SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 30, 1994
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TELEMUNDO GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16099 13-3348686
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
2290 West 8th Avenue, Hialeah, Florida 33010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 884-8200
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On Friday, December 30, 1994 (the "Consummation Date"), the
Registrant consummated its Second Amended Chapter 11 Plan of Reorganization
(the "Plan"). Pursuant to the Plan, as of the Consummation Date, holders of
certain claims against and interests in the Registrant received cash; 10.25%
Senior Notes due December 30, 2001 (the "Senior Notes"); Common Stock, $.01
par value ("Common Stock"), divided into two series, Series A ("Series A
Common Stock") and Series B ("Series B Common Stock"); and/or five-year
warrants to purchase Series A Common Stock at $7.00 per share (the
"Warrants"). The holders of the Series B Common Stock have the right for a
period of five years (or for a shorter period upon the occurrence of certain
events) to elect a majority of the Board of Directors of the Registrant. Of
10,000,000 shares of Common Stock distributed under the Plan, 4,388,394 were
shares of Series A Common Stock and 5,611,606 were shares of Series B Common
Stock.
Prior to the Consummation Date, Reliance Insurance Company ("Reliance")
directly owned or controlled 58.4% of the Registrant's then-outstanding common
stock (the "Old Common Stock"). Pursuant to the Plan, all of the Old Common
Stock was canceled. Following the Consummation Date and pursuant to the Plan,
Reliance received certain shares of Series A Common Stock, which together with
earlier purchases of Series A Common Stock, total approximately 10.2% of the
total outstanding Common Stock (Series A and B) and 23.3% of the outstanding
Series A Common Stock of the Registrant. In addition, Reliance received
warrants to purchase 416,667 shares of Series A Common Stock at $7.19 per
share, which warrants are exercisable beginning one, two and three years after
the Consummation Date and for a period of five years from the date they become
exercisable.
Following the Consummation Date, TLMD Partners II, L.L.C., a Delaware
limited liability company ("TLMD"); Leon D. Black ("Black"); Hernandez
Partners, a California general partnership ("Hernandez"); The Value
Realization Fund, L.P., a Delaware limited partnership ("Value"); GRS Partners
II, an Illinois partnership ("GRS"); and Bastion Capital Fund, L.P., a
Delaware limited partnership ("Bastion") (collectively, the "Controlling
Stockholders") received in exchange for their claims against the Registrant an
aggregate of approximately 3,608,146 shares of Series B Common Stock,
constituting 36.1% of the total outstanding Common Stock and 54.9% of the
outstanding Series B Common Stock of the Registrant.
The Controlling Stockholders have entered into a Shareholders Agreement,
dated as of December 20, 1994 (the "Shareholders Agreement"), pursuant to
which each of the parties thereto has agreed, during the term of the
Shareholders Agreement and subject to the provisions thereof (including the
continued ownership of a specified minimum number of Series B Common Stock, as
set forth in the Shareholders Agreement), among other things, to use its
reasonable best efforts to cause Black (or his nominee), two nominees of TLMD,
a nominee of Bastion and a nominee of Hernandez to be elected to the Board of
Directors of the Registrant. Pursuant to the Shareholders Agreement, the
Controlling Stockholders have agreed that shares of Series B Common Stock
Beneficially Owned (as defined in the Shareholders Agreement) by each of them
will be voted by a Voting Committee comprised of three members, one of which
will be appointed by TLMD, one of which will be appointed by Bastion, and one
of which is an Independent Shareholder (as defined in the Shareholders
Agreement). The parties to the Shareholders Agreement have appointed the
Voting Committee as their attorney-in-fact and proxy to vote all shares of
Series B Common Stock owned by such parties as to which a vote of the
stockholders is required.
As a consequence of the special voting rights of the Series B Common
Stock and the entering into of the Shareholders Agreement, the Controlling
Stockholders are expected to have the ability to cause the nominees of each of
TLMD, Black, Bastion and Hernandez to be elected to the Board of Directors of
the Registrant, which may give the Controlling Stockholders the power to
control or influence the Registrant.
The foregoing description of the interests of the Controlling
Stockholders and the provisions of the Shareholders Agreement is based on the
Schedule 13D of TLMD and Black filed January 9, 1995 (the "TLMD Schedule
13D"). For additional information regarding the persons who acquired control
of the Registrant; the amount and source of the consideration used by such
persons; the basis of the control; the date and description of the transaction
which resulted in the change in control; and the percentage of voting
securities of the Registrant now beneficially owned directly or indirectly by
the persons who acquired control, reference is made to the responses to items
2, 3, 4, 5 and 6 of the TLMD Schedule 13D, which responses are incorporated
herein by reference in response to item 1(a) of this Form 8-K.
(b) Pursuant to the Plan, Reliance Insurance Company and the
holders of certain creditor classes of the Registrant were given the right to
designate certain members of the Registrant's Board of Directors as of the
Consummation Date. Following the Consummation Date, the holders of the Series
B Common Stock voting as a series are entitled to elect a majority of the
Board of Directors of the Registrant for a period of five years or for a
shorter period upon the occurrence of certain events, and the holders of the
Series A Common Stock voting as a series are entitled to elect the remaining
directors of the Registrant. For information regarding the Shareholders
Agreement and other arrangements among the Controlling Stockholders, reference
is made to the responses to items 2, 3, 4, 5 and 6 of the TLMD Schedule 13D,
which responses are incorporated herein by reference in response to item 1(b)
of this Form 8-K.
ITEM 5. OTHER EVENTS
As described in item 1 to this Form 8-K, the Registrant consummated its
Second Amended Chapter 11 Plan of Reorganization on Friday, December 30, 1994.
On December 29, 1994, the Registrant's Form 8-A Registration Statement
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), pertaining to the Registrant's Series A Common Stock and
Warrants became effective, and on January 4, 1995 the Registrant terminated
the registration of the Old Common Stock under the Exchange Act. Also on
December 29, 1994, the Registrant's Application for Qualification of Indenture
Under the Trust Indenture Act of 1939 pertaining to the Indenture for the
Senior Notes was declared effective. On January 3, 1995, the Registrant's
Series A Common Stock and Warrants commenced trading on the Nasdaq National
Market and the Nasdaq Small Cap Market, respectively.
Effective December 31, 1994, the Registrant entered into a Loan and
Security Agreement with Foothill Capital Corporation making available to the
Registrant a $20 million revolving line of credit. The line is available for
five years. Proceeds under the line will be used for general corporate
purposes, including working capital.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
4.1 The Registrant's Restated Certificate of Incorporation
effective December 30, 1994.
4.2 Indenture dated as of December 30, 1994 between the
Registrant and Bankers Trust Company, as Trustee.
4.3 Warrant Agreement dated as of December 30, 1994 between the
Registrant and Shawmut Bank Connecticut, National Association.
4.4 Warrant Agreement dated as of December 30, 1994 between the
Registrant and Reliance Insurance Company.
4.5 Registration Rights Agreement dated as of December 30, 1994
between the Registrant, Apollo Advisors, L.P. and Reliance
Insurance Company.
10.1 Loan and Security Agreement dated as of December 31, 1994
between the Registrant and Foothill Capital Corporation.
99.1 Items 2, 3, 4, 5 and 6 of the TLMD Schedule 13D.
SIGNATURES
Pursuant to the requirements 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.
TELEMUNDO GROUP, INC.
(Registrant)
Date: January 13, 1995 By: /s/ Peter J. Housman II
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Peter J. Housman II
President, Business and
Corporate Affairs
EXHIBIT INDEX
Exhibit No. Description
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4.1 The Registrant's Restated Certificate of Incorporation
effective December 30, 1994.
4.2 Indenture dated as of December 30, 1994 between the
Registrant and Bankers Trust Company, as Trustee.
4.3 Warrant Agreement dated as of December 30, 1994 between the
Registrant and Shawmut Bank Connecticut, National Association.
4.4 Warrant Agreement dated as of December 30, 1994 between the
Registrant and Reliance Insurance Company.
4.5 Registration Rights Agreement dated as of December 30, 1994
between the Registrant, Apollo Advisors, L.P. and Reliance
Insurance Company.
10.1 Loan and Security Agreement dated as of December 31, 1994
between the Registrant and Foothill Capital Corporation.
99.1 Items 2, 3, 4, 5 and 6 of the TLMD Schedule 13D.
RESTATED CERTIFICATE OF
INCORPORATION OF TELEMUNDO GROUP, INC.
PURSUANT TO SECTION 245 AND SECTION 303 OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
Telemundo Group, Inc., a corporation organized and existing under and by
virtue of the laws of the State of Delaware (the ``Corporation''), does
hereby certify:
1. The name of the Corporation is Telemundo Group, Inc. The Corporation
was originally incorporated under the name BJ Holding Corp. The date of
filing of the Corporation's original Certificate of Incorporation with the
Secretary of State of the State of Delaware was May 28, 1986.
2. This Restated Certificate of Incorporation amends, restates and
integrates the Corporation's Restated Certificate of Incorporation, as
amended to date, in its entirety and is intended to supersede the
Corporation's prior Certificate of Incorporation, as amended and restated,
in all respects.
3. Provision for the making of this Restated Certificate of
Incorporation is contained in an order dated July 20, 1994 of the United
States Bankruptcy Court for the Southern District of New York (the
``Bankruptcy Court'') in In re Telemundo Group, Inc., Case No. 93-B-42967
(JLG), confirming the Telemundo Group, Inc., Debtor, Second Amended Chapter
11 Plan of Reorganization (the ``Plan'').
4. This Restated Certificate of Incorporation has been duly executed by
the officers of the Corporation so designated in the Bankruptcy Court order
in accordance with the applicable provisions of Sections 242, 245 and 303
of the General Corporation Law of the State of Delaware.
5. This Restated Certificate of Incorporation has been filed and shall
become effective pursuant to Section 103(c)(3) of the Delaware General
Corporation Law on December 30,1994 (the ``Consummation Date'').
6. The text of the Corporation's Restated Certificate of Incorporation
is hereby amended and restated to read as herein set forth in full:
FIRST: Corporate Title. The name of the Corporation is Telemundo Group,
Inc.
SECOND: Registered Office. The address of the Corporation's registered
office in the State of Delaware is Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle, 19801. The name of
its registered agent at that address is The Corporation Trust Company.
THIRD: Purpose. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware (``Delaware Corporation
Law'') and to possess and employ all powers and privileges now or hereafter
granted or available under the laws of the State of Delaware to such
corporations.
FOURTH: A. Authorized Shares. The aggregate number of shares of capital
stock which the Corporation shall have authority to issue is twenty-one
million (21,000,000) shares, divided into two classes: one million
(1,000,000) shares of Preferred Stock (the ``Preferred Stock''), par value
One Cent ($.01) per share, and twenty million (20,000,000) shares of Common
Stock (the ``Common Stock''), par value One Cent ($.01) per share. The
shares of Common Stock shall be divided into two series, one of which shall
be designated Series A Common Stock (the ``Series A Stock'') and consist of
14,388,394 shares and one of which shall be designated Series B Common
Stock (the ``Series B Stock'') and consist of 5,611,606 shares. Except as
otherwise set forth in this Restated Certificate of Incorporation, all
shares of Common Stock shall be identical and shall entitle the holders
thereof to the same rights and privileges. In accordance with Section
1123(a)(6) of Title 11 of the United States Code, as amended and as in
effect on the date of this Restated Certificate of Incorporation, the
Corporation shall not issue any nonvoting equity securities until all
payments and distributions required to be made under the Plan shall have
been made.
B. Preferred Stock. The Board of Directors is authorized subject to
limitations prescribed by law, to provide for the issuance of shares of
Preferred Stock in one or more series, to establish the number of shares to
be included in each such series, and to fix the designations, powers,
preferences and rights of the shares of each such series, and any
qualifications, limitations, or restrictions thereof. The number of
authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the outstanding shares of Common
Stock, without a vote of the holders of any outstanding shares of the
Preferred Stock, or of any series thereof, unless a vote of any such
holders is required pursuant to the certificate or certificates
establishing such Preferred Stock or series of Preferred Stock.
C. Common Stock.
1. Dividends. The Series A Stock and the Series B Stock shall have the
same rights to, and the respective holders of the Series A Stock and Series
B Stock shall participate ratably in, all dividends of the Corporation,
whether paid in cash, property or stock of the Corporation, as may be from
time to time declared thereon by the Board of Directors out of the assets
or funds of the Corporation legally available therefor. Any dividend paid
in shares of Common Stock shall only be paid in shares of Series A Stock.
2. Voting Rights. (a) Except as required by law or as otherwise provided
herein, the respective holders of the Series A Stock and Series B Stock
shall vote on all matters as a single class, together with the holders of
any shares of any other class or series of stock of the Corporation
entitled to vote therewith, and at every annual or special meeting of
common stockholders of the Corporation, each holder of shares of Common
Stock shall be entitled to one vote, in person or by proxy, for each share
of Common Stock standing in such holder's name on the books of the
Corporation.
(b) From and after the Conversion (as defined in Article FOURTH hereof),
the provisions in this Restated Certificate of Incorporation requiring
class voting by holders of shares of Common Stock shall thereupon
terminate.
3. Liquidation, Dissolution, or Winding Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, after payment or provision for payment of the
debts and other liabilities of the Corporation, and of the preferential
amounts, if any, to which the holders of any other class or series of stock
of the Corporation shall be entitled, the holders of all outstanding shares
of Common Stock shall be entitled to share ratably in the assets of the
Corporation available for distribution to the holders of Common Stock.
4. Conversion.
(a) Definitions. For the purposes of this Restated Certificate of
Incorporation, the following terms shall have the meanings set forth below:
``Affiliate'' of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. 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.
``Apollo'' means Apollo Advisors, L.P., a Delaware limited partnership.
``Apollo Permitted Transferee'' means and includes Apollo, Lion
Advisors, L.P., a Delaware limited partnership (``Lion''), Apollo
Investment Fund, L.P., a Delaware limited partnership (``AIF''), Apollo
Investment Fund II, L.P., a Delaware limited partnership (``AIF II''), TLMD
Partners II, L.L.C., a Delaware limited liability company ("TLMD", which
shall include any member (including voting committee members) of TLMD), or
any investment fund, investment account or other entity whose investing
manager, investment advisor or general partner, or any principal thereof,
is Apollo, Lion, AIF, AIF II, TLMD, or any principal or Affiliate of any of
them, or any "group" (within the meaning of Section 13(d)(3) under the
Exchange Act)(as opposed to a member of such group which member is not a
Permitted Transferee) with respect to the Common Stock of which any Apollo
Permitted Transferee is a member; provided, however, that no Person shall
be an Apollo Permitted Transferee and any Person shall cease to be an
Apollo Permitted Transferee, in either case, if such Person ceases to be an
Affiliate of Apollo or TLMD, and ceases to be an investment fund,
investment account or other entity whose investing manager, investment
advisor or general partner, or any principal thereof, is Apollo or TLMD or
any principal or Affiliate thereof.
``Conversion'' means the first date on which there are no outstanding
shares of Series B Stock.
``Exchange Act'' means the Securities Exchange Act of 1934, as amended.
``Permitted Transferee'' means (i) an Apollo Permitted Transferee, in
the case of a Transfer by Apollo or an Apollo Permitted Transferee or (ii)
any Person (other than Apollo or an Affiliate thereof) which is an
Affiliate of the transferor, in the case of all other Transfers; provided,
however, that for purposes of clause (ii) hereto, no Person shall be a
Permitted Transferee and any Person shall cease to be a Permitted
Transferee, in either case, if such Person ceases to be an Affiliate of the
transferor.
``Person'' means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
``Transfer'' means any direct or indirect sale, assignment, transfer or
other disposition, through any contract, arrangement, understanding,
relationship or otherwise, of any beneficial ownership interest (as defined
in Rule 13d-3(a) under the Exchange Act) of any shares of Series B Stock.
(b) Mandatory Conversion of All Shares of Series B Stock. All
outstanding shares of Series B Stock shall automatically, and without any
further action by the Corporation or the holders thereof, convert into
shares of Series A Stock, on a basis of one share of Series A Stock for one
share of Series B Stock, immediately upon the earlier of (i) December 30,
1999 or (ii) such time as there are less than 2,000,000 shares of Series B
Stock issued and outstanding; provided, that the foregoing number shall be
appropriately adjusted upwards or downwards for any changes resulting in an
increase or decrease, respectively, in the number of shares of Series B
Stock resulting from a recapitalization, stock dividend, combination or
stock split-up in the Series B Stock effected prior to Conversion.
(c) Mandatory Conversion of Transferred Shares of Series B Stock. Each
share of Series B Stock held by any Person shall automatically, and without
any further action by the Corporation or the holder thereof, convert into a
share of Series A Stock upon the Transfer of such share of Series B Stock
to any other Person other than a Transfer to a Permitted Transferee. In
connection with any Transfer to a Permitted Transferee, such shares shall
remain shares of Series B Stock only if simultaneously with such Transfer,
the transferor or transferee provides the Corporation with (i) a legal
opinion, in form and substance reasonably satisfactory to the Corporation,
to the effect that the transferee is a Permitted Transferee or (ii)
evidence reasonably satisfactory to the Corporation and its counsel that
such transferee is a Permitted Transferee. In addition, shares of Series B
Stock held by any Person which is a Permitted Transferee shall remain
Series B Stock only so long as such Person continues to be a Permitted
Transferee, and immediately upon such Person ceasing to be a Permitted
Transferee, such shares of Series B Stock shall automatically, and without
any further action by the Corporation or the holder thereof, convert into
an equal amount of shares of Series A Stock.
(d) Optional Conversion of Series B Stock. The holder of any shares of
Series B Stock shall have the right at such holder's option, at any time or
from time to time, to convert any of such shares of Series B Stock into
fully paid and nonassessable shares of Series A Stock. The holder of any
shares of Series B Stock may exercise this conversion right by surrendering
to the Corporation the certificate or certificates for the shares of Series
B Stock to be converted, accompanied by written notice stating that the
holder elects to convert all or a portion of the shares represented
thereby. Each share of Series B Stock so surrendered for conversion shall
be converted into one share of Series A Stock. Conversion shall be deemed
to have been effected on the date when delivery of notice of an election to
convert and certificates for shares of Series B Stock is made, and the
Corporation shall issue and deliver to such holder in accordance with
paragraph (e) below a certificate or certificates representing shares of
Series A Stock and Series B Stock, if any, issuable to such holder in
respect of the shares of Series B Stock represented by the certificate
surrendered for conversion.
(e) Surrender/Reissuance. Upon surrender to the Corporation of a
certificate formerly representing shares of Series B Stock all or a part of
which have been converted to (or are to be converted into) Series A Stock,
the Corporation or the transfer agent of the Corporation shall cancel the
surrendered certificate for Series B Stock and issue (i) if all the shares
of Series B Stock represented by such surrendered certificate have been (or
are to be) converted into shares of Series A Stock, a new certificate of
Series A Stock in the same name and in the same denomination as the
surrendered certificate, and (ii) if a portion of the shares of Series B
Stock represented by such surrendered certificate have been (or are to be)
converted into shares of Series A Stock, (a) a new certificate of Series A
Stock in the same name for the portion of the shares of Series B Stock
represented by such surrendered certificate which have been (or are to be)
converted and (b) a new certificate of Series B Stock in the same name for
the portion of the shares of Series B Stock represented by such surrendered
certificate which have not been (or are not to be) converted.
(f) Restrictive Legend. Each certificate representing a share of Series
B Stock, and any certificate issued at any time upon transfer of, or in
exchange for or replacement of, any certificate bearing the legend set
forth below, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
``THE SECURITIES REPRESENTED BY THIS CERTIFICATE WILL
AUTOMATICALLY CONVERT INTO SHARES OF SERIES A COMMON STOCK OF
TELEMUNDO GROUP, INC. PURSUANT TO THE RESTRICTIONS ON TRANSFER
SET FORTH IN ARTICLE FOURTH OF THE RESTATED CERTIFICATE OF
INCORPORATION OF TELEMUNDO GROUP, INC. NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
WITHOUT NOTICE TO THE CORPORATION.''
5. Stock Dividends, Splits, Combinations.
The Corporation shall not pay a dividend with respect to its shares of
Common Stock payable in shares of Common Stock or other securities or
effect a stock split-up or combine its outstanding shares of Common Stock,
unless all of its outstanding shares of Common Stock participate on the
same basis in such dividend, split-up or combination.
6. No Additional Issuance of Series B Stock.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the Corporation may not issue any additional
shares of Series B Stock or any options, warrants, calls, subscriptions or
other similar rights or other agreements, commitments or outstanding
securities obligating the Corporation to issue, transfer or sell any shares
of Series B Stock.
FIFTH: Elections of directors need not be by written ballot unless the
by-laws of the Corporation shall otherwise provide.
SIXTH: A. Board of Directors.
1. Number of Directors; Election of Board Prior to Conversion. Prior to
the Conversion, the total number of Directors constituting the Board of
Directors of the Corporation shall be at least nine (9) Directors, the
smallest number constituting a majority of whom shall be Series B Directors
who shall be elected by the holders of the Series B Stock (the ``Series B
Directors''), and the remaining number of whom shall be Series A Directors
who shall be elected by the holders of the Series A Stock (the ``Series A
Directors''). Prior to the Conversion, the size of the Board of Directors
may only be increased (or decreased, but never to a number less than nine
(9)) by an even number of Directors and any Directors appointed to fill the
vacancies resulting therefrom shall be appointed in accordance with Clause
C.1.(b) of this Article SIXTH.
2. Number; Election of Board following Conversion. From and after the
Conversion, the Board of Directors of the Corporation shall initially
consist of the number of Directors in office immediately prior thereto,
and, thereafter, such number as may be fixed in accordance with the by-laws
of the Corporation. From and after Conversion, the Directors shall be
elected by the holders of the Series A Stock.
B. Removal of Directors.
1. Prior to the Conversion. Prior to the Conversion, any Director may be
removed from office without cause, at any time, by the affirmative vote of
stockholders representing not less than a majority of the holders of the
series of Common Stock which elected such Director. Prior to the
Conversion, any vacancy created by the removal of a Director shall be
filled only by the holders of the series of Common Stock that elected the
Director that was removed.
2. Following the Conversion. From and after the Conversion, any Director
may be removed in accordance with the provisions of the Delaware General
Corporation Law and the by-laws of the Corporation.
C. Vacancies on Board.
1. Prior to the Conversion. (a) Except as otherwise set forth in this
Restated Certificate of Incorporation, prior to Conversion, any vacancy in
the Board of Directors, whether arising from death, resignation, or any
other cause (other than removal or an increase in the number of Directors),
may be filled by a majority of the remaining Directors of the same series
as the Director who left the Board of Directors or if only one Director of
such series remains in office, then by such sole Director, in either case,
though less than a quorum; or by the stockholders of the series that
elected such Director at the next annual meeting thereof or at a special
meeting thereof. If there are no remaining Directors of the same series, a
special meeting of stockholders of that series shall be held as soon as
possible to elect the successor. Each Director so elected shall hold office
until his successor shall have been elected and qualified.
(b) Prior to the Conversion, in the event of a newly created
directorship in the Board of Directors of the Corporation resulting from an
increase in the size of the Board of Directors pursuant to Clause A.1 of
this Article SIXTH, half of the Directors appointed to fill the vacancies
resulting therefrom shall be Series A Directors and the remaining newly
appointed Directors shall be Series B Directors, in either case, filled by
a majority of the Directors of that series then in office, though less than
a quorum, or by the holders of the series of Common Stock entitled to elect
such Director at the next annual meeting thereof or at a special meeting
thereof.
2. Following the Conversion. From and after Conversion, any vacancy in
the Board of Directors shall be filled in accordance with the by-laws of
the Corporation.
SEVENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing shall
not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware Corporation
Law is hereafter amended to permit further elimination or limitation of the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted
by the Delaware Corporation Law as so amended. Any repeal or modification
of this Article SEVENTH by the stockholders of the Corporation or otherwise
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
EIGHTH: Amendment of By-laws. The Board of Directors is expressly
authorized to adopt, amend, or repeal the by-laws of the Corporation.
NINTH: Amendment of Certificate. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted
subject to this reservation. Prior to Conversion, in addition to any other
vote required by law, Articles FOURTH, SIXTH and NINTH may be amended only
with the affirmative vote of the holders of a majority of the issued and
outstanding shares of Series A Stock and Series B Stock, in each case,
voting separately as a series.
