
Miami, Florida landlord, who has taken the position that
this lease expired November 9, 1992.
[O'M&M Property No. 9] Sellers informed O'M&M that a new lease with
landlord was negotiated by Sellers for a
[Sellers' File No. 5225] period of three years at substantial
increases in rent and changes in other
Note: Lease rental terms. O'M&M has requested the
Sellers to obtain an executed lease and
consents. It is currently unclear whether
this lease has expired.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16) (SECTION 3.31) NOTEWORTHY ITEMS ASSOCIATED
OCCUPYING WITH LEASES LICENSES,
PROPERTY PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED
PROPERTY (SECTIONS 3.7,
3.20 AND 3.32)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
World Trade Center Univision Television M/H noted on-site diesel Sellers informed O'M&M that
Borough of Manhattan City Group, Inc. generators and potential Sellers have moved their
County and State of New UST's, not operated by the transmitter from the World
York [Originally Spanish Sellers. M/H also Trade Center to the Empire
International recommended requiring the State Building and is in
[O'M&M Property No. 12] Communications landlord for this Property the process of subleasing
Corporation] to conduct an ACM survey, its lease and license
[Sellers' File No. 5231] or testing by Sellers, agreements at the World
prior to any remodeling, Trade Center.
because there is no record
Note: Lease of any such survey.
- -----------------------------------------------------------------------------------------------------------------------------------
24 Meadowlands Parkway Univision Television M/H noted that the landlord According to Sellers, this
Town of Secaucus Group, Inc. for this Property removed lease may expire on January
Hudson County two UST's in 1988 which 22, 1993.
New Jersey [Originally Spanish were not operated by
International Sellers. M/H also observed
[O'M&M Property No. 28] Communications] suspect ACM in good
condition and noted
[Sellers' File No. 5254] references to ACM in the
lease. M/H recommended
Note: Lease sample collection and
analysis prior to any
remodeling.
- -----------------------------------------------------------------------------------------------------------------------------------
Roxborough Antenna Farm Univision Television M/H noted that three It is unclear whether this
Philadelphia, PA Group, Inc. federal superfund sites are lease has expired.
located within 1/2 mile of
[O'M&M Property No. 30] [Originally Spanish this Property, which may
International affect this Property.
[Sellers' File No. 5256] Communications
Corporation]
Note: Lease
- -----------------------------------------------------------------------------------------------------------------------------------
Montclair State College Univision Television M/H recommended testing for It is unclear whether this
Upper Montclair, NJ 07043 Group, Inc. ACM's prior to any lease has expired.
remodeling. M/H noted that
[O'M&M Property No. 33] [Originally Spanish a UST operated by Sellers
International was removed in 1988, and
[Sellers' File No. 5260] Communications M/H recommended reviewing
Corporation] local agency records to
Note: License determine if the removal
was authorized. Finally,
M/H noted that Sellers own
and operate an above-ground
diesel tank with a
secondary containment, and
M/H recommended continued
monitoring.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16) (SECTION 3.31) NOTEWORTHY ITEMS ASSOCIATED
OCCUPYING WITH LEASES LICENSES,
PROPERTY PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED
PROPERTY (SECTIONS 3.7,
3.20 AND 3.32)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prospect, Connecticut Univision Television None noted by M/H According to Sellers, this
(a portion of the WIOF-FM Group, Inc. lease is a handshake
radio tower ("Tower") agreement and is a
located on or near Route [Originally Spanish month-to-month tenancy.
69) International
Communications Sellers informed O'M&M that
[O'M&M Property No. 35] Corporation] a lease on this Property
will be executed for a two
[Sellers' File No. 5262] year period.
Note: Lease
- -----------------------------------------------------------------------------------------------------------------------------------
Montclair State College Univision Television M/H recommended testing for The landlord for this
Group, Inc. ACM's prior to any Property informed O'M&M
[O'M&M Property No. 39] remodeling. M/H noted that that Sellers were sent a
[Originally Spanish a UST operated by Sellers lease extension on November
[Sellers' File No. D-8] International was removed in 1988, and 7, 1991, but that Sellers
Communications M/H recommended reviewing have not executed it and
Note: Lease Corporation] local agency records to thus are currently
determine if the removal occupying the Property
was authorized. Finally, pursuant to a
M/H noted that Sellers own month-to-month tenancy.
and operate an above-ground Such landlord is contacting
diesel tank with a Sellers to resolve the
secondary containment, and current status of this
M/H recommended continued tenancy.
monitoring.
According to Sellers, this
lease may have expired on
August 1, 1990.
- -----------------------------------------------------------------------------------------------------------------------------------
Use of a portion of the Univision Television Category: location of this Sellers have informed O'M&M
Property occupied by KASE Group, Inc. property is uncertain, and that this license agreement
FM, for the purpose of it is unclear whether this may still be in effect and
installing, operating and [Originally Spanish property was assessed as O'M&M has requested
maintaining International part of the assessment for documentation with respect
Communications another property. thereto. However, Sellers'
[O'M&M Property No. 40] Corporation and KVET local managers also believe
Broadcasting Co., that this may be an owned
[Sellers' File No. D-11] Inc.] property. O'M&M has
requested documentation
Note: License with respect thereto.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER
ADDRESS PARTY ENTITY MATTERS (SECTION 3.16) (SECTION 3.31) NOTEWORTHY ITEMS ASSOCIATED
OCCUPYING WITH LEASES LICENSES,
PROPERTY PERMITS, SITE USE
AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED
PROPERTY (SECTIONS 3.7,
3.20 AND 3.32)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mount Oso Univision Television None noted by M/H. The grantor of this license
Stanislaus County, CA Group, Inc. executed the Estoppel but
did not fill in the current
[O'M&M Property No. 29] [Originally KMEX-TV monthly fixed fee and the
The Spanish commencement and
[Sellers' File No. 5255] International termination dates.
Broadcasting
Note: License Company, a
corporation]
- -----------------------------------------------------------------------------------------------------------------------------------
Mt. Wilson Univision Television M/H observed suspect ACM's It is unclear when this
Group, Inc. in fair to good condition permit expires.
[O'M&M Property No. 34] in the building. M/H
[Originally Spanish recommended testing these
[Sellers' File No. 5261] International materials prior to any
Broadcasting remodeling or demolition.
Note: Permit Corporation] M/H also noted that Sellers
operate an above-ground
diesel tank. Although
previous information from
Sellers had indicated that
the main transformer at
this Property utilized
polychlorinated biphenyls
(PCBs), M/H stated that the
main transmitter power
source contains non-PCB
mineral oil according to
the manufacturer, but that
back-up transmitter
capacitors may contain
PCBs.
- -----------------------------------------------------------------------------------------------------------------------------------
Frazier Peak Univision Television None noted by M/H.
Ventura County Group, Inc.
California
[Originally Spanish
[O'M&M Property No. 48] International
Broadcasting
Note: License Corporation]
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADDRESS PARTY ENTITY MATTERS (Section ITEMS ASSOCIATED WITH LEASES
OCCUPYING (Section 3.16) 3.31) LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
premises situated on San Univision Television None noted by M/H. According to Sellers, this lease
Bruno Mountain in the Group, Inc. expires December 31, 1993.
County of San Mateo,
State of California [Originally KDTV -
(KDTV) Bahia de San
Francisco Television
[O'M&M Property No. 6] Company]
[Sellers' File No. 5221]
Note: Lease
- ---------------------------------------------------------------------------------------------------------------------------------
Rocky Ridge, Contra Costa Univision Television M/H recommended testing the
County, CA Group, Inc. insulation for ACM's prior
to any activities which may
[O'M&M Property No. 31] [Originally KDTV - disturb the insulation.
Bahia de San
[Sellers' File No. 5257] Francisco Television
Company]
Note: License
- ---------------------------------------------------------------------------------------------------------------------------------
[Warehouse [Univision None noted by M/H.
6934 N.W. 84th Avenue Television Group,
Miami, Florida] Inc.]
[O'M&M Property No. 69]
[Note: Lease]
- ---------------------------------------------------------------------------------------------------------------------------------
[John Tom Hill [Univision Television None noted by M/H. According to Sellers, this
Glastonbury Tow Group, Inc.] Property is occupied
Hartford, Connecticut] pursuant to an oral, handshake
agreement.
[O'M&M Property No. 60]
[Note: Lease]
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADDRESS PARTY ENTITY MATTERS (Section ITEMS ASSOCIATED WITH LEASES
OCCUPYING (Section 3.16) 3.31) LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[K30AK [Univision None noted by M/H.
Channel 54 Television Group]
Austin, Texas]
[O'M&M Property No. 63]
Note: Lease
- ---------------------------------------------------------------------------------------------------------------------------------
3019 E. Southern Avenue KTVW, Inc. M/H noted three USTs on an
Phoenix, Arizona adjacent site that were
removed in 1988, but which
[O'M&M Property No. 56] had the potential to affect
this Property if there were
Note: Fee any leaks.
- ---------------------------------------------------------------------------------------------------------------------------------
Phoenix, Seven Hills KTVW, Inc. None noted by M/H.
Lease; KTVW 2301 North [KTVW Channel 33]
Forbes Blvd., Suite 108H
Tucson, AZ 85745
(602) 748-7100
[O'M&M Property No. 41]
Note: Lease
- ---------------------------------------------------------------------------------------------------------------------------------
(Tucson) KTVW, Inc. M/H noted several USTs The landlord for this Property
Room TV-108 located on an adjacent noted on the executed Estoppel
Aperture on Tower C property and one above- that the monthly rent has been
Broadcast Facility at ground diesel tank on increased by the 1991 CPI.
Tucson Mountain this Property.
Pima County, AZ
[O'M&M Property No. 42]
Note: Lease
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
PROPERTY NAME OF LOAN ENVIRONMENTAL CONDEMNATION PROBLEMS OR OTHER NOTEWORTHY
ADDRESS PARTY ENTITY MATTERS (Section ITEMS ASSOCIATED WITH LEASES
OCCUPYING (Section 3.16) 3.31) LICENSES, PERMITS, SITE USE
PROPERTY AGREEMENTS, OTHER OCCUPANCY
AGREEMENTS AND OWNED PROPERTY
(Sections 3.7, 3.20 and 3.32)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Phoenix South KTVW, Inc. M/H observed suspect ACM's
Mountain Park in good condition in the
Phoenix, AZ building. M/H recommended
testing these materials
[O'M&M Property No. 43] prior to any remodeling or
demolition. M/H stated that
Note: License transformers at this facility
were tested for PCBs in 1989
and that there are no PCBs in
transformers onsite. However,
according to Sellers, there
are PCB capacitors onsite.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
SCHEDULE 9
BORROWER STATIONS/MEDIA LICENSES
Expiration
Call Sign Date
--------- ----------
1. KDTV (TV), SAN FRANCISCO, CALIFORNIA, CHANNEL 14
LICENSEE: KDTV LICENSE PARTNERSHIP, G.P.
MAIN STATION KDTV 12/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV Pickup KB-98132
TV ICR WBB-442
TV ICR WLF-399
TV ICR WBB-440
TV ICR WBB-441
TV ICR WBG-561
TV ICR WBG-562
TV STL WBB-438
2. KFTV (TV), HANFORD, CALIFORNIA, CHANNEL 21
LICENSEE: KFTV LICENSE PARTNERSHIP, G.P.
MAIN STATION KFTV 12/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV ICR WHF-245
TV ICR WLF-394
TV ICR WBG-564
TV ICR WLD-986
TV ICR WLV-37
TV STL WLG-956
TV ICR WBK-240
TV ICR WKG-56
Schedule 9-1
<PAGE>
TV ICR WBB-445
RP Base Mobile System KPM-280
RP Automatic Relay KPM-284
Expiration
Call Sign Date
--------- ----------
3. KLUZ-TV, ALBUQUERQUE, NEW MEXICO, CHANNEL 41
LICENSEE: KLUZ LICENSE PARTNERSHIP, G.P.
MAIN STATION KLUZ-TV 10/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV STL WHA-986
TV ICR WPJE-690
4. KMEX-TV, LOS ANGELES, CALIFORNIA, CHANNEL 34
LICENSEE: KMEX LICENSE PARTNERSHIP, G.P.
MAIN STATION KMEX-TV 12/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV Pickup KA-88835
R/P Automatic Relay KPF-248
R/P Base Mobile KPF-893
TV ICR WHB-850
Low Power Broadcast BLP00746
TV Pickup KN-5530
TV STL KNL-96
TV ICR WMU-704
Schedule 9-2
<PAGE>
5. KUVN (TV), GARLAND, TEXAS, CHANNEL 23
LICENSEE: KUVN LICENSE PARTNERSHIP, G.P.
MAIN STATION KUVN 8/1/98
ASSOCIATED BROADCAST AUXILIARY STATION
TV Pickup KB-96019
Expiration
Call Sign Date
--------- ----------
6. KWEX-TV, SAN ANTONIO, TEXAS, CHANNEL 41
LICENSEE: KWEX LICENSE PARTNERSHIP, G.P.
MAIN STATION KWEX-TV 8/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV Pickup KB-55882
Low Power Broadcast BLP01001
7. WLTV (TV), MIAMI, FLORIDA, CHANNEL 23
LICENSEE: WLTV LICENSE PARTNERSHIP, G.P.
MAIN STATION WLTV 2/1/97
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV ICR WGZ-614
TV Pickup KA-88659
TV ICR WLP-460
TV Pickup KB-97056
Low Power Broadcast BLP00921
TV STL WLD-706
TV ICR WMW-678
Schedule 9-3
<PAGE>
TV ICR WMW-678
Expiration
Call Sign Date
--------- ----------
8. WXTV (TV), PATERSON, NEW JERSEY, CHANNEL 41
LICENSEE: WXTV LICENSE PARTNERSHIP, G.P.
MAIN STATION WXTV 6/1/99
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV ICR WME-682
Remote Pickup Base KPL-319
TV ICR WBM-698
TV ICR WGV-735
TV ICR WLF-490
TV Pickup KC-23732
TV ICR WGZ-605
TV ICR WHA-925
TV ICR WME-665
TV STL WFD-592
9. KTVW-TV, PHOENIX, ARIZONA, CHANNEL 33
LICENSEE: KTVW LICENSE PARTNERSHIP, G.P.
MAIN STATION KTVW-TV 10/1/98
ASSOCIATED BROADCAST AUXILIARY STATION
TV STL WGR-737
10. WGBO-TV, JOLIET, ILLINOIS, CHANNEL 66
LICENSEE: WGBO LICENSE PARTNERSHIP, G.P.
Schedule 9 - 4
<PAGE>
MAIN STATION WGBO-TV 12/1/97
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV STL WLP-753
TV STL WHB-338
TV ICR WHB-339
TV ICR WLP-752
Expiration
Call Sign Date
--------- ----------
11. KXLN-TV, ROSENBERG, TEXAS, CHANNEL 45
LICENSEE: KXLN LICENSE PARTNERSHIP, G.P.
MAIN STATION KXLN-TV 8/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV STL WLL-563
TV Intercity Relay WLF-776
TV Intercity Relay WMG-217
TV Pickup KC-26082
Remote Pickup KC-27734
12. W47AD (LOW POWER), HARTFORD, CONNECTICUT, CHANNEL 47
(formerly WXTV-LP)
LICENSEE: WXTV LICENSE PARTNERSHIP, G.P.
MAIN STATION W47AD 6/1/98
ASSOCIATED BROADCAST AUXILIARY STATION
TV Translator Relay WFW-578
13. KABE-LP (LOW POWER), BAKERSFIELD, CALIFORNIA, CHANNEL 39
(formerly K39AB)
Schedule 9 - 5
<PAGE>
LICENSEE: KFTV LICENSE PARTNERSHIP, G.P.
MAIN STATION KABE-LP 4/1/98
ASSOCIATED BROADCAST STATIONS
TV Translator Relay WHY-340
TV Translator Relay WLJ-626
TV Translator Relay WMF-705
Expiration
Call Sign Date
--------- ----------
14. K48AM (LOW POWER), ALBUQUERQUE, NEW MEXICO, CHANNEL 48
LICENSEE: KLUZ LICENSE PARTNERSHIP, G.P.
MAIN STATION K48AM 8/1/97
15. K30CE (LOW POWER), AUSTIN, TEXAS, CHANNEL 30
LICENSEE: KWEX LICENSE PARTNERSHIP, G.P.
MAIN STATION K30CE 10/1/98
16. WXTV-LP(1) (LOW POWER), PHILADELPHIA, PENNSYLVANIA, CHANNEL 42
(formerly W35AB)
LICENSEE: WXTV LICENSE PARTNERSHIP, G.P.
- -------------------
(1) The Philadelphia station is currently operating pursuant to a
special temporary authorization under this call sign.
Schedule 9 - 6
<PAGE>
MAIN STATION WXTV-LP(1) 6/1/98
Expiration
Call Sign Date
--------- ----------
17. K40AC(2) (LOW POWER), TUCSON, ARIZONA,
CHANNEL 52
LICENSEE: KTVW LICENSE PARTNERSHIP, G.P.
MAIN STATION K40AC(2) 10/18/96
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV STL WLP-772
TV ICR WLP-773
- -------------------
(2) The Tucson station is currently operating pursuant to a special
temporary authorization as K52AO.
Schedule 9 - 7
<PAGE>
18. KUVN-LP (LOW POWER), FORT WORTH, TEXAS, CHANNEL 31
(formerly K31CM)
LICENSEE: UNIVISION TELEVISION GROUP, INC.(3)
MAIN STATION KUVN-LP(3) 10/1/98
ASSOCIATED BROADCAST AUXILIARY STATIONS
TV STL WMV-246
- -------------------
(3) Effective July 9, 1996, the FCC approved the assignment of
KUVN-LP from KESS-TV License Corp. to Univision Television Group, Inc.
("UTG"). On September 11, 1996, an application was filed with the FCC
requesting pro forma assignment of the KUVN-LP license from UTG to KUVN
License Partnership, G.P., another UCI subsidiary. That application is still
pending.
Schedule 9 - 8
<PAGE>
SCHEDULE 10
BORROWER'S AND SUBSIDIARIES' EXECUTIVE OFFICES
UNIVISION COMMUNICATIONS INC.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
PERENCHIO TELEVISION, INC.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
UNIVISION TELEVISION GROUP, INC.
24 Meadowland Parkway
Third Floor
Secaucus, New Jersey 07094
PTI HOLDINGS, INC.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
GALAVISION, INC.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
&
9405 N.W. 41 Street
Miami, Florida 33178
SUNSHINE ACQUISITION CORP.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
SUNSHINE ACQUISITION, L.P.
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
THE UNIVISION NETWORK LIMITED PARTNERSHIP
9405 N.W. 41 Street
Miami, Florida 33178
THE UNIVISION NETWORK HOLDING LIMITED PARTNERSHIP
9405 N.W. 41 Street
Miami, Florida 33178
Schedule 10-1
<PAGE>
LICENSE SUBSIDIARIES
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Schedule 10-2
<PAGE>
SCHEDULE 11
BORROWER LITIGATION/FCC PROCEEDINGS
None.
Schedule 11-1
<PAGE>
SCHEDULE 12
BORROWERS' AND SUBSIDIARIES' INVESTMENTS
PTI Holdings, Inc., a Delaware corporation
Perenchio Television, Inc., a Delaware corporation
Univision Television Group, Inc., a Delaware corporation
Galavision, Inc., a Delaware corporation
Sunshine Acquisition Corp., a California corporation
Sunshine Acquisition,L.P., a California limited partnership
The Univision Network Holding Limited Partnership, a Delaware limited
partnership
The Univision Network Limited Partnership, a Delaware limited partnership
KWEX License Partnership, G.P., a California general partnership
KUVN License Partnership, G.P., a California general partnership
KLUZ License Partnership, G.P., a California general partnership
KMEX License Partnership, G.P., a California general partnership
KDTV License Partnership, G.P., a California general partnership
KFTV License Partnership, G.P., a California general partnership
KTVW License Partnership, G.P., a California general partnership
KXLN License Partnership, G.P., a California general partnership
WGBO License Partnership, G.P., a California general partnership
WXTV License Partnership, G.P., a California general partnership
WLTV License Partnership, G.P., a California general partnership
Schedule 12-1
<PAGE>
SCHEDULE 13
TRANSPONDER LEASES
1. GE-1 Satellite C-Band Transponder Service Agreement, dated as of
December 7, 1994, between GE American Communications, Inc. and The
Univision Network Limited Partnership.
2. Transponder Service Agreement, dated as of January 17, 1990, between
Hughes Communications Galaxy, Inc. and The Univision Network Limited
Partnership.
3. Transponder Sublease Agreement, dated as of November 15, 1994, between
UV Corp., as sublessor, and The Univision Network Limited Partnership,
as sublessee.
Schedule 13-1
<PAGE>
EXHIBIT 10.13
SCHEDULE OF DOCUMENTS OMITTED
PURSUANT TO ITEM 601, INSTRUCTION NO. 2
OF REGULATION S-K
The following documents are substantially identical in all material respects to
Exhibit 10.13 except as to the material details set forth below:
Guarantor Security Agreements by the following Grantors:
PTI Holdings, Inc., a Delaware corporation
Galavision, a Delaware corporation
Sunshine Acquisition Corp., a California corporation
Sunshine Acquisition, L.P., a California limited partnership
The Univision Network Limited Partnership, a Delaware limited partnership
The Univision Network Holding Limited Partnership, a Delaware limited
partnership (NB THIS ENTITY HAS BEEN TERMINATED)
<PAGE>
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT ("Agreement") dated as of September 26,
1996, is made between UNIVISION TELEVISION GROUP, INC., a Delaware corporation
("the GRANTOR"), and THE CHASE MANHATTAN BANK, a New York banking corporation,
as administrative agent (the "AGENT") for the Lenders (as defined in the Credit
Agreement referred to below, the "LENDERS").
RECITALS
A. The Chase Manhattan Bank, a New York banking corporation, as a managing
agent, Banque Paribas, a French banking corporation, as a managing agent
(collectively, the "MANAGING AGENTS"), the Agent and the Lenders have entered
into a Credit Agreement dated as of September 26, 1996 (said Agreement, as it
may hereafter be amended or otherwise modified from time to time, being called
the "CREDIT AGREEMENT") with Univision Communications, Inc.
B. It is a condition precedent to the extension of credit by the Lenders
under the Credit Agreement that the Grantor shall have executed and delivered
this Agreement.
C. Terms defined in the Credit Agreement and not otherwise defined herein
have the same respective meanings when used herein, and the rules of
interpretation set forth in Section 1.2 of the Credit Agreement are incorporated
herein by reference.