TENTH: Savings Clause. In the event that any provision (or portion
thereof) of this Restated Certificate of Incorporation shall be found to be
invalid, prohibited or unenforceable for any reason, the remaining
provisions (or portions thereof) of this Restated Certificate of
Incorporation shall remain in full force and effect, and shall be construed
as if such invalid, prohibited or unenforceable provision had been stricken
herefrom or otherwise rendered inapplicable, it being the intent of the
Corporation and its stockholders that each such remaining provision (or
portion thereof) of this Restated Certificate of Incorporation remain, to
the fullest extent permitted by law, applicable and enforceable as to all
stockholders notwithstanding any such finding.
ELEVENTH: Alien Ownership of Stock.
This Article ELEVENTH shall be applicable to the Corporation so long as
the provisions of Section 310 of the Communications Act (or any successor
provisions thereto) are applicable to the Corporation. As used herein, the
term ``alien'' shall have the meaning ascribed thereto by the Federal
Communications Commission (``FCC'') on the date hereof and in the future as
Congress or the FCC may change such meaning from time to time. If the
provisions of Section 310 (or any successor provisions thereto) are
amended, the restrictions in this Article ELEVENTH shall be amended in the
same way, and as so amended, shall apply to the Corporation. The Board of
Directors may make such rules and regulations as it shall deem necessary or
appropriate to enforce the provisions of this Article ELEVENTH.
Except as otherwise provided by law, not more than twenty-five percent
of the aggregate number of shares of stock of the Corporation outstanding
in any series entitled to vote on any matter before a meeting of
stockholders of the Corporation shall at any time be voted by or for the
account of aliens or their representatives or by or for the account of a
foreign government or representative thereof, or by or for the account of
any corporation organized under the laws of a foreign country.
Except as otherwise provided by law, not more than twenty-five percent
of the aggregate number of shares of stock of the Corporation outstanding
shall at any time be owned of record by or for the account of aliens or
their representatives or by or for the account of a foreign government or
representatives thereof, or by or for the account of any corporation
organized under the laws of a foreign country. Shares of stock shall not be
transferable on the books of the Corporation to aliens or their
representatives, foreign governments or representatives thereof, or
corporations organized under the laws of foreign countries if, as a result
of such transfer, the aggregate number of shares of stock owned by or for
the account of aliens and their representatives, foreign governments and
representatives thereof, and corporations organized under the laws of
foreign countries shall be twenty-five percent or more of the number of
shares of stock then outstanding.
Notwithstanding any other provision of these Articles, the transfer of
the Corporation's capital stock, whether voluntary or involuntary, shall
not be permitted, and shall be ineffective, if such transfer would violate
(or would result in violation of) the Communications Act or any of the
rules or regulations promulgated thereunder.
The undersigned persons certify that, pursuant to the order of the
Bankruptcy Court having jurisdiction over the chapter 11 case of the
Corporation, Telemundo Group, Inc. this 29th day of December, 1994 has
caused this Restated Certificate of Incorporation to be signed by Peter J.
Housman II, its President-Business and Corporate Affairs, and attested by
Horace G. Dawson III, its Assistant Secretary, and affirm that the
statements contained therein are true.
TELEMUNDO GROUP, INC.
By:/s/ Peter J. Housman II
________________________
Peter J. Housman II
President-Business and
Corporate Affairs
ATTEST:
By: /s/ Horace G. Dawson, III
_______________________
Horace G. Dawson, III
Assistant Secretary
=============================================================================
TELEMUNDO GROUP, INC.
and
BANKERS TRUST COMPANY,
Trustee
------------------------
INDENTURE
Dated as of December 30, 1994
------------------------
$116,889,000
10.25% Senior Notes Due December 30, 2001
-----------------------------
=============================================================================
TABLE OF CONTENTS
Page
----
RECITALS ................................................ 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions ........................... 1
Section 1.02. Incorporation by Reference of Trust
Indenture Act .......................... 11
Section 1.03. Rules of Construction ................. 12
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating ....................... 12
Section 2.02. Execution and Authentication .......... 13
Section 2.03. Registrar and Paying Agent ............ 13
Section 2.04. Paying Agent to Hold Money in Trust ... 14
Section 2.05. Securityholder Lists .................. 14
Section 2.06. Transfer and Exchange ................. 14
Section 2.07. Replacement Securities ................ 15
Section 2.08. Outstanding Securities ................ 15
Section 2.09. Temporary Securities .................. 15
Section 2.10. Treasury Securities ................... 16
Section 2.11. Cancellation .......................... 16
Section 2.12. Defaulted Interest .................... 16
ARTICLE THREE
REDEMPTION
Section 3.01. Election to Redeem; Notices to
Trustee ................................ 16
Section 3.02. Selection of Securities to Be
Redeemed ............................... 17
Section 3.03. Notice of Redemption ................... 17
Section 3.04. Effect of Notice of Redemption ......... 18
Section 3.05. Deposit of Redemption Price and
Payment for Redeemed Securities ........ 18
Section 3.06. Securities Redeemed in Part ............ 18
Section 3.07. Company Purchases ...................... 18
ARTICLE FOUR
COVENANTS
Page
----
Section 4.01. Payment of Securities ................. 18
Section 4.02. Maintenance of Office or Agency ....... 19
Section 4.03. Commission Reports .................... 19
Section 4.04. Compliance Certificate ................ 20
Section 4.05. Limitation on Restricted Payments ..... 21
Section 4.06. Corporate Existence ................... 22
Section 4.07. Payment of Taxes and Other Claims ..... 22
Section 4.08. Maintenance of Properties;
Insurance and Other Matters............ 22
Section 4.09. Limitation on Transactions with
Affiliates ............................ 23
Section 4.10. Limitation on Incurrences of
Additional Indebtedness and
Issuances of Disqualified
Capital Stock ......................... 24
Section 4.11. Limitation on Payment Restrictions
Affecting Subsidiaries ................ 26
Section 4.12. Limitation on Liens ................... 26
Section 4.13. Sales of Assets ....................... 27
Section 4.14. Limitation on Change of Control ....... 30
Section 4.15. Limitation on Investments ............. 31
Section 4.16. Further Assurance to Trustee .......... 32
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, Etc. .......... 32
Section 5.02. Successor Corporation Substituted ..... 33
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ..................... 33
Section 6.02. Acceleration .......................... 35
Section 6.03. Other Remedies ........................ 36
Section 6.04. Waiver of Past Defaults ............... 36
Section 6.05. Control by Majority ................... 36
Section 6.06. Limitation on Suits ................... 36
Section 6.07. Rights of Holders to Receive Payment .. 37
Section 6.08. Collection Suit by Trustee ............ 37
Section 6.09. Trustee May File Proofs of Claim ...... 37
Section 6.10. Priorities ............................ 38
Section 6.11. Undertaking for Costs ................. 38
Section 6.12. Restoration of Rights and Remedies .... 38
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee ..................... 39
Section 7.02. Rights of Trustee ..................... 40
Section 7.03. Individual Rights of Trustee .......... 40
Section 7.04. Trustee's Disclaimer .................. 41
Section 7.05. Notice of Defaults .................... 41
Section 7.06. Reports by Trustee to Holders ......... 41
Section 7.07. Compensation and Indemnity ............ 41
Section 7.08. Replacement of Trustee ................ 42
Section 7.09. Successor Trustee by Merger, Etc. ..... 43
Section 7.10. Eligibility; Disqualifications ........ 43
Section 7.11. Preferential Collection of Claims
Against Company ....................... 43
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Company's Option to Effect
Defeasance or
Covenant Defeasance .................. 43
Section 8.02. Defeasance and Discharge .............. 43
Section 8.03. Covenant Defeasance ................... 44
Section 8.04. Conditions to Defeasance
or Covenant Defeasance ................ 44
Section 8.05. Deposited Money and U.S.
Government Obligations
to Be Held in Trust;
Other Miscellaneous
Provisions ............................ 46
Section 8.06. Reinstatement ......................... 46
ARTICLE NINE
SATISFACTION AND DISCHARGE
Page
----
Section 9.01. Satisfaction and Discharge
of Indenture........................... 47
Section 9.02. Survival of Certain Obligations........ 48
Section 9.03. Application of Trust Money............. 48
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.01. Without Consent of Holders ............ 48
Section 10.02. With Consent of Holders ............... 48
Section 10.03. Compliance with Trust Indenture Act ... 49
Section 10.04. Revocation and Effect of Consents ..... 49
Section 10.05. Notation on or Exchange of Securities . 50
Section 10.06. Trustee to Sign Amendments, Etc. ...... 50
ARTICLE ELEVEN
SINKING FUND
Section 11.01. Sinking Fund Payments ................. 50
Section 11.02. Satisfaction of Sinking Fund
Payments with Securities ............. 51
Section 11.03. Redemption of Securities for
Sinking Fund ........................ 51
ARTICLE TWELVE
MEETINGS OF SECURITYHOLDERS
Section 12.01. Purposes for Which Meeting May
Be Called ........................... 51
Section 12.02. Manner of Calling Meeting ............ 52
Section 12.03. Call of Meetings by Company or
Holders ............................. 52
Section 12.04. Who May Attend And Vote at Meetings... 52
Section 12.05. Regulations May Be Made by Trustee;
Conduct of the Meeting; Voting
Rights; Adjournment ................. 53
Section 12.06. Voting at the Meeting and Record
o Be Kept .......................... 54
Section 12.07. Exercise of Rights of Trustee or
Securityholders May Not Be
Hindered or Delayed by Call of
Meeting ............................. 54
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls .......... 54
Section 13.02. Notices ............................... 55
Section 13.03. Communication by Holders with
Other Holders ........................ 55
Section 13.04. Certificate and Opinion as to
Conditions Precedent ................. 55
Section 13.05. Statements Required in
Certificate or Opinion ............... 56
Section 13.06. Rules by Trustee and Agents ........... 56
Section 13.07. Non-Business Days ..................... 56
Section 13.08. Governing Law ......................... 56
Section 13.09. No Adverse Interpretation of Other
Agreements ........................... 57
Section 13.10. No Recourse Against Others ............ 57
Section 13.11. Successors ............................ 57
Section 13.12. Separability of Provisions ............ 57
Section 13.13. Duplicate Originals ................... 57
Section 13.14. Table of Contents, Headings, Etc. ..... 58
SIGNATURES .............................................. 58
SCHEDULE I - Indebtedness Existing on Issue Date
EXHIBIT A - FORM OF 10.25% SENIOR NOTE
DUE December 30, 2001
CROSS-REFERENCE TABLE
This Cross-Reference Table is not to be construed as part of
the Indenture or to be relevant to the interpretation thereof.
TIA Section Indenture Section
- ----------- ---------------
Section 310(a)(1) ................................. 7.10
(a)(2) ................................. 7.10
(a)(5) ................................. 7.10
(b) .................................... 7.10
Section 311(a) .................................... 7.11
(b) .................................... 7.11
Section 312(a) .................................... 2.05
(b) .................................... 13.03
(c) .................................... 13.03
Section 313(a) .................................... 7.06
(b) (1)................................. 7.06
(b) (2)................................. 7.06
(c) .................................... 7.06
(d) .................................... 7.06
Section 314(a) .................................... 4.03
(a)(4).................................. 4.04
(c)(1) ................................. 13.04
(c)(2) ................................. 13.04
(e) .................................... 13.05
Section 315(a).................................... 7.01
(b) .................................... 7.05
(c) .................................... 7.01
(d) .................................... 7.01
(e) .................................... 6.11
Section 316(a)(last sentence)...................... 2.10
(a)(1)(A) .............................. 6.02,6.05
(a)(1)(B) .............................. 6.04
(b) .................................... 6.07
(c) .................................... 12.05
Section 317(a)(1) ................................. 6.08
(a)(2) ................................. 6.09
(b) .................................... 2.04
Section 318(a) .................................... 13.01
INDENTURE, dated as of December 30, 1994, between TELEMUNDO
GROUP, INC., a Delaware corporation (the "Company"), and BANKERS TRUST
COMPANY, a New York banking corporation, as trustee (the "Trustee").
NOW, THEREFORE, each party agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the holders of the
Company's 10.25% Senior Notes due December 30, 2001:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any
of its subsidiaries, as the case may be, (a) existing at the time such
Person becomes a Subsidiary or is merged into or consolidated with the
Company or a Subsidiary or (b) assumed in connection with the acquisition
of assets from a Person, in each case, other than Indebtedness incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary,
such merger or such acquisition, as the case may be.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. 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; provided, however, that beneficial ownership of 10% or more
of the voting securities of a Person shall be deemed to be control for
purposes of this definition only; and the terms "affiliated," "controlling"
and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar (as
such terms are defined in Section 2.03 hereof).
"Apollo" means collectively, Apollo Advisors, L.P., a Delaware
limited partnership, Lion Advisors, L.P., a Delaware limited partnership,
Apollo Investment Fund, L.P., a Delaware limited partnership, Apollo
Investment Fund II, L.P., a Delaware limited partnership, or any investment
fund, investment account or other entity whose investing manager,
investment advisor or general partner, or any principal thereof, is any of
the foregoing entities or individuals or any principal or Affiliate of any
of them; provided, however, that no entity or individual shall be deemed
within the definition of Apollo when that entity or individual ceases to be
an Affiliate of any of the foregoing entities or individuals or an
investment fund, investment account or other entity whose investing
manager, investment advisor or general partner, or any principal thereof,
is any of the foregoing entities or individuals or any principal or
Affiliate of any of them.
"Asset Sale" means any sale, assignment, conveyance, transfer,
lease or other disposition, directly or indirectly, in one or a series of
related transactions, of any property or assets (whether now owned or
hereafter acquired) by the Company or any Subsidiary to any Person other
than the Company or a Subsidiary, excluding any sale, assignment, transfer
or other disposition of any property or asset in the ordinary course of
business, in connection with the granting or perfection of, or the
foreclosure upon, any Lien permitted by Section 4.12, or in connection with
any agreement entered into in connection with the New News Service.
"Average Life" means, as of the date of determination, with
reference to any Indebtedness, the quotient obtained by dividing (a) the
sum of the products of the number of years from the date of determination
to the dates of each successive scheduled principal payment of such debt
security multiplied by the amount of such principal payment by (b) the sum
of all such principal payments.
"Bankruptcy Code" means title 11 of the United States Code, as
amended from time to time.
"Bankruptcy Law" means the Bankruptcy Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the
Company or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the board of directors of such Person.
"Business Day" means any day other than a Saturday, a Sunday or
other day on which banking institutions or trust companies in the State of
New York, City of New York are not required to be open.
"Capitalized Lease Obligation" of any Person means any lease
obligation of a Person incurred with respect to real or personal property
which obligation is required to be classified and accounted for as a
capitalized lease in accordance with GAAP, and the amount of Indebtedness
represented by such obligations shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of
capital stock of such Person, including, without limitation, each class of
common stock and preferred stock of such Person or each class of
partnership interests of such Person.
"Cash Equivalent" means (a) readily marketable U.S. Government
Obligations maturing in one year or less from the date of purchase, (b)
commercial paper having the highest rating obtainable from either Moody's
Investor Service, Inc. or Standard & Poor's Corporation, Inc., (c)
certificates of deposit maturing in one year or less from the date of
purchase issued by, bankers' acceptances and deposit accounts of, and time
deposits with, commercial banks of recognized standing chartered in the
United States of America or Canada with capital, surplus and undivided
profits aggregating in excess of $250,000,000, (d) demand or fully insured
time deposits used in the ordinary course of the Company's business with
commercial banks insured by the Federal Deposit Insurance Corporation, and
(e) shares of money market funds that invest solely in Cash Equivalents of
the kind described in clauses (a) through (d), above.
"Change of Control" means an event or series of events by which
(i) any "person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly of indirectly, of more than
50% of the aggregate voting power of all the Capital Stock of the Company
normally entitled to vote in the election of directors or (ii) during any
period of two consecutive calendar years, individuals who at the beginning
of such period constituted the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination was previously
so approved) cease for any reason to constitute a majority of the directors
then in office, unless either the nomination or election of such new
directors that would otherwise cause a Change of Control under clause (ii)
above was approved by a vote of at least a majority of the directors then
still in office who were either directors at the beginning of such period
or whose nomination or election was previously so approved; provided,
however, that it shall not constitute a Change of Control for purposes of
this Indenture if, in the case of clause (i) above, Apollo and/or TLMD
and/or Reliance Insurance Company, a Pennsylvania corporation, and/or its
Affiliates (collectively, "Reliance") become the beneficial owners,
directly or indirectly, of more than 50% of the aggregate voting power of
all the Capital Stock of the Company entitled to vote in the election of
directors or, in the case of clause (ii) above, such Change of Control
would be caused by the designation of directors by Apollo, TLMD or
Reliance. Notwithstanding anything to the contrary set forth above in this
definition or in Section 4.14 of this Indenture, a "Change of Control"
shall not be deemed to have occurred for purposes of this Indenture upon
the happening of any of the events specified in clauses (i) and (ii) of
this definition, if and so long as any shares of Series B Common Stock are
issued and outstanding and the holders of such shares have the power to
elect at least a majority of the Board of Directors of the Company.
"Change of Control Date" shall have the meaning provided in
Section 4.14.
"Change of Control Offer" shall have the meaning provided in
Section 4.14.
"Change of Control Payment Date" shall have the meaning
provided in Section 4.14.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such in the first paragraph
of this Indenture unless and until a successor replaces it and, thereafter,
means the successor.
"Consolidated Cash Fixed Charges" means, with respect to any
Person, for any period, the aggregate amount of Consolidated Fixed Charges
of such Person, minus the amount of such Consolidated Fixed Charges that
was not paid, or was not, under the terms of the Indebtedness to which it
relates, required to be paid, in cash or Cash Equivalents.
"Consolidated Fixed Charges" means, with respect to any Person,
for any period, the aggregate amount (without duplication) of interest
expense, accrued in accordance with GAAP, in respect of all Indebtedness of
such Person and its consolidated subsidiaries (including (i) amortization
of original issue discount on any Indebtedness (including, in the case of
the Company, the Securities), (ii) the interest portion of all deferred
payment obligations, calculated in accordance with the effective interest
method, (iii) net interest expense under Interest Swap Obligations, and
(iv) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financings, in each
case to the extent attributable to such period). For purposes of this
definition, (A) interest on a Capitalized Lease Obligation shall be deemed
to accrue at the interest rate implicit in such Capitalized Lease
Obligation in accordance with GAAP and (B) Consolidated Fixed Charges
attributable to any Indebtedness represented by the guaranty by such Person
or a subsidiary of such Person of an obligation of a Person other than such
Person or any subsidiary of such Person shall be deemed to be the
Consolidated Fixed Charges attributable to the items guaranteed.
"Consolidated Net EBITDA" means, with respect to any Person,
for any period, (a) the Consolidated Net Income of such Person and its
subsidiaries for such period, plus (b) the sum, without duplication (and
only to the extent such amounts are deducted from net revenues in
determining such Consolidated Net Income), of (i) the provision for income
taxes for such period for such Person and its consolidated subsidiaries,
(ii) depreciation, amortization and other non-cash charges of such Person
and its consolidated subsidiaries during such period, (iii) Consolidated
Fixed Charges of such Person for such period, determined, in each case, on
a consolidated basis for such Person and its consolidated subsidiaries in
accordance with GAAP, less (c) the sum, without duplication, of (i) non-
cash items increasing Consolidated Net Income, (ii) the amount of all cash
payments made during such period to the extent such payments relate to non-
cash charges that were added back in determining Consolidated Net EBITDA
for such period, (iii) dividends of such Person and its consolidated
subsidiaries (whether in cash or otherwise (except dividends payable solely
in shares of Qualified Capital Stock)) paid, accrued or scheduled to be
paid or accrued during such period, in each case to the extent attributable
to such period and excluding items eliminated in consolidation, (iv) all
extraordinary, unusual or nonrecurring gains and losses, (v) the net income
of any subsidiary subject to any Payment Restriction to the extent of such
Payment Restriction; and (vi) the net income of any other Person acquired
in a pooling of interests transaction for any period prior to such
acquisition; and provided that the net income of any Person that is not a
subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a subsidiary limited, in the
case of a subsidiary, in accordance with GAAP.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall
be administered, which office, on the date of the execution of this
Indenture, is Four Albany Street, New York, New York, 10006, Attention:
Corporate Trust and Agency Group.
"Consolidated Net Income" means, with respect to any Person for
any period, net income (or loss) of such Person and its consolidated
subsidiaries (determined in accordance with GAAP) for such period.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage
of time (or both) would be, an Event of Default (as such term is defined in
Section 6.01 hereof).
"Disqualified Capital Stock" means, with respect to any Person,
Capital Stock of such Person that, by its terms or by the terms of any
security into which it is convertible or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be
redeemed or repurchased by such Person or its subsidiaries, including at
the option of the holder, in whole or in part, or has, or upon the
happening of an event or passage of time would have, a redemption or
similar payment due, on or prior to the Maturity Date.
"Excess Cash Flow" means, with respect to any Person, for any
period, the Consolidated Net Income of such Person for such period, (a)
plus the sum of (in each case only to the extent included in computing such
Consolidated Net Income and without duplication), (i) income tax expense
recognized by such Person and its consolidated subsidiaries for such
period, (ii) depreciation and amortization expense of such Person and its
consolidated subsidiaries accrued during such period, (iii) Consolidated
Fixed Charges of such Person and its consolidated subsidiaries for such
period, (iv) the net decrease (if any) in non-cash working capital accounts
for such Person and its consolidated subsidiaries for such period,
(v) losses arising from extraordinary transactions or the sale of material
assets and (vi) non-cash items that decreased Consolidated Net Income of
such Person and its consolidated subsidiaries for such period, in each case
determined on a consolidated basis in accordance with GAAP, (b) minus the
sum of (without duplication), (i) Consolidated Cash Fixed Charges for such
Person and its consolidated subsidiaries for such period, (ii) the net
increase (if any) in non-cash working capital accounts for such Person and
its consolidated subsidiaries for such period, (iii) amounts paid in cash
for capital expenditures (other than to the extent the same are made with
the proceeds of Indebtedness permitted to be incurred hereunder), (iv)
amounts paid in cash to make scheduled principal payments on outstanding
Indebtedness of such Person and its consolidated subsidiaries (other than
mandatory, voluntary or optional principal payments on the Securities)
during such period (excluding voluntary or optional principal payments,
principal payments made, directly or indirectly, with borrowed money, or
repayments of principal under revolving credit facilities not resulting in
the reduction of the commitment thereunder), (v) the amount of income taxes
paid in cash by such Person and its consolidated subsidiaries for such
period, (vi) any non-cash revenue for such Person and its consolidated
subsidiaries for such period, (vii) any other cash disbursements made by
such Person and its consolidated subsidiaries during such period that were
not deducted in calculating Consolidated Net Income, (viii) the net income
(or loss) of any subsidiary subject to any Payment Restriction to the
extent of such Payment Restriction, (ix) the net income (or loss) of any
other Person acquired in a pooling of interests transaction for any period
prior to such acquisition and (x) gains arising from extraordinary
transactions or the sale of material assets; and provided that the net
income (or loss) of any Person that is not a subsidiary or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid to the referent
Person or a subsidiary limited, in the case of a subsidiary, in accordance
with GAAP.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fixed Charge Coverage Ratio" means, with respect to any Person
on any date (the "Transaction Date"), the ratio of (i) the aggregate amount
of Consolidated Net EBITDA of such Person for the Reference Period to (ii)
the aggregate pro forma Consolidated Cash Fixed Charges of such Person for
the quarter in which the Transaction Date occurs and the three succeeding
quarters. For purposes of this definition, Consolidated Net EBITDA and
Consolidated Cash Fixed Charges shall be calculated after giving effect on
a pro forma basis to (a) the incurrence of any Indebtedness or the issuance
of any Disqualified Capital Stock by the Company or any Subsidiary during
the period commencing on the first day of the Reference Period, (b) the
repayment, retirement, purchase, redemption or other acquisition during the
Reference Period of any Indebtedness of such Person or any of its
subsidiaries, and (c) all Asset Sales occurring during the Reference
Period; in each case giving effect to the use of proceeds therefrom (to the
extent used to retire Indebtedness) as if such event (and use of proceeds)
had occurred, with respect to Consolidated Net EBITDA, on the first day of
the Reference Period, and with respect to Consolidated Cash Fixed Charges,
on the first day of the quarter in which the Transaction Date occurs. In
addition, for purposes of this definition, (a) Consolidated Cash Fixed
Charges attributable to any Indebtedness (whether existing or being
incurred) bearing a floating interest rate shall be computed as if the rate
in effect on the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its subsidiaries is a party to
an Interest Swap Obligation (which shall remain in effect for the 12-month
period after the first day of the quarter in which the Transaction Date
occurs) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be
used, (b) for purposes of calculating Consolidated Cash Fixed Charges, the
aggregate amount of Indebtedness of such Person outstanding under a
revolving credit facility or arrangement shall be deemed to be the greater
of (I) the outstanding balance on the Transaction Date and (II) the average
outstanding balance during the Reference Period, and (c) all members of the
consolidated group (as determined in accordance with GAAP) of such Person
on the Transaction Date that were acquired during the Reference Period
shall be deemed to have been members of the consolidated group of such
Person for the entire Reference Period, but otherwise shall be subject to
the definitions, terms and provisions of this Indenture.
"GAAP" means generally accepted accounting principles as in
effect in the United States on the date of this Indenture.
"Holder" or "Securityholder" means a Person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, (a) all
indebtedness of such Person for borrowed money evidenced by notes, bonds,
debentures or other securities; (b) reimbursement obligations relating to
letters of credit issued for the account of such Person; (c) the balance
deferred and unpaid of the purchase price of any property or services
(except accounts payable to trade creditors created or assumed by such
Person in the ordinary course of business in connection with obtaining
materials or services); (d) all indebtedness incurred by such Person in the
acquisition (whether by way of purchase, merger, consolidation or
otherwise) of any business, real property or other assets (except assets,
other than capital assets, acquired in the ordinary course of the conduct
of the acquiror's business); (e) Capitalized Lease Obligations of such
Person; (f) all obligations secured by a Lien to which the property or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such Person are subject, whether
or not the obligations secured thereby shall have been assumed by or shall
otherwise be such Person's legal liability; (g) Disqualified Capital Stock
of such Person, the amount of which shall be deemed to be the maximum fixed
redemption or repurchase price at the time of determination thereof; (h)
guaranties by such Person of indebtedness or obligations described in
clause (a), (b), (c), (d), (e), (f) or (g) of any corporation; and (i)
renewals, extensions, refundings, deferrals, restructurings, amendments and
modifications of any indebtedness, obligations or guaranties of the kind
described in clause (a), (b), (c), (d), (e), (f), (g) or (h). Indebtedness
shall not include (i) any liability for accounts payable or accrued
expenses incurred in the ordinary course of business and owed or owing by
such Person; (ii) any liability for state, local or other taxes owed or
owing by such Person; or (iii) obligations of such Person to employees in
respect of stock appreciation or similar rights.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Interest Swap Obligation" means any obligation of any Person
pursuant to any arrangement whereby, directly or indirectly, such Person is
entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional
amount in exchange for periodic payments made by such Person calculated by
applying a fixed or floating rate of interest on the same notional amount;
provided, that the term "Interest Swap Obligation" shall also include
interest rate exchange, collar, cap, swap option or similar agreements
providing interest rate protection.
"Investment" by any Person in any other Person means (a) the
acquisition (whether for cash, property, services, securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of such other Person or any agreement to make
any such acquisition; (b) the making of any deposit with, or advance, loan
or other extension of credit to, such other Person (including the purchase
of property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such Person) and
(without duplication) any amount committed to be advanced, lent or extended
to such other Person; (c) the acquisition of all or substantially all of
the assets or property of another Person; or (d) the entering into of any
guarantee of, or other contingent obligation with respect to, Indebtedness
or other liability of such other Person; provided that the term Investment
shall not include any trade credit extended by, or other advance to, such
Person (in connection with the acquisition of television programming or
otherwise) in the ordinary course of business. At the time any
determination thereof is to be made, the amount of any Investment shall be
the original amount of such Investment, without any adjustments for
appreciation, non-cash dividends, accretions, increases or decreases in
value or write-ups, write-downs, write-offs or charge-offs to or with
respect to such Investment; provided, however, that in the case of any
Investment, the original amount of such Investment shall be reduced by the
fair market value (as determined in good faith by the board of directors of
the Person making such Investment and evidenced by a Board Resolution
delivered to the Trustee) of any repayments of, sale proceeds from or
distributions made with respect to such Investment. The amount of any
Investment made in a form other than cash shall be the fair market value
thereof, as determined in good faith by the board of directors of the
Person making such Investment and evidenced by a Board Resolution delivered
to the Trustee.
"Issue Date" means December 30, 1994.
"Lien" means any mortgage, pledge, lien, encumbrance, charge,
interest or adverse claim affecting title or resulting in an encumbrance
upon or with respect to any property of any kind, real or personal, movable
or immovable, now owned or hereafter acquired, or a security interest of
any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction, excluding operating leases).
"Maturity Date" means December 30, 2001.
"Net Cash Proceeds" means with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or Cash Equivalents,
including payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or Cash Equivalents and proceeds from the
conversion of other property received when converted to cash or Cash
Equivalents, net of (a) any amounts actually applied by the Company and its
Subsidiaries to repay Indebtedness outstanding at the time of such Asset
Sale that is secured by a Lien on the property or assets sold, (b) income,
sales, transfer and similar taxes paid or reasonably estimated by the
Company to be actually payable by the Company and its Subsidiaries as a
result thereof, (c) the direct, out-of-pocket expenses of the Company and
its Subsidiaries, including, without limitation, reasonable brokerage fees,
investment banking fees, and fees and expenses of counsel, incurred and
required to be paid to any Person as a result of such sale, (d) the amount
of any liabilities associated with such assets required to be paid or
retained by the Company or any Subsidiary thereof, as the case may be, in
connection with or after such sale or other disposition of such assets and
(e) the aggregate amount of reserves required in the Company's reasonable
judgment to be maintained on the books of the Company and its Subsidiaries
in order to pay contingent liabilities with respect to such sale or other
disposition of assets; provided, that any such reserve shall become Net
Cash Proceeds when and to the extent it is reduced or eliminated.
"New News Service" means a service provided by the Company, a
Subsidiary, or a corporation, partnership, joint venture, or similar entity
in which the Company and/or any of its Subsidiaries own, directly or
indirectly, at least a 25% equity interest, which service will provide
Spanish-language news programming.
"Officer" means, with respect to the Company, the Chairman of
the Board, any President, any Vice President, the Chief Financial Officer,
the Controller, the Secretary or the Treasurer of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and the Assistant Secretary or Assistant
Treasurer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee, which counsel may be an
employee of or counsel to the Company or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company
that is pari passu in right of payment with the Securities.
"Payment Restriction" means any consensual encumbrance,
restriction or limitation on the ability of (a) any Subsidiary to (i) pay
dividends or make other distributions on its Capital Stock owned by, or
make payments on any obligation, liability or Indebtedness owed to the
Company or any Subsidiary, (ii) make loans or advances to the Company or
any Subsidiary, or (iii) transfer any of its properties or assets to the
Company or any Subsidiary, or (b) the Company or any Subsidiary to receive
or retain any such amounts set forth in clause (i), (ii) or (iii), above.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Qualified Capital Stock" of any Person means any and all
Capital Stock of such Person that is not Disqualified Capital Stock.
"Redemption Date", when used with respect to any Security to be
redeemed pursuant to any provision of this Indenture, means the date fixed
for such redemption by or pursuant to this Indenture and Paragraph 5 or 6
in the form of Security annexed to this Indenture as Exhibit A.
"Redemption Price", when used with respect to any Security to
be redeemed pursuant to any provision of this Indenture, means the price at
which it is to be redeemed by or pursuant to Paragraph 5 or 6 in the form
of Security annexed to this Indenture as Exhibit A.
"Reference Period" with respect to any Person means the four
most recent consecutive full fiscal quarters of such Person ended (a), in
the case of any fiscal quarter other than a fiscal quarter ended December
31 of any fiscal year, not less than 45 days and (b), in the case of any
fiscal quarter ended December 31 of any fiscal year, not less than 90 days,
prior to any date upon which any determination is to be made pursuant to
the terms of the Securities or this Indenture.
"Refinancing Indebtedness" means Indebtedness the proceeds from
the issuance and sale of which are used to redeem Securities pursuant to
Paragraph 5 or 6 thereof on the earliest date permitted thereunder, in a
principal amount not in excess of the principal amount of the Securities so
refinanced (plus premiums, accrued interest, and out-of-pocket fees and
expenses); provided that Refinancing Indebtedness of the Company that
repays less than 100% of the then outstanding Securities shall not have an
Average Life less than the Securities to be so refinanced at the time of
such incurrence.
"Restricted Payment" means (a) declaring or paying any dividend
or distribution (whether made in cash, property or securities) on any
shares of Capital Stock of the Company (except a dividend payable solely in
shares of Qualified Capital Stock of the Company or in the form of options,
warrants or other rights to acquire Qualified Capital Stock of the
Company), (b) the redemption, repurchase, retirement or other acquisition
for value of any shares of Capital Stock of the Company, or warrants,
options or other rights to purchase or acquire shares of any Capital Stock
of the Company, or (c) any payment of principal, purchase, redemption,
defeasance (including, but not limited to, in-substance or legal
defeasance) or other acquisition or retirement for value, directly or
indirectly (including by way of an amendment of the terms of any
Indebtedness in anticipation of or in connection with any retirement or
acquisition of such Indebtedness) by the Company or a Subsidiary in respect
of Indebtedness of the Company or any Subsidiary that is subordinated or
junior in right of payment to the Securities (other than (x) in exchange
for Qualified Capital Stock of the Company or (y) in exchange for, or with
the proceeds from the substantially concurrent issuance of, Subordinated
Indebtedness in a principal amount (or, if such Indebtedness provides for
an amount less than the principal amount thereof to be due and payable upon
the acceleration thereof, with an original issue price) not in excess of
the principal amount of the Indebtedness being acquired in exchange
therefor or with the proceeds therefrom (plus premiums, accrued interest,
and reasonable out-of-pocket fees and expenses)).
"Securities" means the Company's 10.25% Senior Notes Due
December 30, 2001, issued under this Indenture.
"Series B Common Stock" means the Series B Common Stock, par
value $.01 per share, of the Company.
"Stated Maturity" when used with respect to any Indebtedness
means the date specified in such Indebtedness as the fixed date on which
the final installment of principal of such Indebtedness is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
that is subordinated in right of payment to the Securities.
"Subsidiary" means (a) a corporation, a majority of whose
Capital Stock having the right to vote for the election of directors is, at
the time, directly or indirectly owned by (i) the Company, (ii) the Company
and one or more Subsidiaries of the Company or (iii) one or more
Subsidiaries of the Company or (b) any other Person (other than a
corporation) in which (i) the Company, (ii) the Company and one or more
Subsidiaries of the Company or (iii) one or more Subsidiaries of the
Company, directly or indirectly, at the date of determination thereof, have
at least a majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended.
"TLMD" means TLMD Partners II, L.L.C., a Delaware limited
liability company, and its Affiliates, members (including voting committee
members), investing managers and investment advisors, or any investment
fund, investment account or other entity whose investing manager,
investment advisor or general partner, or any principal thereof, is any of
the foregoing entities or individuals or any principal or Affiliate of any
of them; provided, however, that no entity or individual shall be deemed
within the definition of TLMD when that entity or individual ceases to be
an Affiliate of any of the foreoing entities or individuals or an
investment fund, investment account or other entity whose investing
manager, investment advisor or general partner, or any principal thereof,
is any of the foregoing entities or individuals or any principal or
Affiliate of any of them.
"Trustee" means the party named as such in this Indenture until
a successor replaces it and thereafter means the successor.
"Trust Officer" means when used with respect to the Trustee,
any officer within the Corporate Trust and Agency Group (or any successor
group) of the Trustee including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any
of the above designated officers and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Person in which the Company
and/or any Subsidiary has an equity ownership interest of at least 20% or
more but which collectively is less than a majority equity ownership
interest of such Person.
"U.S. Government Obligations" means direct obligations of the
United States for the payment of which the full faith and credit of the
United States is pledged and which are not callable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.
Section 1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms, if used in this Indenture, have the
following meanings:
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Securityholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the
Trustee.
"Obligor" on the Indenture Securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by the TIA by reference to another statute or defined by
Commission rule under the TIA have the meanings assigned to them thereby.
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular; and
(5) any gender used in this Indenture shall be deemed to
include the neuter, masculine or feminine genders.
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating.
The Securities and the certificate of authentication shall be
substantially in the form of Exhibit A, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by this Indenture to be determined by the Officers of the Company executing
the Securities, as evidenced by their execution of such Securities.
Securities in the aggregate principal amount of up to $116,889,000 (except
as otherwise provided in Section 2.07 hereof) may be executed by the
Company and authenticated by the Trustee as provided herein upon receipt by
the Trustee of an Officers' Certificate and Opinion of Counsel reasonably
satisfactory to it of the due authorization of and binding effect of the
Securities and of compliance with all applicable regulations relating to
the issuance thereof. The provisions of Exhibit A are part of this
Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rules or usage. The Company shall approve
the form of the Securities and any notation, legend or endorsement on them.
Each Security shall be dated the date of its authentication.
Section 2.02. Execution and Authentication.
Two Officers, or an Officer and the Assistant Secretary of the
Company shall sign the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices on the date of such
Securities.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue in
the aggregate principal amount of up to $116,889,000 upon a written order
of the Company signed by two Officers or by an Officer and an Assistant
Secretary of the Company. The aggregate principal amount of Securities
outstanding at any time may not exceed that amount (except as provided in
Section 2.07 hereof).
The written order of the Company may also request the Trustee
to authenticate certificates representing Securities bearing any notation,
legend or endorsement permitted by Section 2.01 or to remove any such
notation legend or endorsement.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with the Company or its
Affiliates.
Securities shall be issued only in registered form without
coupons in denominations of $100 and any integral multiple thereof.
Section 2.03. Registrar and Paying Agent.
So long as any of the Securities remain outstanding, the
Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may have one or more co-
registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent
and shall furnish the Trustee with an executed counterpart of any such
agency agreement. If the Company fails to maintain or act as a Registrar
or Paying Agent, the Trustee shall act as such after the Trustee is
notified of such failure and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be
maintained by the Company in the Borough of Manhattan, the City of New
York. The Company initially designates the Trustee as the Registrar and a
Paying Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by such Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. While
any such Default continues, the Trustee may require a Paying Agent to pay
all moneys held by it to the Trustee. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee. Upon doing so,
such Paying Agent (other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company acts as Paying Agent, it
shall segregate and hold as a separate trust fund all money held by it as
Paying Agent.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names
and addresses of Securityholders. If the Trustee is not the Registrar, the
Company shall furnish or cause to be furnished to the Trustee on or before
each semiannual interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of such date as
the Trustee may reasonably require, of the names and addresses of
Securityholders.
Section 2.06. Transfer and Exchange.
When a Security is presented to the Registrar or a co-registrar
with a request to register a transfer of Securities, the Registrar or co-
registrar shall register the transfer as requested if the requirements of
the Registrar or co-registrar are met. When Securities are presented to
the Registrar or a co-registrar with a request to exchange them for an
equal principal amount of Securities of other authorized denominations, the
Registrar or co-registrar shall make the exchange as requested if the
requirements of the Registrar or co-registrar are met. The Company shall
cooperate with the Registrar or co-registrar in meeting its requirements.
To permit transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. The Registrar or
co-registrar may charge the Company a reasonable fee for any transfer or
exchange and may require payment by the transferor or the transferee, as
appropriate, of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, but not for any exchange
pursuant to Section 2.09, 3.06 or 10.05 hereof.
The Company shall not be required (a) to issue, register the
transfer of, or exchange any Security during a period beginning at the
opening of business 15 days before the day of mailing of a notice of
redemption of Securities selected for redemption and ending at the close
of business on the date of such mailing, or (b) to register the transfer of
or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
If the Registrar is presented with a request to register a
transfer of a certificate representing any Securities bearing a notation,
legend or endorsement restricting the transfer of such Security, the
Registrar shall register such transfer only upon receipt of an Opinion of
Counsel from the Holder of such Securities, in substance reasonably
satisfactory to the Registrar and the Company, that such transfer may be
registered. The Registrar shall make a record of all certificates
representing Securities bearing a notation, legend or endorsement
restricting the transfer of such certificate, and shall notify the Company
promptly and prior to the registration of the proposed transfer of any such
certificate of a request to so register a proposed transfer.
Section 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the requirements of the Trustee are
met. An indemnity bond may be required that is sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Security is replaced.
The Company may charge for its expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee, except for those cancelled by it and those
described in this Section 2.08 as not outstanding. Except as provided in
Section 2.10 hereof, a Security does not cease to be outstanding because
the Company or any Subsidiary holds the Security.
If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Security is held by a bona fide purchaser.
If any Paying Agent holds on a Redemption Date or the Maturity
Date money received by the Paying Agent pursuant to this Indenture and
sufficient to pay the principal and interest on Securities payable on that
date or if Securities are considered paid on a date under Section 4.01,
then on and after that date such Securities cease to be outstanding and
interest on them ceases to accrue.
Except as otherwise provided in Article Eight of this
Indenture, Securities with respect to which the Company has effected either
defeasance pursuant to Section 8.02 or covenant defeasance pursuant to
Section 8.03 shall cease to be outstanding upon effectuation by the Company
of such defeasance or covenant defeasance.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate
for temporary Securities. Holders of temporary Securities shall be
entitled to the same rights and privileges as Holders of definitive
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities surrendered to the Trustee.
Section 2.10. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, amendment,
supplement, waiver, or consent, Securities owned (a) for purposes of
Sections 6.02, 6.04 and 6.05, by the Company and Subsidiaries of the
Company and, to the extent required by Section 316(a) or Section 315(d)(3)
of the TIA, Affiliates of the Company and (b) for all other purposes, by
the Company and Subsidiaries of the Company, shall be disregarded, both in
determining the aggregate principal amount of Securities concurring in any
such direction, amendment, supplement, waiver or consent and the aggregate
principal amount of Securities outstanding for purposes of determining
whether the holders of the requisite percentage of Securities concurred in
any such direction, amendment, supplement, waiver or consent, except that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, amendment, supplement, waiver or consent,
only Securities that a Trust Officer of the Trustee knows or has reason to
know are so owned shall be disregarded.
Section 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities
surrendered for transfer, exchange, payment or cancellation and shall
destroy cancelled Securities and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver cancelled
Securities to the Company. The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest in any lawful manner. It
may pay the defaulted interest to the Persons who are Securityholders on a
subsequent special record date fixed by the Company. The Company shall set
the payment date as of a date no later than 30 days after such special
record date. At least 15 days before such special record date, the Company
shall mail to each Securityholder a notice that states the special record
date, the payment date, and the amount of defaulted interest to be paid.
ARTICLE THREE
REDEMPTION
Section 3.01. Election to Redeem; Notices to Trustee.
In addition to any redemption of Securities required to be made
hereunder or through the operation of the sinking fund provided for in
Article Eleven hereof, the Securities may be redeemed, as a whole or from
time to time in part, at the election of the Company, by payment thereof in
accordance with Paragraph 5 of the Securities.
If the Company elects or is required to redeem Securities
pursuant to the terms hereof, the Company shall, at least 45 days prior to
the Redemption Date fixed by the Company, notify the Trustee in writing of
such Redemption Date and of the principal amount of Securities to be
redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant
to Section 3.02 hereof.
Section 3.02. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed, the
Trustee shall select, not more than 60 days prior to the Redemption Date,
either pro rata or by lot or by a method the Trustee considers fair and
appropriate, the Securities to be redeemed from outstanding Securities not
previously called for redemption. The Trustee shall select Securities for
redemption in amounts of $100 or, for Securities that have denominations
larger than $100, portions of the principal amount thereof in integral
multiples of $100. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail,
postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of
accrued and unpaid interest to the Redemption Date;
(3) the name and address of the Paying Agent;
(4) if any Security is to be redeemed in part only, the
portion of the principal amount to be redeemed;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price;
(6) that, unless the Company defaults in making the
redemption payment, interest on Securities or portions thereof
called for redemption ceases to accrue on and after the
Redemption Date;
(7) the CUSIP number, if any, relating to such
Securities;
(8) that, on or after the Redemption Date, upon
surrender of any Security to be redeemed in part only, a new
Security or Securities in principal amount equal to the
unredeemed portion thereof will be issued; and
(9) that the redemption is for the sinking fund, if such
is the case.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption shall become due and payable on the Redemption Date at the
Redemption Price. Upon surrender to the Paying Agent, such Securities
shall be paid on the Redemption Date at the Redemption Price. If a
Redemption Date is a date other than a Business Day, payment shall be made
on the next succeeding Business Day and no interest shall accrue for the
period from such Redemption Date to such succeeding Business Day.
Section 3.05. Deposit of Redemption Price and Payment for
Redeemed Securities.
Prior to, or upon the opening of business on, the Redemption
Date, the Company shall deposit with the Trustee or with the Paying Agent
(if other than the Trustee) or, if the Company is the Paying Agent, shall
segregate and hold in trust, U.S. Legal Tender sufficient to pay the
Redemption Price.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part,
the Trustee shall authenticate for the Holder a new Security or Securities
equal in aggregate principal amount to the unredeemed portion of the
Security surrendered in a denomination of $100 or any integral multiple
thereof.
Section 3.07. Company Purchases.
Notwithstanding anything in this Indenture or the Securities to
the contrary, nothing herein or therein shall be construed or interpreted
to prevent or inhibit the Company or its Subsidiaries from purchasing the
Securities at any time or from time to time whether in the open market,
upon any exchange where the Securities may be listed for trading, by tender
or exchange offer, by privately negotiated purchases, or otherwise. Any
Securities so purchased by the Company or its Subsidiaries shall be
delivered to the Trustee for cancellation and shall be applied by the
Company toward its sinking fund and other redemption obligations under this
Indenture.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities. An
installment of principal or interest shall be considered paid on the date
it is due if the Trustee or Paying Agent holds such installment on the date
such installment is due.
The Company shall pay interest on overdue principal at the rate
borne by the Securities. It shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
So long as any of the Securities remain outstanding, the
Company will maintain in the Borough of Manhattan, City and State of New
York an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where any of the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, City and State of
New York, for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
Section 4.03. Commission Reports.
(a) The Company shall file with the Trustee, within 15 days
after it files them with the Commission, copies of the annual, quarterly
and periodic reports, and of the information, documents and other reports,
which the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. If the Company is not subject to
the requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the Trustee, within 15 days after it would have been
required to file such information with the Commission, financial
statements, including any notes thereto (and with respect to annual
reports, an auditors' report by a firm of established national reputation),
and a "Management's Discussion and Analysis of Financial Condition and
Results of Operations," both comparable to that which the Company would
have been required to include in the annual and quarterly reports the
Company would have been required to file if the Company were subject to the
requirements of Section 13 or 15(d) of the Exchange Act. The Company also
shall comply with the provisions of TIA Section 314(a).
(b) If the Company is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, so long as any
Securities remain outstanding, the Company shall cause any annual report to
stockholders and any quarterly or other financial reports furnished by it
to stockholders to be filed with the Trustee at the time of such mailing or
furnishing to stockholders. If the Company is not required to furnish
annual or quarterly reports to its stockholders pursuant to the Exchange
Act, the Company shall cause its financial statements referred to in
Section 4.03(a) above, including any notes thereto (and with respect to
annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," comparable to that which would have
been required to appear in annual or quarterly reports filed under Section
13 or 15(d) of the Exchange Act to be filed with the Trustee within 105
days after the end of each of the Company's fiscal years and within 60 days
after the end of each of the Company's first three fiscal quarters of such
fiscal year. The Trustee will make available for inspection and copying
by, and will provide copies to, each Holder requesting the reports
described in this Section 4.03(b).
(c) The Company shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information that
the Trustee may be required to provide to the Holders upon request under
Section 4.03(b) to permit the Trustee to satisfy that requirement.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, a certificate of the
principal executive officer, the principal financial officer or the
principal accounting officer stating that a review of the activities of the
Company and its Subsidiaries during the preceding period has been made
under the supervision of the signing Officer with a view to determining
whether the Company (together with its Subsidiaries, taken as a whole) has
kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company (together
with its Subsidiaries, taken as a whole) has kept, observed, performed and
fulfilled each and every covenant or condition contained in this Indenture
and is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge, no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the
Securities are prohibited or if such event has occurred, a description of
the event and what action the Company is taking or proposes to take with
respect thereto. The Trustee will provide a copy of such certificate to
each Holder requesting the same.
(b) So long as not contrary to the then current requirements
of the American Institute of Certified Public Accountants, the annual
financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that
in making the examination necessary for certification of such annual
financial statements nothing has come to their attention that would lead
them to believe that there then exists or existed during the period covered
by such annual financial statements any Default or Event of Default under
this Indenture or, if any such Default or Event of Default has occurred,
specifying the nature and period of existence thereof, it being understood
that such accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such Default or Event of
Default. The Trustee will provide a copy of such statement to each Holder
requesting the same.