AGREEMENT
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, Grantor hereby represents, warrants,
covenants, agrees, assigns and grants as follows:
1. DEFINITIONS. Unless the context otherwise requires, terms defined in
the Uniform Commercial Code of the State of New York (the "Uniform Commercial
Code") and not otherwise defined in this Agreement or in the Credit Agreement
shall have the meanings defined for those terms in the Uniform Commercial Code.
In addition, the following terms shall have the meanings respectively set forth
after each:
"CERTIFICATES" means all certificates, instruments and other documents now
or hereafter representing or evidencing any Pledged Securities.
<PAGE>
"COLLATERAL" means and includes all present and future right, title and
interest of Grantor in or to any personal property or assets whatsoever, whether
now owned or existing or hereafter arising or acquired and wheresoever located,
and all rights and powers of Grantor to transfer any interest in or to any
personal property or assets whatsoever, including, without limitation, any and
all of the following personal property:
(a) All present and future accounts, accounts receivable,
agreements, guarantees, contracts (including without limitation the
Material Contracts), leases, contract rights and rights to payment
(collectively, the "ACCOUNTS"), together with all instruments, documents,
chattel paper, security agreements, guaranties, undertakings, surety bonds,
insurance policies, notes and drafts, and all forms of obligations owing to
Grantor or in which Grantor may have any interest, however created or
arising;
(b) All present and future general intangibles, including without
limitation the proprietary rights of the Grantor in all Media Licenses
(including without limitation the FCC licenses for the Primary Stations
described in SCHEDULE E attached hereto and made a part hereof and
including, without limitation, goodwill, going concern value, all of
Grantor's rights under or relating to any Media License and the proceeds of
any Media License; provided, however, that the Collateral does not include
at any time any license granted by the FCC to the extent, but only to the
extent, that the Grantor is prohibited at that time from granting a
security interest therein pursuant to the Communications Act of 1934, as
amended, and the policies and regulations promulgated thereunder, but
includes, to the maximum extent permitted by law, all rights incident or
appurtenant to such Media License and the rights to receive all proceeds
derived from or in connection with the sale, assignment or transfer of such
Media License), all tax refunds of every kind and nature to which Grantor
now or hereafter may become entitled, however arising, all other refunds,
all commitments to extend financing to the Grantor, and all deposits,
goodwill, choses in action, trade secrets, computer programs, software,
customer lists, trademarks, trade names, patents, licenses, copyrights,
technology, processes, proprietary information and insurance proceeds,
including, without limitation, the Copyrights, the Patents, the Marks and
the Programs, and the goodwill of Grantor's business connected with and
symbolized by the Marks;
(c) All present and future demand, time, savings, passbook, deposit
and like accounts (general or special) (collectively, the "DEPOSIT
ACCOUNTS") in which Grantor has any interest which are maintained with any
bank, savings and loan association, credit union or like organization,
including, without limitation, each account listed on SCHEDULE K attached
hereto and made a part hereof, and all
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money, cash and cash equivalents of Grantor, whether or not deposited in any
Deposit Account;
(d) All present and future books and records, including, without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to Grantor or the business thereof,
all receptacles and containers for such records, and all files and
correspondence;
(e) All present and future goods, including, without limitation, all
equipment, machinery, cameras, recording equipment, transmitters, satellite
transponders, transmitting towers, transmitters, broadcasting equipment,
videotapes, audio tapes and other recorded media, tools, molds, dies,
furniture, furnishings, fixtures, trade fixtures, motor vehicles and all
other goods used in connection with or in the conduct of Grantor's
business, including, but not limited to, all goods as defined in Section
9-109(2) of the Uniform Commercial Code (collectively, the "EQUIPMENT");
(f) All present and future inventory and merchandise, including,
without limitation, all present and future goods held for sale or lease or
to be furnished under a contract of service, all videotapes, audio tapes
and other recorded media, all raw materials, work in process and finished
goods, all packing materials, supplies and containers relating to or used
in connection with any of the foregoing, and all bills of lading, warehouse
receipts and documents of title relating to any of the foregoing
(collectively, the "INVENTORY");
(g) All present and future stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates,
partnership interests, joint venture interests and investment and/or
brokerage accounts, including without limitation the Certificates, the
Pledged Securities and the Pledged Partnership Interests, and all rights,
preferences, privileges, dividends, distributions (in cash or in kind),
redemption payments or liquidation payments with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible personal property of Grantor;
(j) All rights, remedies, powers and/or privileges of Grantor with
respect to any of the foregoing; and
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(k) Any and all proceeds and products of the foregoing, including
without limitation, all money, accounts, general intangibles, deposit
accounts, documents, instruments, chattel paper, goods, insurance proceeds
and any other tangible or intangible property received upon the sale or
disposition of any of the foregoing;
PROVIDED that the term "COLLATERAL", as used in this Agreement, shall not
include real property or any interest therein.
"COPYRIGHTS" means all:
(i) copyrights, whether or not published or registered under the
Copyright Act of 1976, 17 U.S.C. Section 101 et seq., as the same shall be
amended from time to time, and any predecessor or successor statute thereto
(the "COPYRIGHT ACT"), and applications for registration of copyrights, and
all works of authorship and other intellectual property rights therein,
including, without limitation, copyrights for computer programs, source
code and object code data bases and related materials and documentation and
including, without limitation, the registered copyrights and copyright
applications listed on SCHEDULE A attached hereto and made a part hereof
(as such Schedule may be supplemented from time to time in accordance with
the terms of this Agreement), and (a) all renewals, revisions, derivative
works, enhancements, modifications, updates, new releases and other
revisions thereof, (b) all income, royalties, damages and payments now and
hereafter due and/or payable with respect thereto, including, without
limitation, payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements
thereof, (c) the right to sue for past, present and future infringements
thereof and (d) all of Grantor's rights corresponding thereto throughout
the world;
(ii) rights under or interests in any copyright license agreements
with any other party, whether Grantor is a licensee or licensor under any
such license agreement, including, without limitation, the copyright
license agreements listed on SCHEDULE A attached hereto and made a part
hereof, and the right to use the foregoing in connection with the
enforcement of the Lenders' rights under the Loan Documents; and
(iii) copyrightable materials now or hereafter owned by Grantor,
including Programs not copyrighted, all tangible property embodying the
copyrights described in clause (i) hereof or such copyrightable materials,
and all tangible property covered by the licenses described in clause (ii)
hereof.
"MARKS" means all (i) trademarks, trademark registrations, interests under
trademark license agreements, tradenames,
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trademark applications, service marks, business names, trade styles, designs,
logos and other source or business identifiers for which registrations have
been issued or applied for in the United States Patent and Trademark Office
or in any other office or with any other official anywhere in the world or
which are used in the United States or any state, territory or possession
thereof, or in any other place, nation or jurisdiction anywhere in the world
including, without limitation, the trademarks, trademark registrations,
applications, service marks, business names, trade styles, design logos and
other source or business identifiers listed on SCHEDULE B attached hereto and
made a part hereof (as such Schedule may be supplemented from time to time in
accordance with the terms of this Agreement), (ii) licenses pertaining to any
such mark whether Grantor is licensor or licensee including, without
limitation, the licenses listed on SCHEDULE B hereto (as such Schedule may be
supplemented from time to time in accordance with the terms of this
Agreement), (iii) all income, royalties, damages and payments now and
hereafter due and/or payable with respect to any such mark or any such
license, including, without limitation, damages and payments for past,
present or future infringements thereof, (iv) rights to sue for past, present
and future infringements thereof, (v) rights corresponding thereto throughout
the world, (vi) all product specification documents and production and
quality control manuals used in the manufacture of products sold under or in
connection with such marks, (vii) all documents that reveal the name and
address of all sources of supply of, and all terms of purchase and delivery
for, all materials and components used in the production of products sold
under or in connection with such marks, (viii) all documents constituting or
concerning the then current or proposed advertising and promotion by Grantor,
its subsidiaries or licensees of products sold under or in connection with
such marks, including, without limitation, all documents that reveal the
media used or to be used and the cost for all such advertising conducted
within the described period or planned for such products and (ix) renewals
and proceeds of any of the foregoing.
"MATERIAL CONTRACTS" means the contracts set forth on SCHEDULE D
attached hereto and made a part hereof (as such Schedule may be supplemented
from time to time in accordance with the terms of this Agreement) and all
contracts entered into by Grantor in the future which are material and
necessary to the conduct of Grantor's business.
"PATENTS" means all (i) letters patent, design patents, utility patents,
inventions and trade secrets, all patents and patent applications in the
United States Patent and Trademark Office, and interests under patent license
agreements, including, without limitation, the inventions and improvements
described and claimed therein, including, without limitation, those patents
listed on SCHEDULE C attached hereto and made a part hereof (as such Schedule
may be supplemented from time to time in accordance with the terms of this
Agreement), (ii)
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licenses pertaining to any patent whether Grantor is licensor or licensee,
(iii) income, royalties, damages and payments now and hereafter due and/or
payable under and with respect thereto, including, without limitation,
damages and payments for past, present or future infringements thereof, (iv)
rights to sue for past, present and future infringements thereof, (v) rights
corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for and (vi) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing.
"PLEDGED COLLATERAL" means the Certificates, the Pledged Securities and
the Pledged Partnership Interests.
"PLEDGED PARTNERSHIP INTERESTS" means all interests in any partnership
or joint venture held by Grantor including but not limited to those
partnerships and/or joint ventures identified in SCHEDULE F attached hereto
and made a part hereof, as such Schedule may be supplemented from time to
time in accordance with the terms of this Agreement, and all dividends, cash,
instruments and other properties from time to time received, to be received
or otherwise distributed in respect of or in exchange for any or all of such
interests.
"PLEDGED SECURITIES" means all shares of capital stock of any issuer in
which Grantor has an interest, including but not limited to, those shares of
stock identified in SCHEDULE F attached hereto, as such Schedule may be
supplemented from time to time in accordance with the terms of this
Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of
or in exchange for any or all of such shares.
"PROGRAMS" means all (a) media broadcasting programs originating from
the Grantor or any Affiliate of the Grantor, all other general intangibles of
a like nature, and all recordings and renewals thereof; and (b) licenses,
contracts or other agreements, whether written or oral, naming the Grantor as
licensee or licensor and providing for the grant of any right to produce,
use, sell, broadcast or rebroadcast any media or broadcasting programs.
"SECURED PARTY" means, collectively, the Agent, the Managing Agents and
the Lenders.
2. CREATION OF SECURITY INTEREST. Grantor hereby pledges to the Agent for
the ratable benefit of the Lenders, and grants to the Agent for the ratable
benefit of the Lenders a security interest in and to, all right, title and
interest of Grantor in and to all presently existing and hereafter acquired
Collateral. The security interest and pledge created by this Section 2 shall
continue in effect so long as any Obligation (as defined below) remains unpaid
or any Commitment remains in effect or any Letter of Credit remains outstanding.
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3. SECURITY FOR OBLIGATIONS. This Agreement and the security interests
granted herein secure the prompt payment, in full in cash, and full performance
of, all obligations of Grantor now or hereafter existing under any Loan
Document, whether for principal, interest, fees, expenses or otherwise,
including without limitation all obligations of Grantor now or hereafter
existing under this Agreement, and all interest that accrues (whether or not
allowed) at the then applicable rate (including interest at the rate for overdue
payments described in Section 2.9(c) of the Credit Agreement) specified in the
Credit Agreement on all or any part of any of such obligations after the filing
of any petition or pleading against Grantor for a proceeding under any
bankruptcy or related law (collectively, the "OBLIGATIONS").
4. DELIVERY OF PLEDGED COLLATERAL.
(a) Each Certificate shall, on or before the earliest of (i) the Initial
Closing Date, (ii) the Second Closing Date and (iii) the day on which such
Certificate shall be received or acquired by the Grantor, be delivered to and
held by the Agent on behalf of the Lenders and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed undated
endorsements, instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Managing Agents.
(b) Subject to any necessary prior approval of the FCC, the Managing Agents
shall have the right, upon the occurrence and during the continuance of an Event
of Default, without notice to the Grantor, to transfer to or to direct the
Grantor or any nominee of the Grantor to register or cause to be registered in
the name of the Agent or any of its nominees any or all of the Pledged
Securities. In addition, the Managing Agents shall have the right at any time
to exchange certificates or instruments representing or evidencing Pledged
Securities for certificates or instruments of smaller or larger denominations.
5. FURTHER ASSURANCES.
(a) At any time and from time to time at the reasonable written request
of the Agent, Grantor shall execute and deliver to the Agent, at Grantor's
expense, all such financing statements and other instruments, certificates and
documents (including notices to financial institutions holding deposit accounts
of Grantor as to the security interest granted hereby) in form and substance
reasonably satisfactory to the Agent, and perform all such other acts as shall
be necessary or reasonably desirable to fully perfect or protect or maintain,
when filed, recorded, delivered or performed, the Secured Party's security
interests granted pursuant to this Agreement or to enable the Lenders to
exercise and enforce their rights and remedies hereunder with respect to any
Collateral. Without limiting the
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generality of the foregoing, Grantor shall: (i) at the request of the Agent,
mark conspicuously each document included in the Inventory and each other
contract relating to the Accounts, and all chattel paper, instruments and
other documents and each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Agent, indicating that such
document, contract, chattel paper, instrument or Collateral is subject to the
security interest granted hereby; (ii) at the request of the Agent, if any
Account or contract or other writing relating thereto shall be evidenced by a
promissory note or other instrument, deliver and pledge to the Agent, for the
ratable benefit of the Lenders, such note or other instrument duly endorsed and
accompanied by duly executed undated instruments of transfer or assignment, all
in form and substance reasonably satisfactory to the Agent; (iii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as the Agent
may reasonably request, in order to perfect and preserve, with the required
priority, the security interests granted, or purported to be granted hereby;
(iv) upon Grantor's registration, or application therefor, of any copyright
under the Copyright Act, at the Agent's request execute and deliver to the Agent
for recordation and filing in the United States Copyright Office a copy of this
Agreement or another appropriate copyright mortgage document in form and
substance reasonably satisfactory to the Managing Agents; (v) upon Grantor's
registration, or application therefor, of any Patent or Mark, execute and
deliver to the Agent for recordation and filing in the United States Patent
and Trademark Office a copy of this Agreement or another appropriate patent or
trademark mortgage document, as applicable, in form and substance reasonably
satisfactory to the Managing Agents; and (vi) with respect to any Material
Contract in which Grantor now has or hereafter acquires an interest which by
its terms prohibits assignment, Grantor will use reasonable efforts to procure
the consent of the counterparty to such contract (a "CONSENT") in the form
attached as SCHEDULE J hereto and made a part hereof.
(b) At any time and from time to time, the Agent shall be entitled to file
and/or record any or all such financing statements, instruments and documents
held by it, and any or all such further financing statements, documents and
instruments, relative to the Collateral or any part thereof in each instance,
and to take all such other actions as the Agent may reasonably deem appropriate
to perfect and to maintain perfected the security interests granted herein.
(c) Grantor hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of Grantor where permitted by law.
A carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof
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shall be sufficient as a financing statement where permitted by law.
(d) Grantor shall furnish to the Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Agent may reasonably request.
Upon Grantor's publication or registration, or application for registration,
of any copyright under the Copyright Act, Grantor shall, in addition to all
other acts required to be performed in respect thereof pursuant to this
Agreement, supplement SCHEDULE A to this Agreement to reflect the publication
or registration of such copyright or application therefor. Upon Grantor's
obtaining any rights and interests in any additional Marks, Grantor shall,
in addition to all other acts required to be performed in respect thereof
pursuant to this Agreement, supplement SCHEDULE B to this Agreement to reflect
such additional Marks. Upon Grantor's obtaining any rights and interests in any
additional Patents, Grantor shall, in addition to all other acts required to be
performed in respect thereof pursuant to this Agreement, supplement SCHEDULE C
to this Agreement to reflect such additional Patents. Upon Grantor's receipt or
acquisition of any additional shares of capital stock of any Person or any
additional partnership interests in any partnership or joint venture, Grantor
shall, in addition to all other acts required to be performed in respect thereof
pursuant to this Agreement, supplement SCHEDULE F to this Agreement to reflect
such additional Pledged Collateral. Grantor shall promptly give Agent notice of
any Material Contract to which it becomes party after the Closing Date and, in
addition to all other acts required to be performed in respect thereof pursuant
to this Agreement, upon request of the Agent, shall supplement SCHEDULE D to
this Agreement to reflect such additional contract.
(e) With respect to any Collateral consisting of certificates of title or
the like as to which Secured Party's security interest need be perfected by, or
the priority thereof need be assured by, notation on the certificate of title
pertaining to such Collateral, Grantor will upon demand of the Agent note the
lien on such certificate of title in favor of the Lenders.
(f) With respect to any Collateral consisting of securities, instruments,
partnership or joint venture interests or the like, Grantor hereby consents and
agrees that, upon the occurrence and during the continuance of an Event of
Default, subject to any necessary prior approval of the FCC, the issuers of,
or obligors on, any such Collateral, or any registrar or transfer agent or
trustee for any such Collateral, shall be entitled to accept the provisions of
this Agreement as conclusive evidence of the right of the Agent to effect any
transfer or exercise any right hereunder or with respect to any such Collateral
subject to the terms hereof, notwithstanding any
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other notice or direction to the contrary heretofore or hereafter given by
Grantor or any other Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
(vii) With respect to any Media Licenses:
(i) The parties acknowledge their intention that, upon the
occurrence of an Event of Default, the Agent and the Lenders shall
receive, to the fullest extent permitted by Requirements of Law
(including, without limitation, the rules and policies of the FCC), all
rights necessary or desirable to obtain, use or sell such Collateral or
to have such Collateral or rights in connection therewith sold for the
benefit of the Lenders and, in connection therewith, to assign the Media
Licenses or to have the Media Licenses assigned, to such purchaser, and
to exercise all remedies available to the Lenders under this Agreement,
the other Loan Documents, the Uniform Commercial Code and other
applicable law.
(ii) The parties agree that, in the event of changes in the
Requirement of Law occurring after the date hereof that affect in any
manner the Lenders' rights of access to, or use or sale of, the Media
Licenses, or the procedures necessary to enable the Lenders to obtain such
rights of access, use or sale (including changes allowing greater access),
the Lenders and the Grantor, upon request of any of the Lenders or the
Agent, shall amend this Agreement and the other Loan Documents in such
manner as the Lenders or the Agent shall reasonably request, in order to
provide the Lenders with such rights to the greatest extent possible
consistent with then-applicable Requirements of Law.
vi. VOTING RIGHTS; DIVIDENDS; ETC. Subject to any necessary prior
approval from the FCC, so long as no Event of Default shall have occurred and
be continuing:
(i) VOTING RIGHTS. Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Securities or
the Pledged Partnership Interests, or any part thereof, for any purpose not
inconsistent with the terms of this Agreement, the Credit Agreement or the
other Loan Documents; PROVIDED, HOWEVER, that Grantor shall not exercise, or
shall refrain from exercising, any such right if it would result in a Default.
(ii) DIVIDEND AND DISTRIBUTION RIGHTS. Subject to the terms of the
Credit Agreement, Grantor shall be entitled to receive and to retain and use
any and all dividends or distributions paid in respect of the Pledged
Securities or the Pledged Partnership Interests; PROVIDED, HOWEVER, that any
and all
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(i) non-cash dividends or distributions in the form of capital
stock, instruments or other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Securities or
Pledged Partnership Interests,
(ii) dividends and other distributions paid or payable in cash in
respect of any Pledged Securities or Pledged Partnership Interests in
connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus,
and
(iii) cash paid, payable or otherwise distributed in redemption of, or
in exchange for, any Pledged Securities or Pledged Partnership Interests,
shall, except as otherwise provided for in the Credit Agreement or the other
Loan Documents, forthwith be delivered to the Agent, in the case of (i) above,
to be held as Collateral and shall, if received by Grantor, be received in trust
for the benefit of Secured Party, be segregated from the other property of
Grantor and forthwith be delivered to the Agent as Collateral in the same form
as so received (with any necessary endorsements), and in the case of (ii) and
(iii) above, to be applied to the Obligations to the extent permitted by the
Credit Agreement or otherwise to be held as Collateral.
vii. RIGHTS AS TO PLEDGED COLLATERAL DURING EVENT OF DEFAULT. When an
Event of Default has occurred and is continuing, subject to any necessary
prior approval of the FCC:
(i) VOTING, DIVIDEND AND DISTRIBUTION RIGHTS. At the option of the
Agent, all rights of Grantor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section
6(a) above, and to receive the dividends and distributions which it would
otherwise be authorized to receive and retain pursuant to Section 6(b) above,
shall cease, and all such rights shall thereupon become vested in the Agent
who shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and to hold as Pledged Collateral such
dividends and distributions during the continuance of such Event of Default.
(ii) DIVIDENDS AND DISTRIBUTIONS HELD IN TRUST. All dividends and
other distributions which are received by Grantor contrary to the provisions
of Section 7(a) of this Agreement shall be received in trust for the benefit
of Secured Party, shall be segregated from other funds of Grantor and
forthwith shall be paid over to the Agent as Collateral in the same form as
so received (with any necessary endorsements).
viii. IRREVOCABLE PROXY. Grantor hereby revokes all previous proxies
with regard to the Pledged Securities and, subject to any necessary prior
approval of the FCC, appoints the Agent as
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its proxyholder to attend and vote at any and all meetings of the
shareholders of the corporation(s) which issued the Pledged Securities, and
any adjournments thereof, held on or after the date of the giving of this
proxy and prior to the termination of this proxy and to execute any and all
written consents of shareholders of such corporation(s) executed on or after
the date of the giving of this proxy and prior to the termination of this
proxy, with the same effect as if Grantor had personally attended the
meetings or had personally voted its shares or had personally signed the
written consents; PROVIDED, HOWEVER, that the Agent as proxyholder shall have
rights hereunder only upon the occurrence and during the continuance of an
Event of Default and subject to Section 16(j) hereof. Grantor hereby
authorizes the Agent to substitute another Person (which Person shall be a
successor to the rights of the Agent hereunder, a nominee appointed by the
Agent to serve as proxyholder, or otherwise as approved by the Grantor in
writing, such approval not to be unreasonably withheld) as the proxyholder
and, upon the occurrence or during the continuance of any Event of Default,
hereby authorizes and directs the proxyholder to file this proxy and the
substitution instrument with the secretary of the appropriate corporation.
This proxy is coupled with an interest and is irrevocable until such time as
no part of any Commitment remains outstanding, all Obligations have been
indefeasibly paid in full and no Letter of Credit remains outstanding.
ix. COPYRIGHTS.
(i) ROYALTIES. Grantor hereby agrees that the use by the Agent or any
Lender of the Copyrights as authorized hereunder in connection with the
Agent's or the Lenders' exercise of their rights and remedies hereunder shall
be without any liability for royalties or other related charges from the
Agent or the Lenders to Grantor.
(ii) RESTRICTIONS ON FUTURE AGREEMENTS. Subject to the terms hereof and
of the Credit Agreement, Grantor shall be permitted to manage, license and
administer its Copyrights, Patents and Marks in such manner as Grantor in its
reasonable business judgment deems desirable; PROVIDED, HOWEVER, that Grantor
will not, without the Agent's prior written consent, such consent not to be
unreasonably withheld or delayed, (a) enter into any copyright license
agreements except license agreements entered into in the ordinary course of
its business consistent with past practices and containing such additional
provisions to protect the Lenders' interest hereunder as the Agent may from
time to time reasonably request or (b) take any action, or permit any action
to be taken by others, including, without limitation, licensees, or fail to
take any action, which would customarily be taken by a Person in the same
business and in similar circumstances as the Grantor, which could in any
respect reasonably be expected to have a Material Adverse Effect.
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(iii) DUTIES OF GRANTOR. Grantor shall have the duty to: (i) prosecute
diligently any copyright application included in the Copyrights, (ii) upon
the occurrence and during the continuance of an Event of Default, at the
request of the Agent, make application for registration of such uncopyrighted
but copyrightable material owned by Grantor as the Managing Agents reasonably
deem appropriate if the failure to do so could reasonably be expected to have
a Material Adverse Effect, (iii) place notices of copyright on all
copyrightable property produced or owned by Grantor embodying the Copyrights
and use diligent reasonable efforts to have its licensees do the same and
(iv) take all reasonable action necessary in Grantor's reasonable business
judgment consistent with past practices to preserve and maintain all of
Grantor's rights in the Copyrights that are or shall be necessary in the
operation of Grantor's business, including, without limitation, making timely
filings for renewals and extensions of registered Copyrights and diligently
monitoring unauthorized use thereof, unless the failure to do so could not
reasonably be expected to have a Material Adverse Effect. Any expenses
incurred in connection with the foregoing shall be borne by Grantor. Neither
the Agent nor the Lenders shall have any duty with respect to the Copyrights
other than to act lawfully and without gross negligence or willful
misconduct. Without limiting the generality of the foregoing, neither the
Agent nor the Lenders shall be under any obligation to take any steps
necessary to preserve rights in the Copyrights against any other parties, but
the Agent may do so at its option upon the occurrence and during the
continuance of an Event of Default, and all reasonable expenses incurred in
connection therewith shall be for the sole account of Grantor and shall be
added to the Obligations.
x. PATENTS AND MARKS.
(i) ROYALTIES. Grantor hereby agrees that any rights granted hereunder
to the Lenders with respect to Patents and Marks shall be applicable to all
territories in which the Grantor has the right to use such Patents and Marks,
from time to time, and without any liability for royalties or other related
charges from the Lenders to Grantor.
(ii) RESTRICTIONS ON FUTURE AGREEMENTS. Grantor will not, without the
Agent's prior written consent, such consent not to be unreasonably withheld
or delayed, abandon any Patent or Mark in which Grantor now owns or hereafter
acquires any rights or interests if such abandonment could reasonably be
expected to have a Material Adverse Effect or enter into any agreement,
including, without limitation, any license agreement, which is inconsistent
with Grantor's obligations under this Agreement, if such actions could
reasonably be expected to have a Material Adverse Effect, and Grantor further
agrees that it will not take any action, or permit any action to be taken by
others subject to its control, including licensees, or fail to take any
action which would customarily be taken by a Person in the same
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business and in similar circumstances as the Grantor, which could reasonably
be expected to have a Material Adverse Effect.
(iii) DUTIES OF GRANTOR. Grantor shall have the duty to (i) prosecute
diligently any patent application or trademark application pending as of the
date hereof or thereafter until the Obligations shall have been indefeasibly
paid in full, no Commitment remains outstanding and no Letter of Credit
remains outstanding, (ii) upon the occurrence and during the continuance of
an Event of Default, make application on unpatented but patentable inventions
owned by the Grantor and on Marks, as the case may be, as the Managing Agents
reasonably deem appropriate, (iii) file and prosecute opposition and
cancellation proceedings if the failure to do so could reasonably be expected
to have a Material Adverse Effect and (iv) take all reasonable action
necessary in Grantor's reasonable business judgment consistent with past
practices to preserve and maintain all rights in patent applications of the
Patents and in applications for registrations of the Marks unless the failure
so to do could not reasonably be expected to have a Material Adverse Effect.
Any expenses incurred in connection with such applications shall be borne by
Grantor. Grantor shall not abandon any right to file a Patent application or
Mark application without the consent of the Agent, which consent shall not be
unreasonably withheld or delayed, if such abandonment could reasonably be
expected to have a Material Adverse Effect. Grantor shall give proper
statutory notice in connection with its use of each of the Marks to the
extent necessary for the protection of each of the Marks. Grantor shall
notify the Agent of any suits it commences to enforce the Patents and Marks
and shall provide the Agent with copies of any documents reasonably requested
by the Agent relating to such suits.
xi. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants as follows:
(i) (i) The locations listed on SCHEDULE G attached hereto and
made a part hereof constitute all locations at which Inventory and/or
Equipment are located; (ii) the chief executive office of the Grantor, where
the Grantor keeps its records concerning the Collateral and the chattel paper
evidencing the Collateral, is located at the address set forth for Grantor on
SCHEDULE H attached hereto and made a part hereof; (iii) all records
concerning any Account, any Material Contract and all originals of all
contracts and other writings which evidence any Account are located at the
addresses listed on SCHEDULE H hereto; and (iv) the Grantor has exclusive
possession and control of the Equipment and the Inventory.
(ii) The Grantor currently conducts business only under its own
name and the trade names listed on Part 1 of SCHEDULE I attached hereto and
made a part hereof. Neither the Grantor nor any corporate predecessor has,
during the
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preceding five years, been known as or used any other corporate or
fictitious name, except the names disclosed on Part 2 of SCHEDULE I hereto.
(c) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted by Section 6.3 of
the Credit Agreement. Grantor has the power, authority and legal right to
grant the security interests in the Collateral purported to be granted
hereby, and to execute, deliver and perform this Agreement. The pledge of
the Collateral pursuant to this Agreement creates a valid security interest
in the Collateral. That Collateral the perfection of which is governed by
the Uniform Commercial Code as in effect in the applicable jurisdictions
in the United States, or federal copyright, trademark and patent law, will
be a first-priority (except for any Liens or security interests permitted
under Section 6.3 of the Credit Agreement which have priority by operation
of law perfected security interest in such Collateral upon taking the
appropriate actions pursuant to Sections 9-301, 9-302, 9-304, 9-305, 9-306,
8-313 or 8-321 of the Uniform Commercial Code, as applicable, (or the
equivalent code sections as in effect in the applicable jurisdictions) and
the recordation of appropriate documentation (including all appropriate
registrations of Marks, Patents and Copyrights, to the extent such have not
been previously registered) with the United States Copyright Office and the
United States Patent and Trademark Office, as applicable.
(d) The Pledged Securities have been duly authorized and validly
issued and are fully paid and nonassessable.
(e) No consent of any Person, including any partner in a partnership
with respect to which Grantor has pledged its interest as a Pledged
Partnership Interest, is required for the pledge by Grantor of the
Collateral other than consents required under the agreements described on
Schedule M hereto.
(f) The Pledged Securities described on SCHEDULE F constitute (i) all
of the shares of capital stock of any Person owned by Grantor and (ii) that
percentage of the issued and outstanding shares of the respective issuers
thereof indicated on SCHEDULE F hereto, and there is no other class of
shares issued and outstanding of the respective issuers thereof except as
set forth on SCHEDULE F.
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(g) Upon the filing of UCC-1 Financing Statements in the filing
offices set forth on SCHEDULE L hereto, all appropriate financing
statements will have been filed in the necessary jurisdictions with respect
to the Collateral as to which financing statements are required to be
filed, so that the security interest granted pursuant to this Agreement,
to the extent it may be perfected by filing financing statements in the
necessary jurisdictions, constitutes a valid, continuing and perfected
first-priority (except for any Liens or security interests permitted under
Section 6.3 of the Credit Agreement which have priority by operation of
law security interest in and lien on the Collateral to the extent a
security interest can be created therein under the Uniform Commercial Code
as in effect in the applicable jurisdictions in the United States,
securing the payment of the Obligations. All other actions necessary or
requested by the Agent to perfect the security interest granted hereby in
each item of Collateral with respect to which perfection is governed by the
filing of financing statements under the Uniform Commercial Code and in
the Pledged Securities have been duly taken or waived in writing by the
Agent.
(h) Subject to Section 16(j) hereof, no authorization, approval or
other action by, and no notice to or filing with, any Governmental
Authority (other than such authorizations, approvals and other actions as
have already been taken and are in full force and effect) is required
(A) for the pledge of the Collateral or the grant of the security interest
in the Collateral by the Grantor hereby or for the execution, delivery or
performance of this Agreement by the Grantor, or (B) for the exercise by
the Agent of the voting rights in the Pledged Securities or of any other
rights or remedies in respect of the Collateral hereunder except as may
be required in connection with any disposition of Collateral consisting of
securities by laws affecting the offering and sale of securities generally.
(i) The Patents listed on SCHEDULE C constitute all of the Patents
material and necessary for the conduct of Grantor's business as currently
conducted (the "MATERIAL PATENTS") and applications therefor now owned or
applied for by Grantor, and Grantor is the sole owner or licensee of all
Material Patents except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Effect. The
Patent license agreements listed on SCHEDULE C constitute all of the
material licenses entered into by Grantor with respect to the Material
Patents. The Marks listed on SCHEDULE B constitute all of the Marks
material and necessary for the conduct of Grantor's business as currently
conducted (the "MATERIAL MARKS") and applications therefor now owned or
applied for by Grantor, and Grantor is the sole owner or licensee of all
Material Marks except for those the failure to own or license which could
not reasonably be expected to have a
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Material Adverse Effect. The Mark license agreements listed on SCHEDULE B
constitute all of the material licenses entered into by Grantor with
respect to the Marks. Upon the filing of this Agreement (or another
appropriate patent or trademark mortgage document, as applicable, in form
and substance reasonably satisfactory to the Managing Agents) with the
United States Patent and Trademark Office and the filing of appropriate
UCC financing statements, all appropriate documents will have been filed
with any Governmental Authority with respect to the United States Material
Marks listed on SCHEDULE B as to which appropriate registrations have been
made as to the underlying mark and Grantor's interest therein (the
"REGISTERED MATERIAL MARKS"), so that the security interest in such
Registered Material Marks granted pursuant to this Agreement constitutes a
valid, continuing and perfected first-priority (except for any Liens or
security interests permitted under Section 6.3 of the Credit Agreement
which have priority by operation of law security interest in and lien on
such Registered Material Marks, securing the payment of the Obligations.
Subject to the foregoing, all other actions necessary or reasonably
requested by the Agent to perfect such security interest in the Registered
Material Marks have been duly taken.
(j) The Copyrights and applications therefor listed on SCHEDULE A
constitute all of the copyrights material and necessary for the conduct of
Grantor's business as currently conducted ("MATERIAL COPYRIGHTS") and
applications therefor now owned or held by Grantor. The Copyright license
agreements listed on SCHEDULE A constitute all of the licenses material and
necessary to the conduct of Grantor's business entered into by Grantor with
respect to the Copyrights. Upon the filing of this Agreement with the
United States Copyright Office, all appropriate documents will have been
filed with the United States Copyright Office with respect to the United
States Copyrights and applications listed on SCHEDULE A as to which
appropriate registrations have been made as to the underlying copyright and
Grantor's interest therein (the "REGISTERED MATERIAL COPYRIGHTS"), so that
the security interest in such Registered Material Copyrights and
applications granted pursuant to this Agreement constitutes a valid,
continuing and perfected first-priority (except for any Liens or security
interests permitted under Section 6.3 of the Credit Agreement which have
priority by operation of law or any PARI PASSU Liens security interest in
and lien upon such copyrights and applications, securing the payment of the
Obligations. Subject to the foregoing, all other actions necessary or
reasonably requested by the Agent to perfect such security interest in such
Registered Material Copyrights have been duly taken.
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(k) The deposit accounts listed on SCHEDULE K hereto constitute all
deposit accounts maintained by Grantor.
(l) The contracts set forth on SCHEDULE D constitute all contracts to
which Grantor is party which are material and necessary for the conduct of
Grantor's business as currently conducted. None of the Material Contracts
contains provisions prohibiting the assignment thereof by Grantor to
Lenders following foreclosure by Lenders hereunder which has not been
waived by the counterparty thereto pursuant to a Consent or disclosed on
SCHEDULE M hereto. All the Material Contracts set forth on SCHEDULE D are
in full force and effect, were duly executed by Grantor pursuant to due
authorization and constitute the legal and binding obligations of Grantor.
(m) The broadcast licenses described on SCHEDULE E constitute all
Media Licenses issued or granted by the FCC in connection with the Primary
Stations owned or held by Grantor and are in full force and effect.
12. GRANTOR'S COVENANTS. In addition to the other covenants and agreements
set forth herein and in the other Loan Documents, Grantor covenants and agrees
as follows:
(a) Grantor will pay, prior to delinquency, all taxes, charges, Liens
and assessments against the Collateral owned by it, except those with
respect to which the amount or validity is 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 Grantor and except those which
could not reasonably be expected to have a Material Adverse Effect.
(b) The Collateral will not be used in violation of any material law,
regulation or ordinance or any Requirement of Law applicable to Grantor,
nor used in any way that will void or impair any insurance required to be
carried in connection therewith.
(c) Grantor will keep the Collateral in reasonably good repair,
working order and operating condition (normal wear and tear excluded),
and from time to time make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto and, as appropriate and
applicable, will otherwise deal with the Collateral in all such ways as
are considered customary practice by owners of like property.
(d) Grantor will take all reasonable steps to preserve and protect
the Collateral except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
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(e) Grantor will maintain all insurance coverage required pursuant to
Section 5.5 of the Credit Agreement.
(f) Grantor will promptly notify the Agent in writing in the event of
any material damage to the Collateral from any source whatsoever.
(g) Grantor will not (i) establish any location of Inventory or
Equipment not listed on SCHEDULE G hereto, (ii) move its principal place
of business, chief executive offices or any other office listed on
SCHEDULE H hereto or (iii) adopt, use or conduct business under any trade
name or other corporate or fictitious name not disclosed on SCHEDULE I
hereto, except upon not less than 30 days prior notice to the Agent and
Grantor's prior compliance with all applicable requirements of Section 5
hereof necessary to perfect the Lender's security interest hereunder.
(h) Subject to the provisions of Section 16(j) hereof, the Grantor
agrees to take any action which the Agent may reasonably request in order
to obtain from the FCC such approval as may be necessary to enable the
Lenders to exercise and enjoy the full rights and benefits granted to them
by this Agreement, including the use of the Grantor's best efforts to
assist in obtaining the approval of the FCC for any action or transaction
contemplated by this Agreement for which such approval is required by law.
13. AGENT'S RIGHTS REGARDING COLLATERAL. At any time and from time
to time, the Agent (for the benefit of Secured Party) may, to the extent
necessary or desirable to protect the security hereunder, but the Agent
shall not be obligated to: (a) (whether or not a Default has occurred)
itself or through its representatives, at its own expense, upon
reasonable notice and at such reasonable times during usual business
hours, visit and inspect any of the Grantor's properties and examine and
make abstracts from any of its books and records at any reasonable time
and as often as may reasonably be desired and discuss the business,
operations, properties and financial and other condition of the Grantor
and its Subsidiaries with officers and employees of the Grantor and its
Subsidiaries and with its Accountants (as long as a member of senior
management of the Grantor is present during such discussion) or (b) if
an Event of Default has occurred and is continuing, at the expense of
the Grantor, perform any obligation of Grantor under this Agreement. At
any time and from time to time, at the expense of Grantor, the Agent
(for the benefit of Secured Party) may, to the extent necessary or
desirable to protect the security hereunder, but the Agent shall not be
obligated to: (i) notify obligors on the Collateral that the Collateral
has been assigned as security to the Agent for the benefit of Secured
Party; (ii) after an Event of Default has occurred and is continuing, at
any time and from time to time request from obligors on the Collateral,
in the name of Grantor or in the name of Secured Party, information
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concerning the Collateral and the amounts owing thereon; and (iii) after an
Event of Default has occurred and is continuing, direct obligors under the
contracts included in the Collateral to which Grantor is party to direct
their performance to the Agent or the Lenders. Grantor shall keep proper
books and records and accounts in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all
material dealings and transactions pertaining to the Collateral. The Agent
shall at all reasonable times on reasonable notice have full access to and
the right to audit any and all of Grantor's books and records pertaining to
the Collateral, and to confirm and verify the value of the Collateral.
Neither the Agent nor the Lenders shall be under any duty or obligation
whatsoever to take any action to preserve any rights of or against any prior
or other parties in connection with the Collateral, to exercise any voting
rights or managerial rights with respect to any Collateral or to make or give
any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices
of any other nature whatsoever in connection with the Collateral or the
Obligations. Neither the Agent nor the Lenders shall be under any duty or
obligation whatsoever to take any action to protect or preserve the
Collateral or any rights of Grantor therein, or to make collections or
enforce payment thereon, or to participate in any foreclosure or other
proceeding in connection therewith. Nothing contained herein or in any
Consent shall constitute an assumption by the Lenders of any of Grantor's
obligations under the contracts assigned hereunder unless the Agent shall
have given written notice to the counterparty to such assigned contract of
the Lenders' intention to assume such contract. Grantor shall continue to be
liable for performance of its obligations under such contracts.
14. COLLECTIONS ON THE COLLATERAL. Except as provided to the contrary
in the Credit Agreement, Grantor shall have the right to use and to continue
to make collections on and receive dividends and other proceeds of all of the
Collateral in the ordinary course of business so long as no Event of Default
shall have occurred and be continuing. Upon the occurrence and during the
continuance of an Event of Default, at the option of the Agent, Grantor's
right to make collections on and receive dividends and other proceeds of the
Collateral and to use or dispose of such collections and proceeds shall
terminate, and any and all dividends, proceeds and collections, including all
partial or total prepayments, then held or thereafter received on or on
account of the Collateral will be held or received by Grantor in trust for
Secured Party and immediately delivered in kind to the Agent (duly endorsed
to the Agent, if required), to be applied to the Obligations or held as
Collateral, as the Agent shall elect. Upon the occurrence and during the
continuance of an Event of Default, the Agent shall have the right at all
times to receive, receipt for, endorse, assign, deposit and deliver, in the
name of the Agent or the Lenders or
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in the name of Grantor, any and all checks, notes, drafts and other
instruments for the payment of money constituting proceeds of or otherwise
relating to the Collateral; and Grantor hereby authorizes the Agent to affix,
by facsimile signature or otherwise, the general or special endorsement of
Grantor, in such manner as the Agent shall deem advisable, to any such
instrument in the event the same has been delivered to or obtained by the
Agent without appropriate endorsement, and the Agent and any collecting bank
are hereby authorized to consider such endorsement to be a sufficient, valid
and effective endorsement by Grantor, to the same extent as though it were
manually executed by the duly authorized representative of Grantor,
regardless of by whom or under what circumstances or by what authority such
endorsement actually is affixed, without duty of inquiry or responsibility as
to such matters, and Grantor hereby expressly waives demand, presentment,
protest and notice of protest or dishonor and all other notices of every kind
and nature with respect to any such instrument.
15. POSSESSION OF COLLATERAL BY AGENT. All the Collateral now,
heretofore or hereafter delivered to the Agent shall be held by the Agent in
its possession, custody and control. Any or all of the Collateral delivered
to the Agent constituting cash or cash equivalents shall, prior to the
occurrence of any Event of Default, be held in an interest-bearing account
with one or more of the Lenders, and shall be, upon Grantor's request,
invested in investments permitted by Section 6.7(b) of the Credit Agreement.
The Grantor shall be permitted to withdraw any of such Collateral from time
to time, PROVIDED that no Event of Default has occurred and is continuing and
Grantor has not received written notice from the Agent prohibiting such
withdrawal. Nothing herein shall obligate Agent to obtain any particular
return thereon. Upon the occurrence and during the continuance of an Event
of Default, whenever any of the Collateral is in the Agent's possession,
custody or control, the Agent may use, operate and consume the Collateral,
whether for the purpose of preserving and/or protecting the Collateral, or
for the purpose of performing any of Grantor's obligations with respect
thereto, or otherwise, and, subject to the terms of Section 9.7 of the Credit
Agreement, any or all of the Collateral delivered to the Agent constituting
cash or cash equivalents shall be applied by the Agent to payment of the
Obligations to the extent permitted by the terms of the Credit Agreement or
otherwise held as Collateral as the Agent shall elect. The Agent may at any
time deliver or redeliver the Collateral or any part thereof to Grantor, and
the receipt of any of the same by Grantor shall be complete and full
acquittance for the Collateral so delivered, and the Agent thereafter shall
be discharged from any liability or responsibility arising after such
delivery to Grantor. So long as the Agent exercises reasonable care with
respect to any Collateral in its possession, custody or control, neither the
Agent nor the Lenders shall have any liability for any loss of or damage to
any Collateral, and in no event shall the Agent or
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the Lenders have liability for any diminution in value of Collateral
occasioned by economic or market conditions or events, absent the gross
negligence or willful misconduct of the Agent or any of the Lenders. The
Agent shall be deemed to have exercised reasonable care within the meaning of
the preceding sentence if the Collateral in the possession, custody or
control of the Agent is accorded treatment substantially equal to that which
the Agent accords similar property for its own account, it being understood
that neither the Agent nor the Lenders shall have any responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or
not the Agent or any Lender has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps to preserve rights against any
Person with respect to any Collateral.