(c) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee as soon as possible and in any event
within five Business Days of any Officer becoming aware of any Default,
Event of Default or default in the performance of any covenant or agreement
contained in this Indenture, an Officers' Certificate specifying such
Default, Event of Default or default and what action the Company is taking
or proposes to take with respect thereto.
Section 4.05. Limitation on Restricted Payments.
Except as provided herein, the Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make any
Restricted Payment if, at the time of such Restricted Payment, or after
giving effect thereto (on a pro forma basis), (a) a Default or an Event of
Default shall have occurred and be continuing; (b) the Company shall not be
able to incur $1.00 of Indebtedness pursuant to Section 4.10(b), and
(c) the aggregate amount expended for all Restricted Payments, including
such Restricted Payment (the amount of any Restricted Payment, if other
than cash, to be the fair market value thereof at the date of payment, as
determined in good faith by the Board of Directors, which determination
shall be evidenced by a Board Resolution) shall exceed the sum of (i) 25%
of the aggregate cumulative Excess Cash Flow accrued on a cumulative basis
during the period commencing on the Issue Date and ending on the last day
of the fiscal quarter of the Company ending prior to the date of such
Restricted Payment plus (ii) the aggregate net proceeds, including the fair
market value of property other than cash, received by the Company
subsequent to the Issue Date from capital contributions or the issuance of
Qualified Capital Stock, including, without limitation, issuances of
Qualified Capital Stock of the Company upon the exercise of any options,
warrants or rights to purchase shares of Qualified Capital Stock of the
Company; provided, however, that the declaration or payment of any dividend
or distribution on any Capital Stock of any Subsidiary to the Company or
any other Subsidiary or the purchase, redemption or other acquisition or
retirement for value of (i) any Capital Stock of any Subsidiary held by the
Company or any other Subsidiary or (ii) the Capital Stock of the Company or
any of its Subsidiaries held by any employee of the Company or any of its
Subsidiaries upon termination of employment with the Company or any of its
Subsidiaries shall not constitute a Restricted Payment and shall not in any
other manner be restricted under this Indenture.
Notwithstanding the foregoing, if no other Default or Event of
Default shall have occurred and be continuing or would occur as a
consequence thereof, the provisions set forth in the immediately preceding
paragraph will not prevent (a) the payment of any dividend within 60 days
after the date of its declaration if the dividend would have been permitted
under the foregoing provisions on the date of the declaration; or (b) the
acquisition of any shares of Capital Stock of the Company in exchange for
or solely out of the proceeds of the substantially concurrent sale (other
than to a Subsidiary) of shares of Qualified Capital Stock; provided, that
the declaration of each dividend paid in accordance with clause (a) above
and each acquisition made in accordance with clause (b) above, shall be
counted for purposes of computing amounts expended pursuant to clause (c)
in the immediately preceding paragraph.
Section 4.06. Corporate Existence.
Subject to Article Five, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, and the rights (charter and statutory) and material
franchises and licenses of the Company and its Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
franchise or license if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries and that the loss thereof is not, and
will not be, adverse in any material respect to the Holders; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of its property or assets in compliance
with the terms of this Indenture.
Section 4.07. Payment of Taxes and Other Claims.
The Company will pay and discharge or cause to be paid and
discharged all material taxes, assessments and governmental charges or
levies imposed upon the Company or any Subsidiary or upon any of their
respective income, profits or properties, prior to the date on which
penalties attach thereto, and all material lawful claims which, if unpaid,
might become a lien upon any material properties of the Company or any of
its Subsidiaries, except to the extent such taxes, assessments or
governmental charges or levies are being contested in good faith and are
adequately reserved against in accordance with GAAP.
Section 4.08. Maintenance of Properties; Insurance and Other
Matters.
The Company shall, and shall cause each of its Subsidiaries to,
maintain its properties and assets in good working order and condition and
make all repairs, renewals, replacements, additions, betterments and
improvements thereto, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times. The Company shall
cause each of its Subsidiaries that holds a license from the Federal
Communications Commission to take any and all such actions, and to refrain
from any and all such other actions, as may reasonably be prudent to
preserve such licenses in full force and effect, to avoid any impairment or
restriction affecting such licenses and to secure renewals of such licenses
in due course; provided, however, that nothing in this Section 4.08 shall
prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any properties (including broadcast licenses)
if, in the reasonable judgment of the Board of Directors evidenced by a
Board Resolution to that effect, such discontinuance would not have a
material adverse effect on the business, earnings, properties, prospects,
assets or financial condition of the Company and its Subsidiaries, taken as
a whole; would be desirable in the conduct of the business of the Company
or the Subsidiary, as the case may be; and would not be disadvantageous in
any material respect to the Holders of the Securities.
The Company shall, and shall cause each of its Subsidiaries to,
maintain with financially sound and reputable insurers such insurance as
may be required by law and such other insurance, to such extent and against
such hazards and liabilities, as is customarily maintained by companies
similarly situated with like properties.
The Company shall keep true books of records and accounts in
which full and correct entries will be made of all its business
transactions, in accordance with sound business practices, and reflect in
its financial statements adequate accruals and appropriations to reserves
all in accordance with GAAP. The Company shall cause its books of record
and account and those of each of its Subsidiaries to be examined, either on
a consolidated or individual basis, by one or more firms of independent
public accountants not less frequently than annually and shall not make any
change in the accounting principles applied to its financial statements not
concurred in by such firm or firms. The Company shall prepare its
financial statements in accordance with GAAP.
The Company shall, and shall cause each of its Subsidiaries to,
do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, material rights and franchises, except to
the extent specifically permitted by this Indenture, and except in those
cases in which the Board of Directors reasonably determines as evidenced by
a Board Resolution to that effect that the failure to keep the same in full
force and effect would not have a material adverse effect on the business,
earnings, properties, prospects, assets or financial condition of the
Company and its Subsidiaries, taken as a whole; would be desirable in the
conduct of the business of the Company or the Subsidiary, as the case may
be; and would not be disadvantageous in any material respect to the Holders
of the Securities.
The Company shall, and shall cause each of its Subsidiaries to,
comply in all material respects with all statutes, laws, ordinances, or
government rules and regulations to which it is subject.
Section 4.09. Limitation on Transactions with Affiliates.
(a) The Company will not, nor will any of its
Subsidiaries be permitted to, directly or indirectly, enter into or suffer
to exist any transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of assets,
property or services) with any Affiliates of the Company (other than a
wholly-owned Subsidiary) unless such transaction or series of related
transactions is on terms that are no less favorable to the Company or such
Subsidiary, as the case may be, than would be available at the time of such
transaction or transactions in a comparable transaction in arm's-length
dealings with an unaffiliated third party and, with respect to a
transaction or series of related transactions involving aggregate payments
equal to or greater than $5,000,000, such transaction or series of related
transactions is approved by a majority of the Board of Directors who are
disinterested (within the meaning of Section 144(a)(1) of the General
Corporation Law of the State of Delaware as in effect on the Issue Date)
with respect to such transaction or series of related transactions.
(b) Notwithstanding the foregoing, the restrictions in
this Section 4.09 shall not apply to (i) the performance by the Company of
its obligations hereunder or under the Securities, (ii) the payment of
reasonable and customary regular fees and compensation to, and the making
of loans or advances (or guarantees in respect thereof and payments
thereunder) made in the ordinary course of business to, officers,
directors, and employees of the Company or any Subsidiary, (iii) the making
of loans or advances (or guarantees in respect thereof and payments
thereunder) made outside the ordinary course of business (and approved by a
majority of the Board of Directors who are disinterested (within the
meaning of Section 144(a)(1) of the General Corporation Law of the State of
Delaware as in effect on the Issue Date) to officers, directors or
employees of the Company or any Subsidiary, (iv) any Restricted Payment
that is made in compliance with the provisions of Section 4.05 hereof, (v)
transactions exclusively between or among the Company and any of its
Subsidiaries or exclusively between or among any such Subsidiaries, (vi)
transactions permitted by, and complying with, the provisions of Section
5.01 hereof, (vii) the payment of amounts by the Company to one or more of
its Affiliates pursuant to a tax sharing agreement or otherwise for the
payment of the Company's income tax obligations, (viii) transactions in the
ordinary course of business that, in the aggregate, do not exceed
$1,000,000 in any fiscal year, or (ix) any transaction arising out of any
agreement entered into in connection with the New News Service or in any
agreement existing on the date of this Indenture.
Section 4.10. Limitation on Incurrences of Additional
Indebtedness and Issuances of Disqualified Capital Stock.
(a) Except as set forth in this Section 4.10, the
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, incur, assume, guarantee, become directly or
indirectly liable, contingently or otherwise, with respect to, extend the
maturity of, or otherwise become responsible for the payment of
(collectively, "incur") any Indebtedness or issue any Disqualified Capital
Stock from and after the Issue Date. For purposes of this Indenture,
Indebtedness incurred and Disqualified Capital Stock issued by any Person
that is not a Subsidiary, which Indebtedness is outstanding at the time
such Person becomes, or is merged into or consolidated with, the Company or
a Subsidiary shall be deemed to have been incurred or issued, as the case
may be, at the time such Person becomes, or is merged into or consolidated
with, the Company or a Subsidiary.
(b) The Company and any Subsidiary may incur
Indebtedness if (i) no Default or Event of Default shall have occurred and
be continuing at the time or as a consequence of the incurrence of such
Indebtedness and (ii) on the date of the incurrence of such Indebtedness,
the Fixed Charge Coverage Ratio of the Company and its Subsidiaries, on a
pro forma basis after giving effect to such incurrence and the use of the
proceeds therefrom, would equal or exceed 1.5 to 1.
(c) The Company may incur Indebtedness evidenced by the
Securities and other obligations under this Indenture and any Subsidiary
may guaranty the Securities under this Indenture.
(d) The Company or any Subsidiary may incur Refinancing
Indebtedness.
(e) The Company may incur Indebtedness to any Subsidiary
and any Subsidiary may incur Indebtedness to the Company or to another
Subsidiary.
(f) The Company or any Subsidiary may incur Indebtedness
solely for the purpose of, and the proceeds of which are used solely for,
the purchase of (including the payment of any early termination fees on the
leases for) any real or tangible personal property (including Capitalized
Lease Obligations) used in the Company's or any Subsidiary's business;
provided, that the aggregate principal amount of Indebtedness at any one
time outstanding pursuant to this paragraph (f) shall not exceed
$20,000,000.
(g) The Company or any Subsidiary may incur Indebtedness
in the ordinary course of business under a working capital facility or
facilities (including without limitation, any reimbursement obligations in
connection with letters of credit or bankers acceptances issued thereunder
and Indebtedness, if any, arising upon the extinguishment of such
reimbursement obligations); provided, that the aggregate principal amount
of Indebtedness at any one time outstanding pursuant to this paragraph (g)
shall not exceed $25,000,000.
(h) The Company or any Subsidiary may incur or guaranty
Indebtedness solely for the purpose of, and the proceeds of which are used
solely for, the making of an Investment in the New News Service; provided,
that the aggregate principal amount of Indebtedness at any one time
outstanding pursuant to this paragraph (h) shall not exceed $20,000,000.
(i) The Company or any Subsidiary may incur Indebtedness
in the form of surety bonds or appeal bonds required in the ordinary course
of business in connection with the enforcement of rights or claims of the
Company or a Subsidiary in connection with judgments that do not result in
a Default under this Indenture.
(j) The Company or any Subsidiary may incur any
Indebtedness (including Capitalized Lease Obligations) existing on the
Issue Date and set forth on Schedule I.
(k) The Company or any Subsidiary may incur any
Indebtedness used for the refinancing, renewal, extension or replacement of
Indebtedness listed in clause (b) or clauses (e)-(j); provided that the
aggregate principal amount of Indebtedness represented thereby does not
exceed the principal amount of such Indebtedness being renewed, extended,
substituted, refunded, refinanced or replaced (or, if such Indebtedness
provides for any amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof, such lesser amount
as of the date of determination) plus accrued interest thereon, plus, in
the case of refinancings, the amount of any premium or other payment
required to be paid under the terms of the instrument governing such
Indebtedness or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated purchase and, in each case, actually paid,
plus the amount of expenses of the Company incurred in connection with such
refinancing, and such renewal, extension, substitution, refinancing or
replacement does not reduce the Average Life or the Stated Maturity of such
Indebtedness.
Section 4.11. Limitation on Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create or suffer to exist or allow to become
effective any Payment Restriction with respect to any of its Subsidiaries,
except for (a) restrictions contained in this Indenture, (b) customary
provisions restricting subletting or assignment of any agreement entered
into in the ordinary course of business consistent with past practice,
(c) Liens permitted under Section 4.12(f) and customary provisions in
instruments or agreements relating to Liens permitted under Section
4.12(f), which encumbrance or restriction is not applicable to any property
or assets other than the property or assets subject to such Lien, (d)
restrictions contained in Indebtedness permitted under Section 4.10(f), (g)
or (h), which may impose Liens only on the assets or properties purchased
with the proceeds of such Indebtedness in accordance with Section 4.10(f),
(g) or (h), (e) restrictions contained in Indebtedness constituting
Acquired Indebtedness, provided, that such restriction is not applicable to
any Person, or the properties or assets of any Person, other than the
Person so acquired, (f) customary restrictions contained in Indebtedness
permitted under Section 4.10(d), provided that any such restrictions are no
less favorable to the holders of the Securities than those contained in
this Indenture, (g) any restriction contained in contracts for sales of
assets permitted by Section 4.13 with respect to assets to be sold pursuant
to such contracts, (h) any restriction required by any regulatory authority
and any restriction existing under, or by reason of, applicable law, (i)
any restriction contained in any agreement entered into in connection with
the New News Service or in an agreement in effect on the date of this
Indenture, or (j) any restriction existing under any agreement that
extends, renews, refinances or replaces any agreement containing
restrictions described in clauses (c), (d), (e), and (f) above.
Section 4.12. Limitation on Liens.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Liens
upon any of their respective assets or any income or profits therefrom, or
assign or convey any right to receive income therefrom, except for:
(a) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being contested in
good faith and by appropriate proceedings promptly instituted and
diligently conducted, if adequate reserves with respect thereto are
maintained in accordance with GAAP;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens, including landlord's Liens
under operating leases, arising in the ordinary course of business with
respect to amounts not yet delinquent or being contested in good faith and
by appropriate proceedings, if adequate reserves with respect thereto are
maintained in accordance with GAAP;
(c) Liens to secure pledges or deposits made in the
ordinary course of business to secure nondelinquent obligations arising
under statutory or regulatory requirements, including worker's
compensation, unemployment insurance and similar legislation;
(d) Liens to secure the performance of public statutory
obligations that are not delinquent, appeal bonds, judgment bonds, surety
bonds, performance bonds and other obligations of a like nature (or other
than for borrowed money);
(e) Zoning restrictions, consents, reservations,
encumbrances, easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances existing
on the date the Company or a Subsidiary acquires the property to which they
attach, which Liens do not (i) secure Indebtedness or the deferred purchase
price of any asset or (ii) interfere in any material respect with the
business of the Company or any of its Subsidiaries;
(f) Liens upon real, tangible personal and/or intangible
property acquired after the date hereof (by purchase, construction or
otherwise) (including Capitalized Lease Obligations) by the Company or any
of its Subsidiaries securing Indebtedness permitted by Section 4.10;
provided that no such Lien shall be in an amount in excess of the face
amount of the Indebtedness that it secures, or extend to or cover any
property of the Company or such Subsidiary other than the respective
property so acquired and improvements thereon;
(g) Liens existing, or provided for under arrangements
existing, as of the Issue Date;
(h) judgment and attachment Liens not giving rise to an
Event of Default;
(i) Liens securing Acquired Indebtedness, provided, that
such Liens do not extend to or cover any property or assets of the Company
or any Subsidiary other than the property or assets acquired;
(j) Liens securing Indebtedness under a working capital
facility or facilities permitted by Section 4.10(g) hereof;
(k) Liens securing Refinancing Indebtedness, provided
that the proceeds of such Refinancing Indebtedness are used to redeem 100%
of the then outstanding Securities;
(l) Liens which may be, directly or indirectly, created,
incurred, assumed or existing on the Company's or any Subsidiary's equity
interest in the New News Service; and
(m) any extension, renewal or replacement of the
foregoing (a)-(j) and (l), provided that the Liens permitted by this clause
(m) shall not be spread to cover any additional Indebtedness.
Section 4.13. Sales of Assets.
(a) The Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, consummate an Asset Sale
unless (i) no Default or Event of Default shall have occurred and be
continuing at the time of the Asset Sale and (ii) 85% of the proceeds
thereof are in the form of cash or Cash Equivalents and 100% of the Net
Cash Proceeds from such Asset Sale are applied either (x) to invest in
assets directly related to the business of the Company or its Subsidiaries,
provided that a definitive agreement to reinvest the Net Cash Proceeds is
consummated within 120 days after the receipt thereof, or (y) to repurchase
Securities tendered pursuant to this Section 4.13. The Company shall
accumulate all Net Cash Proceeds allocated pursuant to clause (y) of the
prior sentence, and the aggregate amount of such accumulated Net Cash
Proceeds less any amount of such Net Cash Proceeds used or set aside to
purchase Securities pursuant to a prior Section 4.13 Offer (as defined
below) shall be referred to as the "Accumulated Amount."
(b) Notwithstanding anything to the contrary contained
herein, the Company shall not dispose of property or assets comprising all
or substantially all of the properties or assets of the Company unless (i)
such disposition is made in compliance with the provisions of Article Five
and any disposition made in accordance with Article Five shall not be
subject to the provisions of this Section 4.13 or (ii) within 60 days
following the consummation of such disposition, the Company shall redeem
all of the outstanding Securities in accordance with the provisions of
Article Three of this Indenture and Paragraph 5 of the Securities.
(c) If as of the first day of any fiscal quarter of the
Company the Accumulated Amount is at least $10,000,000, then not later than
15 Business Days after the first day of such fiscal quarter, the Company
shall make an offer (a "Section 4.13 Offer") to the Holders to purchase, on
a pro rata basis, Securities having a principal amount (the "Offer Amount")
equal to the Accumulated Amount, at a purchase price (the "Section 4.13
Offer Price") equal to 100% of the principal amount plus accrued but unpaid
interest to the date of purchase (the "Purchase Date"), which shall not be
earlier than the 30th or later than the 60th day after the date of such
offer. Notice of a Section 4.13 Offer shall be sent, by first class mail,
by the Company to each Holder at its registered address, with a copy to the
Trustee. The notice to the Holders shall contain all information,
instructions and materials required by applicable law or otherwise material
to such Holders' decision to tender Securities pursuant to the Section 4.13
Offer. The notice, which shall govern the terms of the Section 4.13 Offer,
shall state:
(1) that the Section 4.13 Offer is being made
pursuant to this Section 4.13;
(2) the Section 4.13 Offer Price (including the
amount of accrued interest) and the Purchase Date;
(3) that any Security not tendered or accepted for
payment will continue to accrue interest if interest is then accruing;
(4) that unless the Company defaults in making
payment therefor any Security accepted for payment pursuant to the Section
4.13 Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security
purchased pursuant to a Section 4.13 Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business at least
three Business Days prior to the Purchase Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than two Business Days
prior to the Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have the Security purchased;
(7) that if Securities in a principal amount in
excess of the principal amount of Securities to be acquired pursuant to the
Section 4.13 Offer are tendered and not withdrawn pursuant to the Section
4.13 Offer, the Company shall purchase Securities on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $100 or integral multiples of $100 shall be
acquired);
(8) that Holders whose Securities were purchased
only in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding
such Asset Sale.
Any such Section 4.13 Offer shall comply with all applicable provisions of
Federal and state laws regulating tender offers, and any provisions of this
Indenture that conflict with such laws shall be deemed to be superseded by
the provisions of such laws.
At least one Business Day before a Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Section 4.13 Offer (on a pro rata basis if required
pursuant to paragraph (7) above), (ii) deposit with the Paying Agent U.S.
Legal Tender or Securities acquired in the manner described in Section
4.13(a) sufficient to pay the purchase price of all Securities or portions
thereof so accepted or to be credited against the Net Cash Proceeds and
(iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail or deliver
to Holders of Securities so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Section
4.13 Offer on or as soon as practicable after the Purchase Date.
(d) If the principal amount of Securities validly
tendered and not withdrawn after tender by Holders pursuant to the
Section 4.13 Offer (the "Section 4.13 Acceptance Amount") shall be less
than the Offer Amount, the excess of the Offer Amount over the Section 4.13
Acceptance Amount or any remaining portion thereof may be used by the
Company for general corporate purposes without restriction except as
provided by the other provisions of this Indenture.
Section 4.14. Limitation on Change of Control.
(a) Not later than 30 days after the occurrence of a
Change of Control, the Company shall make an offer (a "Change of Control
Offer") to the Holders to purchase all of the outstanding Securities, at a
purchase price equal to 101% of the principal amount thereof plus accrued
but unpaid interest, if any, to the date of purchase. Within five days
after each date upon which a Change of Control shall occur (the "Change of
Control Date") requiring the Company to make a Change of Control Offer
pursuant to this Section 4.14, the Company shall so notify the Trustee.
Failure to give such notice shall not affect the obligations of the Company
pursuant to this Section 4.14.
(b) Notice of a Change of Control Offer shall be sent,
by first class mail, by the Company to each Holder at its registered
address, with a copy to the Trustee. The notice to the Holders shall
contain all instructions and materials required by applicable law or
otherwise material to such Holders' decision to tender Securities pursuant
to the Change of Control Offer. The notice, which shall govern the terms
of the Change of Control Offer, shall state:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.14 and that all Securities tendered will be
accepted for payment;
(2) the purchase price (including the amount of
accrued interest) and the purchase date (which shall be no earlier than 30
days nor later than 40 days from the date such notice is mailed, other than
as may be required by law) (the "Change of Control Payment Date");
(3) that any Security not tendered or accepted for
payment will continue to accrue interest if interest is then accruing;
(4) that, unless the Company defaults in making
payment therefor any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have a Security
purchased pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying Agent at
the address specified in the notice prior to the close of business at least
three Business Days prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than two Business Days
prior to the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Security
purchased; and
(7) a brief description of events resulting in such
Change of Control.
Any such Change of Control Offer shall comply with all
applicable provisions of Federal and state laws regulating tender offers,
and any provisions of this Indenture which conflict with such laws shall be
deemed to be superseded by the provisions of such laws. On or before the
Change of Control Payment Date, the Company shall (i) accept for payment
Securities or portions thereof tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the purchase price of all Securities so tendered and (iii) deliver to
the Trustee Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price. The Company
will publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
Section 4.15. Limitation on Investments.
The Company shall not, and shall not permit any of its
Subsidiaries to, make any Investment, except for:
(a) Investments in Cash Equivalents;
(b) Investments in any Subsidiary (including any Person
that thereby becomes a Subsidiary);
(c) Investments in any of the Securities;
(d) Investments in Indebtedness permitted under Section
4.10(b)-(k) of this Indenture;
(e) Investments in the New News Service in the form of
advances, loans or extensions of credit in an amount
which shall not exceed $20,000,000 in aggregate
principal amount at any one time outstanding;
(f) Investments made in connection with the acquisition
of all or substantially all of the assets or
property of another Person or Investments in an
Unrestricted Subsidiary (including Investments in
any Person which, after giving effect to such
Investment, thereby becomes an Unrestricted
Subsidiary) in an aggregate amount not in excess of
$7,500,000 in any fiscal year; provided, that to the
extent that all or any portion of such amount is not
used in any fiscal year, the amount not used may be
carried forward to successive fiscal years and used
for Investments made during any of such successive
fiscal years;
(g) Investments in existence or made pursuant to legally
binding written commitments in existence on the
Issue Date;
(h) Investments in receivables owing to the Company or
any Subsidiary created in the ordinary course of
business;
(i) Investments acquired by the Company or any
Subsidiary in connection with Asset Sales permitted
under Section 4.13(a) of this Indenture;
(j) Investments in the form of evidences of
Indebtedness, securities or other property received
from another Person by the Company or any Subsidiary
in connection with any bankruptcy proceeding or
other reorganization of such other Person in
exchange for evidences of Indebtedness, securities
or other property of such other Person held by the
Company or any Subsidiary in accordance with the
terms of this Indenture, or for other liabilities or
obligations of such other Person to the Company or
any Subsidiary;
(k) Investments in any Person to the extent acquired in
exchange for Capital Stock or Investments made as
additional capital contributions in respect of
Capital Stock previously acquired in accordance with
the provisions of this Indenture; and
(l) other Investments not in excess of $5,000,000 in any
fiscal year; provided, that to the extent that all
or any portion of such amount is not used in any
fiscal year, the amount not used may be carried
forward to successive fiscal years and used for
Investments made during any of such successive
fiscal years.