16. REMEDIES.
(i) RIGHTS UPON EVENT OF DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, Grantor shall be in default hereunder and
the Agent for the benefit of the Secured Party shall have, in any
jurisdiction where enforcement is sought, in addition to all other rights and
remedies that the Agent on behalf of Secured Party may have under this
Agreement and under applicable laws or in equity, all rights and remedies of
a secured party under the Uniform Commercial Code as enacted in any such
jurisdiction in effect at that time, and in addition the following rights and
remedies, all of which may be exercised with or without further notice to
Grantor except such notice as may be specifically required by applicable law:
(a) to foreclose the Liens and security interests created hereunder or under
any other Loan Document by any available judicial procedure or without
judicial process; (b) to enter any premises where any Collateral may be
located for the purpose of securing, protecting, inventorying, appraising,
inspecting, repairing, preserving, storing, preparing, processing, taking
possession of or removing the same; (c) to sell, assign, lease or otherwise
dispose of any Collateral or any part thereof, either at public or private
sale or at any broker's board, in lot or in bulk, for cash, on credit or
otherwise, with or without representations or warranties and upon such terms
as shall be commercially reasonable; (d) to notify obligors on the Collateral
that the Collateral has been assigned to the Agent for the benefit of Secured
Party and that all payments thereon, or performance with respect thereto, are
to be made directly and exclusively to the Agent for the account of Secured
Party; (e) to collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable
upon or on account of the Collateral; (f) to enter into any extension,
reorganization, disposition, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection
therewith the Agent may deposit or surrender control of the Collateral and/or
accept other property in exchange for the Collateral as the Agent reasonably
deems
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appropriate and is commercially reasonable; (g) to settle, compromise or
release, on terms acceptable to the Managing Agents, in whole or in part, any
amounts owing on the Collateral and/or any disputes with respect thereto; (h)
to extend the time of payment, make allowances and adjustments and issue
credits in connection with the Collateral in the name of the Agent for the
benefit of Secured Party or in the name of Grantor; (i) to enforce payment
and prosecute any action or proceeding with respect to any or all of the
Collateral and take or bring, in the name of Secured Party or in the name of
Grantor, any and all steps, actions, suits or proceedings deemed necessary or
reasonably desirable by the Managing Agents to effect collection of or to
realize upon the Collateral, including any judicial or nonjudicial
foreclosure thereof or thereon, and Grantor specifically consents to any
nonjudicial foreclosure of any or all of the Collateral or any other action
taken by the Lenders which may release any obligor from personal liability on
any of the Collateral, and Grantor waives, to the extent permitted by
applicable law, any right to receive notice of any public or private judicial
or nonjudicial sale or foreclosure of any security or any of the Collateral,
and any money or other property received by the Agent in exchange for or on
account of the Collateral, whether representing collections or proceeds of
Collateral, and whether resulting from voluntary payments or foreclosure
proceedings or other legal action taken by Agent or Grantor may be applied by
the Agent, without notice to Grantor, to the Obligations in such order and
manner as the Managing Agents in their sole discretion shall determine; (j)
to insure, protect and preserve the Collateral; (k) to exercise all rights,
remedies, powers or privileges provided under any of the Loan Documents; and
(l) to remove, from any premises where the same may be located, the
Collateral and any and all documents, instruments, files and records, and any
receptacles and cabinets containing the same, relating to the Collateral, and
the Agent may, at the cost and expense of Grantor, use such of its supplies,
equipment, facilities and space at its places of business as may be necessary
or appropriate to properly administer, process, store, control, prepare for
sale or disposition and/or sell or dispose of the Collateral or to properly
administer and control the handling of collections and realizations thereon,
and the Agent shall be deemed to have a rent-free tenancy of any premises of
Grantor for such purposes and for such periods of time as reasonably required
by the Agent. Grantor will, at the Agent's request, assemble the Collateral
and make it available to the Agent at places which the Agent may designate,
whether at the premises of Grantor or elsewhere, and will make available to
the Agent, free of cost, all premises, equipment and facilities of Grantor
for the purpose of the Agent's taking possession of the Collateral or storing
the same or removing or putting the Collateral in salable form or selling or
disposing of the same.
Nothing herein contained shall be construed to give the Agent, the
Managing Agents or the Lenders or any purchaser of
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the Collateral the right to operate any of the Stations without the prior
consent of the FCC, to the extent required by law or the terms of any Media
License.
(ii) POSSESSION BY AGENT. Upon the occurrence and during the
continuance of an Event of Default, the Agent also shall have the right,
without notice or demand, either in person, by agent or by a receiver to be
appointed by a court in accordance with the provisions of applicable law (and
Grantor hereby expressly consents, to the fullest extent permitted by
applicable law, upon the occurrence and during the continuance of an Event of
Default to the appointment of such a receiver), and, to the extent permitted
by applicable law, without regard to the adequacy of any security for the
Obligations, to take possession of the Collateral or any part thereof and to
collect and receive the rents, issues, profits, income and proceeds thereof.
The taking possession of the Collateral by the Agent shall not cure or waive
any Event of Default or notice thereof or invalidate any act done pursuant to
such notice. The rights, remedies and powers of any receiver appointed by a
court shall be as ordered by said court.
(iii)SALE OF COLLATERAL. Any public or private sale or other
disposition of the Collateral may be held at any office of Agent, or at
Grantor's place of business, or at any other place permitted by applicable
law, and without the necessity of the Collateral's being within the view of
prospective purchasers. The Agent may direct the order and manner of sale of
the Collateral, or portions thereof, as it in its sole and absolute
discretion may determine provided such sale is commercially reasonable, and
Grantor expressly waives, to the extent permitted by applicable law, any
right to direct the order and manner of sale of any Collateral. The Agent or
any Person acting on the Agent's behalf may bid and purchase at any such sale
or other disposition. In addition to the other rights of the Agent and the
Lenders hereunder, Grantor hereby grants to the Agent and the Lenders a
license or other right to use, without charge, Grantor's labels, copyrights,
patents, rights of use of any name, trade names, trademarks and advertising
matter, or any property of a similar nature, including, without limitation,
the Copyrights, the Patents and the Marks in advertising for sale and selling
any Collateral.
(iv) NOTICE OF SALE. Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Agent will give Grantor reasonable notice of the time and place
of any public sale thereof or of the time on or after which any private sale
thereof is to be made. The requirement of reasonable notice conclusively
shall be met if such notice is mailed, certified mail, postage prepaid, to
Grantor at its address set forth on the signature page hereto or delivered or
otherwise sent to Grantor, at least five (5) days before the date of the
sale. Grantor expressly waives, to the fullest extent permitted by
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applicable law, any right to receive notice of any public or private sale of
any Collateral or other security for the Obligations except as expressly
provided for in this paragraph. The Agent shall not be obligated to make any
sale of the Collateral if it shall determine not to do so regardless of the
fact that notice of sale of the Collateral may have been given. The Agent
may, without notice or publication, except as required by applicable law,
adjourn the sale from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice (except as required
by applicable law), be made at the time and place to which the same was so
adjourned.
(v) PRIVATE SALES. With respect to any Collateral consisting of
securities, partnership interests, joint venture interests or the like, and
whether or not any of such Collateral has been effectively registered under
the Securities Act of 1933, as amended, or other applicable laws, the Agent
may, in its sole and absolute discretion, sell all or any part of such
Collateral at private sale in such manner and under such circumstances as the
Agent may deem necessary or advisable in order that the sale may be lawfully
conducted in a commercially reasonable manner. Without limiting the
foregoing, the Agent may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. In the event that any such Collateral is
sold at private sale, Grantor agrees to the extent permitted by applicable
law that if such Collateral is sold for a price which is commercially
reasonable, then (A) Grantor shall not be entitled to a credit against the
Obligations in an amount in excess of the purchase price, and (B) the Lenders
shall not incur any liability or responsibility to Grantor in connection
therewith, notwithstanding the possibility that a substantially higher price
might have been realized at a public sale. Grantor recognizes that a ready
market may not exist for such Collateral if it is not regularly traded on a
recognized securities exchange, and that a sale by the Agent of any such
Collateral for an amount substantially less than a pro rata share of the fair
market value of the issuer's assets minus liabilities may be commercially
reasonable in view of the difficulties that may be encountered in attempting
to sell a large amount of such Collateral or Collateral that is privately
traded.
(vi) TITLE OF PURCHASERS. Upon consummation of any sale of Collateral
hereunder, the Agent on behalf of Secured Party shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the
Collateral so sold absolutely free from any claim or right upon the part of
Grantor or any other Person claiming through Grantor, and Grantor hereby
waives (to the extent permitted by applicable laws) all rights
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<PAGE>
of redemption, stay and appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted. If the sale of all or any part of the Collateral is made on credit
or for future delivery, the Agent shall not be required to apply any portion
of the sale price to the Obligations until such amount actually is received
by the Agent, and any Collateral so sold may be retained by the Agent until
the sale price is paid in full by the purchaser or purchasers thereof.
Secured Party shall not incur any liability in case any such purchaser or
purchasers shall fail to pay for the Collateral so sold, and, in case of any
such failure, the Collateral may be sold again.
(vii) DISPOSITION OF PROCEEDS OF SALE. The proceeds resulting from the
collection, liquidation, sale or other disposition of the Collateral shall be
applied, FIRST, to the reasonable costs and expenses (including reasonable
attorneys' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting and liquidating the Collateral, and the like;
SECOND, to the satisfaction of all Obligations; and THIRD, any surplus
remaining after the satisfaction of all Obligations, provided no Commitment
exists and no Letter of Credit remains outstanding, to be paid over to
Grantor or to whomsoever may be lawfully entitled to receive such surplus.
(viii) CERTAIN WAIVERS. To the extent permitted by applicable law,
Grantor waives all claims, damages and demands against the Agent and the
Lenders arising out of the repossession, retention or sale of the Collateral,
or any part or parts thereof, except to the extent any such claims, damages
and awards arise out of the gross negligence or willful misconduct of the
Agent or the Lenders.
(ix) REMEDIES CUMULATIVE. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any other rights and remedies provided by law or equity.
(x) COMPLIANCE WITH COMMUNICATIONS ACT AND FCC RULES AND REGULATIONS.
(i) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of
any right to vote or consent with respect to, any of the Collateral as
provided herein or any other action taken or proposed to be taken by the
Agent hereunder which would affect the operational, voting or other control
of any entity holding a Media License shall be made in accordance with the
Communications Act of 1934, as amended, the terms of each Media License,
and any applicable rules and regulations of the FCC, including, to the
extent applicable under rules and regulations of the FCC in effect at the
time of a Default, any requirement that there be a public or private sale.
-26-
<PAGE>
(ii) Notwithstanding anything to the contrary contained in this
Agreement, or in the Credit Agreement or the other Loan Documents or in any
other related instrument, the Agent shall not, without first obtaining any
consent or approval of the FCC, take any action pursuant to this Agreement
which would constitute or result in any change of control of a Subsidiary
holding a Media License if any such change in control would require, under
then existing law, the prior approval of the FCC.
(iii) If an Event of Default shall have occurred and be continuing,
the Grantor shall take any action which the Agent may request in the
exercise of its rights and remedies under this Agreement in order to
transfer and assign to the Agent or to one or more third parties as the
Agent may designate, or to a combination of the foregoing, the Collateral
for the purposes of a public or private sale. To enforce the provisions of
this Section 16, the Agent is empowered to request, and the Grantor agrees
to authorize, the appointment of a receiver or trustee from any court of
competent jurisdiction. Such receiver or trustee shall be instructed to
seek from the FCC (and any other Governmental Authority, if required) its
consent to an involuntary transfer of control or assignment of any Media
License or of any entity whose stock, partnership interests or other
securities are subject to this Agreement, for the purpose of seeking a bona
fide purchaser to whom such Media License or control of such entity
ultimately will be transferred or assigned in connection with a public or
private sale. The Grantor hereby agrees to authorize (including Grantor's
execution of any necessary or appropriate applications or other
instruments) such an involuntary transfer of control or assignment upon the
request of the receiver or trustee so appointed; and, if the Grantor's
approval is required by the court and the Grantor shall refuse to authorize
such transfer or assignment, then, to the extent permitted by the
Communications Act and the rules and regulations of the FCC in effect at
such time and provided that the Grantor has been given 2 Business Days'
prior written notice telecopied to its telecopier number set forth on the
signature page hereof and the Grantor has not responded by executing any
such applications or other instruments, the clerk of the court may execute
in the place of Grantor any application or other instrument necessary or
appropriate for the obtaining of such consent. Upon the occurrence and
during the continuance of an Event of Default, Grantor shall further use
its best efforts to assist in obtaining the approval of the FCC (and that
required by any other Governmental Authority) for any action or transaction
contemplated by this Agreement, including without limitation, the
preparation, execution and filing with the FCC of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any Media License or transfer of control of any entity
holding or
-27-
<PAGE>
controlling any Media License as may be necessary or appropriate
under the FCC's rules and regulations for approval of the transfer or
assignment of any portion of the Collateral or any Media License. Grantor
further agrees that, because of the unique nature of its undertaking in
this Section 16, the same may be specifically enforced, and it hereby
waives, and agrees to waive, any claim or defense that the Agent, the
Managing Agents or the Lenders would have an adequate remedy at law for the
breach of this undertaking and any requirement for the posting of bond or
other security. This Section 16 shall not be deemed to limit any other
rights of the Agent, the Managing Agents and the Lenders available under
applicable law and consistent with the Communications Act of 1934, as
amended, and the applicable rules and regulations of the FCC.
(xi) NOTICE. The Agent shall use reasonable efforts to give the
Grantor prior written notice of the exercise of any remedy provided for
herein, PROVIDED that the failure to give such notice shall not subject the
Agent or any Lender to liability and shall not affect the validity or
exercise of any remedy hereunder.
xvii. AGENT APPOINTED ATTORNEY-IN-FACT. To the full extent permitted
by applicable law, including the Communications Act and FCC regulations, and
subject to Section 16(j) hereof, Grantor hereby irrevocably appoints the
Agent as Grantor's attorney-in-fact, effective upon and during continuance of
an Event of Default, with full authority in the place and stead of Grantor,
and in the name of Grantor, or otherwise, from time to time, in the Agent's
sole and absolute discretion to do any of the following acts or things: (a) to
do all acts and things and to execute all documents necessary or advisable
to perfect and continue perfected the security interests created by this
Agreement and to preserve, maintain and protect the Collateral; (b) to do any
and every act which Grantor is obligated to do under this Agreement; (c) to
prepare, sign, file and record, in Grantor's name, any financing statement
covering the Collateral; (d) to endorse and transfer the Collateral upon
foreclosure by the Agent; (e) to grant or issue an exclusive or nonexclusive
license under the Copyrights, the Programs, the Patents or the Marks to
anyone upon foreclosure by the Agent; (f) to assign, pledge, convey or
otherwise transfer title in or dispose of the Copyrights, the Programs, the
Patents or the Marks to anyone upon foreclosure by the Agent; and (g) to file
any claims or take any action or institute any proceedings which the Agent
may reasonably deem necessary or desirable for the protection or enforcement
of any of the rights of the Lenders with respect to any of the Copyrights,
the Programs, the Patents and the Marks; PROVIDED, HOWEVER, that the Agent
shall be under no obligation whatsoever to take any of the foregoing actions,
and neither the Agent nor the Lenders shall have any liability or
responsibility for any act or omission (other than the Agent's or the
Lenders' own gross negligence or willful misconduct) taken with respect
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<PAGE>
thereto. Grantor hereby agrees to repay within 5 Business Days after demand
all reasonable out-of-pocket costs and expenses (including attorneys' fees)
incurred or expended by the Agent in exercising any right or taking any
action under this Agreement.
xviii. COSTS AND EXPENSES. After the occurrence and during the
continuance of a Default, Grantor agrees to pay to the Agent all reasonable
costs and out-of-pocket expenses (including, without limitation, reasonable
attorneys' fees and disbursements) incurred by the Agent in the enforcement
or attempted enforcement of this Agreement, whether or not an action is filed
in connection therewith, and in connection with any waiver or amendment of
any term or provision hereof. All reasonable advances, charges, costs and
expenses, including reasonable attorneys' fees and disbursements, incurred or
paid by the Agent in exercising any right, privilege, power or remedy
conferred by this Agreement (including, without limitation, the right to
perform any Obligation of Grantor under the Loan Documents), or in the
enforcement or attempted enforcement thereof, shall be secured hereby and
shall become a part of the Obligations and shall be due and payable to the
Agent by Grantor on demand therefor.
xix. TRANSFERS AND OTHER LIENS. Grantor agrees that, except as
specifically permitted under the Credit Agreement or any other Loan Document,
it will not (i) sell, assign, exchange, transfer or otherwise dispose of, or
contract to sell, assign, exchange, transfer or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (ii) create or
permit to exist any Lien upon or with respect to any of the Collateral,
except for Liens in favor of the Agent for the benefit of the Lender or
otherwise permitted under the Credit Agreement or any other Loan Document.
xx. OTHER AGREEMENTS. Nothing herein shall in any way modify or limit
the effect of terms or conditions set forth in any other Loan Document
executed by Grantor or any other Person in connection with the Obligations,
but each and every term and condition hereof shall be in addition thereto.
In the event of inconsistency between this Agreement and the Credit
Agreement, the Credit Agreement shall govern.
xxi. [Intentionally Omitted.]
xxii. UNDERSTANDINGS WITH RESPECT TO WAIVERS AND CONSENTS. Grantor
warrants and agrees that each of the waivers and consents set forth herein
are made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Grantor
otherwise may have against Secured Party or others, or against any
Collateral. If any of the waivers or consents herein are determined to be
unenforceable under applicable law, such
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<PAGE>
waivers and consents shall be effective to the maximum extent
permitted by law.
xxiii. INDEMNITY. Grantor agrees to indemnify the Agent and the
Lenders from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or
liabilities result from the Agent's or the Lenders' gross
negligence or willful misconduct.
xxiv. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Grantor
herefrom (other than supplements to the Schedules hereto in
accordance with the terms of this Agreement) shall in any
event be effective unless the same shall be in writing and
made in accordance with Section 9.1 of the Credit Agreement,
and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given.
xxv. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner set forth in Section 9.2
of the Credit Agreement, and if to the Agent, to the address set
forth for it in Section 9.2 of the Credit Agreement and if to the
Grantor, to the address set forth for it on the signature page
hereof.
xxvi. CONTINUING SECURITY INTEREST: TRANSFER OF NOTES;
TERMINATION. (a) This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in
full force and effect until indefeasible payment in full in
cash of the Obligations and the termination or expiration of
the Commitments and the Letters of Credit, (ii) be binding
upon Grantor, its successors and assigns and (iii) inure,
together with the rights and remedies of the Lenders
hereunder, to the benefit of the Agent, any successor Agent
and the Lenders, subject to the terms and conditions of the
Credit Agreement. Subject to the terms of the Credit
Agreement, any Lender may assign or otherwise transfer any
Loans, Commitments, participations in Letters of Credit or
any rights in Collateral held by it to any other Person, and
such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Agent or Lender
herein or otherwise. Nothing set forth herein or in any
other Loan Document is intended or shall be construed to
give to any other party any right, remedy or claim under, to
or in respect of this Agreement or any other Loan Document
or any Collateral. Grantor's successors and assigns shall
include, without limitation, a receiver, trustee or
debtor-in-possession thereof or therefor, PROVIDED THAT,
except as otherwise permitted under the Credit Agreement or
any other Loan Document, none of the rights or obligations
of the Grantor hereunder may be assigned or otherwise
transferred without the prior written consent of the
Lenders.
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<PAGE>
xxvii. RELEASE OF GRANTOR. This Agreement and all
obligations of Grantor hereunder and all security interests
granted hereby shall be released and terminated when all
Obligations have been indefeasibly paid in full in cash and
when all Commitments and all Letters of Credit have expired
or have otherwise been terminated. Upon such release and
termination of all Obligations and such expiration or
termination of all Commitments and all Letters of Credit and
the security interest hereunder, all rights in and to the
Collateral pledged or assigned by Grantor hereunder shall
automatically revert to the Grantor, and the Agent and the
Lenders shall return any pledged Collateral in their
possession to Grantor, or to the Person or Persons legally
entitled thereto, and shall endorse, execute, deliver,
record and file all instruments and documents, and do all
other acts and things, reasonably required for the return of
the Collateral to Grantor, or to the Person or Persons
legally entitled thereto, and to evidence or document the
release of the interests of Secured Party arising under this
Agreement, all as reasonably requested by, and at the sole
expense of, Grantor.
(i) The Agent agrees that if an Asset Disposition
or other sale or disposition of any personal
property or assets constituting Collateral
permitted under the Credit Agreement occurs, the
Agent shall release the Collateral that is the
subject of such Asset Disposition or other sale or
disposition to Grantor free and clear of the Lien
and security interest under this Agreement,
PROVIDED that so long as any Obligations remain
outstanding under the Credit Agreement or any
Commitment or Letter of Credit remains
outstanding, the Agent shall have no obligation to
make such release until arrangements reasonably
satisfactory to it have been made for delivery to
it of any Net Proceeds of any Asset Disposition
required to be used to prepay the Loans pursuant
to Section 2.6(a) of the Credit Agreement.
xxviii. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW PROVISIONS),
EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK ARE
GOVERNED BY THE LAWS OF SUCH JURISDICTION.
xxix. COVENANT NOT TO ISSUE UNCERTIFICATED SECURITIES.
Grantor represents and warrants to the Lenders that all of
the Pledged Securities are in certificated form (as
contemplated by Article 8 of the Uniform Commercial Code),
and covenants to the Lenders that it will not permit any of
its Subsidiaries which are issuers of Pledged Securities to
issue any securities in uncertificated form or seek to
convert all or any part of any Pledged Securities into
uncertificated form (as contemplated by Article 8 of the
Uniform Commercial Code).
xxx. COVENANT NOT TO DILUTE INTERESTS OF SECURED PARTY IN
SECURITIES. Grantor represents, warrants and covenants to
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<PAGE>
Secured Party that it will (i) not at any time cause or permit
any Subsidiary that is an issuer of Pledged Securities to issue
any additional capital stock or any warrant options or other
rights to acquire any additional capital stock, other than to
Grantor or as otherwise permitted under the Credit Agreement and
(ii) pledge to the Agent in accordance with the terms hereof,
immediately upon its acquisition (directly or indirectly)
thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Securities.
xxxi. WAIVERS OF JURY TRIAL. THE GRANTOR AND THE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH AND FOR ANY
COUNTERCLAIM THEREIN.
xxxii. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which shall be deemed to be
an original, but all of which taken together shall
constitute one and the same agreement.
xxxiii. COPIES OF CERTIFICATES, ETC. Whenever the Grantor is
required to deliver notices, certificates, opinions,
statements or other information hereunder to the Agent or to
the Agent or to the Managing Agents for delivery to any
Lender, it shall do so in such number of copies as the Agent
shall reasonably specify.
xxxiv. SECURITY INTEREST ABSOLUTE. The obligations of the
Grantor hereunder shall remain in full force and effect
without regard to, and shall not be affected or impaired by
the following, any of which may be taken without the consent
of, or notice to, the Grantor, nor shall any of the
following give the Grantor any recourse or right of action
against the Lenders:
(i) any lack of validity or enforceability of, or
any release or discharge of the Borrower or any
other Loan Party from liability under, the Credit
Agreement or any other Loan Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of
the Obligations (as defined in the Credit
Agreement) or any other amendment or waiver of, or
any consent to departure from, the Credit
Agreement or any other Loan Document;
(iii) any subordination, compromise, exchange,
release, nonperfection or liquidation of any
collateral, or any release, amendment or
waiver of, or consent to departure from, any
other guaranty, for any or all of the
Obligations (as defined in the Credit
Agreement);
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<PAGE>
(iv) any express or implied amendment,
modification, renewal, supplement, extension or
acceleration of the Obligations (as defined in the
Credit Agreement) or any of the Loan Documents;
(v) any exercise or nonexercise by the Lenders of
any right or privilege under this Agreement or any
of the other Loan Documents;
(vi) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation
or other like proceeding relating to the Grantor,
the Borrower or any other guarantor of the
Obligations (as defined in the Credit Agreement)
or any action taken with respect to this Agreement
by any trustee, receiver or court in any such
proceeding, whether or not the Grantor shall have
had notice or knowledge of any of the foregoing;
(vii) any assignment or other transfer, in
whole or in part, of this Agreement or any of
the other Loan Documents;
(viii) any acceptance of partial performance of
the Obligations (as defined in the Credit
Agreement);
(ix) any consent to the transfer of, or any bid or
purchase at sale of, any collateral for the
Obligations; or
(x) any other circumstance that might otherwise
constitute a defense available to, or a discharge
of, the Borrower or any guarantor (other than
payment by the Borrower or any other Loan Party of
the Obligations).
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<PAGE>
IN WITNESS WHEREOF, Grantor and Agent have executed this Agreement by
their duly authorized representatives as of the date first written above.
UNIVISION TELEVISION GROUP, INC.
By: ____________________________
Name:___________________________
Title:__________________________
Address for Notices:
24 Meadowland Parkway
Third Floor
Secaucus, New Jersey 07094
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_____________________________
Name:___________________________
Title:__________________________
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<PAGE>
STATE OF CALIFORNIA, )
) ss.
County of Los Angeles )
On ____________, 1996, before me, _____________
__________________________, a Notary Public in and for the State of California,
personally appeared ________________ __________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument, and acknowledged to me
that he or she executed the within instrument in his or her authorized capacity
and that, by his or her signature on the within instrument, the person or entity
upon behalf of which he or she acted executed the within instrument.
WITNESS my hand and official seal.
Signature _________________________ (Seal)
STATE OF CALIFORNIA, )
) ss.
County of Los Angeles )
On __________, 1996, before me, _____________
__________________________, a Notary Public in and for the State of California,
personally appeared ________________ __________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument, and acknowledged to me
that he or she executed the within instrument in his or her authorized capacity
and that, by his or her signature on the within instrument, the person or entity
upon behalf of which he or she acted executed the within instrument.
WITNESS my hand and official seal.
Signature _________________________ (Seal)
<PAGE>
SCHEDULE A
COPYRIGHTS
[TO BE PROVIDED BY GRANTOR]
1. Federal Copyright Registrations
TITLE/DESCRIPTION REGISTRATION NO.
----------------- ----------------
2. Federal Copyright Applications
TITLE/DESCRIPTION REGISTRATION NO.
----------------- ----------------
3. Copyright License Agreements
4. Foreign Copyrights or Copyright Applications
Country Title/Description Reg. or Filing No. Reg. or Filing Date
- ------- ----------------- ------------------ -------------------
A-1
<PAGE>
SCHEDULE B
MARKS
[TO BE PROVIDED BY GRANTOR]
1. Federal Mark Registrations
TITLE/DESCRIPTION REGISTRATION NO. REGISTRATION DATE
----------------- ---------------- -----------------
2. Federal Mark Applications
TITLE/DESCRIPTION SERIAL NO. FILING DATE
----------------- ---------- ------------
3. Federal Mark License Agreements
4. State Mark Registrations
STATE TITLE/DESCRIPTION REGISTRATION NO. REGISTRATION DATE
- ----- ----------------- ---------------- -----------------
5. State Mark Applications
STATE TITLE/DESCRIPTION SERIAL NO. FILING DATE
- ----- ----------------- ---------- ------------
6. State Mark License Agreements
7. Foreign Mark Registrations
COUNTRY TITLE/DESCRIPTION REGISTRATION NO. REGISTRATION DATE
- ------- ----------------- ---------------- -----------------
B-1
<PAGE>
8. Foreign Mark Applications
COUNTRY TITLE/DESCRIPTION SERIAL NO. FILING DATE
- ------- ----------------- ---------- ------------
9. Foreign Mark License Agreements
B-2
<PAGE>
SCHEDULE C
PATENTS
[TO BE PROVIDED BY GRANTOR]
1. Registered Patents
TITLE/DESCRIPTION REGISTRATION NO.
----------------- ----------------
2. Patent Applications
TITLE/DESCRIPTION REGISTRATION NO.
----------------- ----------------
3. Patent License Agreements
4. Foreign Patents or Patent Applications
C-1
<PAGE>
<PAGE>
SCHEDULE D
MATERIAL CONTRACTS
[TO BE PROVIDED BY GRANTOR]
D-1
<PAGE>
SCHEDULE E
BROADCAST LICENSES
[TO BE PROVIDED BY GRANTOR]
E-1
<PAGE>
SCHEDULE F
PLEDGED COLLATERAL
[TO BE PROVIDED BY GRANTOR]
1. Pledged Shares
Percentage Other
Interest in Classes of
Issues Certificate No. No of Shares Issuer Shares
- ------ --------------- ------------ ------------ ----------
2. Pledged Partnership Interests
Percentage Interest
Name of Partnership in Partnership
------------------- --------------------
F-1
<PAGE>
SCHEDULE G
LOCATIONS OF EQUIPMENT AND INVENTORY
[TO BE PROVIDED BY GRANTOR]
G-1
<PAGE>
SCHEDULE H
LOCATIONS OF BOOKS AND RECORDS
[TO BE PROVIDED BY GRANTOR]
1. Chief Executive Office
2. Locations of Account Records and Chattel Paper
H-1
<PAGE>
SCHEDULE I
TRADE NAMES AND OTHER FICTITIOUS NAMES
[TO BE PROVIDED BY GRANTOR]
1. Tradenames
2. Corporate and Other Fictitious Names
I-1
<PAGE>
<PAGE>
SCHEDULE J
----------
FORM OF CONSENT
---------------
Date: __________________
_________________
_________________
_________________
_________________
RE: Agreement between _____________________ and
___________________ dated as of ____________
Dear [Counterparty]:
As you are aware, Univision Television Group, Inc. ("UTG"), is a party to
the following Agreement(s):
1. ______________________________________________________________
2. _______________________________________________________________
[and so on] (collectively, the "Agreements")
The Lenders, under that certain Credit Agreement dated as of September 26,
1996 among The Chase Manhattan Bank ("Chase"), as the administrative agent (the
"Administrative Agent") and a managing agent, Banque Paribas, as a managing
agent, the Lenders parties thereto (the "Lenders") and Univision Communications
Inc. (the "Credit Agreement") will be granted a security interest in the
Agreements, as security for the obligations of Univision Communications Inc.
under the Credit Agreement.
In connection with the granting of such security interests, we are
requesting that you sign this letter in order to provide the Lenders with
certain assurances with respect to the status and good standing of the
Agreements. We are hereby giving you notice that a security interest in the
Agreements will be granted to the Lenders concurrently with the closing of the
Credit Agreement transaction. By signing this letter, you are hereby (if and to
the extent required under the Agreements) consenting to the foregoing grant to
the Lenders of a security interest in the Agreements, and any transfer of the
Agreements to an assignee of the Lenders following any exercise by the Lenders
of their rights under the Credit Agreement on the
J-1
<PAGE>
express condition that any subsequent transfer or assignment will be subject to
the terms and conditions set forth in the Agreements. You further acknowledge,
agree, and certify that the following statements are true and accurate and may
be relied upon by UTG, Lenders and each of their respective successors and
assigns:
1. The Agreements are in full force and effect and neither you nor
UTG is presently in default thereunder.
2. All conditions under the Agreements to be performed by UTG as of
the date hereof have been satisfied.
3. True and correct copies of the Agreements are attached hereto as
Exhibit A.
4. Your interest in the Agreements has not been assigned, pledged or
transferred.
5. You acknowledge and consent to the grant of a security interest
in the Agreements to the Lenders.
Please review this letter in detail, particularly Exhibit A. Exhibit A
shows all of the documents constituting the Agreements, including modifications,
if any.
If the terms of this letter are acceptable, please execute all four (4)
originals in the area indicated by the "sign here" tabs. After execution,
please return to the undersigned three (3) of the copies.
Thank you for your assistance in this matter.
Sincerely yours,
[SIGNATURE OF COUNTERPARTY]
By: ______________________
Its: _____________________
Dated: ___________________
J-2
<PAGE>
SCHEDULE K
DEPOSIT ACCOUNTS
Name and Address of
Institution Holding Account Account No.
- --------------------------- -----------
[TO BE PROVIDED BY GRANTOR]
K-1
<PAGE>
SCHEDULE L
UCC FILING OFFICES
[To be provided by Grantor]
L-1
<PAGE>
SCHEDULE M
REQUIRED CONSENTS
M-1
<PAGE>
EXHIBIT 10.14.1
SCHEDULE OF DOCUMENTS OMITTED
PURSUANT TO ITEM 601, INSTRUCTION NO. 2
OF REGULATION S-K
The following documents are substantially identical in all material respects to
Exhibit 10.14.1 except as to the material details set forth below:
Guarantees by each of the following Guarantors:
PTI Holdings, Inc., a Delaware corporation
Galavision, a Delaware corporation
Sunshine Acquisition Corp., a California corporation
Sunshine Acquisition, L.P., a California limited partnership
The Univision Network Holding Limited Partnership, a Delaware limited
partnership (NB THIS ENTITY HAS BEEN TERMINATED)
<PAGE>
GUARANTEE
(UNIVISION TELEVISION GROUP, INC.)
This GUARANTEE ("GUARANTEE"), dated as of September 26, 1996, is made
by UNIVISION TELEVISION GROUP, INC., a Delaware corporation (the
"GUARANTOR"), in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (the "AGENT") for the benefit of the
Lenders (as defined in the Credit Agreement referred to below, the "LENDERS").
RECITALS
A. The Chase Manhattan Bank, a New York banking corporation, as a
managing agent, Banque Paribas, a French banking corporation, as a managing
agent (collectively, the "MANAGING AGENTS"), the Agent and the Lenders have
entered into a Credit Agreement dated as of September 26, 1996 (said
Agreement, as it may hereafter be amended or otherwise modified from time to
time, being called the "CREDIT AGREEMENT") with Univision Communications
Inc., a Delaware corporation (the "BORROWER").
B. Guarantor previously executed that certain Guarantee dated as of
December 17, 1992 (the "PRIOR GUARANTEE"), in favor of the Agent for the
benefit of certain financial institutions party to a Credit Agreement dated
as of December 17, 1992 among such financial institutions, the Agent, as
agent therefor, the Managing Agents and Univision Television Group, Inc., as
amended (the "PRIOR CREDIT AGREEMENT"). Concurrently herewith, borrowings
under the Credit Agreement are being used to repay indebtedness under the
Prior Credit Agreement. This Guarantee is being given in exchange for the
release of the Prior Guarantee.
C. It is a condition precedent to the extension of credit by the
Lenders under the Credit Agreement that the Guarantor shall have executed and
delivered this Guarantee. Guarantor desires to execute this Guarantee
because it is interested in the financial success of the Borrower and, in
addition, anticipates that extensions of credit under the Credit Agreement
may be distributed by the Borrower to it or its Subsidiaries, including
Univision Television Group, Inc., for use in their respective businesses.
D. Terms defined in the Credit Agreement and not otherwise defined
herein have the same respective meanings when used herein, and the rules of
interpretation set forth in Section 1.2 of the Credit Agreement are
incorporated herein by reference.
<PAGE>
AGREEMENT
NOW, THEREFORE, in order to induce the Lenders to enter into the
Credit Agreement and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Guarantor hereby agrees as
follows:
SECTION 1. GUARANTEE.
(a) The Guarantor hereby unconditionally, continually
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the Borrower
now or hereafter existing under the Credit Agreement, the Notes and the other
Loan Documents, whether for principal, interest, fees, reimbursement under
Letters of Credit, expenses or otherwise and whether accruing before or after
the filing of a petition initiating any insolvency, bankruptcy,
reorganization or similar proceeding affecting the Borrower or the Guarantor
(collectively, the "OBLIGATIONS"); PROVIDED, HOWEVER, that the Guarantor's
liability hereunder in respect of the Obligations shall not exceed at any
time the greater of (i) the net benefit realized by the Guarantor from
proceeds of working capital advances made by the Borrower from the proceeds
of extensions of credit under the Credit Agreement to the Guarantor or any of
its Subsidiaries from time to time and (ii) the lesser of (A) the Obligations
or (B) 95% of (1) the fair salable value of the property of the Guarantor
from time to time minus (2) the total liabilities of the Guarantor (including
contingent liabilities, but excluding the obligations of the Guarantor
hereunder and under any Subordinated Indebtedness of the Guarantor) from time
to time. This is a guaranty of payment and not of collection only.
(b) In addition to the amount stated above (and not
limited by the proviso set forth therein), after the occurrence and during
the continuance of a Default, the Guarantor agrees to pay or reimburse each
Managing Agent, the Agent and each Lender for all its reasonable costs and
out-of-pocket expenses incurred in connection with the enforcement or
preservation of any rights under this Guarantee and any other documents
executed in connection herewith or in connection with any refinancing or
restructuring of the credit arrangements provided under the Credit Agreement
involving this Guarantee in the nature of a "work-out" or of any insolvency
or bankruptcy proceeding, including, without limitation, reasonable legal
fees and disbursements of counsel to the Agent, the Managing Agents and each
Lender and the allocated reasonable cost of internal counsel to the Managing
Agents, the Agent and each Lender.
(c) Without limiting the generality of the foregoing,
this Guarantee guarantees, to the extent provided herein, the payment of all
amounts which constitute part of the
<PAGE>
Obligations and would be owed by the Borrower to the Lenders under any Loan
Document but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower or the Guarantor.
(d) This Guarantee is secured by, among other things,
the Guarantor Security Agreement executed by Guarantor in connection herewith
and may be secured from time to time in the future by leasehold and/or fee
deeds of trust or mortgages on forms and containing terms and conditions
acceptable to the Majority Lenders which Guarantor shall provide to the Agent
for the benefit of the Lenders, all as more particularly set forth and
described in the Credit Agreement.
SECTION 2. GUARANTEE ABSOLUTE. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Loan Documents, regardless of any
Requirement of Law now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Lenders with respect thereto. The
obligations of the Guarantor hereunder shall remain in full force and effect
without regard to, and shall not be affected or impaired by the following,
any of which may be taken without the consent of, or notice to, the
Guarantor, nor shall any of the following give the Guarantor any recourse or
right of action against the Lenders:
(a) any lack of validity or enforceability of, or any
release or discharge of the Borrower or any other Loan Party from liability
under, the Credit Agreement or any other Loan Document;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations or any other
amendment or waiver of, or any consent to departure from, the Credit
Agreement or any other Loan Document;
(c) any subordination, compromise, exchange, release,
nonperfection or liquidation of any collateral, or any release, amendment or
waiver of, or consent to departure from, any other guaranty, for any or all
of the Obligations;
(d) any express or implied amendment, modification,
renewal, supplement, extension or acceleration of the Obligations or any of
the Loan Documents;
(e) any exercise or nonexercise by the Lenders of any
right or privilege under this Guarantee or any of the other Loan Documents;
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<PAGE>
(f) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Guarantor, the Borrower or any other guarantor of the
Obligations or any action taken with respect to this Guarantee by any
trustee, receiver or court in any such proceeding, whether or not the
Guarantor shall have had notice or knowledge of any of the foregoing;
(g) any assignment or other transfer, in whole or in
part, of this Guarantee or any of the other Loan Documents;
(h) any acceptance of partial performance of the
Obligations;
(i) any consent to the transfer of, or any bid or
purchase at sale of, any collateral for the Obligations; or
(j) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
guarantor (other than payment by the Borrower or any other Loan Party of the
Obligations).
So long as any of the obligations guaranteed hereunder shall be owing to the
Lenders, or any Commitment or Letter of Credit shall be outstanding, the
Guarantor shall not, without the prior written consent of the Lenders,
commence or join with any other party in commencing any bankruptcy,
reorganization or insolvency proceedings of or against the Borrower. The
Guarantor understands and acknowledges that by virtue of this Guarantee, it
has specifically assumed any and all risks of a bankruptcy or reorganization
case or proceeding with respect to the Borrower. As an example and not in
any way of limitation, a subsequent modification of the Obligations not
consented to by the required number of Lenders under the Credit Agreement in
any reorganization case concerning the Borrower shall not affect the
obligation of the Guarantor to pay and perform the Obligations in accordance
with their respective terms prior to such reorganization case. If claim is
ever made upon the Lenders for repayment of any amount or amounts received by
the Lenders in payment of the Obligations and the Lenders repay all or any
part of said amount, then, notwithstanding any revocation or termination of
this Guarantee or any other instrument evidencing the Obligations, the
Guarantor shall be and remain liable to the Lenders for the amount so repaid
to the same extent as if such amount had never originally been received by
the Lenders.
SECTION 3. WAIVERS. The Guarantor unconditionally waives any
defense to the enforcement of this Guarantee, including the following:
(a) all presentments, demands for performance, notices
of nonperformance, protests, notices of protests,
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<PAGE>
notices of dishonor and notices of acceptance of this Guarantee;
(b) any right to require the Lenders to proceed against
the Borrower or any other guarantor of the Obligations at any time, to
proceed against or exhaust any security held by the Lenders at any time or to
pursue any other remedy whatsoever at any time;
(c) the defense of any statute of limitations affecting
the liability of the Guarantor hereunder, the liability of the Borrower or
any other guarantor of the Obligations or the enforcement hereof, to the
extent permitted by law;
(d) any defense arising by reason of any invalidity or
unenforceability of any of the Loan Documents, any disability of the Borrower
or any other guarantor of the Obligations, any manner in which the Lenders
have exercised their rights and remedies under the Loan Documents or any
cessation from any cause whatsoever of the liability of the Borrower or any
other guarantor of the Obligations;
(e) any defense based upon an election of remedies by
the Lenders, including any election to proceed by judicial or nonjudicial
foreclosure of any Lien, whether on real property or personal property, or by
deed in lieu thereof, whether or not every aspect of any foreclosure sale is
commercially reasonable, or any election of remedies, including remedies
relating to real-property or personal-property security, that destroys or
otherwise impairs any subrogation rights of the Guarantor or any rights of
the Guarantor to proceed against the Borrower or any other guarantor of the
Obligations for reimbursement, or both (including California Code of Civil
Procedure Sections 580a, 580b, 580d and 726);
(f) any duty of the Lenders to advise the Guarantor of
any information known to the Lenders regarding the financial condition of the
Borrower or any other circumstance affecting the Borrower's ability to
perform its obligations to the Lenders, it being agreed that the Guarantor
assumes responsibility for being and keeping informed regarding such
condition or any such circumstance;
(g) any right of subrogation, contribution, indemnity or
otherwise against the Borrower that may arise out of or be caused by this
Guarantee, all rights and/or claims against the Borrower which may arise
against the Borrower by reason of this Guarantee, any right to enforce any
remedy that the Lenders now have or may hereafter have against the Borrower
and any benefit of, and any right to participate in, any security now or
hereafter held by the Lenders;
-5-
<PAGE>
(h) any failure by the Lenders to perfect or continue
the perfection of any lien or security interest in any collateral, including,
but not limited to, the collateral given under the Loan Documents or any
failure by the Lenders to protect the property covered by any such lien or
security interest;
(i) any right to interpose any defense, counter-claim or
offset of any nature and description which the Guarantor may now have or
which may exist between and among the Lenders and the Loan Parties (other
than payment by the Borrower or any other Loan Party of the Obligations); and
(j) in furtherance and not in limitation of the
foregoing, the Guarantor waives all rights and defenses arising out of an
election of remedies by the Lenders, even though that election of remedies,
such as a nonjudicial foreclosure with respect to any mortgages or deeds of
trust securing the Obligations from time to time, has destroyed the
Guarantor's rights of subrogation and reimbursement against the Borrower by
the operation of Section 580d of the California Code of Civil Procedure or
otherwise.
SECTION 4. PAYMENTS IN TRUST. If any amount shall be paid to the
Guarantor contrary to the provisions of Section 3(g), such amount shall be
held in trust for the benefit of the Lenders and shall forthwith be paid to
the Agent to be credited and applied to the Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.
SECTION 5. CONTINUING GUARANTEE; SUCCESSORS. The obligations of the
Guarantor under this Guarantee and any Guarantor Collateral Documents
executed by Guarantor in connection herewith shall continue in full force and
effect until the Obligations shall have been fully paid in cash and
performed, the Commitments and any Letters of Credit shall have been
terminated or shall have expired and the expiration of the period of time
during which payments by the Borrower to the Lenders may be deemed to be
preferential payments under the United States Bankruptcy Code or other
similar applicable laws. This Guarantee shall be binding upon the Guarantor
and its successors and assigns (provided that the Guarantor may not assign
this Guarantee without the prior written consent of each of the Lenders) and
shall inure to the benefit of and be enforceable by the Lenders and their
successors, transferees and assigns. Without limiting the generality of the
foregoing, and without notice to the Guarantor, the Lenders may assign or
otherwise transfer any of their rights and obligations under the Loan
Documents to any other person or entity in accordance with the terms of the
Credit Agreement, and such other person or entity shall thereupon become
vested with all the rights in respect thereof granted to the Lenders herein
or otherwise.
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<PAGE>
The term "BORROWER" shall mean both the named Borrower and any other person
or entity at any time assuming or otherwise becoming primarily liable on all
or any part of the Obligations.