Section 4.16. Further Assurance to Trustee.
The Company will, upon request of the Trustee, execute and
deliver such further instruments and do such further acts as may reasonably
be necessary or proper to carry out more effectively the purposes of this
Indenture.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, Etc.
The Company shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any
other Person, or, except as provided in Section 4.13(b) of this Indenture,
transfer (by lease, assignment, sale or otherwise) all or substantially all
of the assets of the Company and its Subsidiaries as an entirety or
substantially as an entirety to, another Person or group of affiliated
Persons unless:
(a) the Company shall be the continuing Person, or the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which all or substantially all of the
assets of the Company are transferred as an entirety or substantially as an
entirety (the Company or such other Person being hereinafter referred to as
the "Surviving Person") shall be a corporation organized and validly
existing under the laws of the United States, any State thereof or the
District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture,
(b) immediately after giving effect to such transactions
and the assumption contemplated by Section 5.01(a) above and the incurrence
of or anticipated incurrence of any Indebtedness to be incurred in
connection therewith, the Fixed Charge Coverage Ratio of the Company and
its Subsidiaries, on a pro forma basis after giving effect to the
incurrence,if any, of such indebtedness would equal or exceed 2.0 to 1,
(c) immediately before and immediately after and giving
effect to such transaction and the assumption of the obligations as set
forth in Section 5.01(a) above and the incurrence or anticipated incurrence
of any Indebtedness to be incurred in connection therewith, no Default or
Event of Default shall have occurred and be continuing, and
(d) immediately after such transaction, the Company or
the Surviving Person holds all material permits, licenses, certifications
or approvals required for operation of the business of the Company as the
same is conducted prior to such transaction and immediately thereafter.
Nothing contained herein shall be deemed to prevent any
Subsidiary from consolidating with or merging with or into the Company or
any other Subsidiary.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any transfer of assets in
accordance with Section 5.01 hereof, the Surviving Person formed by such
consolidation or into which the Company is merged or to which such transfer
is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect
as if such Surviving Person had been named as the Company herein.
When a Surviving Person assumes all of the obligations of the
Company hereunder and under the Securities, the predecessor shall be
released from such obligations.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on
any Securities when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal
of (or premium, if any, on) any Securities when the same
becomes due and payable at maturity, upon acceleration,
optional or mandatory redemption or the Company defaults in the
deposit of any sinking fund payments, when and as due;
(3) the Company fails to comply with any of its other
covenants and agreements contained in the Securities or this
Indenture and such default continues for the period and after
the notice specified below;
(4) there shall be a default under any bond, debenture,
note or other evidence of Indebtedness of the Company or any of
its Subsidiaries or under any mortgage, indenture or other
instrument under which there may be issued or by which there
may be secured or evidenced any Indebtedness of the Company or
any of its Subsidiaries, whether such Indebtedness or guarantee
now exists or shall hereafter be created, if (a) either such
default (i) results from the failure to pay any scheduled
principal payments beyond applicable grace periods under such
Indebtedness (including payment of such Indebtedness at
maturity) or (ii) relates to an obligation other than the
obligation to pay any scheduled principal of such Indebtedness
and results in such Indebtedness becoming due prior to its
stated maturity and (b) the principal amount of such
Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at
maturity or the maturity of which has been so accelerated,
aggregates $5,000,000 or more at any one time; provided, that
an Event of Default shall not be deemed to have occurred with
respect to any acceleration of Indebtedness if such
Indebtedness is discharged or such acceleration is rescinded or
annulled, within 30 days after such acceleration;
(5) any warrant of attachment in an amount of $5,000,000
or more is issued against any portion of the property of the
Company or any of its Subsidiaries and is not quashed within 30
days after issuance, or final judgments not covered by
insurance for the payment of money which in the aggregate at
any one time exceeds $5,000,000 shall be rendered against the
Company or any of its Subsidiaries by a court of competent
jurisdiction and shall remain undischarged for a period (during
which execution shall not be effectively stayed) of 30 days
after such judgment becomes final and nonappealable;
(6) the Company or any Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law, (A) becomes insolvent, (B)
fails generally to pay its debts as they become due, (C) admits
in writing its inability to pay its debts generally as they
become due, (D) commences a voluntary case or proceeding under
any Bankruptcy Law with respect to itself, (E) consents to the
entry of a judgment, decree or order for relief against it in
an involuntary case or proceeding under any Bankruptcy Law, (F)
consents to the appointment of a Custodian of it or for any
part of its property, (G) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against
it, (H) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the
Company or any of its Subsidiaries, or for any part of its
property, (I) makes a general assignment for the benefit of its
creditors, or (J) takes any corporate action in furtherance of
any of the foregoing; or
(7) a court of competent jurisdiction enters a judgment
decree or order for relief under any Bankruptcy Law which shall
(A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in
respect of the Company or any of its Subsidiaries, (B) appoint
a Custodian of the Company, any of its Subsidiaries or for any
part of its property or (C) order the winding-up or liquidation
of the Company's affairs; and such judgment, decree or order
shall remain unstayed and in effect for a period of 60
consecutive days; or any bankruptcy or insolvency petition or
application is filed, or any bankruptcy or insolvency
proceeding is commenced, against the Company or any of its
Subsidiaries and such petition, application or proceeding is
not dismissed within 60 days.
A Default under clause (3) of this Section 6.01 is not an Event
of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company of the Default and
the Company does not cure the Default within 30 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default." When a Default is
cured or waived, it ceases.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in Section 6.01(6) or (7)) occurs and is continuing, the Trustee
may, by notice to the Company, or the Holder or Holders of at least 25% in
aggregate principal amount of the Securities then outstanding may, by
notice to the Company and the Trustee, and the Trustee shall, upon the
request of such Holder or Holders, declare the aggregate principal amount
of the Securities outstanding, together with accrued but unpaid interest
thereon to the date of payment, to be due and payable and, upon any such
declaration, the same shall become and be immediately due and payable. If
an Event of Default specified in Section 6.01(6) or (7) occurs, all unpaid
principal and accrued interest on the Securities then outstanding shall
ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. Upon
payment of such principal amount, and interest, all of the Company's
obligations under the Securities and this Indenture, other than obligations
under Section 7.07, shall terminate. The Holder or Holders of a majority
in aggregate principal amount of the Securities then outstanding by notice
to the Trustee may rescind an acceleration and its consequences if (i) all
existing Events of Default, other than the nonpayment of the principal of
the Securities which has become due solely by such declaration of
acceleration, have been cured or waived, (ii) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration
of acceleration, has been paid, and (iii) the rescission would not conflict
with any judgment or decree of a court of competent jurisdiction.
In the event that the maturity of the Securities is accelerated
pursuant to this Section 6.02, 100% of the principal amount thereof shall
become due and payable plus accrued interest to the date of payment.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of and interest on the Securities or to
enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon any Event of Default shall not
impair any such right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
Section 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 10.02 hereof, the Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its
consequences except a Default in the payment of principal of or interest on
any Security as specified in clauses (1) and (2) of Section 6.01. When a
Default or Event of Default is waived, it is cured and ceases, but no such
waiver shall extend to any subsequent or other Default or impair any
consequent right.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that is unduly
prejudicial to the rights of another Securityholder or that would involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the outstanding Securities make a written request to the
Trustee to pursue the remedy in its own name as Trustee under
this Indenture;
(3) such Holder or Holders offer(s) to the Trustee
indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
indemnity; and
(5) no direction inconsistent with the request has been
given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the outstanding
Securities.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
other Securityholders.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of the principal of, premium, if
any, and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.
The Company is personally obligated and fully liable for the
amount due under this Indenture and the Securities. Either the Holders or
the Trustee for the benefit of the Holders, as the case may be, have the
right to sue on this Indenture and the Securities and obtain a personal
judgment against the Company for satisfaction of the amount due under this
Indenture and the Securities.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal and interest
remaining unpaid and such further amounts as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation
and expenses of the Trustee, its agents and counsel. Nothing in this
Section 6.08 shall require the Company to pay the costs or expenses of any
Holder or Holders in any action, proceeding or negotiation involving the
Securities and/or this Indenture.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee and the Securityholders allowed in any judicial proceedings
relating to the Company, its creditors or its property. Any custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee
any amount due it for the reasonable compensation and expenses of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.01. Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or
to authorize the Trustee to vote in respect of the claim of any
Securityholder in such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money in the following order:
First, to the Trustee for amounts due under Section 7.07
hereof;
Second, to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Third, to the Company.
The Trustee, upon written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof, or
a suit by Holders of more than 10% in principal amount of the outstanding
Securities.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Company, the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein
expressed.
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
(b) Except during the continuance of an Event of
Default known to a Trust Officer :
(1) the Trustee need perform only those duties that are
specifically set forth (or incorporated by reference) in this
Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; provided,
however, that the Trustee shall examine reports, certificates
and opinions specifically required to be furnished to the
Trustee under this Indenture to determine whether or not they
conform to the requirements of this Indenture;
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee is negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05
hereof;
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to this Section, including without
limitation, paragraphs (a), (b) and (c) of this Section 7.01;
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or
omit to take any action under this Indenture or at the request, order or
direction of the Holders or in exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it; and
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(a) the Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the
proper Person; the Trustee need not investigate any fact or
matter stated in the document;
(b) before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers'
Certificate (with respect to matters of fact) or an Opinion of
Counsel (with respect to matters of law) which shall conform to
Sections 13.04 and 13.05; the Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance
on the written advice of such counsel or on such Officers'
Certificate (with respect to matters of fact) or Opinion of
Counsel (with respect to matters of law);
(c) the Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence
of any attorney or agent appointed with due care;
(d) the Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers;
(e) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond, debenture, or
other paper or document but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit; and
(f) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request, order or direction of any of the Holders, pursuant
to the provisions of this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be
incurred therein or thereby.
Section 7.03. Individual Rights of Trustee.
Subject to Sections 7.10 and 7.11 hereof, the Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company and its Subsidiaries and
Affiliates with the same rights it would have if it were not the Trustee.
Any Agent may do the same, without limitation with respect to Sections 7.10
and 7.11 hereof, with like rights.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, and it shall not be
responsible for any statement in this Indenture or the Securities other
than its certification of authentication, or the use or application of any
funds received by a Paying Agent other than the Trustee.
Section 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each
Securityholder a notice of Default within 90 days after such Default or
Event of Default becomes known to a Trust Officer. Except in the case of a
Default or an Event of Default in payment of principal of, or interest on,
any Security, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding
the notice is in the interest of the Securityholders.
Section 7.06. Reports by Trustee to Holders.
If required by the TIA, within 60 days after each December 31
beginning with the December 31 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such
December 31 that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Commission and each stock exchange,
if any, on which the Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services (which compensation shall not be
limited by any provisions of law in regard to the compensation of a trustee
of an express trust). The Company shall reimburse the Trustee upon request
for all reasonable out-of-pocket expenses incurred by it. Such expenses
may include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and counsel.
The Company shall indemnify the Trustee against any loss or
liability incurred by it in connection with its serving as Trustee,
Registrar or Paying Agent, except for any loss or liability arising from
the negligence or willful misconduct of the Trustee. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or willful
misconduct.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to that of the Holders on all
money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Securities. When the
Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.07 and any lien
arising hereunder shall survive the resignation or removal of the Trustee,
the discharge of the Company's obligations pursuant to Article Nine of this
Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.
The rights and protections set forth in Sections 7.02 and 7.07
afforded the Trustee pursuant to this Article Seven shall also be afforded
the Registrar and Paying Agent if the Trustee acts as such.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing.
The Holders of a majority in principal amount of the outstanding Securities
may remove the Trustee by so notifying the Company and the removed Trustee
in writing and may appoint a successor Trustee with the Company's consent.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10
hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting as Trustee
hereunder.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, the resignation or removal of the
retiring Trustee shall become effective and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.
A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust assets to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall, if such resulting, surviving or transferee
corporation is otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualifications.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall
always have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and a
corporate trust office in the City of New York. The Trustee shall comply
with TIA Section 310(b), ; provided, however, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation
in other securities, of the Company are outstanding, if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Company's Option to Effect Defeasance or
Covenant Defeasance.
The Company may, at its option by Board Resolution, at any
time, with respect to the Securities, elect to have either Section 8.02 or
Section 8.03 be applied to all of the outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this
Article Eight.
Section 8.02. Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.02, the Company shall be deemed to have been
discharged from its obligations with respect to the Defeased Securities on
the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that
the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Defeased Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 and the
other Sections of this Indenture referred to in (a) and (b) below, and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, and, upon written request, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of Defeased Securities to receive, solely from the trust fund
described in Section 8.04 and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on
such Securities when such payments are due, (b) the Company's obligations
with respect to such Defeased Securities under Sections 2.06, 2.07, 2.09
and 4.02, (c) the rights, powers, trusts, duties, indemnities and
immunities of the Trustee hereunder, and (d) this Article Eight. Subject
to compliance with this Article Eight, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 with respect to the Securities.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, the Company and its Subsidiaries shall be
released from their obligations under any covenant or provision contained
in Sections 4.05 and 4.07 through 4.16, inclusive, with respect to the
Defeased Securities on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "covenant defeasance"), and the
Defeased Securities shall thereafter be deemed to be not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants and provisions, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the Defeased Securities, the Company may omit
to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein or in such Defeased
Securities to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default
under Section 6.01, but, except as specified above, the remainder of this
Indenture and such Defeased Securities shall be unaffected thereby.
Section 8.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 8.02 or Section 8.03 to the Defeased Securities:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.08 who shall agree to comply with the provisions
of this Article Eight applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such
Securities, (i) U.S. Legal Tender in an amount, or (ii) U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, U.S. Legal Tender in an
amount, or (iii) a combination thereof, sufficient, as reflected in the
written report of a nationally recognized firm of independent public
accountants or a nationally recognized investment banking firm delivered to
the Trustee, to pay and discharge (and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge) the principal
of, premium, if any, and interest on, the Defeased Securities at the Stated
Maturity thereof (such date being referred to as the "Defeasance Redemption
Date"), if prior to electing either defeasance or covenant defeasance, the
Company has delivered to the Trustee an irrevocable notice to redeem all of
the outstanding Securities on the Defeasance Redemption Date of such
principal or installment of interest; provided that the Trustee (or such
qualifying trustee) shall have been irrevocably instructed to apply such
U.S. Legal Tender or the proceeds of such U.S. Government Obligations to
said payments with respect to the Securities.
(b) In the case of an election under Section 8.02, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (ii) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred.
(c) In the case of an election under Section 8.03, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same time as would have been the
case if such covenant defeasance had not occurred.
(d) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit.
(e) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default under, this
Indenture or any other material agreement or instrument to which the
Company is a party or by which it is bound.
(f) No event or condition shall exist that would prevent
the Company from making payments of the principal of, premium, if any, and
interest on the Securities on the date of such deposit.
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent provided for relating to either the defeasance
under Section 8.02 or the covenant defeasance under Section 8.03 (as the
case may be) have been complied with as contemplated by this Section 8.04.
(h) Ninety-one (91) days pass after the deposit is made
and during the 91-day period no Event of Default specified in Sections
6.01(6) or (7) with respect to the Company occurs which is continuing at
the end of the period.
Opinions of Counsel required to be delivered under this Section
may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, which certificates shall be limited to matters of fact, including
that various financial covenants have been complied with.
Section 8.05. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of this Indenture, all U.S. Legal
Tender and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee referred to in
Section 7.08 -- collectively for purposes of this Section 8.05 and Section
8.06, the "Trustee") pursuant to Section 8.04 in respect of the Defeased
Securities shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Securities and this Indenture, to the payment,
either directly or through any Paying Agent as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon
in respect of principal, premium, if any, and interest, but such money need
not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.04 or the principal and
interest received in respect thereof, other than any such tax, fee or other
charge which by law is for the account of the Holders of the Defeased
Securities.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. Government Obligations
held by it as provided in Section 8.04 which, in the opinion of a
nationally recognized firm of independent public accountants or nationally
recognized investment banking firm expressed in a written report delivered
to the Trustee, are in excess of the amount thereof which would then be
required to be deposited to effect defeasance or covenant defeasance. In
the event of an error in any calculation resulting in a withdrawal
hereunder, the Company shall deposit an amount equal to the amount
erroneously withdrawn as promptly as practicable after becoming aware of
such error.
Section 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 8.02
or 8.03, as the case may be, by reason of any order or judgment of any
court or governmental authority, enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all
such U.S. Legal Tender or U.S. Government Obligations in accordance with
Section 8.02 or 8.03, as the case may be; provided, however, that (a) if
the Company makes any payment to the Trustee or Paying Agent of principal,
premium, if any, or interest on any Security following the reinstatement of
its obligations, the Trustee or Paying Agent shall promptly pay any such
amount to the Holders of the Securities and the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment
from the U.S. Legal Tender and U.S. Government Obligations held by the
Trustee or Paying Agent and (b) the Trustee or Paying Agent shall return
all such U.S. Legal Tender and U.S. Government Obligations to the Company
if permitted under applicable law promptly after receiving a Company
request therefor at any time, if the Trustee or Paying Agent receives
written notice from the Company that such reinstatement of the Company's
obligations has occurred and continues to be in effect at such time.
ARTICLE NINE
SATISFACTION AND DISCHARGE
Section 9.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to surviving obligations expressly provided for herein) and the Trustee, on
demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture,
when
(a) either
(1) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided
in Section 2.07 and (ii) Securities for whose payment U.S.
Legal Tender or U.S. Government Obligations has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 2.04, 8.05 and 9.03) have
been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the
Company or any other obligor under the Securities has
irrevocably deposited or caused to be deposited with the
Trustee in trust for such purpose an amount in U.S. Legal
Tender or U.S. Government Obligations sufficient to pay and
discharge the principal of, premium, if any, and interest to
the date of such deposit on such Securities (other than
Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07);
(b) the Company or any other obligor under the
Securities has paid or caused to be paid all other sums payable hereunder
by the Company and any other obligor under the Securities; and
(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each to the effect that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Section 9.02. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this
Indenture and of the Securities referred to in Section 9.01, the respective
obligations of the Company and the Trustee under Sections 7.07, 8.05, 8.06
and 9.03 shall survive.
Section 9.03. Application of Trust Money.
The Trustee shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 9.01 hereof.
It shall apply the deposited U.S. Legal Tender and the money from the U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities without prior notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article Five hereof;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(4) to make any change that does not adversely affect
the rights or obligations of any Securityholder; or
(5) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the
TIA.
Section 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend
or supplement this Indenture or the Securities with the written consent of
the Holders of at least a majority in aggregate principal amount of the
outstanding Securities without notice to any Securityholder. Subject to
Section 6.07, the Holders of a majority in aggregate principal amount of
the outstanding Securities may waive compliance by the Company with any
provision of this Indenture without notice to any Securityholder. However,
without the consent of each Securityholder affected, no amendment,
supplement or waiver, including a waiver pursuant to Section 6.04 hereof,
may:
(1) change the principal amount of Securities whose
Holders must consent to an amendment, supplement or waiver of
any provision of this Indenture or the Securities;
(2) reduce the rate or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security, or alter
Article Three hereof or Paragraphs 5 or 6 of the Securities in
a manner adverse to any Holder;
(5) make any changes in the provisions concerning
waivers of Defaults or Events of Default by Holders of the
Securities or the rights of Holders to recover the principal
of, interest on, or redemption payment with respect to, any
Security;
(6) make any changes in Section 6.04, 6.07 or this third
sentence of this Section 10.02; or
(7) make the principal of, or the interest on, any
Security payable with anything or in any manner other than as
provided for in this Indenture and the Securities as in effect
on the date hereof.
It shall not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section
10.02 becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver.
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
After an amendment, supplement or waiver under this Section
10.02 or 10.04 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under
this Article Ten, the Company may, but shall not be obligated to, offer to
any Holder who consents to such amendment, supplement or waiver, or to all
Holders, consideration for such Holder's consent to such amendment,
supplement or waiver.
Section 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 10.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of
a Security is a continuing consent by the Holder and by every subsequent
Holder of a Security or portion of a Security that evidences the same debt
as the consenting Holder's Security, even if notation of the consent is not
made on any Security. Any such Holder or subsequent Holder, however, may
revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder unless it makes a change described in any
of clauses (1) through (7) of Section 10.02 hereof. In that case, the
amendment, supplement or waiver shall bind each Holder of a Security who
has consented to it and every subsequent Holder of a Security or portion of
a Security that evidences the same debt as the consenting Holder's
Security.
Section 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it
to the Trustee. The Trustee may place an appropriate notation on the
Security regarding the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, in exchange for
the Security, the Company shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms.
Section 10.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Ten if the amendment, supplement or
waiver does not adversely affect the rights of the Trustee. If it does
adversely affect the rights of the Trustee, the Trustee may but need not
sign it. In signing such amendment, supplement or waiver, the Trustee
shall be entitled to receive, and (subject to Article Seven hereof) shall
be fully protected in relying upon, an Opinion of Counsel stating that such
amendment, supplement or waiver is authorized or permitted by and complies
with this Indenture. The Company may not sign an amendment, supplement or
waiver until the Board of Directors approves it.
ARTICLE ELEVEN
SINKING FUND
Section 11.01. Sinking Fund Payments.
As and for a sinking fund for the retirement of the Securities,
the Company will, until all Securities are paid or payment thereof provided
for, deposit sinking fund payments with the Trustee in accordance with
Paragraph 6 of the Securities. The cash amount of any sinking fund payment
is subject to reduction as provided in Section 11.02. Each sinking fund
payment shall be applied to the redemption of Securities on such sinking
fund payment date as herein provided.
Section 11.02. Satisfaction of Sinking Fund Payments with
Securities.
The Company (1) may deliver outstanding Securities (other than
any previously called for redemption) and (2) may apply as a credit
Securities (or portions thereof) which have been redeemed at the election
of the Company pursuant to Article Three or purchased pursuant to Sections
4.13 or 4.14, in each case in satisfaction of all or any part of any
sinking fund payment required to be made pursuant to Paragraph 6 of the
Securities -- in the order in which they become due -- provided that such
Securities have not been previously so credited. Each such Security shall
be received and credited for such purpose by the Trustee at the redemption
price specified in the form of Security annexed hereto as Exhibit A for
redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
Section 11.03. Redemption of Securities for Sinking Fund.
On or before September 30, in each year commencing with the
year 1999 and ending in 2000, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking
fund payment pursuant to Paragraph 6 of the Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 11.02 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate
shall also state that the Securities forming the basis of any such credit
do not include any Securities previously credited against a sinking fund
payment. Before October 31, in each such year, the Trustee shall select the
Securities to be redeemed upon the next ensuing December 30 in the manner
specified in Section 3.02, and cause notice of the redemption thereof to be
given in the manner specified in Section 3.03, and once notice has been
duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 3.04, 3.05 and 3.06.
ARTICLE TWELVE
MEETINGS OF SECURITYHOLDERS
Section 12.01. Purposes for Which Meeting May Be Called.
A meeting of Securityholders may be called at any time and from
time to time pursuant to the provisions of this Article Twelve for any of
the following purposes:
(a) to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its consequences,
or to take any other action authorized to be taken by Securityholders
pursuant to any of the provisions of Article Six;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver
pursuant to the provisions of Section 10.02; or
(d) to take any other action (i) authorized to be taken
by or on behalf of the Holder or Holders of any specified aggregate
principal amount of the Securities under any other provision of this
Indenture, or authorized or permitted by law or (ii) which the Trustee
deems necessary or appropriate in connection with the administration of
this Indenture.
Section 12.02. Manner of Calling Meeting.
The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 12.01, to be held at such time and
at such place in the City of New York, State of New York or elsewhere as
the Trustee shall determine. Notice of every meeting of Securityholders,
setting forth the time and place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be mailed by the
Trustee, first-class postage prepaid, to the Company and to the Holders at
their last addresses as they shall appear on the registration books of the
Registrar, not less than 10 nor more than 60 days prior to the date fixed
for a meeting.
Any meeting of Securityholders shall be valid without notice if
the Holders of all Securities then outstanding are present in person or by
proxy, or if notice is waived before or after the meeting by the Holders of
all Securities outstanding, and if the Company and the Trustee are either
present by duly authorized representatives or have, before or after the
meeting, waived notice.