SECTION 6. SUBORDINATION. Any indebtedness of the Borrower now or
hereafter held by the Guarantor is hereby subordinated to the prior payment
and performance in full of the Obligations. The Guarantor agrees not to ask
for, demand, sue for, take or receive from the Borrower, directly or
indirectly, in cash or other property, by setoff or in any other manner
(including, without limitation, from or by way of collateral), payment of all
or any of such indebtedness of the Borrower unless and until the Obligations
shall have been paid in full in cash. If the Guarantor shall receive any
payments from the Borrower in violation of the preceding sentence, the
Guarantor shall act as trustee for the Lenders and immediately pay over to
the Agent for the benefit of the Lenders any amounts received by the
Guarantor to be applied against the Obligations. However, no such payment
shall reduce or affect in any manner the absolute, unconditional and
independent liability of the Guarantor hereunder except to the extent such
payment is applied against the Obligations.
SECTION 7. PAYMENTS. It is understood that the Obligations may at
any time and from time to time exceed the aggregate liability of the
Guarantor hereunder without impairing this Guarantee. The Guarantor agrees
that whenever the Guarantor shall make any payment to the Agent for the
benefit of the Lenders hereunder on account of the liability hereunder, the
Guarantor will deliver such payment to the Agent at the address provided for
it in Section 11 below and notify the Agent in writing that such payment is
made under this Guarantee for such purpose. It is understood that the Agent,
without impairing this Guarantee, may apply payments from the Borrower to the
Obligations or to such other obligations owed by the Borrower to the Lenders
in such amounts and in such order as the Lenders in their complete discretion
determine. No payment made hereunder by the Guarantor to the Agent or the
Lenders shall constitute the Guarantor as a creditor of the Agent, the
Lenders or the Borrower.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants as follows:
(a) SOLVENCY. The execution and delivery of this
Guarantee and the other Loan Documents to which Guarantor is party will not
(i) render the Guarantor insolvent under GAAP nor render it Insolvent (as
defined below), (ii) leave the Guarantor with remaining assets which
constitute unreasonably small capital given the nature of the Guarantor's
business, or (iii) result in the incurrence of Debts (as defined below)
beyond the Guarantor's ability to pay them when and as they
-7-
<PAGE>
mature. For the purposes of this Section, "INSOLVENT" means that the present
fair salable value of assets is less than the amount that will be required to
pay the probable liability on existing Debts as they become absolute and
matured. For the purposes of this Section, "DEBTs" includes any legal
liability for indebtedness, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent.
(b) FINANCIAL OR OTHER BENEFIT OR ADVANTAGE. The
Guarantor hereby acknowledges and warrants that it has derived or expects to
derive a financial or other benefit or advantage from the Credit Agreement
and from each and every renewal, extension, release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
the Lenders to the Borrower in connection with the Credit Agreement.
(c) EXISTENCE AND RIGHTS. The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Guarantor has the power and authority and
legal right to own its property and to carry on its business as now owned and
carried on and in which it proposes to be engaged after the Initial Closing
Date and is duly qualified and in good standing in each jurisdiction in which
the property owned by it or the business conducted by it makes such
qualification necessary (except to the extent the failure to qualify
thereunder could not, in the aggregate, reasonably be expected to have a
material adverse effect on the financial condition or business of the
Guarantor or its ability to perform under this Guarantee or any other
Guarantor Collateral Document executed by the Guarantor (a "MATERIAL ADVERSE
EFFECT")) and the Guarantor has the power and authority to make and carry out
this Guarantee and the other Loan Documents to which Guarantor is party.
(d) GUARANTEE AUTHORIZED AND BINDING; COMPLIANCE WITH
LAW. The execution, delivery and performance of each of this Guarantee and
the other Loan Documents to which the Guarantor is party has been duly
authorized and, except as set forth on Schedule 7 to the Credit Agreement,
does not require the consent or approval of any Governmental Authority
(including, without limitation, the FCC) and is not in contravention of, or
in conflict with, any Requirement of Law. The Guarantor is in compliance
with all Requirements of Law except to the extent that a failure to comply
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each of this Guarantee and the other Loan
Documents to which the Guarantor is party is a valid and legally binding
obligation of the Guarantor enforceable in accordance with its terms, subject
to and limited by the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium or other laws
affecting or relating to the rights of creditors generally and
-8-
<PAGE>
by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
(e) NO CONFLICT. The execution and delivery of this
Guarantee and the other Loan Documents to which the Guarantor is party are
not, and the performance of this Guarantee and the other Loan Documents to
which the Guarantor is party will not be, in contravention of, or in conflict
with, any agreement, indenture or undertaking to which the Guarantor is a
party or by which it or any of its property is or may be bound or affected
and do not, and will not cause any Lien to be created or imposed upon any
such property, other than security interests imposed by the Loan Documents.
(f) LITIGATION. Except as set forth on Schedule 1
hereto, there is no litigation or other proceeding pending or, to the
knowledge of the Guarantor, threatened against, or affecting, it or its
properties (a) on the Initial Closing Date with respect to this Guarantee or
any other Guarantor Collateral Document executed by the Guarantor or (b)
which, if determined adversely to the Guarantor, would, individually or in
the aggregate, have a Materially Adverse Effect, and the Guarantor is not in
default with respect to any order, writ, injunction, decree or demand of any
court or other Governmental Authority which default could reasonably be
expected to have a Material Adverse Effect.
(g) OWNERSHIP OF GUARANTOR. The ownership of the
Guarantor on the Initial Closing Date and the Second Closing Date is as set
forth in Section 3.30 of the Credit Agreement.
SECTION 9. COVENANTS. The Guarantor covenants and agrees that, so
long as any part of the Obligations shall remain unpaid or any Commitment
shall remain in effect or any Letter of Credit shall remain outstanding the
Guarantor will, unless the Majority Lenders shall otherwise consent in
writing:
(a) REPORTING REQUIREMENTS. The Guarantor will furnish
to the Agent (i) as soon as available and in any event within 90 days after
the end of each fiscal year of the Guarantor, a copy of the financial
statements of the Guarantor for such period and (ii) such other information
respecting the financial condition or business of the Guarantor as any
Lender, through the Agent, may from time to time request.
(b) NOTICE OF PROCEEDINGS. The Guarantor will promptly
give notice in writing to the Agent of all litigation, arbitral proceedings
and regulatory proceedings not otherwise described on Schedule 1 hereto
affecting the Guarantor or the properties of the Guarantor, except litigation
or proceedings that, if adversely determined, could not reasonably be
expected to have a Material Adverse Effect.
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<PAGE>
(c) LIMITATIONS ON FUNDAMENTAL CHANGES. Except as
permitted under the Credit Agreement, the Guarantor shall not, and shall not
permit any of its Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets.
(d) LIMITATION ON DISTRIBUTIONS. The Guarantor shall
not, and shall not permit any of its Subsidiaries to, except as otherwise
permitted pursuant to the Credit Agreement, declare or pay any dividend on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of its stock or any warrants or
options to purchase any such stock, whether now or hereafter outstanding, or
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property.
SECTION 10. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Guarantee or consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and otherwise in accordance with Section 9.1 of the Credit Agreement, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 11. ADDRESSES FOR NOTICES. All notices, requests and
demands or other communications hereunder 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 by hand, or 3
days after being deposited in the United States mail, certified and postage
prepaid and return receipt requested, or, in the case of telecopy notice,
when received, in each case addressed as follows: if to the Guarantor to it
at its address or telecopier number set forth on the signature page hereof,
and if to the Agent, to it at the address or telecopier number specified for
the Agent in the Credit Agreement; or, as to each party, to it at such other
address as shall be designated by such party in a written notice to the other
party.
SECTION 12. NO WAIVER; REMEDIES. No failure on the part of the
Lenders to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, and no single or partial exercise of any right
hereunder shall preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
SECTION 13. RIGHT OF SETOFF. In addition to any rights and remedies
of the Lenders provided by law, with the prior
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<PAGE>
consent of the Majority Lenders, each Lender shall have the right,
exercisable upon the occurrence and during the continuance of an Event of
Default and acceleration of the Obligations pursuant to Section 7 of the
Credit Agreement, without prior notice to the Guarantor, any such notice
being expressly waived by the Guarantor to the extent permitted by applicable
law, to set off and appropriate and apply against any such Obligations any
and all deposits (general or special, time or demand, provisional or final),
in any currency, and any other credits, indebtedness or claims in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch
or agency thereof or bank controlling such Lender to or for the credit or the
account of the Guarantor. Each Lender agrees promptly to notify the
Guarantor after any such set-off and application made by such Lender,
PROVIDED that the failure to give such notice shall not affect the validity
of such set-off and application.
SECTION 14. CONSENT TO JURISDICTION.
(a) The Guarantor, to the extent permitted by applicable
law, hereby irrevocably submits to the non-exclusive general jurisdiction of
the courts of the States of California and New York, the courts of the United
States of America for the Central District of California and the Southern
District of New York and appellate courts from any thereof in any legal
action or proceeding arising out of or relating to this Guarantee or any
other Loan Document to which the Guarantor is or may be a party, and the
Guarantor hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such California, New York or
federal court. The Guarantor hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection to venue of such
action or proceeding.
(b) Nothing in this Section shall affect the right of
the Lenders to serve legal process in any manner permitted by law or affect
the right of the Lenders to bring any action or proceeding against the
Guarantor or its property in the courts of any other jurisdictions.
SECTION 15. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES).
SECTION 16. COMPLETE AGREEMENT. This Guarantee supersedes any prior
negotiations, discussions or communications between the Guarantor and the
Lenders and constitutes the entire agreement between the Guarantor and the
Lenders with respect to the guarantee of the Obligations.
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<PAGE>
SECTION 17. WAIVER OF JURY TRIAL. THE GUARANTOR, THE AGENT, THE
MANAGING AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR
ANY OTHER LOAN DOCUMENT TO WHICH THE GUARANTOR IS OR MAY BE A PARTY OR ANY
DOCUMENT EXECUTED IN CONNECTION HEREWITH AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 18. SEVERABILITY. Any provision of this Guarantee 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 portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
SECTION 19. COPIES OF CERTIFICATES, ETC. Whenever the Guarantor is
required to deliver notices, certificates, opinions, statements or other
information hereunder to the Agent or to the Managing Agents for delivery to any
Lender, it shall do so in such number of copies as the Agent or the Managing
Agents shall reasonably specify.
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<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
executed by its duly authorized representative as of the date first above
written.
UNIVISION TELEVISION GROUP, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address for Notices:
24 Meadowland Parkway
Third Floor
Secaucus, New Jersey 07094
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<PAGE>
SCHEDULE 1 TO
GUARANTEE
GUARANTOR LITIGATION
NONE
<PAGE>
GUARANTEE
(THE UNIVISION NETWORK LIMITED PARTNERSHIP)
This GUARANTEE ("GUARANTEE"), dated as of September 26, 1996, is made by
THE UNIVISION NETWORK LIMITED PARTNERSHIP, a Delaware limited partnership
(the "GUARANTOR"), in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (the "AGENT") for the benefit of the
Lenders (as defined in the Credit Agreement referred to below, the "LENDERS").
RECITALS
A. The Chase Manhattan Bank, a New York banking corporation, as a
managing agent, Banque Paribas, a French banking corporation, as a managing
agent (collectively, the "MANAGING AGENTS"), the Agent and the Lenders have
entered into a Credit Agreement dated as of September 26, 1996 (said
Agreement, as it may hereafter be amended or otherwise modified from time to
time, being called the "CREDIT AGREEMENT") with Univision Communications
Inc., a Delaware corporation (the "BORROWER").
B. Guarantor previously executed that certain Guarantee dated as of
December 17, 1992 (the "PRIOR GUARANTEE"), in favor of the Agent for the
benefit of certain financial institutions party to a Credit Agreement dated
as of December 17, 1992 among such financial institutions, the Agent, as
agent therefor, the Managing Agents and Univision Television Group, Inc., as
amended (the "PRIOR CREDIT AGREEMENT"). Concurrently herewith, borrowings
under the Credit Agreement are being used to repay indebtedness under the
Prior Credit Agreement. This Guarantee is being given in exchange for the
release of the Prior Guarantee.
C. It is a condition precedent to the extension of credit by the
Lenders under the Credit Agreement that the Guarantor shall have executed and
delivered this Guarantee. Guarantor desires to execute this Guarantee
because it is interested in the financial success of the Borrower and, in
addition, anticipates that extensions of credit under the Credit Agreement
may be distributed by the Borrower to it or its Subsidiaries.
D. Terms defined in the Credit Agreement and not otherwise defined
herein have the same respective meanings when used herein, and the rules of
interpretation set forth in Section 1.2 of the Credit Agreement are
incorporated herein by reference.
<PAGE>
AGREEMENT
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Guarantor hereby agrees as follows:
SECTION 1. GUARANTEE.
(a) The Guarantor hereby unconditionally, continually and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the Borrower
now or hereafter existing under the Credit Agreement, the Notes and the other
Loan Documents, whether for principal, interest, fees, reimbursement under
Letters of Credit, expenses or otherwise and whether accruing before or after
the filing of a petition initiating any insolvency, bankruptcy,
reorganization or similar proceeding affecting the Borrower or the Guarantor
(collectively, the "OBLIGATIONS"); PROVIDED, HOWEVER, that the Guarantor's
liability hereunder in respect of the Obligations shall not exceed at any
time the greater of (i) the net benefit realized by the Guarantor from
proceeds of working capital advances made by the Borrower from the proceeds
of extensions of credit under the Credit Agreement to the Guarantor or any of
its Subsidiaries from time to time and (ii) the lesser of (A) the Obligations
or (B) 95% of (1) the fair salable value of the property of the Guarantor
from time to time minus (2) the total liabilities of the Guarantor (including
contingent liabilities, but excluding the obligations of the Guarantor
hereunder and under any Subordinated Indebtedness of the Guarantor) from time
to time. This is a guaranty of payment and not of collection only.
(b) In addition to the amount stated above (and not limited by the
proviso set forth therein), after the occurrence and during the continuance
of a Default, the Guarantor agrees to pay or reimburse each Managing Agent,
the Agent and each Lender for all its reasonable costs and out-of-pocket
expenses incurred in connection with the enforcement or preservation of any
rights under this Guarantee and any other documents executed in connection
herewith or in connection with any refinancing or restructuring of the credit
arrangements provided under the Credit Agreement involving this Guarantee in
the nature of a "work-out" or of any insolvency or bankruptcy proceeding,
including, without limitation, reasonable legal fees and disbursements of
counsel to the Agent, the Managing Agents and each Lender and the allocated
reasonable cost of internal counsel to the Managing Agents, the Agent and
each Lender.
(c) Without limiting the generality of the foregoing, this
Guarantee guarantees, to the extent provided
<PAGE>
herein, the payment of all amounts which constitute part of the Obligations
and would be owed by the Borrower to the Lenders under any Loan Document but
for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Borrower or the Guarantor.
(d) This Guarantee is secured by, among other things, the
Guarantor Security Agreement executed by Guarantor in connection herewith and
may be secured from time to time in the future by leasehold and/or fee deeds
of trust or mortgages on forms and containing terms and conditions acceptable
to the Majority Lenders which Guarantor shall provide to the Agent for the
benefit of the Lenders, all as more particularly set forth and described in
the Credit Agreement.
SECTION 2. GUARANTEE ABSOLUTE. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Loan Documents, regardless of any
Requirement of Law now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Lenders with respect thereto. The
obligations of the Guarantor hereunder shall remain in full force and effect
without regard to, and shall not be affected or impaired by the following,
any of which may be taken without the consent of, or notice to, the
Guarantor, nor shall any of the following give the Guarantor any recourse or
right of action against the Lenders:
(a) any lack of validity or enforceability of, or any release or
discharge of the Borrower or any other Loan Party from liability under, the
Credit Agreement or any other Loan Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or waiver
of, or any consent to departure from, the Credit Agreement or any other Loan
Document;
(c) any subordination, compromise, exchange, release,
nonperfection or liquidation of any collateral, or any release, amendment or
waiver of, or consent to departure from, any other guaranty, for any or all
of the Obligations;
(d) any express or implied amendment, modification, renewal,
supplement, extension or acceleration of the Obligations or any of the Loan
Documents;
(e) any exercise or nonexercise by the Lenders of any right or
privilege under this Guarantee or any of the other Loan Documents;
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(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Guarantor, the Borrower or any other guarantor of the Obligations or any
action taken with respect to this Guarantee by any trustee, receiver or court
in any such proceeding, whether or not the Guarantor shall have had notice or
knowledge of any of the foregoing;
(g) any assignment or other transfer, in whole or in part, of this
Guarantee or any of the other Loan Documents;
(h) any acceptance of partial performance of the Obligations;
(i) any consent to the transfer of, or any bid or purchase at sale
of, any collateral for the Obligations; or
(j) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or any guarantor (other
than payment by the Borrower or any other Loan Party of the Obligations).
So long as any of the obligations guaranteed hereunder shall be owing to the
Lenders, or any Commitment or Letter of Credit shall be outstanding, the
Guarantor shall not, without the prior written consent of the Lenders,
commence or join with any other party in commencing any bankruptcy,
reorganization or insolvency proceedings of or against the Borrower. The
Guarantor understands and acknowledges that by virtue of this Guarantee, it
has specifically assumed any and all risks of a bankruptcy or reorganization
case or proceeding with respect to the Borrower. As an example and not in
any way of limitation, a subsequent modification of the Obligations not
consented to by the required number of Lenders under the Credit Agreement in
any reorganization case concerning the Borrower shall not affect the
obligation of the Guarantor to pay and perform the Obligations in accordance
with their respective terms prior to such reorganization case. If claim is
ever made upon the Lenders for repayment of any amount or amounts received by
the Lenders in payment of the Obligations and the Lenders repay all or any
part of said amount, then, notwithstanding any revocation or termination of
this Guarantee or any other instrument evidencing the Obligations, the
Guarantor shall be and remain liable to the Lenders for the amount so repaid
to the same extent as if such amount had never originally been received by
the Lenders.
SECTION 3. WAIVERS. The Guarantor unconditionally waives any defense
to the enforcement of this Guarantee, including the following:
(a) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest,
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notices of dishonor and notices of acceptance of this Guarantee;
(b) any right to require the Lenders to proceed against the
Borrower or any other guarantor of the Obligations at any time, to proceed
against or exhaust any security held by the Lenders at any time or to pursue
any other remedy whatsoever at any time;
(c) the defense of any statute of limitations affecting the
liability of the Guarantor hereunder, the liability of the Borrower or any
other guarantor of the Obligations or the enforcement hereof, to the extent
permitted by law;
(d) any defense arising by reason of any invalidity or
unenforceability of any of the Loan Documents, any disability of the Borrower
or any other guarantor of the Obligations, any manner in which the Lenders
have exercised their rights and remedies under the Loan Documents or any
cessation from any cause whatsoever of the liability of the Borrower or any
other guarantor of the Obligations;
(e) any defense based upon an election of remedies by the Lenders,
including any election to proceed by judicial or nonjudicial foreclosure of
any Lien, whether on real property or personal property, or by deed in lieu
thereof, whether or not every aspect of any foreclosure sale is commercially
reasonable, or any election of remedies, including remedies relating to
real-property or personal-property security, that destroys or otherwise
impairs any subrogation rights of the Guarantor or any rights of the
Guarantor to proceed against the Borrower or any other guarantor of the
Obligations for reimbursement, or both (including California Code of Civil
Procedure Sections 580a, 580b, 580d and 726);
(f) any duty of the Lenders to advise the Guarantor of any
information known to the Lenders regarding the financial condition of the
Borrower or any other circumstance affecting the Borrower's ability to
perform its obligations to the Lenders, it being agreed that the Guarantor
assumes responsibility for being and keeping informed regarding such
condition or any such circumstance;
(g) any right of subrogation, contribution, indemnity or otherwise
against the Borrower that may arise out of or be caused by this Guarantee,
all rights and/or claims against the Borrower which may arise against the
Borrower by reason of this Guarantee, any right to enforce any remedy that
the Lenders now have or may hereafter have against the Borrower and any
benefit of, and any right to participate in, any security now or hereafter
held by the Lenders;
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<PAGE>
(h) any failure by the Lenders to perfect or continue the perfection of
any lien or security interest in any collateral, including, but not limited
to, the collateral given under the Loan Documents or any failure by the
Lenders to protect the property covered by any such lien or security interest;
(i) any right to interpose any defense, counter-claim or offset of any
nature and description which the Guarantor may now have or which may exist
between and among the Lenders and the Loan Parties (other than payment by the
Borrower or any other Loan Party of the Obligations); and
(j) in furtherance and not in limitation of the foregoing, the
Guarantor waives all rights and defenses arising out of an election of
remedies by the Lenders, even though that election of remedies, such as a
nonjudicial foreclosure with respect to any mortgages or deeds of trust
securing the Obligations from time to time, has destroyed the Guarantor's
rights of subrogation and reimbursement against the Borrower by the operation
of Section 580d of the California Code of Civil Procedure or otherwise.
SECTION 4. PAYMENTS IN TRUST. If any amount shall be paid to the
Guarantor contrary to the provisions of Section 3(g), such amount shall be
held in trust for the benefit of the Lenders and shall forthwith be paid to
the Agent to be credited and applied to the Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.
SECTION 5. CONTINUING GUARANTEE; SUCCESSORS. The obligations of the
Guarantor under this Guarantee and any Guarantor Collateral Documents
executed by Guarantor in connection herewith shall continue in full force and
effect until the Obligations shall have been fully paid in cash and
performed, the Commitments and any Letters of Credit shall have been
terminated or shall have expired and the expiration of the period of time
during which payments by the Borrower to the Lenders may be deemed to be
preferential payments under the United States Bankruptcy Code or other
similar applicable laws. This Guarantee shall be binding upon the Guarantor
and its successors and assigns (provided that the Guarantor may not assign
this Guarantee without the prior written consent of each of the Lenders) and
shall inure to the benefit of and be enforceable by the Lenders and their
successors, transferees and assigns. Without limiting the generality of the
foregoing, and without notice to the Guarantor, the Lenders may assign or
otherwise transfer any of their rights and obligations under the Loan
Documents to any other person or entity in accordance with the terms of the
Credit Agreement, and such other person or entity shall thereupon become
vested with all the rights in respect thereof granted to the Lenders herein
or otherwise.
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<PAGE>
The term "BORROWER" shall mean both the named Borrower and any other person
or entity at any time assuming or otherwise becoming primarily liable on all
or any part of the Obligations.
SECTION 6. SUBORDINATION. Any indebtedness of the Borrower now or
hereafter held by the Guarantor is hereby subordinated to the prior payment
and performance in full of the Obligations, pursuant to the terms of the
Intercreditor Agreement. If the Guarantor shall receive any payments from
the Borrower in violation of the preceding sentence, the Guarantor shall act
as trustee for the Lenders and immediately pay over to the Agent for the
benefit of the Lenders any amounts received by the Guarantor to be applied
against the Obligations. However, no such payment shall reduce or affect in
any manner the absolute, unconditional and independent liability of the
Guarantor hereunder except to the extent such payment is applied against the
Obligations.
SECTION 7. PAYMENTS. It is understood that the Obligations may at any
time and from time to time exceed the aggregate liability of the Guarantor
hereunder without impairing this Guarantee. The Guarantor agrees that
whenever the Guarantor shall make any payment to the Agent for the benefit of
the Lenders hereunder on account of the liability hereunder, the Guarantor
will deliver such payment to the Agent at the address provided for it in
Section 11 below and notify the Agent in writing that such payment is made
under this Guarantee for such purpose. It is understood that the Agent,
without impairing this Guarantee, may apply payments from the Borrower to the
Obligations or to such other obligations owed by the Borrower to the Lenders
in such amounts and in such order as the Lenders in their complete discretion
determine. No payment made hereunder by the Guarantor to the Agent or the
Lenders shall constitute the Guarantor as a creditor of the Agent, the
Lenders or the Borrower.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants as follows:
(a) SOLVENCY. The execution and delivery of this Guarantee and
the other Loan Documents to which Guarantor is party will not (i) render the
Guarantor insolvent under GAAP nor render it Insolvent (as defined below),
(ii) leave the Guarantor with remaining assets which constitute unreasonably
small capital given the nature of the Guarantor's business, or (iii) result
in the incurrence of Debts (as defined below) beyond the Guarantor's ability
to pay them when and as they mature. For the purposes of this Section,
"INSOLVENT" means that the present fair salable value of assets is less than
the amount that will be required to pay the probable liability on existing
Debts as they become absolute and matured. For the purposes of this Section,
"DEBTS" includes any legal liability
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<PAGE>
for indebtedness, whether matured or unmatured, liquidated or unliquidated,
absolute, fixed or contingent.
(b) FINANCIAL OR OTHER BENEFIT OR ADVANTAGE. The Guarantor hereby
acknowledges and warrants that it has derived or expects to derive a
financial or other benefit or advantage from the Credit Agreement and from
each and every renewal, extension, release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
the Lenders to the Borrower in connection with the Credit Agreement.
(c) EXISTENCE AND RIGHTS. The Guarantor is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Guarantor has the power and authority and legal right
to own its property and to carry on its business as now owned and carried on
and in which it proposes to be engaged after the Initial Closing Date and is
duly qualified and in good standing in each jurisdiction in which the
property owned by it or the business conducted by it makes such qualification
necessary (except to the extent the failure to qualify thereunder could not,
in the aggregate, reasonably be expected to have a material adverse effect on
the financial condition or business of the Guarantor or its ability to
perform under this Guarantee or any other Guarantor Collateral Document
executed by the Guarantor (a "MATERIAL ADVERSE EFFECT")) and the Guarantor
has the power and authority to make and carry out this Guarantee and the
other Loan Documents to which Guarantor is party.
(d) GUARANTEE AUTHORIZED AND BINDING; COMPLIANCE WITH LAW. The
execution, delivery and performance of each of this Guarantee and the other
Loan Documents to which the Guarantor is party has been duly authorized and,
except as set forth on Schedule 7 to the Credit Agreement, does not require
the consent or approval of any Governmental Authority (including, without
limitation, the FCC) and is not in contravention of, or in conflict with, any
Requirement of Law. The Guarantor is in compliance with all Requirements of
Law except to the extent that a failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each of
this Guarantee and the other Loan Documents to which the Guarantor is party
is a valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, subject to and limited by the effect of
bankruptcy, insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium or other laws affecting or relating to the rights of
creditors generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).
(e) NO CONFLICT. The execution and delivery of this Guarantee and
the other Loan Documents to which the Guarantor
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<PAGE>
is party are not, and the performance of this Guarantee and the other Loan
Documents to which the Guarantor is party will not be, in contravention of,
or in conflict with, any agreement, indenture or undertaking to which the
Guarantor is a party or by which it or any of its property is or may be bound
or affected and do not, and will not cause any Lien to be created or imposed
upon any such property, other than security interests imposed by the Loan
Documents.
(f) LITIGATION. Except as set forth on Schedule 1 hereto, there
is no litigation or other proceeding pending or, to the knowledge of the
Guarantor, threatened against, or affecting, it or its properties (a) on the
Initial Closing Date with respect to this Guarantee or any other Guarantor
Collateral Document executed by the Guarantor or (b) which, if determined
adversely to the Guarantor, would, individually or in the aggregate, have a
Materially Adverse Effect, and the Guarantor is not in default with respect
to any order, writ, injunction, decree or demand of any court or other
Governmental Authority which default could reasonably be expected to have a
Material Adverse Effect.
(g) OWNERSHIP OF GUARANTOR.
a. On the Initial Closing Date, the following Persons have the
following ownership interests in the Guarantor:
(i) The Univision Holding Limited Partnership, a Delaware
limited partnership -- 99.99%, and
(ii) Network Limited Partners, Inc., a Delaware corporation --
0.01%.
b. On and after the Second Closing Date (except as otherwise
permitted by the Credit Agreement), the following Persons will have the
following ownership interests in the Guarantor:
(i) The Borrower -- 71.85%; and
(ii) Sunshine Acquisition, L.P., a California limited partnership
- -- 28.15%.
SECTION 9. COVENANTS. The Guarantor covenants and agrees that, so long
as any part of the Obligations shall remain unpaid or any Commitment shall
remain in effect or any Letter of Credit shall remain outstanding the
Guarantor will, unless the Majority Lenders shall otherwise consent in
writing:
(a) REPORTING REQUIREMENTS. The Guarantor will furnish to the
Agent (i) as soon as available and in any event within 90 days after the end
of each fiscal year of the
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Guarantor, a copy of the financial statements of the Guarantor for such
period and (ii) such other information respecting the financial condition or
business of the Guarantor as any Lender, through the Agent, may from time to
time request.
(b) NOTICE OF PROCEEDINGS. The Guarantor will promptly give
notice in writing to the Agent of all litigation, arbitral proceedings and
regulatory proceedings not otherwise described on Schedule 1 hereto affecting
the Guarantor or the properties of the Guarantor, except litigation or
proceedings that, if adversely determined, could not reasonably be expected
to have a Material Adverse Effect.
(c) LIMITATIONS ON FUNDAMENTAL CHANGES. Except as permitted under
the Credit Agreement, the Guarantor shall not, and shall not permit any of
its Subsidiaries to, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose
of, all or substantially all of its property, business or assets.
(d) LIMITATION ON DISTRIBUTIONS. The Guarantor shall not, and
shall not permit any of its Subsidiaries to, except as otherwise permitted
pursuant to the Credit Agreement, declare or pay any dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of its stock or any warrants or
options to purchase any such stock, whether now or hereafter outstanding, or
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property.
(e) COMBINED ENTITIES LOAN AGREEMENT. The Guarantor shall comply
with all the terms and provisions of the Combined Entities Loan Agreement.
(f) MANAGEMENT FEES. The Guarantor shall not, and shall not
permit any of its Subsidiaries to, pay any management fees for services
rendered, except for the Management Fees and other management fees to Persons
not Affiliates for services rendered and incurred in an arm's length
transaction and in the ordinary course of the Guarantor's or such
Subsidiaries' business. The Guarantor shall make no payment with respect to
the Management Fees unless (i) such payment is made in accordance with the
terms of its partnership agreement (unless provided otherwise herein), (ii)
no Default shall occur and be continuing at the time of and immediately after
giving effect to such payment, (iii) such payment shall not result in the
aggregate annual Management Fees paid exceeding 3% of Combined Net Time
Sales, (iv) such Management Fee is paid no more frequently than quarterly,
provided that such quarterly payment shall be subject to adjustment following
review of the annual
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financial statements referred to in Section 5.1(a) of the Credit Agreement,
and (v) the Management Fees remain subordinated to the Obligations pursuant
to the Intercreditor Agreement. Concurrently with delivery of the financial
statements referred to in Sections 5.1(a) and 5.1(b) of the Credit Agreement,
the Guarantor shall deliver to the Managing Agents a certificate setting
forth the calculation of such Management Fees.
(g) PROGRAM FEES. Televisa shall pay 100% of its portion of all
programming costs under the Program Cost Sharing Agreement as follows:
(A) on the fourth day prior to each calendar quarter
commencing with the fourth fiscal quarter of 1996, except as
hereinafter set forth, Univisa shall prepay to the Guarantor an amount
equal to 100% of its portion of the budgeted program costs for such
calendar quarter, which amount shall be either increased or decreased
by an amount equal to the difference between the prior quarter's
budgeted and actual program costs. (For purposes of illustration
only, if the budgeted program costs for quarters 1, 2 and 3 were
$5,000,000 each, but the actual program costs for quarter 1 were
$6,000,000 and the actual program costs for quarter 2 were $4,000,000,
Univisa would prepay (i) $5,000,000 on the fourth day prior to the
first day of quarter 1, (ii) $6,000,000 ($5,000,000 budgeted for
quarter 2 plus $1,000,000 for cost overage for quarter 1) on the
fourth day prior to the first day of quarter 2 and (iii) $4,000,000
($5,000,000 budgeted for quarter 3 minus $1,000,000 for cost underage
for quarter 2) on the fourth day prior to the first day of quarter 3).
(B) The Guarantor shall be obligated to reimburse Univisa
for program costs as follows: (i) thirty days following the final
principal payment required to be made on the Loans each calendar year
by the Borrower, the Guarantor shall reimburse Univisa for 50% of the
amount prepaid by Univisa for the prior 4 calendar quarters (if
Univisa is required, as set forth above, to make prepayments) or (ii)
at times mutually agreed upon by Univisa and the Guarantor, the
Guarantor shall reimburse Univisa for 50% of the actual program costs
paid by Univisa (if Univisa is not required to make such prepayments).
In addition, as long as Univisa continues to make prepayments, the
Guarantor shall make a further payment, if necessary, after the
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<PAGE>
Guarantor has received its audited year-end financial statements,
equal to 50% of the positive difference between the actual program
costs for the fourth calendar quarter and the budgeted program costs
for such quarter. After Univisa is no longer required to make
prepayments, the Guarantor and Univisa shall make whatever adjustments
are necessary, after the Guarantor has received its audited year-end
financial statements, to provide that the Guarantor and Univisa shall
share 50% each in actual program costs.
In addition, and subject to the preceding sentence, the Guarantor
shall make no payment with respect to Program Fees unless (i) such
payment is made in accordance with the terms of the Program Cost
Sharing Agreement, (ii) no Default shall occur and be continuing at
the time of and immediately after giving effect to such payment and
(iii) the Program Fees shall remain subordinated to the Obligations
pursuant to the Intercreditor Agreement.
SECTION 10. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Guarantee or consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same
shall be in writing and otherwise in accordance with Section 9.1 of
the Credit Agreement, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose
for which given.
SECTION 11. ADDRESSES FOR NOTICES. All notices, requests and demands
or other communications hereunder 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
by hand, or 3 days after being deposited in the United States mail,
certified and postage prepaid and return receipt requested, or, in the
case of telecopy notice, when received, in each case addressed as
follows: if to the Guarantor to it at its address or telecopier
number set forth on the signature page hereof, and if to the Agent, to
it at the address or telecopier number specified for the Agent in the
Credit Agreement; or, as to each party, to it at such other address as
shall be designated by such party in a written notice to the other
party.
SECTION 12. NO WAIVER; REMEDIES. No failure on the part of the
Lenders to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, and no single or partial exercise
of any right hereunder shall preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided
herein are cumulative and not exclusive of any remedies provided by
law.
SECTION 13. RIGHT OF SETOFF. In addition to any rights and remedies
of the Lenders provided by law, with the prior consent of the Majority
Lenders, each Lender shall have the right, exercisable upon the
occurrence and during the continuance of an Event of Default and
acceleration of the Obligations pursuant to Section 7 of the Credit
Agreement, without prior notice to the Guarantor, any such notice
being expressly waived by the Guarantor to the extent permitted by
applicable law, to set off and appropriate and apply against
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any such Obligations any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof or bank
controlling such Lender to or for the credit or the account of the
Guarantor. Each Lender agrees promptly to notify the Guarantor after
any such set-off and application made by such Lender, PROVIDED that
the failure to give such notice shall not affect the validity of such
set-off and application.
SECTION 14. CONSENT TO JURISDICTION.
(a) The Guarantor, to the extent permitted by applicable law, hereby
irrevocably submits to the non-exclusive general jurisdiction of the courts
of the States of California and New York, the courts of the United States of
America for the Central District of California and the Southern District of
New York and appellate courts from any thereof in any legal action or
proceeding arising out of or relating to this Guarantee or any other Loan
Document to which the Guarantor is or may be a party, and the Guarantor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such California, New York or
federal court. The Guarantor hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection to venue of such
action or proceeding.
(b) Nothing in this Section shall affect the right of the Lenders to
serve legal process in any manner permitted by law or affect the right of the
Lenders to bring any action or proceeding against the Guarantor or its
property in the courts of any other jurisdictions.
SECTION 15. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES).
SECTION 16. COMPLETE AGREEMENT. This Guarantee supersedes any prior
negotiations, discussions or communications between the Guarantor and the
Lenders and constitutes the entire agreement between the Guarantor and the
Lenders with respect to the guarantee of the Obligations.
SECTION 17. WAIVER OF JURY TRIAL. THE GUARANTOR, THE AGENT, THE MANAGING
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY
OTHER LOAN DOCUMENT TO WHICH THE GUARANTOR IS OR MAY BE A PARTY OR ANY
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DOCUMENT EXECUTED IN CONNECTION HEREWITH AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 18. SEVERABILITY. Any provision of this Guarantee 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 portions hereof or
thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 19. COUNTERPARTS. This Guarantee may be executed in any number
of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
SECTION 20. COPIES OF CERTIFICATES, ETC. Whenever the Guarantor is
required to deliver notices, certificates, opinions, statements or other
information hereunder to the Agent or to the Managing Agents for delivery to
any Lender, it shall do so in such number of copies as the Agent or the
Managing Agents shall reasonably specify.
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IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
executed by its duly authorized representative as of the date first above
written.
THE UNIVISION NETWORK LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: THE UNIVISION NETWORK HOLDING
LIMITED PARTNERSHIP, a Delaware
limited partnership
By: Sunshine Acquisition L.P., a
California limited
partnership
its General Partner
By: Sunshine Acquisition
Corp., a California
corporation
By:
----------------------
Name:
--------------------
Title:
-------------------
Address for Notices:
Chartwell Partners
1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Telecopier: (310) 556-3568
Attention: Stephen P. Rader, Esq.
15
<PAGE>
SCHEDULE 1 TO
GUARANTEE
GUARANTOR LITIGATION
NONE
<PAGE>
AMENDMENT TO EMPLOYMENT AGREEMENT
January 1, 1997
George Blank
Univision Television Group, Inc.
Dear George:
Reference is made to the Employment Agreement between us dated
January 1, 1995 (the "Employment Agreement"). You and we hereby agree to
amend the Employment Agreement as follows:
1. The Term is hereby extended to expire on December 31,
1999.
2. Your Base Salary for calendar year 1997 shall be Five
Hundred Thousand Dollars ($500,000), for calendar year 1998 shall be Five
Hundred Fifty Thousand Dollars ($550,000) and for calendar year 1999 shall be
Five Hundred Fifty Thousand Dollars ($550,000).
3. As hereby amended, the Employment Agreement is hereby
ratified and confirmed.
Please indicate your agreement to this amendment to the
Employment Agreement by signing this letter amendment in the space provided
below.
Univision Television Group, Inc.
By: /s/ Robert R. Cahill
-------------------------------
Its: Vice Pres.
------------------------------
Agreed:
/s/ George Blank
- ------------------------
George Blank
<PAGE>
AMENDMENT TO EMPLOYMENT AGREEMENT
January 1, 1997
Ray Rodriguez
The Univision Network Limited Partnership
Dear Ray:
Reference is made to the Employment Agreement between us dated January
1, 1995 (the "Employment Agreement"). You and we hereby agree to amend the
Employment Agreement as follows:
1. The Term is hereby extended to expire on December 31, 1999.
2. Your Base Salary for calendar year 1997 shall be Six Hundred
Thousand Dollars ($600,000), for calendar year 1998 shall be Six Hundred Fifty
Thousand Dollars ($650,000) and for calendar year 1999 shall be Six Hundred
Fifty Thousand Dollars ($650,000).
3. As hereby amended, the Employment Agreement is hereby ratified
and confirmed.
Please indicate your agreement to this amendment to the Employment
Agreement by signing this letter amendment in the space provided below.
The Univision Network Limited Partnership
By: Robert Cahill
-------------------------------------
Its: Vice President
-------------------------------------
Agreed:
/s/ Ray Rodriguez
- -------------------------
Ray Rodriguez
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of February
10, 1997, by and between Univision Communications Inc., a Delaware corporation
("Company"), and Henry Cisneros ("Employee").
WITNESSETH:
WHEREAS, Company and Employee desire to set forth the terms and
conditions of Employee's employment with Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the Employee and Company agree as follows:
1. TERM. Company agrees to employ Employee and Employee agrees to serve
Company in accordance with the provisions hereof for a term commencing on
February 10, 1997, and ending on February 9, 2000, unless earlier terminated in
accordance with the terms hereof (the "Term").
2. BASE SALARY. On the condition that Employee shall have kept and
performed all of his obligations hereunder, Company shall pay to Employee a base
salary (the "Base Salary") at the annualized rate of $400,000 during the first
twelve months of the Term, $500,000 during the second twelve months of the Term,
and $600,000 during the third twelve months of the Term. Such salary shall be
earned weekly, in arrears, and shall be payable no less frequently than monthly,
in accordance with Company's customary practices. Employee shall be granted a
stock option on 100,000 shares of Company's Class A Common Stock pursuant to the
terms and conditions of Company's 1996 Performance Award Plan at the closing
price for such stock on the New York Stock Exchange on February 10, 1997.
3. BONUSES. Company shall review Employee's performance and the result
of operations and prospects of Company on an annual basis. Following such
review, Company may, in its sole and absolute discretion, grant Employee a
bonus, provided that if and at such time as the Company adopts a bonus plan for
its senior management, Employee's bonus will be determined and paid in
accordance with such plan. In the event this Agreement is not renewed upon
expiration of its Term, Employee will be entitled to consideration for a bonus
based on the last calendar year of the Term.
<PAGE>
In addition, Company shall pay Employee within 30 days of the date
hereof a signing bonus of $1,000,000.
4. SPECIFIC POSITION; DUTIES AND RESPONSIBILITIES. Company and Employee
agree that, subject to the provisions of this Agreement, Company will employ
Employee and Employee will serve during the Term as President and Chief
Operating Officer. Employee shall report to Company's Chief Executive Officer,
Mr. A. Jerrold Perenchio. Employee agrees to observe and comply with Company's
rules and regulations as adopted by Company and agrees to carry out and perform
orders, directions and policies of Company as they may be, from time to time,
stated either orally or in writing. Employee shall be elected to Company's
Board of Directors as soon as practicable.
5. BENEFITS. Employee shall be entitled to all insurance and other
benefits which Company may provide during the Term (provided Employee is
eligible to participate therein) for senior management and for employees of
Company generally, as are from time to time in effect during the Term (the
"Benefits"). Currently, the Benefits include (i) disability and life insurance
(subject to underwriting requirements), (ii) a vehicle allowance as determined
by Company from time to time, (iii) reimbursement for the cost of an annual
physical examination by a physician of Employee's choice, and (iv) twenty
business days paid vacation each year. In lieu of the vehicle allowance,
Company shall provide Employee with the use of a Lincoln Town Car.
6. BUSINESS EXPENSES. During the Term, to the extent that such
expenditures meet the criteria under the Internal Revenue Code for deductibility
by Company (whether or not fully deductible by Company) for federal income tax
purposes as reasonable and necessary business expenses and are substantiated by
Employee as from time to time required by the Internal Revenue Service and by
policies of Company, Company shall reimburse Employee promptly for all
expenditures made in accordance with rules and policies established from time to
time by Company's Management Committee in pursuance and furtherance of Company's
business and goodwill.
7. PLACE OF EMPLOYMENT. The principal place of employment and the
location of Employee's principal office shall be in Los Angeles, California.
Company currently intends to relocate Employee to New York City at some time
during the Term; the decision to relocate Employee to New York City and timing
of such relocation shall be made by Company in its sole discretion. Employee
shall be expected to engage in temporary travel as Company may reasonably
request or as may be required for the proper rendition of
2
<PAGE>
services hereunder. Company shall pay the reasonable expenses of Employee's
relocation from Washington D.C. to Los Angeles and from Los Angeles to New
York City if and when Company decides to relocate Employee to New York City.
8. STANDARD TERMS AND CONDITIONS. This Agreement includes the Standard
Terms and Conditions attached hereto and by this reference made a part of this
Agreement. In the event of any conflict between the terms of the Standard Terms
and Conditions and any express term or condition above provided, the express
terms and conditions above provided shall prevail.
9. CHANGE IN CONTROL. In the event that there is a change in control of
the Company during the Term of the Agreement, Employee shall immediately vest in
all unvested options he has been granted, and shall have the right, within 60
days of the date the change in control occurs, to terminate his employment by
the Company. For purposes of this Agreement, a change in control will be deemed
to have occurred at such time as A. Jerrold Perenchio owns directly or
indirectly less than 10% of the outstanding voting common stock of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
UNIVISION COMMUNICATIONS INC.
By: /s/ Henry Cisneros
---------------------------------
Its:
---------------------------------
"EMPLOYEE"
/s/ Henry Cisneros
--------------------------------------
HENRY CISNEROS
3
<PAGE>
STANDARD TERMS AND CONDITIONS
1. EXCLUSIVITY OF SERVICES. So long as this Agreement shall continue in
effect, Employee shall render his services solely and exclusively for Company
and shall devote his full business time, energy and ability to the business,
affairs and interests of Company and matters related thereto, and shall perform
services contemplated hereby in accordance with Company's policies consistent
with Employee's position. Employee agrees to faithfully and diligently promote
the business, affairs and interests of Company.
Without the prior express written authorization of Company, Employee
shall not, directly or indirectly, during the Term: (a) render services to any
other person, firm or corporation; or (b) directly or indirectly engage in any
activity other than the business of Company, whether alone, as a partner, joint
venturer or as an officer, director, employee, agent, consultant or in any other
capacity. Company consents to (i) Employee's rendering services for no
consideration for any charitable organization provided that rendering such
services does not interfere with performance by Employee of his obligations
under this Agreement, and (ii) investments of Employee's personal assets in any
business that is not directly or indirectly involved in any business in which
Company, or any affiliate of Company is involved provided that Employee does not
render any services in connection with or for any such business.