Section 12.03. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board
Resolution, or the Holders of not less than 10% in aggregate principal
amount of the Securities then outstanding shall have requested the Trustee
to call a meeting of Securityholders to take any action specified in
Section 12.01, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or the Holders of Securities in the amount above
specified may determine the time and place in the City of New York, State
of New York or elsewhere for such meeting and may call such meeting for the
purpose of taking such action, by mailing or causing to be mailed notice
thereof as provided in Section 12.02, or by causing notice thereof to be
published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a
general circulation in the City of New York, State of New York, the first
such publication to be not less than 10 nor more than 60 days prior to the
date fixed for the meeting.
Section 12.04. Who May Attend And Vote at Meetings.
To be entitled to vote at any meeting of Securityholders, a
Person shall (a) be a registered Holder of one or more Securities, or (b)
be a Person appointed by an instrument in writing as proxy for the
registered Holder or Holders of Securities. The only Persons who shall be
entitled to be present or to speak at any meeting of Securityholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.
Section 12.05. Regulations May Be Made by Trustee; Conduct of
the Meeting; Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any action by or any meeting of Securityholders, in regard to proof of the
holding of Securities and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, and submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Such regulations may fix a record date and time
for determining the Holders of record of Securities entitled to vote at
such meeting, in which case those and only those Persons who are Holders of
Securities at the record date and time so fixed, or their proxies, shall be
entitled to vote at such meeting whether or not they shall be such Holders
at the time of the meeting.
If the Company shall solicit from Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other act, the
Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent,
waiver or other act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 60 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is commenced. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other act may
be given before or after such record date, but only the Securityholders of
record at the close of business on such record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of
the requisite proportion of Securities outstanding have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other act, and for that purpose the Securities
outstanding shall be computed as of such record date.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Securityholders as provided in Section 12.03,
in which case the Company or the Securityholders calling the meeting, as
the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority in principal amount of the
Securities represented at the meeting and entitled to vote.
At any meeting, each Securityholder or proxy shall be entitled
to one vote for each $100 principal amount of Securities held or
represented by such Securityholder; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Securities challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other
than by virtue of Securities held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 12.02 or Section 12.03 may be adjourned from time
to time by vote of the Holder or Holders of a majority in aggregate
principal amount of the Securities represented at the meeting and entitled
to vote, and the meeting may be held as so adjourned without further
notice.
Section 12.06. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballots on which shall be subscribed
the signatures of the Holders of Securities or of their representatives by
proxy and the principal amount of the Securities voted by the ballot. The
permanent chairman of the meeting shall appoint two inspectors of votes,
who shall count all votes cast at the meeting for or against any resolution
and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Securityholders
shall be prepared by the secretary of the meeting and there shall be
attached to such record the original reports of the inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts, setting forth a copy of the notice of the
meeting and showing that such notice was mailed as provided in Section
12.02 or published as provided in Section 12.03. The record shall be
signed and verified by the affidavits of the permanent chairman and the
secretary of the meeting and one of the duplicates shall be delivered to
the Company and the other to the Trustee to be preserved by the Trustee,
the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 12.07. Exercise of Rights of Trustee or
Securityholders May Not Be Hindered or Delayed by Call of Meeting.
Nothing contained in this Article Twelve shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of
Securityholders or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the Securityholders
under any of the provisions of this Indenture or of the Securities.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by any of Sections 310 to 317, inclusive,
of the TIA through operation of Section 318(c) or with another provision
which is required to be included in this Indenture by the TIA, the duties
imposed by or required provisions of the TIA shall control.
Section 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by certified or registered mail
(return receipt requested) or sent by facsimile transmission addressed as
follows:
If to the Company:
Telemundo Group, Inc.
2290 W. 8th Avenue
Hialeah, Florida 33010
Attn: Chief Financial Officer
Fax: 305-889-7997
If to the Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attn: Corporate Trust and Agency Group
Fax: 212-250-6961
The Company or the Trustee by notice to the other may designate
an additional or different address for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be
mailed to him by first-class mail at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
Failure to mail, or any defect in, a notice or communication to
a Securityholder shall not affect the sufficiency thereof with respect to
other Securityholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee
receives it.
Section 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this
Indenture or the Securities, and the Trustee shall comply with TIA Section
312(b). The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to
Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the Company, all conditions precedent (including any
covenants compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent (including any
covenants compliance with which constitutes a condition
precedent) have been complied with.
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the annual
certificate provided pursuant to Section 4.04) shall include:
(1) a statement that each Person making such certificate
or opinion has read such covenant or condition;
(2) a statement that such Person has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(3) a statement as to whether or not, in the opinion of
each such Person, such covenant or condition has been complied
with.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by
Securityholders. The Registrar or co-registrar and the Paying Agent may
make reasonable rules for their respective functions.
Section 13.07. Non-Business Days.
If a payment date is not a Business Day at a place of payment,
payment may be made at the place on the next succeeding Business Day
without additional interest.
Section 13.08. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE COMPANY, THE
TRUSTEE AND THE HOLDERS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
COMPANY, THE TRUSTEE AND THE HOLDERS IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY, THE TRUSTEE AND THE
HOLDERS IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
PARTY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 13.10. No Recourse Against Others.
All liability described in Paragraph 18 of the Securities of
any director, officer, employee or stockholder, as such, of the Company is
waived and released.
Section 13.11. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 13.12. Separability of Provisions.
Each provision of this Indenture shall be considered separable
and if for any reason any provision or provisions herein are determined to
be invalid and contrary to any existing or future law, the balance of this
Indenture shall be interpreted, to the extent practicable, so as to give
effect to the original intent of the parties hereto.
Section 13.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent
the same instrument.
Section 13.14. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and the Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
SIGNATURES:
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman II
-----------------------
Peter J. Housman II
President-Business and
Corporate Affairs
(SEAL)
Attest:
/s/ Horace G. Dawson, III
_________________________
Horace G. Dawson III
Vice President and
Assistant Secretary
BANKERS TRUST COMPANY,
as Trustee
By: /s/ Jenna Rossheim
--------------------------
Name: Jenna Rossheim
Title: Assistant Vice President
(SEAL)
Attest:
/s/ Mark A. Woodward
- ------------------------
Name: Mark A. Woodward
Title: Assistant Vice President
Indenture Schedule I
(In Thousands)
------------
Capital Lease Obligations $7,962
------
Total Obligations $7,962
======
EXHIBIT A
Form of Security
10.25% SENIOR NOTE DUE DECEMBER 30, 2001
No. $
----------- -------
TELEMUNDO GROUP, INC.
Promises to pay to _______________________________________________
or registered assigns, the principal sum of ____________ Dollars on
December 30, 2001
Interest Payment Dates: June 30; December 31
TELEMUNDO GROUP, INC.
By: ______________________
President and Chief
Executive Officer
(SEAL)
Attest:
_____________________
Assistant Secretary
Certificate of Authentication
This Note is one of the Securities
referred to in the within-mentioned
Indenture.
BANKERS TRUST COMPANY
, as Trustee
By ________________________
Authorized Signatory
Dated __________________
TELEMUNDO GROUP, INC.
10.25% SENIOR NOTE DUE DECEMBER 30, 2001
1. Interest. Telemundo Group, Inc. (the "Company") promises
to pay interest on the principal amount of this Note (individually, a
"Note" and collectively, the "Notes") at the rate of 10.25% per annum. The
Company will pay interest semi-annually on June 30 and December 31 of each
year commencing June 30, 1995. Interest on this Note will accrue from
December 31, 1994 and each semi-annual interest payment shall include all
accrued interest on the Notes through the close of business as of the last
day of the month during which the interest payment date occurs. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will, subject to certain
exceptions provided in the Indenture referred to herein, pay interest on
the Notes (except defaulted interest) to the Persons who are registered
Holders of Notes at the close of business as of the first day of the month
during which the interest payment date occurs. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company will
pay principal and interest in money of the United States that at the time
of payment is U.S. Legal Tender. However, the Company may pay principal
and interest by check payable in such U.S. Legal Tender. It may mail an
interest check to a Holder's registered address.
3. Paying Agent; Registrar. Initially, Bankers Trust Company
(the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its Subsidiaries may act as Paying Agent, Registrar
and/or co-registrar.
4. Indenture. The Company issued the Notes under an Indenture
dated as of December 30, 1994, between the Company and the Trustee (the
"Indenture"). Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) as amended and in effect on the date of the Indenture. The Notes
are subject to all such terms, and Holders of the Notes are referred to the
Indenture and such Act for a statement of them.
The Notes are general unsecured obligations of the Company limited to
$116,889,000 in aggregate principal amount.
5. Optional Redemption. The Notes may be redeemed, as a whole
or from time to time in part, at the election of the Company, otherwise
than through operation of the sinking fund provided for in Paragraph 6
hereof, at any time after the third anniversary of the Issue Date at a
Redemption Price for each $100 of principal amount set forth in the table
below if redeemed during the 12-month period ending on the date specified
below, together with accrued and unpaid interest to the Redemption Date:
Redemption Date Redemption Price
---------------- ----------------
December 30, 1998 $105.00
December 30, 1999 $103.00
December 30, 2000 $101.00
Thereafter $100.00
6. Sinking Fund. The Notes are subject to mandatory
redemption, upon not less than 30 or more than 60 days' notice by mail,
through the operation of a sinking fund at a Redemption Price equal to 100%
of their principal amount, together with accrued and unpaid interest to the
Redemption Date. Generally, the sinking fund provides for the redemption
of Notes having an aggregate principal amount as follows:
Sinking Fund Payment Date Amount
------------------------- ------
December 30, 1999 $25,000,000
December 30, 2000 $25,000,000
Notes acquired or redeemed by the Company may be credited against any
required sinking fund payment on the terms and conditions set forth in the
Indenture.
7. Notice of Redemption. Notice of redemption will be mailed
to the address of the registered Holder of each Note to be redeemed at
least 30 days but not more than 60 days before the redemption date. Notes
in denominations larger than $100 may be redeemed in part. On and after
the Redemption Date, interest ceases to accrue on Notes or the portions of
them called for redemption, provided that the funds necessary to pay the
Redemption Price thereof have been duly deposited with the Trustee.
8. Denominations; Transfer; Exchange. The Notes are in
registered form without coupons in denominations of $100 and whole
multiples of $100. A Holder may transfer or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Note selected for redemption.
9. Persons Deemed Owners. The registered Holder of a Note may
be treated as the owner of it for all purposes whether or not the Note may
be overdue, and neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
10. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will
repay the money to the Company at its request. After that, Holders
entitled to the money must look to the Company for payment unless otherwise
provided by law.
11. Amendment; Supplement; Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented and
any past default or compliance with any provision may be waived with the
consent of the Holders of at least a majority in principal amount of the
Notes. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to cure any ambiguity,
defect or inconsistency, to provide for certain mergers or consolidations
involving the Company, to provide for uncertificated Notes in addition to
or in place of certificated Notes or to make any change that does not
adversely affect the rights of any Holder.
12. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among
other things, incur additional Indebtedness, make payments in respect of
its Capital Stock, enter into transactions with Affiliates, merge or
consolidate with any other Person and sell, lease, transfer or otherwise
dispose of substantially all of its properties or assets. In addition, the
Indenture contains certain covenants with respect to Asset Sales and
Changes of Control. The limitations and covenants are subject to a number
of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
13. Change of Control. In the event there shall occur any
Change of Control, each Holder of Notes shall have the right, at such
Holder's option but subject to the limitations and conditions set forth in
the Indenture, to require the Company to purchase on the Change of Control
Payment Date in the manner specified in the Indenture, all or any part (in
integral multiples of $100) of such Holder's Notes at a Change of Control
Purchase Price equal to 101% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the Change of Control Payment Date.
14. Defeasance. The Indenture contains provisions for
defeasance at any time of (a) the entire Indebtedness on this Note and (b)
certain restrictive covenants and related Defaults and Events of Default,
in each case upon compliance with certain conditions set forth therein.
15. Defaults and Remedies. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be
due and payable immediately in the manner and with the effect provided in
the Indenture. However, if an Event of Default specified in Section
6.01(6) or (7) of the Indenture occurs, the unpaid principal and the
accrued interest on the Note would become due and payable immediately
without any such declaration. Holders of Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture
or the Notes. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest), if it determines
that withholding notice is in their interest.
16. Successor Corporation. When a successor corporation
assumes all the obligations of its predecessor under the Notes and the
Indenture, the predecessor corporation will be released from those
obligations.
17. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
18. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for
any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
19. Authentication. This Note shall not be valid until the
Trustee or an authenticating agent manually signs the certificate of
authentication on the other side of this Note.
20. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common);
TEN ENT (= tenants by the entireties); JT TEN (= joint tenants with right
of survivorship and not as tenants in common); CUST (= Custodian); and
U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Corporate Secretary, Telemundo Group, Inc., at the address specified in
Section 13.02 of the Indenture.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's soc. sec. or tax ID no.)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- -----------------------------------------------------------------------
Your Signature: _______________________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Date:_____________________ Signature:____________________<F1>
Signature Guarantee: ____________________
<F1>The Holder's signature must be guaranteed by an eligible guarantor that
is a member of one of the following recognized signature guarantee programs:
(A) the Securities Transfer Agents Medallion Program; (B) the New York Stock
Exchange Medallion Signature Program; or (C) the Stock Exchanges Medallion
Program.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.13 or 4.14 of the Indenture, check the
appropriate box: [ ] 4.13 [ ] 4.14
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.13 or 4.14 of the Indenture,
as the case may be, state the amount: $____________________
Date:_____________________ Signature:_______________________<F2>
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:__________________________
<F2>The Holder's signature must be guaranteed by an eligible
guarantor that is a member of one of the following recognized signature
guarantee programs: (A) the Securities Transfer Agents Medallion Program;
(B) the New York Stock Exchange Medallion Signature Program; or (C) the
Stock Exchanges Medallion Program.
TELEMUNDO GROUP, INC. WARRANT
AGREEMENT AND FORM OF WARRANT
WARRANT AGREEMENT (the ``Agreement''), dated as of December 30, 1994,
between Telemundo Group, Inc., a Delaware corporation (the ``Company''),
and Shawmut Bank Connecticut, National Association, a national banking
association (the ``Warrant Agent'').
WHEREAS, the authorized common stock of the Company consists of
20,000,000 shares of common stock, par value $.01 per share (the ``Common
Stock''), divided into two series consisting of 14,388,394 shares of Series
A Common Stock (the ``Series A Common Stock'') and 5,611,606 shares of
Series B Common Stock (the ``Series B Common Stock'');
WHEREAS, in accordance with the plan of reorganization of the Company,
confirmed by final order of the United States Bankruptcy Court for the
Southern District of New York (the ``Bankruptcy Court'') on July 20, 1994
(the ``Plan''), the Company proposes to issue to certain holders of Allowed
General Claims and Allowed 12% Debenture Claims (as those terms are defined
in the Plan) (each, a ``Creditor'' and collectively, the ``Creditors''),
643,462 Warrants in the aggregate (the ``Warrants''), each Warrant
entitling the registered holder thereof (the ``Holder'') to purchase, upon
the terms and subject to the conditions contained in this Agreement and the
Warrant Certificates (as defined below), one share of Series A Common
Stock, subject to adjustment as provided in Section 12 hereof;
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of certificates evidencing the Warrants (the ``Warrant
Certificates'') and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions set forth in this Agreement, and the Warrant Agent hereby
accepts such appointment. Upon execution of this Agreement, and from time
to time thereafter as it determines, the Warrant Agent shall deliver to the
Company a certificate certifying the incumbency and specimen signatures of
persons who are authorized to authenticate and deliver Warrant
Certificates. Until the Company shall receive a subsequent certificate from
the Warrant Agent, or unless the Company shall have actual knowledge of the
lack of authority of any individual, the Company may rely upon the last
such certificate delivered to it.
SECTION 2. Warrant Certificates. The Warrant Certificates (and the Forms
of Exercise, Assignment and Partial Assignment to be set forth on the
reverse thereof) shall be substantially in the forms set forth in Exhibits
A and B attached hereto, and may have such letters, numbers or other marks
of identification and such legends printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with
any rule or regulation of any stock exchange on which the Warrants may be
listed.
SECTION 3. Execution and Countersignature of Warrant Certificates. The
Warrant Certificates shall be executed on behalf of the Company by its
Chief Executive Officer, President, Chief Financial Officer or Treasurer
(each, a ``Company Officer'') under its corporate seal reproduced thereon
attested by its Secretary or Assistant Secretary. The signature of any of
these Company Officers on any Warrant Certificate may be manual or
facsimile. The name, incumbency and specimen signature of each Company
Officer authorized to act and give instructions and notices under this
Agreement shall be certified to the Warrant Agent by the Secretary or
Assistant Secretary of the Company. Warrant Certificates bearing the manual
or facsimile signatures of individuals who were at any time Company
Officers shall bind the Company even if any such individual ceased to be a
Company Officer prior to the execution and delivery of such Warrant
Certificate or was not a Company Officer at the date of this Agreement.
Each Warrant Certificate shall be countersigned by the manual
signature of an authorized officer of the Warrant Agent and shall not be
valid for any purpose unless so countersigned. The Warrant Agent is hereby
authorized to countersign Warrant Certificates for issuance pursuant to any
provision of this Agreement.
Each Warrant Certificate shall be dated the date of its
countersignature by the Warrant Agent.
SECTION 4. Distribution of Warrant Certificates. As soon as
reasonably practical after the date hereof, the Company shall execute and
deliver to the Warrant Agent for authentication Warrant Certificates
representing an aggregate of 643,462 Warrants. The Warrant Agent shall
promptly thereupon authenticate and deliver to each Creditor, as of the
date immediately prior to the Consummation Date (as defined in the Plan),
as shown by the records of the Company, at the address of such Creditor
shown on such records, a Warrant Certificate, representing such number of
Warrants as is equal to (as calculated by the Company):(i) in the case of a
holder of an Allowed General Claim (as defined in the Plan), the product of
(a) a fraction, the numerator of which is such holder's Allowed General
Claim and the denominator of which is the aggregate amount of all Unsecured
Claims (as defined in the Plan) that have not been disallowed as of the
Consummation Date and (b) 643,462; and (ii) in the case of a holder of an
Allowed 12% Debenture Claim, the product of (a) a fraction, the numerator
of which is such holder's Allowed 12% Debenture Claim and the denominator
of which is the aggregate amount of all Allowed 12% Debenture Claims and
(b) an amount of Warrants equal to 643,462 less the aggregate number of
Warrants distributed to holders of Allowed General Claims under clause (i)
above.
The Company and the Warrant Agent shall cooperate to effect the
foregoing as expeditiously as possible and to execute, authenticate and
deliver, from time to time, such other Warrant Certificates as are required
by the terms of this Agreement.
SECTION 5. Registration; Transfers; Exchanges; Purchases by the Company
and Legend. From the date hereof, the Warrant Agent will keep or cause to
be kept, at an office in New York, New York (the "Warrant Agent Office"),
books for registration and transfer of the Warrant Certificates (the
``Warrant Register''). The Warrant Register shall show the names and
addresses of the respective Holders, the number of Warrants evidenced on
its face by each of the Warrant Certificates and the date of each of the
Warrant Certificates.
The Company and the Warrant Agent may deem and treat each Holder as the
absolute owner of the Warrant Certificate registered in his name
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof, any distribution to the
Holder thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
Each Warrant shall be transferable, in whole or in part, on the Warrant
Register, upon surrender of the Warrant Certificate at the Warrant Agent
Office , together with a written assignment of the Warrant Certificate, on
the Form of Assignment or Partial Assignment, as the case may be, set forth
on the reverse thereof or in other form satisfactory to the Warrant Agent,
duly executed by the Holder thereof or such Holder's duly appointed legal
representative, and together with funds to pay any transfer taxes payable
in connection with such transfer. Upon such surrender and payment, a new
Warrant Certificate, in the name of the assignee and in the denomination or
denominations specified in such instrument of assignment, shall be issued
and delivered. If less than all of a Warrant Certificate is being
transferred, a new Warrant Certificate or Certificates shall be issued for
the portion of the Warrant not being transferred. The Warrant Certificate
surrendered shall be cancelled by the Warrant Agent.
A Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender thereof at the Warrant Agent Office together
with a written notice specifying the names and denominations in which new
Warrant Certificates are to be issued, signed by the Holder thereof or such
Holder's duly appointed legal representative, and together with the funds
to pay any transfer taxes payable in connection with such transfer. Upon
such surrender and payment, a new Warrant Certificate or Certificates shall
be issued and delivered in accordance with such notice. The Warrant
Certificate surrendered shall be cancelled by the Warrant Agent.
The Company shall make no service or other charge in connection with any
such transfer or exchange of Warrant Certificates, except for any transfer
taxes or other governmental charges payable in connection therewith.
Warrant Certificates cancelled by the Warrant Agent pursuant to any
provisions of this Agreement shall not be reissued, and shall be destroyed
by the Warrant Agent unless the Company directs their return to the
Company. The Warrant Agent shall furnish to the Company written
confirmation of the destruction of the Warrant Certificates so cancelled.
The Company shall have the right, except as limited by law, other
agreements or herein, to purchase or otherwise acquire in negotiated
transactions Warrants evidenced by the Warrant Certificates at such times,
in such manner and for such consideration as it may deem appropriate
through privately negotiated transactions, open market purchases, tender
offers or otherwise. In the event the Company shall purchase or otherwise
acquire Warrants, the Warrant Certificate(s) evidencing such Warrants shall
thereupon be delivered to the Warrant Agent. The Warrant Agent shall cancel
any Warrant Certificate surrendered for exchange, substitution, transfer or
exercise in whole or in part. The Warrant Agent shall deliver all Warrant
Certificates to the Company.
Each Warrant Certificate and any certificate issued at any time upon
transfer of, or in exchange for or replacement of, any certificate shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
``THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF
DECEMBER 30, 1994, BY AND AMONG SHAWMUT BANK CONNECTICUT, N.A., AS
WARRANT AGENT, AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.''
The Holder by its acceptance of such security understands that such
security may bear a legend as contemplated by this Section 5.
SECTION 6. Duration and Exercise of Warrants. The Warrants shall expire
at 5:00 p.m. New York City time on December 29, 1999, provided, that if
such date falls on a day other than a Business Day, then the Warrants shall
expire at 5:00 p.m. New York City time on the next succeeding Business Day
(such date of expiration being herein referred to as the ``Expiration
Date''). A ``Business Day'' shall mean a day other than a Saturday, Sunday
or a public or national bank holiday or the equivalent for banks generally
under the laws of the State of New York. Each Warrant may be exercised on
any Business Day on or prior to 5:00 p.m. New York City time on the
Expiration Date. After 5:00 p.m. New York City time on the Expiration Date,
unexercised Warrants will become wholly void and of no value.
Subject to the provisions of this Agreement, each Holder shall have the
right to purchase from the Company (and the Company shall issue and sell to
such Holder) one fully paid and nonassessable share of Series A Common
Stock at the exercise price (the ``Exercise Price'') at the time in effect
hereunder, upon surrender to the Warrant Agent Office , of the Warrant
Certificate evidencing such Warrant, with the Form of Exercise on the
reverse thereof duly completed and signed, and upon payment of the Exercise
Price in lawful money of the United States of America by certified or
official bank cashier's check or wire transfer payable to the order of the
Company. The Exercise Price shall be as provided in Section 7. The Exercise
Price and the number of shares of Series A Common Stock purchasable upon
exercise of a Warrant shall be subject to adjustment as provided in Section
12. Except as provided in Section 12, no adjustment shall be made for any
cash dividends or other distributions on or in respect of the Common Stock
or other securities purchasable upon the exercise of a Warrant.
Subject to Section 8, upon surrender of a Warrant Certificate and
payment of the Exercise Price at the time in effect hereunder and an amount
equal to any applicable transfer tax in cash or by certified check or bank
draft payable to the order of the Company, the Warrant Agent shall
thereupon promptly cause to be issued and shall deliver to or upon the
written order of the Holder of each such Warrant and in such name or names
as such Holder may designate, within a reasonable time, not exceeding
fifteen days after each Warrant represented by the Warrant Certificate
shall have been exercised, a certificate for the Common Stock issuable upon
the exercise of each Warrant evidenced by such Warrant Certificate. Such
certificate shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become the holder of
record of such shares of Common Stock (a ``Shareholder'') as of the date of
the surrender of such Warrant Certificate and payment of the Exercise
Price.
The Warrants evidenced by a Warrant Certificate shall be exercisable, at
the election of the Holder thereof, either as an entirety or from time to
time in part only of the number of Warrants evidenced by the Warrant
Certificate. In the event that less than all of the Warrants evidenced by a
Warrant Certificate surrendered upon the exercise of Warrants are
exercised, a new Warrant Certificate or Certificates shall be issued for
the remaining number of Warrants evidenced by the Warrant Certificate so
surrendered. All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent.