Employee represents to Company that Employee has no other outstanding
commitments inconsistent with any of the terms of this Agreement or service to
be rendered hereunder.
2. TERMINATION. The compensation and other benefits provided for in this
Agreement, and the employment of Employee by Company, shall be terminated prior
to expiration of the Term only as provided below in this Section 2:
(a) DISABILITY.
In the event that Employee shall fail, because of illness, incapacity,
disability or injury, to render the services contemplated by this Agreement
for one hundred and thirty (130) business days either consecutively or in
the aggregate during the Term, Employee's employment hereunder may be
terminated by written notice of termination from Company to Employee. If
Company exercises its right to terminate Employee's services for any such
illness, incapacity, disability or injury, Company shall pay to Employee
any Base
4
<PAGE>
Salary, Benefits and expense reimbursement that have accrued but remain
unpaid at the time of such termination.
(b) DEATH.
In the event of Employee's death during the Term, this Agreement shall
terminate. Company shall pay to Employee's estate any Base Salary,
Benefits and expense reimbursement that have accrued but remain unpaid at
the time of Employee's death.
(c) FOR CAUSE.
Employee's employment hereunder shall be terminated and all of his
rights to receive Base Salary, Benefits and expense reimbursement, whether
or not accrued, shall terminate and be forfeited upon a determination by
Company of Employee's failure to perform his services hereunder in any
material way; breach of fiduciary duty; Employee's conviction of (or
pleading guilty or NOLO CONTENDERE in respect of) a felony or any lesser
offense involving dishonesty, moral turpitude or Company's or any
affiliate's property; or upon material breach by Employee of any of the
provisions of this Agreement. No termination of Employee's employment
under this Section 2(c) shall limit Company's rights under this Agreement
or at law or in equity.
(d) WITHOUT CAUSE.
In addition to Company's rights pursuant to any other provision of
this Section 2, Company shall have the right to terminate Employee's
employment with Company at any time for any reason or no reason with or
without notice. Notwithstanding any termination pursuant to this
subparagraph (d), Employee shall receive Base Salary under this Agreement
for the remaining unexpired Term subject to the terms and conditions of
Section 2(e) below, and shall immediately vest in all unvested options
granted pursuant to paragraph 1 of the Agreement or otherwise. The
payments provided for in this Section 2(d) shall be in lieu of all other
rights of Employee hereunder and at law or in equity, except that Company
shall pay any Benefits and expense reimbursement that have accrued but
remain unpaid at the time of termination under this Section 2(d).
5
<PAGE>
(e) COMPLIANCE WITH SECTION 3(g) FOR CONTINUED RECEIPT OF PAYMENTS.
In addition to Company's other remedies at law or in equity, in the
event the Employee fails to comply with Section 3(g) below, Company's
obligation to make payments under Section 2(d) shall terminate. Such
termination shall in no way limit or replace Company's other rights and
remedies at law and in equity.
(f) RESIGNATION FROM BOARDS OF DIRECTORS.
Employee shall resign from Company's and its affiliates boards of
directors upon any termination of Employee's employment pursuant to this
Section 2.
3. MISCELLANEOUS.
(a) SUCCESSION.
This Agreement shall inure to the benefit of and shall be binding upon
Company, its successors and assigns. The obligations and duties of
Employee hereunder shall be personal and not assignable. Company shall
have the right to assign its rights and obligations to any successor or
affiliate.
(b) NOTICES.
Any notice provided for in this Agreement shall be in writing and
sent if to Company to:
A. Jerrold Perenchio
1901 Avenue of the Stars
Los Angeles, California 90067
Fax: (310) 556-3568
With copies to:
Robert V. Cahill
1901 Avenue of the Stars
Los Angeles, California 90067
Fax: (310) 556-3568
and
General Counsel
Univision
6701 Center Drive West
Los Angeles, California 90045
or at such other address as Company may from time to time in writing
designate, and if to Employee at such
6
<PAGE>
address as Employee may from time to time in writing designate (or
Employee's business address of record in the absence of such
designation). All notices shall be deemed to have been given
immediately if communicated by telecopy or facsimile transmission and
two business days after they have been deposited, certified mail, return
receipt requested, postage paid and properly addressed to the designated
address of the party to receive the notice.
(c) ENTIRE AGREEMENT.
This instrument contains the entire agreement of the parties relating
to the subject matter hereof and it replaces and supersedes any prior
agreements, undertakings, commitments and practices relating to Employee's
employment by Company and its affiliates. No amendment or modification of
the terms of this Agreement shall be valid unless made in writing and
signed by Employee and Company.
(d) WAIVER.
No failure on the part of any party to exercise or delay in exercising
any right hereunder shall be deemed a waiver thereof or of any other right,
nor shall,any single or partial exercise preclude any further or other
exercise of such or any other right.
(e) CHOICE OF LAW.
To the extent permitted by applicable law, this Agreement shall be
construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed there.
(f) RENEWAL.
Company agrees to give Employee written notice six (6) months prior to
completion of the Term advising Employee whether Company will seek to
negotiate the terms and conditions for an extension of the Term of
Employee's employment. If Company gives Employee such notice advising
Employee that Company will not seek to negotiate an extension of the Term
of Employee's employment, or if Company gives Employee such notice seeking
to negotiate an extension of the Term of Employee's employment and Company
and Employee do not agree on the terms and conditions for an extended Term
of Employee's employment, this Agreement shall expire at the end of the
Term and Company and Employee shall have no further obligations under this
Agreement following the expiration of the Term except to the
7
<PAGE>
extent specifically provided in this Agreement. If Company gives such
notice to Employee less than six (6) months prior to the end of the Term
or fails to give such notice and if Company and Employee do not
negotiate an extension of the Term of Employee's employment, this
Agreement shall expire at the end of the Term and Company and Employee
shall have no further obligations under this Agreement following
expiration of the Term except as specifically provided in this Agreement
and except that Company shall continue to pay Employee's then current
Base Salary provided for in Section 2 of the main body of this Agreement
after expiration of the Term for the unexpired portion of the six (6)
month period that commenced with the giving of such notice, or for a
period of six (6) months from and after the end of the Term if Company
fails to give such notice. The election to seek an extension of the
Term of Employee's employment shall be at the sole and absolute
discretion of Company. No renewal or extension of this Agreement shall
result in any subsequent renewal or extension of this Agreement unless
such subsequent renewal or extension is by written agreement between
Company and Employee.
(g) CONFIDENTIALITY/TRADE SECRETS/COMPETITIVE ACTIVITIES/PROPRIETARY
RIGHTS.
(1) Confidentiality
Employee agrees not to make use of, divulge or otherwise
disclose, directly or indirectly any trade secret or other
confidential information concerning the business or policies of
Company or any of its affiliates of which Employee may learn as a
result of Employee's employment during the term of this Agreement or
prior thereto as stockholder, employee, officer or director of or
consultant to Company or its predecessors, except to the extent such
use or disclosure is (i) necessary to the performance of this
Agreement and in furtherance of Company's best interests,
(ii) required by applicable law, (iii) lawfully obtainable from other
sources, or (iv) authorized by Company. The provisions of this
subsection shall survive the expiration, suspension or termination,
for any reason, of this Agreement.
(2) Trade Secrets
Employee, prior to and during the Term, has had and will have
access to and become acquainted with various trade secrets, consisting
of plans, agreements, devices, processes, customer lists,
8
<PAGE>
contracts, and compilations of information which are owned by
Company or by its affiliates and regularly used in the operation of
their respective businesses and which may give Company an
opportunity to obtain an advantage over competitors, who do not
know or use such trade secrets. Employee agrees and acknowledges
that Employee has been granted access to these valuable trade
secrets only by virtue of the confidential relationship created by
his employment by Company and Employee's prior interest in and
fiduciary relationships to Company. Employee shall not disclose
any of these trade secrets, directly or indirectly, or use them in
any way, either during the Term or at any time thereafter, except
as required in the course of his employment by Company or for its
benefit.
All records, files, documents, drawings, specifications,
software, equipment, and similar items relating to the business of
Company or its affiliates, including without limitation all records
relating to performances and/or customers (the "Documents"), whether
prepared by Employee or otherwise coming into Employee's possession,
shall remain the exclusive property of Company or such affiliates and
shall not be removed from the premises of Company or its affiliates
under any circumstances whatsoever. Upon termination of employment,
Employee agrees to promptly deliver to Company all Documents in the
possession or under the control of Employee.
(3) Competitive Activities
Employee promises and agrees that if Employee's employment under
this Agreement is terminated prior to the expiration of the Term,
Employee shall not during the remainder of the unexpired Term (the
"Cooling-Off Period"), (A) directly or indirectly engage in any
activity competitive with or adverse to Company's Spanish language
broadcasting and cable business in the United States and Puerto Rico
(whether alone, as a partner, joint venturer, officer, director,
employee, consultant or investor of any other entity), including but
not limited to any activity that is competitive with or adverse to
such business that involves (x) representing, as talent agent or
otherwise, any performer or celebrity, (y) the production in the
United States of Spanish language advertising, news or programming of
any kind or the distribution or transmission in or to
9
<PAGE>
the United States of any such advertising, news or programming
wherever produced, or (z) the advertising, marketing, telemarketing
or sale in any Spanish-language format of any product, institution
or service and (B) influence or attempt to influence present or
future customers, employees, performers or independent contractors
of the Company or any of its affiliates to restrict, reduce, sever
or otherwise alter their relationship with the Company or such
affiliates. Employee further promises and agrees that during the
Cooling-Off Period he shall not (other than in the performance of
his duties under this Agreement) join or participate with any
person who is, or hereafter at any time becomes, employed as an
officer, performer or independent contractor by Company or any of
its affiliates in the conduct of any business, corporation,
partnership, firm or enterprise competing with the business of the
Company or any of its affiliates.
(4) Proprietary Rights
Employee acknowledges and agrees that he is the Company's
employee for hire. In this regard, all right, title and interest of
every kind and nature whatsoever, whether now known or unknown, in and
to any property (intellectual or otherwise), including without
limitation any inventions, patents, trademarks, copyrights, films,
scripts, ideas, writings and discoveries, invented, created, written,
developed, furnished, produced, disclosed or acquired by Employee,
alone or in collaboration with others, during Employee's employment by
Company or within the one (1) year period thereafter (qualified by the
last sentence of this paragraph), which relates to or may be useful in
connection with the actual business or activities of Company, shall be
and remain, as between Employee and Company, the sole and exclusive
property of Company for any and all purposes and uses whatsoever
(including any of Employee's right, title and interest in and to any
domestic or foreign applications for patent or trademark, as well as
any divisions, continuations, reissues, revivals, renewals or
extensions thereof), and to the extent protectible under copyright
law, shall be deemed for such purposes as works made for hire for
Company. Employee further agrees that, at Company's request, whether
during or subsequent to employment by the Company, that Employee shall
do any and all acts, and execute and deliver to
10
<PAGE>
Company (in form satisfactory to the Company) such instruments or
documents, as may be deemed by Company as necessary or desirable to
evidence, effectuate, secure, maintain, or establish the terms of
this Agreement or Company's ownership of any of the foregoing, all
without charge; but notwithstanding that no such instruments or
documents are executed, Company, as Employee's employer, shall be
deemed the owner thereof immediately upon the discovery, invention,
creation, etc. thereof. Any invention, patent, trademark or other
property relating to Company's actual or contemplated business or
activities, that is discovered, invented, created, etc. by
Employee, alone or in collaboration with others, within one (1)
year after the termination of Employee's employment by Company for
any reason, shall be deemed to be within the provisions of this
paragraph, unless Employee can prove that the same was conceived
and made following said termination.
(h) SEVERABILITY.
If this Agreement shall for any reason be or become unenforceable in
any material respect by any party, this Agreement shall thereupon terminate
and become unenforceable by the other party as well. In all other
respects, if any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless remain in
full force and effect, and if any provision is held invalid or
unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances, to
the fullest extent permitted by law. Further, in the event that any
portion of the second paragraph of Section 1 or any portion of Section 3(g)
of these Standard Terms and Conditions is more restrictive than permitted
by applicable law, such provisions shall be deemed and construed as limited
to the extent, but only to the minimum extent, necessary to permit their
enforcement under such law. In particular, the parties acknowledge that
the duration and geographic scope of such provisions may be so limited to
permit the greatest possible enforcement thereof.
(i) WITHHOLDING.
All compensation payable hereunder shall be subject to applicable
taxes, withholding, premium charges, co-payment of benefits, self-insured
retentions and other normal employee deductions.
11
<PAGE>
(j) REMEDIES.
Each of the parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for certain breaches of
the provisions of this Agreement and that any party may, in such cases, and
in its sole discretion, apply to any court of law or equity or competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
Such specific performance and/or injunctive relief shall be available
without the posting of any bond or other security. In this connection, the
parties agree that the services to be rendered by Employee hereunder are of
a special, unique and extraordinary nature, which gives them a peculiar
value and that a breach by Employee will cause Company great and
irreparable injury and harm. Except when a party is seeking an injunction
or specific performance hereunder, the parties agree they shall submit any
controversy or claim arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or arising out
of or relating in any way to the employment of Employee or the termination
thereof to binding arbitration. In the event the parties shall fail to
agree upon terms of arbitration within twenty (20) days from the first
written demand for arbitration, then such disputed matter shall be settled
by arbitration under the Rules of the American Arbitration Association, by
a single arbitrator appointed in accordance with such Rules. Such
arbitration shall be held in New York City. Once a matter has been
submitted to arbitration pursuant to this section, the decision of the
arbitrator reached and promulgated as a result thereof shall be final and
binding upon all parties and each party shall pay the fees and expenses of
such party's attorneys and accountants and one-half of the arbitrator's
fees and expenses, except that the arbitrator shall be entitled to award
the costs of arbitration, attorneys' and accountants' fees, as well as
costs, to the party that the arbitrator determines to be the prevailing
party in any such arbitration. The Company shall pay Employee's reasonable
travel expenses in connection with any arbitration and preparation
therefor. In reaching a decision the arbitrator shall have no authority to
ignore, change, modify, add to or delete from any
12
<PAGE>
provision of this Agreement, but instead is limited solely to interpreting
this Agreement in accordance with the laws of New York.
13
<PAGE>
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is entered into
effective as of February 10, 1997, by and between Univision Communications Inc.,
a Delaware corporation ("Company") and Henry Cisneros ("Employee").
WITNESSETH:
WHEREAS, Company and Employee entered into an employment agreement
(the "Agreement") dated as of February 10, 1997;
WHEREAS, Company and Employee wish to amend the Agreement to make it
effective as of January 27, 1997 and to change certain other provisions in the
Agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment, the Company and Employee agree as follows:
1. TERM. This Section of the Agreement shall be restated in its
entirety to read as follows:
Company agrees to employ Employee and Employee agrees to serve
Company in accordance with the provisions of the Agreement, as
amended, for a term commencing on January 27, 1997, and ending on
January 26, 1997, unless earlier terminated in accordance with
the terms of the Agreement, as amended (the "Term").
2. BASE SALARY. The last sentence of this Section of the Agreement
shall be restated in its entirety to read as follows:
Employee shall be granted a stock option on 100,000 shares of
Company's Class A Common Stock pursuant to the terms and
conditions of Company's 1996 Performance Award Plan at the
closing price for such stock on the New York Stock Exchange on
January 27, 1997, and such option shall vest in three annual
increments.
3. BONUSES. The second paragraph of this Section of the Agreement
shall be restated in its entirety to read as follows:
In addition, Company shall pay Employee within 30 days after
the commencement of the Term, a signing bonus of $1,000,0000;
provided, that if
<PAGE>
Employee resigns as an employee of the Company at any time during
the first year of the Term, Employee shall repay the Company a
pro rata portion of such bonus. For example, if Employee resigns
on April 27, 1997, he shall repay the Company $750,000.
4. SPECIFIC POSITION; DUTIES AND RESPONSIBILITIES. The following
proviso shall be added to the end of the first sentence of this Section of the
Agreement:
; provided that Employee's selection as President and Chief
Operating Officer shall not become effective until the Board of
Directors has taken action to elect him to such office.
Except as provided above, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
UNIVISION COMMUNICATIONS INC.
By: Robert Cahill
-----------------------------------
Its: V.P./Secretary
-----------------------------------
"EMPLOYEE"
/s/ Henry Cisneros
----------------------------------------
HENRY CISNEROS
2
<PAGE>
EXHIBIT 11.1
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
COMPUTATION OF HISTORICAL PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1996 1995 1994 1993
----------- ------------- ------------- ------------- 1992(A)
-----------
PREDECESSOR
COMPANY
<S> <C> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Income (loss) before extraordinary loss on
extinguishment of debt.......................... $ 18,593 $ (9,388) $ (7,739) $ (27,181) $ 28,623
Extraordinary loss on extinguishment of debt...... (8,228) (801) (4,321) -- --
----------- ------------- ------------- ------------- -----------
Net income (loss) applicable to common stock...... $ 10,365 $ (10,189) $ (12,060) $ (27,181) $ 28,623
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
NUMBER OF SHARES ON WHICH NET INCOME (LOSS) PER
SHARE IS BASED:
Historical weighted average common shares
outstanding..................................... 126,666 10,000 10,000 10,000 10,000
Reorganization stock dividend (227.010528 shares
for each common share).......................... 28,754,515 2,270,105 2,270,105 2,270,105 2,270,105
Reorganization shares issued...................... 4,335,499 -- -- -- --
Public offering shares issued..................... 8,170,000 -- -- -- --
Additional shares issued to underwriters.......... 1,225,500 -- -- -- --
----------- ------------- ------------- ------------- -----------
Weighted average common shares before dilutive
effect of common stock equivalents.............. 42,612,180 2,280,105 2,280,105 2,280,105 2,280,105
----------- ------------- ------------- ------------- -----------
Common stock equivalents:
Warrants.......................................... 14,389,708 -- -- -- --
Options........................................... 711,631 -- -- -- --
----------- ------------- ------------- ------------- -----------
Weighted average common shares.................... 57,713,519 2,280,105(b) 2,280,105(b) 2,280,105(b) 2,280,105(b)
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
PRIMARY EARNINGS PER SHARE:
Income (loss) per share before extraordinary
loss............................................ $ 0.32 $ (4.12) $ (3.39) $ (11.92) $ 12.55
Extraordinary loss per share...................... (0.14) (0.35) (1.90) -- --
----------- ------------- ------------- ------------- -----------
Net income (loss) per share....................... $ 0.18 $ (4.47) $ (5.29) $ (11.92) $ 12.55
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
FULLY DILUTED EARNINGS PER SHARE (c)
Income (loss) before extraordinary loss on
extinguishment of debt.......................... $ 18,593 $ (9,388) $ (7,739) $ (27,181) $ 28,623
Extraordinary loss on extinguishment of debt...... (8,228) (801) (4,321) -- --
----------- ------------- ------------- ------------- -----------
Net income (loss) applicable to common stock...... $ 10,365 $ (10,189) $ (12,060) $ (27,181) $ 28,263
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
NUMBER OF SHARES ON WHICH NET INCOME (LOSS) PER
SHARE IS BASED:
Historical weighted average common shares
outstanding..................................... 126,666 10,000 10,000 10,000 10,000
Reorganization stock dividend (227.010528 shares
for each common share).......................... 28,754,515 2,270,105 2,270,105 2,270,105 2,270,105
Reorganization shares issued...................... 4,335,499 -- -- -- --
Public offering shares issued..................... 8,170,000 -- -- -- --
Additional shares issued to underwriters.......... 1,225,500 -- -- -- --
----------- ------------- ------------- ------------- -----------
Weighted average common shares before dilutive
effect of common stock equivalents.............. 42,612,180 2,280,105 2,280,105 2,280,105 2,280,105
----------- ------------- ------------- ------------- -----------
Common stock equivalents:
Warrants.......................................... 14,390,550 -- -- -- --
Options........................................... 731,784 -- -- -- --
Convertible Preferred Stock....................... 79,970 -- -- -- --
----------- ------------- ------------- ------------- -----------
Weighted average common shares.................... 57,814,484 2,280,105(b) 2,280,105(b) 2,280,105(b) 2,280,105(b)
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
FULLY DILUTED EARNINGS PER SHARE:
Income (loss) per share before extraordinary
loss............................................ $ 0.32 $ (4.12) $ (3.39) $ (11.92) $ 12.55
Extraordinary loss per share...................... (0.14) (0.35) (1.90) -- --
----------- ------------- ------------- ------------- -----------
Net income (loss) per share....................... $ 0.18 $ (4.47) $ (5.29) $ (11.92) $ 12.55
----------- ------------- ------------- ------------- -----------
----------- ------------- ------------- ------------- -----------
</TABLE>
- ------------------------------
(a) Represents the addition of the results of operations of the predecessor
company (January 1, 1992 through December 16, 1992) and PCI for the period
of December 17 through December 31, 1992.
(b) For the years ended 1995, 1994 and 1993, and for the period December 17
through December 31, 1992 losses were generated before extraordinary loss on
extinguishment of debt and the warrants were excluded from the weighted
average common shares outstanding since their effect were anti-dilutive.
(c) This calculation is presented in accordance with the Securities Exchange Act
of 1934, although it is not required disclosure under APB Opinion No. 15.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIVISION
COMMUNICATIONS INC. AND SUBSIDARIES STATEMENTS OF EARNINGS AND BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 11,588
<SECURITIES> 0
<RECEIVABLES> 96,692
<ALLOWANCES> 8,738
<INVENTORY> 0
<CURRENT-ASSETS> 111,790
<PP&E> 125,556
<DEPRECIATION> 22,183
<TOTAL-ASSETS> 884,367
<CURRENT-LIABILITIES> 120,350
<BONDS> 498,137
0
0
<COMMON> 426
<OTHER-SE> 261,781
<TOTAL-LIABILITY-AND-EQUITY> 884,367
<SALES> 244,858
<TOTAL-REVENUES> 244,858
<CGS> 58,443
<TOTAL-COSTS> 58,443
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,986
<INTEREST-EXPENSE> 41,691
<INCOME-PRETAX> 24,307
<INCOME-TAX> 5,714
<INCOME-CONTINUING> 18,593
<DISCONTINUED> 0
<EXTRAORDINARY> (8,228)
<CHANGES> 0
<NET-INCOME> 10,365
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