The Warrant Agent shall deposit to the account of the Company all monies
received by the Warrant Agent in payment of the Exercise Price of any
Warrant and any applicable transfer taxes. The Warrant Agent shall account
promptly to the Company with respect to the exercise of Warrants.
SECTION 7. Exercise Price. The Exercise Price shall be equal to $7.00
per share of Series A Common Stock, subject to adjustment as provided in
Section 12.
SECTION 8. Payment of Taxes. The Company shall pay all documentary stamp
taxes, if any, attributable to the issuance of Warrants and the issuance of
Series A Common Stock upon the exercise of any Warrant, provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance of any
certificates for shares of Series A Common Stock in a name other than that
of the Holder of a Warrant Certificate surrendered upon the exercise of a
Warrant and the Company shall not be required to issue or deliver such
certificates unless or until the persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, and the Warrant Agent shall countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and in substitution for the Warrant Certificate
lost, stolen or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such loss,
theft or destruction of such Warrant Certificate and indemnity, if
requested, also satisfactory to the Company and the Warrant Agent.
Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable requirements and pay such other reasonable charges as
the Company or the Warrant Agent may prescribe.
SECTION 10. Reservation of Series A Common Stock. The Company will at
all times reserve and keep available, free from preemptive rights, out of
the aggregate of its authorized but unissued shares of Series A Common
Stock and shares of Series A Common Stock held in its Treasury, for the
purpose of enabling it to satisfy any obligation to issue shares of Series
A Common Stock upon the exercise of Warrants, the maximum number of shares
of Series A Common Stock which are required to be delivered upon the
exercise of all outstanding Warrants.
The Company covenants that all shares of Series A Common Stock which may
be issued upon the exercise of Warrants will, upon issuance and payment
therefor, be duly issued and outstanding, fully paid and nonassessable and
free from all taxes, liens, charges and security interests with respect to
the issuance thereof.
The Warrant Agent is authorized to requisition from time to time from a
transfer agent for the Series A Common Stock (including the Company if then
acting as a transfer agent) stock certificates required to honor the
exercise of outstanding Warrants. The Company hereby authorizes its present
and any future such transfer agent to comply with all such requests. The
Company will supply such transfer agent with duly executed Series A Common
Stock certificates for such purposes and will itself provide or otherwise
make available any cash which may be payable as provided in Section 13.
SECTION 11. Obtaining of Governmental Approvals and Stock Exchange
Listings. The Company will in good faith and as expeditiously as possible
take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and
authorities, and will make any and all filings under federal and state
securities laws necessary in connection with the issuance, distribution and
transfer of Warrant Certificates, the exercise of the Warrants and the
issuance, sale, transfer and delivery of shares of Series A Common Stock
upon the exercise of Warrants, provided, that the foregoing provisions of
this sentence shall not be deemed to require the registration under the
Securities Act of 1933, as amended (the ``Securities Act''), or similar
state securities laws of the Warrants or the shares of Series A Common
Stock issuable upon the exercise of the Warrants. The Company will use
reasonable efforts to have the shares of Series A Common Stock which are
issuable upon the exercise of the Warrants listed for trading on any
securities exchanges on which the then outstanding Series A Common Stock is
listed (or on the Nasdaq Stock Market(``NASDAQ'')).
SECTION 12. Adjustment of Exercise Price and Number and Kind of
Securities Purchasable upon Exercise of Warrants.
(a) Adjustment of Exercise Price and Number of Warrants. The Exercise
Price shall be subject to adjustment from time to time by the Company as
hereinafter provided in this Section 12 . No adjustment of the Exercise
Price, however, shall be made in an amount less than $.01 per share, but
any such lesser adjustment shall be carried forward and shall be made at
the time and together with the next subsequent adjustment, which together
with any subsequent adjustments so carried forward shall amount to $.01 per
share or more. Upon each adjustment of the Exercise Price, except pursuant
to subsection (f) of this Section, the Holder shall thereafter, at or prior
to the Expiration Date, be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares issuable upon exercise
of the Warrants (calculated to the nearest whole share) obtained by
multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so obtained
by the Exercise Price resulting from such adjustment.
(b) Adjustment of Exercise Price upon Certain Issuances of Common Stock.
If and whenever after the date hereof, the Company shall issue or sell any
shares of Common Stock for a consideration per share less than the current
market price (as hereinafter defined) in effect immediately prior to the
time of such issue or sale, then, forthwith upon such issue or sale, the
Exercise Price shall be reduced to the price (calculated to the nearest
cent) determined by multiplying the Exercise Price in effect immediately
prior to the time of such issue or sale by a fraction, the numerator of
which shall be the sum of (i) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the
current market price immediately prior to such issue or sale, plus (ii) the
consideration received by the Company upon such issue or sale, and the
denominator of which shall be the product of (iii) the total number of
shares of Common Stock outstanding immediately after such issue or sale,
multiplied by (iv) the current market price immediately prior to such issue
or sale.
(c) Constructive Issuances of Stock; Convertible Securities; Rights and
Options. For purposes of subsection (b) of this Section, the following
clauses shall also be applicable:
(i) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant any rights or options to subscribe for or to
purchase, or any options for the purchase of, Common Stock or stock or
securities convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being hereinafter called
``Convertible Securities''), whether or not such rights or options or
the right to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per share for which Common Stock
is issuable upon the exercise of such rights or options or upon
conversion or exchange of such Convertible Securities (determined as
provided below) shall be less than the current market price determined
as of the date of granting such rights or options, then the total
maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon conversion or exchange of the total
maximum amount of such Convertible Securities issuable upon the exercise
of such rights or options shall (as of the date of granting of such
rights or options) be deemed to be outstanding and to have been issued
for such price per share. For the purposes of calculations under this
clause (i), the price per share for which Common Stock is issuable upon
the exercise of any such rights or options or upon conversion or
exchange of any such Convertible Securities shall be determined by
dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional consideration payable to
the Company upon the exercise of all such rights or options, plus, in
the case of such rights or options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (b) the total maximum number
of shares of Common Stock issuable upon the exercise of such rights or
options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such rights or options. Except
as provided in clause (iii) of this subsection (c), no further
adjustments of any Exercise Price shall be made upon the actual issue of
such Common Stock or of such Convertible Securities upon exercise of
such rights or options or upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. In case at any time the
Company shall in any manner issue or sell any Convertible Securities,
whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock
is issuable upon conversion or exchange of such Convertible Securities
(determined as provided below) shall be less than the current market
price determined as of the date of such issue or sale of such
Convertible Securities, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale of
such Convertible Securities) be deemed to be outstanding and to have
been issued for such price per share, provided that if any such issue or
sale of such Convertible Securities is made upon exercise of any rights
to subscribe for or to purchase or any option to purchase any such
Convertible Securities for which adjustments of any Exercise Price have
been or are to be made pursuant to other provisions of this subsection
(c), no further adjustment of the Exercise Price shall be made by reason
of such issue or sale. For the purposes of calculations under this
clause (ii), the price per share for which Common Stock is issuable upon
conversion or exchange of Convertible Securities shall be determined by
dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, by (b)
the total maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. Except as
provided in clause (iii) of this subsection, no further adjustments of
any Exercise Price shall be made upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.
(iii) Change in Option Price or Conversion Rate; Expiration or
Termination of Rights or Convertible Securities. If the purchase price
provided for in any rights or options referred to in clause (i) above,
or the additional consideration, if any, payable upon the conversion or
exchange of Convertible Securities referred to in clause (i) or (ii)
above, or the rate at which any Convertible Securities referred to in
clause (i) or (ii) above are convertible into or exchangeable for Common
Stock, shall change (other than under or by reason of provisions
designed to protect against dilution), then the Exercise Price then in
effect shall forthwith be readjusted to the Exercise Price which would
have then been in effect had such then outstanding rights, options or
Convertible Securities provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. If the purchase price provided
for in any such right or option referred to in clause (i) above or the
rate at which any Convertible Securities referred to in clause (i) or
(ii) above are convertible into or exchangeable for Common Stock, shall
decrease at any time under or by reason of provisions with respect
thereto designed to protect against dilution, the Exercise Price then in
effect hereunder shall forthwith be decreased to such Exercise Price as
would have been obtained had the adjustments made upon issuance of such
right or option or such Convertible Securities been made upon the basis
of the actual issuance of (and the total consideration received for) the
shares of Common Stock delivered upon such exercise, conversion or
exchange. Upon the expiration of any rights, options or Convertible
Securities, if any thereof shall not have been exercised, converted or
exchanged, as the case may be, the Exercise Price and the number of
shares issuable upon exercise of the Warrants shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (a) the only shares of Common
Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise, conversion or exchange, as the case may be,
of such rights, options or Convertible Securities and (b) such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise, conversion or exchange, as
the case may be, plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all of such
rights, options or Convertible Securities, whether or not exercised,
converted or exchanged.
(iv) Stock Dividends. In case at any time the Company shall declare
a dividend or make any other distribution upon any stock of the Company
which is payable in shares of Common Stock or Convertible Securities,
any shares of Common Stock or Convertible Securities, as the case may
be, issuable in payment of such dividend or distribution shall be deemed
to have been issued or sold without consideration.
(v) Consideration for Stock. In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such
Common Stock or Convertible Securities shall be issued or sold for cash,
the consideration received therefor shall be deemed to be the issuance
or sales price therefor, without deducting therefrom any expenses
incurred or any underwriting commissions or concessions or discounts
paid or allowed by the Company in connection therewith. In case any
shares of Common Stock or Convertible Securities or any rights or
options to purchase any such shares of Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined
reasonably and in good faith by the Board of Directors of the Company,
without deducting any expenses incurred or any underwriting commissions
or concessions or discounts paid or allowed by the Company in connection
therewith. In case any shares of Common Stock or Convertible Securities
or any rights or options to purchase any shares of Common Stock or
Convertible Securities shall be issued in connection with any merger of
another corporation into the Company, the amount of consideration
therefor shall be deemed to be the fair value as determined reasonably
and in good faith by the Board of Directors of the Company of such
portion of the assets of such merged corporation as the Board shall
determine to be attributable to such shares of Common Stock, Convertible
Securities, rights or options, as the case may be.
(vi) Definition of Current Market Price. For the purpose of any
computation hereunder, the ``current market price'' shall mean (1) if
the Common Stock is listed on one or more stock exchanges or is quoted
on the National Market System of NASDAQ (the ``National Market
System''), the average of the closing sales prices of a share of such
Common Stock on the primary national or regional stock exchange on which
such shares are listed or on the National Market System if quoted
thereon or (2) if the Common Stock is not so listed or quoted but is
traded in the over-the-counter market (other than the National Market
System), the average of the closing bid and asked prices of a share of
such Common Stock, in the case of clauses (1) and (2), for the 30
trading days (or such lesser number of trading days as such Common Stock
shall have been so listed, quoted or traded) next preceding the date of
measurement; provided, however, that if no such sales price or bid and
asked prices have been quoted during the preceding 30-day period,
``current market price'' means the value as determined reasonably and in
good faith by the Board of Directors of the Company; and provided,
further, however, that in the event the current market price of a share
of such Common Stock is determined during a period following the
announcement by the Company of (i) a dividend or distribution on the
Common Stock payable in shares of Common Stock or Convertible
Securities, (ii) a dividend of the type referred to in subsection (d) of
this Section 12, or (iii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of 30
trading days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the ``current market
price'' shall be appropriately adjusted to take into account ex-dividend
trading. Anything herein to the contrary notwithstanding, in case the
Company shall issue any shares of Common Stock, rights, options or
Convertible Securities in connection with the acquisition by the Company
of the stock or assets of any other corporation or the merger of any
other corporation into the Company, the current market price shall be
determined as of the date the number of shares of Common Stock, rights,
options or Convertible Securities (or in the case of Convertible
Securities other than stock, the aggregate principal amount of
Convertible Securities) was determined (as set forth in a written
agreement between the Company and the other party to the transaction)
rather than on the date of issuance of such shares of Common Stock,
rights, options or Convertible Securities.
(d) Adjustment for Certain Special Dividends. In case the Company shall
declare a dividend upon the Common Stock payable otherwise than out of
earnings or earned surplus, determined in accordance with generally
accepted accounting principles, and otherwise than in shares of Common
Stock or Convertible Securities, the Exercise Price in effect immediately
subsequent to the declaration of such dividend shall be determined by
multiplying the Exercise Price in effect immediately prior to such
declaration by a fraction, the numerator of which shall be the current
market price immediately prior to such distribution less the amount of cash
(or, if the distribution is for property other than cash, the fair market
value of such property determined reasonably and in good faith by the Board
of Directors of the Company) distributed in respect of one share of Common
Stock, and the denominator of which shall be the current market price
immediately prior to such distribution. For the purposes of the foregoing,
a dividend other than in cash shall be considered payable out of earnings
or earned surplus (other than revaluation of paid-in-surplus) only to the
extent that such earnings or earned surplus are charged an amount equal to
the fair value of such dividend as determined, reasonably and in good
faith, by the Board of Directors of the Company. Such reductions shall take
effect as of the date on which a record is taken for the purpose of such
dividend, or, if a record is not taken, the date as of which the holders of
Common Stock of record entitled to such dividend are determined.
(e) Subdivision or Combination of Stock. In case the Company shall at
any time subdivide the outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares
issuable upon exercise of the Warrants immediately prior to such
subdivision shall be proportionately increased, and conversely, in case the
outstanding shares of Common Stock shall be combined at any time into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased and the number of
shares issuable upon exercise of the Warrants immediately prior to such
combination shall be proportionately reduced.
(f) Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company (i) consolidates with or merges
into any other corporation and is not the continuing or surviving
corporation of such consolidation or merger, or (ii) permits any other
corporation to consolidate with or merge into the Company and the Company
is the continuing or surviving corporation but, in connection with such
consolidation or merger, the Common Stock is changed into or exchanged for
stock or other securities of any other corporation or cash or any other
assets, or (iii) transfers all or substantially all of its properties and
assets to any other corporation, or (iv) effects a capital reorganization
or reclassification of the capital stock of the Company in such a way that
holders of Common Stock shall be entitled to receive stock, securities,
cash or assets with respect to or in exchange for Common Stock, then, and
in each such case, proper provision shall be made so that, upon the basis
and upon the terms and in the manner provided in this subsection (f), the
Holder, upon the exercise of the Warrants at any time after the
consummation of such consolidation, merger, transfer, reorganization or
reclassification, shall be entitled to receive (at the aggregate Exercise
Price in effect for shares issuable upon such exercise of the Warrants
immediately prior to such consummation), in lieu of shares issuable upon
such exercise of the Warrants prior to such consummation, the stock and
other securities, cash and assets to which such Holder would have been
entitled upon such consummation if such Holder had so exercised such
Warrants immediately prior thereto (subject to adjustments subsequent to
such corporate action as nearly equivalent as possible to the adjustments
provided for in this Section 12). Notwithstanding the foregoing, in the
event that a definitive agreement (a ``Sale Agreement'') is executed with
respect to an all cash transaction involving (i) either a merger or
consolidation of the Company with and into another corporation or (ii) the
sale of all or substantially all of the outstanding shares of Common Stock
of the Company, the Company shall have the right, on three (3) days prior
written notice to the Holder, to pay or cause to be paid to the Holder on
or immediately prior to the closing date of the transactions under the Sale
Agreement in full and complete satisfaction and cancellation of the
Warrants, an amount in cash equal to (A) the product of (x) the price per
share of Common Stock payable to the holders of shares of Common Stock
under the Sale Agreement and (y) the number of shares of Common Stock
issuable upon exercise of the Warrants on such date minus (B) the product
of (x) the Exercise Price in effect at such date and (y) the number of
shares of Common Stock issuable upon exercise of the Warrants on such date.
(g) Notice of Adjustment. Whenever the number of shares issuable upon
the exercise of the Warrants or the Exercise Price is adjusted, as provided
in this Section 12, the Company shall prepare and mail to the Holder a
certificate setting forth (i) the Exercise Price and the number of shares
issuable upon the exercise of the Warrants after such adjustment, (ii) a
brief statement of the facts requiring such adjustment and (iii) the
computation by which such adjustment was made.
(h) No Change of Warrant Necessary. Irrespective of any adjustment in
the Exercise Price or in the number or kind of shares issuable upon
exercise of the Warrants, unless the Holder otherwise requests, the
Warrants may continue to express the same price and number and kind of
shares as are stated in the Warrants as initially issued.
(i) Treasury Shares. The number of shares of Common Stock outstanding at
any given time shall not include shares of Common Stock owned or held by or
for the account of the Company. The disposition of any shares of Common
Stock owned or held by or for the account of the Company shall be
considered an issue of Common Stock for the purposes of this Section 12.
(j) Certain Adjustment Rules.
(i) The provisions of this Section 12 shall similarly apply to
successive transactions.
(ii) If the Company shall declare any dividend referred to in
paragraph (iv) of subsection (c) of this Section 12 or subsection (d) of
this Section 12 and if the Holder exercises all or any part of the
Warrants after such declaration but before the payment of such dividend,
the Company may elect to defer, until the payment of such dividend,
issuing to the Holder the shares issuable upon such exercise of the
Warrants over and above the shares issuable upon such exercise of the
Warrants on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to the
Holder a due bill or other appropriate instrument evidencing the
Holder's right to receive such additional shares upon the payment of
such dividend.
(iii) If the Company shall declare any dividend referred to in
paragraph (iv) of subsection (c) of this Section 12 or subsection (d) of
this Section 12 and shall legally abandon such dividend prior to
payment, then no adjustment shall be made pursuant to this Section 12 in
respect of such declaration.
(k) Exceptions to Adjustment to Purchase Price. Notwithstanding anything
herein to the contrary, no adjustment to the Exercise Price or the number
of shares issuable upon exercise of the Warrants shall be made in the case
of the following:
(i) the issuance of any Warrant or the issuance of any shares upon
any exercise of any Warrant or any adjustment of the Exercise Price with
respect thereto;
(ii) the issuance of any Reliance Warrant (as defined in the Plan)
or the issuance of any shares upon any exercise of any Reliance Warrant
or any adjustment of the Exercise Price (as defined therein) with
respect thereto;
(iii) the grant of options to purchase shares of Series A Common
Stock to employees or officers of the Company, or the adjustment of the
exercise price thereof;
(iv) the issuance of shares of Series A Common Stock to any
employees or officers of the Company, including without limitation, upon
the exercise of any options to purchase Series A Common Stock (whether
such options were granted prior to the date hereof or are granted on or
after the date hereof);
(v) sales of shares of Series A Common Stock pursuant to a Company
plan for the reinvestment of dividends or stated interest; or
(vi) any change in the par value of the Series A Common Stock.
(l) Other Exercise Price Reductions. Anything in this Section 12 to
the contrary notwithstanding, the Company shall be entitled to reduce
the Exercise Price, in addition to those adjustments required by this
Section 12, to the extent necessary so that any consolidation or
subdivision of the Common Stock, issuance wholly for cash of any Common
Stock at less than the current market price, issuance wholly for cash of
Common Stock or Convertible Securities or dividends on Common Stock
payable in Common Stock or other assets, hereafter made by the Company
to the holders of its Common Stock, shall not be taxable to them.
(m) Certain Events. In case any event shall occur as to which the
other provisions of this Section 12 are not strictly applicable or if
strictly applicable would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles of such provisions, then the Company shall make an
adjustment, in its sole discretion, in accordance with such essential
intent and principles, so as to protect, without dilution, the purchase
rights represented by this Warrant.
SECTION 13. Fractional Shares of Series A Common Stock. The Company may,
but will not be required to, issue fractions of shares of Series A Common
Stock or distribute shares of Series A Common Stock certificates which
evidence fractions of shares upon the exercise of the Warrants, provided,
however, that in lieu of fractional shares of Series A Common Stock the
Company shall make a cash payment therefor equal in amount to the product
of the applicable fraction multiplied by the current market price then in
effect.
SECTION 14. Notices of Certain Events. In the event that the Company
shall propose (a) to pay any dividend payable in stock of any class to the
holders of shares of Common Stock or to make any other distribution to the
holders of shares of Common Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), (b) to offer
to the holders of shares of Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock
of any class or any other securities, rights or options, (c) to effect any
reclassification of its Common Stock, (d) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to permit
one or more of its subsidiaries to effect any sale or other transfer) in
one or more transactions, of more than fifty percent (50%) of the assets or
earning power of the Company and its subsidiaries (taken as a whole) to,
any other person or entity, or (e) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall
give to each Holder of a Warrant Certificate, in accordance with this
Section 14, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the Common
Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (a) or (b) above at least
twenty (20) days prior to the record date for determining holders of the
shares of Common Stock for purposes of such action, and in the case of any
such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock whichever shall be the earlier.
Notices authorized or required by this Agreement to be given by the Company
or the Warrant Agent to the Holder of any Warrant Certificate shall be
sufficiently given if sent by first-class mail, postage prepaid, addressed
to such Holder at such Holder's address as shown on the Warrant Register.
Failure to mail or receive such notice or any defect therein or in the
mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up.
SECTION 15. Representations and Warranties.
The Company represents and warrants that:
(a) Organization, Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware; and has all requisite power and
authority to own or lease and operate its properties and to carry on its
business as now conducted.
(b) Authority. The Company has all requisite power and authority to
enter into and perform all of its obligations under this Agreement, to
issue the Warrants and to carry out the transactions contemplated
hereby. The Company has taken all corporate or stockholder actions
necessary to authorize it to enter into and perform all of its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(c) Validity. This Agreement and the Warrants are the legal, valid
and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the rights of creditors generally.
(d) Capitalization. As of the date hereof, the equity capitalization
of the Company consists of (i) 20,000,000 shares of Common Stock,
divided into two series consisting of 14,388,394 shares of Series A
Common Stock and 5,611,606 shares of Series B Common Stock, and of which
14,388,394 shares of Series A Common Stock and 5,611,606 shares of
Series B Common Stock will initially be outstanding; (ii) 1,000,000
shares of preferred stock, par value $.01 per share, none of which will
be outstanding; (iii) warrants (including the Warrants) to purchase up
to 1,060,129 shares of Series A Common Stock; and (iv) options, if
granted, to purchase up to 1,000,000 shares of Series A Common Stock.
All of the shares comprising the Common Stock will, when issued and paid
for, be validly issued, fully paid and non-assessable. Except as set
forth in the first sentence of this Section 15(d), as of the date
hereof, there will not be any outstanding securities convertible into,
exchangeable for, or carrying the right to acquire, equity securities of
the Company, or subscriptions, warrants, options, rights or other
arrangements or commitments obligating the Company to issue or dispose
of any of its equity securities or any ownership interest therein.
SECTION 16. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any document or any further act on the
part of any of the parties hereto, provided, that such corporation would be
eligible for appointment as a successor Warrant Agent under the provisions
of Section 18. Any such successor Warrant Agent shall promptly cause notice
of its succession as Warrant Agent to be mailed (by first-class mail,
postage prepaid) to each Holder of a Warrant Certificate at such Holder's
last address as shown on the register of the Company maintained by the
Warrant Agent. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement any of the Warrant
Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and if any of the Warrant Certificates shall not
have been countersigned, any successor to the Warrant Agent may countersign
such Warrant Certificates either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent; and such Warrant
Certificates shall have the full force provided in the Warrant Certificates
and in this Agreement.
If the name of the Warrant Agent shall be changed and at such time
Warrant Certificates shall have been countersigned but not delivered, the
Warrant Agent may adopt the counter-signature under its prior name, and if
any of the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Warrant Certificates either in its prior
name or in its changed name, and such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.
SECTION 17. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed on it by this Agreement, upon the following terms and
conditions, by all of which the Company and the Holders, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except
such as describe the Warrant Agent or action taken or to be taken by it.
The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrant Certificates except as herein provided.
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this
Agreement or in the Warrants.
(c) The Warrant Agent may consult at any time with counsel to it
(who may be counsel for the Company) and the Warrant Agent shall incur
no liability or responsibility to the Company or to any Holder in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion or the advice of such counsel,
provided that the Warrant Agent shall have exercised reasonable care in
the selection and continued employment of such counsel.
(d) Whenever in the performance of its duties under this Agreement
the Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by a Company Officer and delivered to the Warrant Agent and such
certificate shall be full authorization to the Warrant Agent for any
action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(e) The Warrant Agent shall incur no liability or responsibility to
the Company or to any Holder for any action taken in reliance upon any
Warrant Certificate, Common Stock Certificate, notice, resolution,
waiver, consent, order, certificate, or other document or instrument
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(f) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind
and nature, incurred by the Warrant Agent in the execution of this
Agreement and to indemnify the Warrant Agent and hold it harmless
against any and all liabilities, including judgments and reasonable
costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of the
Warrant Agent's willful misconduct, negligence or bad faith.
(g) The Warrant Agent shall be under no obligation to institute
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses which may
be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as it may consider proper, whether
with or without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of the Warrant Certificate or the
production thereof at any trial or proceeding relative thereto and any
such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall
be for the ratable benefit of the Holders, as their respective rights or
interests may appear. The Warrant Agent shall promptly notify the
Company in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in connection with this
Agreement, provided that failure to notify the Company shall not alter
the Company's responsibilities and obligations hereunder, unless such
failure has materially adversely prejudiced the Company.
(h) Except as otherwise required by law, the Warrant Agent, and any
stockholder, director, officer or employee of the Warrant Agent may buy,
sell, or deal in any of the Warrants or other securities of the Company
or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though they were not the Warrant
Agent, or a stockholder, director, officer or employee of the Warrant
Agent, as the case may be. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) Except as set forth in Section 17(h), the Warrant Agent shall
act hereunder solely as agent of the Company, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not
be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own willful misconduct,
negligence or bad faith.
(j) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any Company Officer and to apply to any such Company Officer for
advice or instructions in connection with the Warrant Agent's duties,
and it shall not be liable for any action taken, suffered or omitted by
it in good faith in accordance with the instruction of any such Company
Officer.
SECTION 18. Change of Warrant Agent. The Company may remove the Warrant
Agent or any successor Warrant Agent upon 30 days' notice in writing,
mailed to the Warrant Agent or successor Warrant Agent, as the case may be,
and to each transfer agent of the Common Stock by registered or certified
mail, and to the Holders by first class mail. If the Warrant Agent shall be
removed, become incapable of acting as Warrant Agent, or resign as Warrant
Agent (which it may do at any time upon 30 days' prior written notice to
the Company), the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30
days after such removal or after it has been notified in writing of such
incapacity or resignation by the Warrant Agent or by a Holder, any Holder
may apply to any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Pending appointment of a successor to the
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. Any successor Warrant
Agent, whether appointed by the Company or by such court, shall be a bank
or trust company, in good standing, incorporated under the laws of the
State of New York or of the United States of America, and having an office
in New York, and must have at the time of its appointment as Warrant Agent
a combined capital and surplus of at least $50,000,000. The combined
capital and surplus of any such new warrant agent shall be deemed to be the
combined capital and surplus as set forth in the most recent annual report
of its condition published by such warrant agent prior to its appointment,
provided that such reports are published at least annually pursuant to law
or to the requirements of a Federal or state supervising or examining
authority. After appointment, the successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary to implement the
appointment of the successor Warrant Agent. The Company shall cause notice
of the appointment of any successor Warrant Agent to be mailed by first-
class mail, postage prepaid, to each Holder at his or her address appearing
on the Warrant Register. Failure to give any notice provided for in this
Section 18, or any defect therein, shall not, however, affect the legality
or validity of the appointment of a successor Warrant Agent.
SECTION 19. Notices to Company and Warrant Agent. Any notice, demand,
request, instruction or other communication which any party hereto may be
required or may desire to give shall be in writing and shall be deemed to
have been properly given (a) if by hand delivery or telecopy, upon delivery
to such party at the address or to the telecopier number specified below;
(b) if by registered or certified mail, on the third Business Day after the
day deposited with the United States Postal Service, postage prepaid,
return receipt requested, addressed to such party at the address specified
below; or (c) if by Federal Express or other reputable express mail
service, on the next Business Day after delivery to such express mail
service, addressed to such party at the address specified below:
If to the Company, at: Telemundo Group, Inc.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Chief Financial Officer
Telecopier: (305) 889-7997
If to the Warrant Agent, at: Shawmut Bank Connecticut, National
Association
777 Main Street, MSN 238
Hartford, Connecticut 06115
Attn: Corporate Trust Administration
Telecopier: (203) 986-7920
or at such other address or telecopier number as the party to be served
with notice may have furnished in writing to the party seeking or desiring
to serve notice as a place or number for the service of notice.
SECTION 20. Identity of Transfer Agent. Forthwith upon the appointment
of any subsequent transfer agent for the Series A Common Stock, or any
other shares of the Company's capital stock issuable upon the exercise of
the Warrants, the Company will file with the Warrant Agent a statement
setting forth the name and address of such subsequent transfer agent.
SECTION 21. Supplements and Amendments.
(a) The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with
any provisions herein, or to make any other provisions with regard to
matters or questions arising hereunder which the Company and the Warrant
Agent may deem necessary or desirable and which shall not adversely
affect the interests of any Holder.
(b) Any term, covenant, agreement or condition contained in this
Agreement may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument signed by the Company and, upon
the approval of the Holders of not less than 51% of the Warrants then
outstanding, by the Warrant Agent, provided that the prior written
consent of the Warrant Agent shall be necessary for any amendment or
waiver which adversely affects the interests of the Warrant Agent.
Promptly after the execution of any amendment or waiver pursuant hereto,
the Warrant Agent shall notify each Holder in writing of the substance
of such amendment or waiver.
SECTION 22. No Rights as Stockholders. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders or their transferees any rights of a
stockholder, including without limitation, the right to vote, to receive
dividends or to consent to, or receive notice as stockholders in respect
of, any meeting of stockholders for the election of directors of the
Company or for any other matter.
SECTION 23. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and permitted
assigns hereunder.
SECTION 24. Termination. This Agreement shall terminate and be of no
further force and effect at, and no Warrant may be exercised after, 5:00
p.m. New York City time on the Expiration Date. Notwithstanding the
foregoing, this Agreement will terminate on such earlier date when all
Warrants have been exercised and no Warrants remain outstanding. The
provisions of Section 17 shall survive such termination.
SECTION 25. Governing Law. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made
and performed entirely within such state.
SECTION 26. Benefits of this Agreement; Rights of Action. Nothing in
this Agreement shall be construed to give to any person or corporation
other than the Company, the Warrant Agent and the Holders any legal or
equitable right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant
Agent and the Holders.
SECTION 27. Damages. The Company recognizes and agrees that a Holder
will not have an adequate remedy if the Company fails to comply with the
terms of this Agreement and the Warrant Certificates and that damages will
not readily be ascertainable, and the Company expressly agrees that, in the
event of such failure, it shall not oppose an application by such Holder
requiring specific performance of any and all provisions of the Warrants or
this Agreement or enjoining the Company from continuing to commit any such
breach of the terms of the Warrants or this Agreement.
SECTION 28. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
SECTION 29. Headings. The headings used in this Agreement are inserted
for convenience only and neither constitute a portion of this Agreement nor
in any manner affect the construction of the provisions of this Agreement.
SECTION 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman II
_______________________________
Name: Peter J. Housman II
Title: President, Business and
Corporate Affairs
Attest:
/s/ Horace G. Dawson, III
_______________________
Horace G. Dawson III
Assistant Secretary
SHAWMUT BANK CONNECTICUT,NATIONAL
ASSOCIATION
By: /s/ Pablo de la Canal
_______________________________
Name: Pablo de la Canal
Title: Corporate Trust Officer
Attest:
/s/ Elna Deguia
_______________________
Elna Deguia
Secretary
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF THAT CERTAIN WARRANT
AGREEMENT DATED AS OF DECEMBER 30, 1994, BY AND
AMONG SHAWMUT BANK CONNECTICUT,NATIONAL ASSOCIATION,
AS WARRANT AGENT, AND THE COMPANY.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY
[FORM OF WARRANT CERTIFICATE]
[FACE]
EXERCISABLE ONLY ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME
December 29, 1999
No. W- Warrants
WARRANT CERTIFICATE
TELEMUNDO GROUP, INC.
This Warrant Certificate certifies that _____________ , is the
registered holder (the ``Holder'') of ________ Telemundo Warrants (the
``Warrants'') expiring December 29, 1999 to purchase common stock of
Telemundo Group, Inc., a Delaware corporation (the ``Company''). Each
Warrant entitles the Holder to purchase from the Company, on or after the
issuance hereof, and on or before 5:00 p.m. New York City time on December
29, 1999 one fully paid and nonassessable share of series A common stock of
the Company, par value $.01 per share (``Series A Common Stock''), at the
exercise price (the ``Exercise Price'') at the time in effect under the
Warrant Agreement (as defined on the reverse hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of such Exercise Price at the Warrant Agent Office
, but only subject to the conditions set forth herein and in the Warrant
Agreement; provided, however, that the number or kinds of shares of Series
A Common Stock or other securities (or in certain events other property)
purchasable upon exercise of the Warrants and the Exercise Price referred
to on the reverse hereof may as of the date of this Warrant Certificate
have been, or may after such date be, adjusted as a result of the
occurrence of certain events, as more fully provided in the Warrant
Agreement. Payment of the Exercise Price shall be made by certified or
official bank cashier's check or wire transfer payable to the order of the
Company.
No Warrant may be exercised after 5:00 p.m. New York City time on December
29, 1999 (the ``Expiration Date'').
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at
this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent by the manual signature of one of its authorized officers.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
TELEMUNDO GROUP, INC.
By:
Dated: , 1994
Attest:
Countersigned:
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, as Warrant Agent
By:
Authorized Signature
Void after December 29, 1999
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
TELEMUNDO GROUP, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated
as of December 30, 1994 (the ``Warrant Agreement''), duly executed and
delivered by the Company to Shawmut Bank, as warrant agent (the ``Warrant
Agent''), which Warrant Agreement is hereby incorporated by reference in
and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the Holders.
Initially capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Warrant Agreement. A copy of the
Warrant Agreement is available for inspection at the Warrant Agent Office
located at Shawmut Trust Company, 14 Wall Street, Window No. 2, 8th Floor,
New York, New York 10005, during regular business hours.
Warrants may be exercised to purchase shares of Series A Common Stock
from the Company at any time, or from time to time on or after
December 30, 1994, and on or before the Expiration Date, at the Exercise
Price then in effect. The Holder may exercise the Warrants represented by
this Warrant Certificate by surrendering the Warrant Certificate with the
Form of Exercise set forth hereon properly completed and executed, together
with payment of the Exercise Price at the time in effect, at the principal
corporate trust office of the Warrant Agent. In the event that an exercise
of Warrants evidenced hereby shall be an exercise of less than the total
number of Warrants evidenced hereby, there shall be issued to the Holder
hereof or such Holder's assignee a new Warrant Certificate evidencing the
number of Warrants not exercised. No adjustment will be made for any
dividends on any shares of Common Stock issuable upon exercise of this
Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price may, subject to certain conditions, be adjusted
and under certain circumstances the Warrant may become exercisable for
securities or other assets other than the shares of Common Stock referred
to on the face hereof. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be adjusted.
The Company may, but shall not be required to, issue fractions of shares
of Common Stock or any certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the current market price then in effect.
Subject to the terms and conditions contained in the Warrant Agreement,
the Warrants represented by this Warrant Certificate are transferable, in
whole or in part, on the register maintained by the Warrant Agent for such
purpose, upon surrender of this Warrant Certificate at the principal
corporate trust office of the Warrant Agent, together with a written
assignment of the Warrant on the Form of Assignment or Partial Assignment,
as the case may be, set forth hereon or in other form satisfactory to the
Warrant Agent, duly executed by the Holder or such Holder's duly appointed
legal representative, and together with funds to pay any transfer taxes
payable in connection with such transfer. Upon such surrender and payment,
a new Warrant Certificate shall be issued and delivered in the name of the
assignee and in the denomination or denominations specified in such
instrument of assignment. If less than all of the Warrants represented by
this Warrant Certificate are being transferred, a new Warrant Certificate
or Certificates shall be issued for the portion of this Warrant Certificate
not being transferred.
This Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender hereof at the principal corporate trust office
of the Warrant Agent, together with a written notice specifying the names
and denominations in which new Warrant Certificates are to be issued,
signed by the Holder hereof or his or her duly appointed legal
representative, and together with the funds to pay any transfer taxes
payable in connection with such transfer. Upon such surrender and payment,
a new Warrant Certificate or Certificates shall be issued and delivered in
accordance with such notice.
The Company shall make no service or other charge in connection with any
such transfer or exchange of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, any distribution to the Holder hereof, and
for all other purposes.
EXHIBIT B
[FORM OF EXERCISE]
[To be executed upon exercise of Warrant]
The undersigned (the ``Holder'') hereby irrevocably elects to exercise
the right, represented by Telemundo Group, Inc. Warrant Certificate No.
W ____________, to purchase _____________ shares of Telemundo Group, Inc.
Series A Common Stock (``Series A Common Stock'') and herewith tenders
payment for such Series A Common Stock to the order of Telemundo Group,
Inc., in the amount of $____________ in accordance with the terms hereof.
The undersigned requests that a certificate for such Series A Common Stock
be registered in the name of _______________________________ (insert social
security or other identifying number) whose address is
________________________________. If said number of shares of Series
A Common Stock is less than all of the shares of Series A Common Stock
purchasable under Telemundo Group, Inc. Warrant Certificate No. W? ,
the Holder requests that a new Warrant Certificate representing the
remaining balance of the shares of Series A Common Stock be registered in
the name of the Holder and that such Warrant Certificate be delivered to
____________________ whose address is
______________________________________________.
Dated: , 199__
Signature:
(Signature must conform in all respects to
name of Holder as specified on the face
of the Warrant Certificate.)
(Insert Social Security or Taxpayer
Identification Number of Holder)
Signature Guaranteed:
[FORM OF ASSIGNMENT]
(To be executed to transfer the Warrant Certificate)
FOR VALUE RECEIVED ______________________________ hereby sells,
assigns and transfers unto _____________________________________(print name
and address of transferee) the Warrants represented by Telemundo Group,
Inc. Warrant Certificate No. W together with all right, title and interest
evidenced thereby, and does hereby irrevocably constitute and appoint
____________________, attorney, to transfer the said Warrants on the books
of Telemundo Group, Inc., with full power of substitution.
Dated: December ___, 1994
Signature:
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Taxpayer
Identification Number of Holder)
Signature Guaranteed:
[FORM OF PARTIAL ASSIGNMENT]
(To be executed to transfer the Warrant Certificate)
FOR VALUE RECEIVED _______________________ (the ``Holder'') hereby sells,
assigns and transfers unto _____________________________________ (print
name and address of transferee) Warrants represented by Telemundo
Group, Inc. Warrant Certificate No. W ________________, together with all
right, title and interest evidenced thereby, and does hereby irrevocably
constitute and appoint _________________________, attorney, to transfer
said Warrants on the books of Telemundo Group, Inc., with full power of
substitution. The Holder requests that a new Warrant Certificate
representing the remaining balance of Warrants represented by Telemundo
Group, Inc. Warrant Certificate No. W ________________ be registered in the
name of the Holder and that such Warrant Certificate be delivered
to______________________ whose address is
_______________________________________.
Dated: December ___, 1994
Signature:
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Taxpayer
Identification Number of Holder)
Signature Guaranteed:
TELEMUNDO GROUP, INC. WARRANT
AGREEMENT AND FORM OF WARRANT
WARRANT AGREEMENT (the ``Agreement''), dated as of December 30, 1994,
between Telemundo Group, Inc., a Delaware corporation (the ``Company''),
and Reliance Insurance Company, a Pennsylvania corporation (the
``Holder'').
WHEREAS, the authorized common stock of the Company consists of
20,000,000 shares of common stock, par value $.01 per share (the ``Common
Stock''), divided into two series consisting of 14,388,394 shares of Series
A Common Stock (the ``Series A Common Stock'') and 5,611,606 shares of
Series B Common Stock (the ``Series B Common Stock'');
WHEREAS, in accordance with the plan of reorganization of the Company,
confirmed by final order of the United States Bankruptcy Court for the
Southern District of New York (the ``Bankruptcy Court'') on July 20, 1994
(the ``Plan''), the Company proposes to issue an aggregate of 416,667
Warrants in three series (the ``Warrants'') to the Holder or its designee,
each Warrant entitling the Holder or its designee to purchase, upon the
terms and subject to the conditions contained in this Agreement and the
Warrant Certificates (as defined below), one share of Series A common stock
of the Company, subject to adjustment as provided in Section 11 hereof;
WHEREAS, the Company will issue certificates evidencing the Warrants
(the ``Warrant Certificates'') and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Warrant Certificates. The Warrant Certificates (and the Forms
of Exercise, Assignment and Partial Assignment to be set forth on the
reverse thereof) shall be substantially in the forms set forth in Exhibits
A-D attached hereto, and may have such letters, numbers or other marks of
identification and such legends printed, lithographed or engraved thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement.
Section 2. Execution and Countersignature of Warrant Certificates. The
Warrant Certificates shall be executed on behalf of the Company by its
Chief Executive Officer, President, Chief Financial Officer or Treasurer
(each, a ``Company Officer'') under its corporate seal reproduced thereon
attested by its Secretary or Assistant Secretary. The signature of any of
these Company Officers on any Warrant Certificate may be manual or
facsimile. The name, incumbency and specimen signature of each Company
Officer authorized to act and give instructions and notices under this
Agreement shall be certified by the Secretary or Assistant Secretary of the
Company. Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at any time Company Officers shall bind the Company
even if any such individual ceased to be a Company Officer prior to the
execution and delivery of such Warrant Certificate or was not a Company
Officer at the date of this Agreement.
Each Warrant Certificate shall be countersigned by the manual signature
of an authorized officer of the Holder and shall not be valid for any
purpose unless so countersigned. The Holder is hereby authorized to
countersign Warrant Certificates for issuance pursuant to any provision of
this Agreement.
Each Warrant Certificate shall be dated the date of its countersignature
by the Holder.
Section 3. Distribution of Warrant Certificates. As soon as reasonably
practical after the date hereof, the Company shall execute and authenticate
Warrant Certificates representing an aggregate of 416,667 Warrants (as
described below). The Company shall promptly thereupon deliver to the
Holder, (i) one Warrant Certificate representing 138,889 Warrants to
purchase an equal number of shares of Series A Common Stock of the Company
(the ``Series 1 Warrants''); (ii) one Warrant Certificate representing
138,889 Warrants to purchase an equal number of shares of Series A Common
Stock of the Company (the ``Series 2 Warrants''); and (iii) one Warrant
Certificate representing 138,889 Warrants to purchase an equal number of
shares of Series A Common Stock of the Company (the ``Series 3 Warrants'').
The terms and conditions of each series of Warrants described in the
preceding sentence shall be identical, except for the Exercise Date and
Expiration Date (each as defined below) of each such series, which are set
forth in Section 5 of this Agreement. The Company shall effect the
foregoing as expeditiously as possible and execute, authenticate and
deliver, from time to time, such other Warrant Certificates as are required
by the terms of this Agreement.
Section 4. Transfers; Exchanges and Purchases by the Company. Subject to
Section 14, each Warrant shall be transferable, in whole or in part, upon
surrender of the Warrant Certificate to the Company together with a written
assignment of the Warrant Certificate, on the Form of Assignment or Partial
Assignment, as the case may be, set forth on the reverse thereof or in
other form satisfactory to the Company, duly executed by the Holder, and
together with funds to pay any transfer taxes payable in connection with
such transfer. Upon such surrender and payment, a new Warrant Certificate,
in the name of the assignee and in the denomination or denominations
specified in such instrument of assignment, shall be issued and delivered.
If less than all of a Warrant Certificate is being transferred, a new
Warrant Certificate or Certificates shall be issued for the portion of the
Warrant not being transferred. The Warrant Certificate surrendered shall be
cancelled by the Company.
A Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender thereof to the Company, together with a written
notice specifying the names and denominations in which new Warrant
Certificates are to be issued, signed by the Holder, and together with the
funds to pay any transfer taxes payable in connection with such transfer.
Upon such surrender and payment, a new Warrant Certificate or Certificates
shall be issued and delivered in accordance with such notice. The Warrant
Certificate surrendered shall be cancelled by the Company.
The Company shall make no service or other charge in connection with any
such transfer or exchange of Warrant Certificates, except for any transfer
taxes or other governmental charges payable in connection therewith.
Warrant Certificates cancelled pursuant to any provisions of this
Agreement shall not be reissued, and shall be returned to the Company.
The Company shall have the right, except as limited by law, other
agreements or herein, to purchase or otherwise acquire in negotiated
transactions Warrants evidenced by the Warrant Certificates at such times,
in such manner and for such consideration as it may deem appropriate
through privately negotiated transactions, open market purchases, tender
offers or otherwise. In the event the Company shall purchase or otherwise
acquire Warrants, the Warrant Certificate(s) evidencing such Warrants shall
thereupon be cancelled by the Company.
Section 5. Duration and Exercise of Warrants. Each series of Warrants
shall expire at 5:00 p.m. New York City time on the fifth anniversary of
the Exercise Date (as defined below) for such series, provided, that if
such date falls on a day other than a Business Day, then the Warrants shall
expire at 5:00 p.m. New York City time on the next succeeding Business Day
(such date of expiration being herein referred to as the ``Expiration
Date''). A ``Business Day'' shall mean a day other than a Saturday, Sunday
or a public or national bank holiday or the equivalent for banks generally
under the laws of the State of New York.
The ``Exercise Date'' shall be (i) December 30, 1995 with respect to
the Series 1 Warrants, evidenced by the Series 1 Warrant Certificate,
substantially in the form attached hereto as Exhibit A, and the Series 1
Warrants shall be exercisable from such date through and including
December 30, 2000, (ii) December 30, 1996 with respect to the Series 2
Warrants, evidenced by the Series 2 Warrant Certificate, substantially in
the form attached hereto as Exhibit B, and the Series 2 Warrants shall be
exercisable from such date through and including December 31, 2001, and
(iii) December 30, 1997 with respect to the Series 3 Warrants, evidenced by
the Series 3 Warrant Certificate, substantially in the form attached hereto
as Exhibit C, and the Series 3 Warrants shall be exercisable from such date
through and including December 31, 2002. The Warrants represented by each
Warrant Certificate shall only be exercisable for shares of Series A Common
Stock from the Exercise Date with respect to such Warrants through and
including the Expiration Date with respect to such Warrants. Each Warrant
may be exercised on any Business Day on or prior to 5:00 p.m. New York City
time on the Expiration Date. After 5:00 p.m. New York City time on the
Expiration Date, unexercised Warrants will become wholly void and of no
value.
Subject to the provisions of this Agreement, the Holder shall have
the right to purchase from the Company (and the Company shall issue and
sell to the Holder) one fully paid and nonassessable share of Series A
Common Stock at the exercise price (the ``Exercise Price'') at the time in
effect hereunder, upon surrender to the Company of the Warrant Certificate
evidencing such Warrant, with the Form of Exercise on the reverse thereof
duly completed and signed, and upon payment of the Exercise Price in lawful
money of the United States of America by certified or official bank
cashier's check or wire transfer payable to the order of the Company. The
Exercise Price shall be as provided in Section 6. The Exercise Price and
the number of shares of Series A Common Stock purchasable upon exercise of
a Warrant shall be subject to adjustment as provided in Section 11. Except
as provided in Section 11, no adjustment shall be made for any cash
dividends or other distributions on or in respect of the Common Stock or
other securities purchasable upon the exercise of a Warrant.
Subject to Section 7, upon surrender of a Warrant Certificate and
payment of the Exercise Price at the time in effect hereunder and an amount
equal to any applicable transfer tax in cash or by certified check or bank
draft payable to the order of the Company, the Company shall thereupon
promptly cause to be issued and shall deliver to or upon the Holder, within
a reasonable time, not exceeding fifteen days after each Warrant
represented by the Warrant Certificate shall have been exercised, a
certificate for the shares of Series A Common Stock issuable upon the
exercise of each Warrant evidenced by such Warrant Certificate. Such
certificate shall be deemed to have been issued and the Holder shall be
deemed to have become the holder of record of such shares of Series A
Common Stock (a ``Shareholder'') as of the date of the surrender of such
Warrant Certificate and payment of the Exercise Price. The Warrants
evidenced by a Warrant Certificate shall be exercisable, at the election of
the Holder, either as an entirety or from time to time for part only of the
number of Warrants evidenced by the Warrant Certificate. In the event that
less than all of the Warrants evidenced by a Warrant Certificate
surrendered upon the exercise of Warrants are exercised, a new Warrant
Certificate or Certificates shall be issued for the remaining number of
Warrants evidenced by the Warrant Certificate so surrendered. All Warrant
Certificates surrendered upon exercise of Warrants shall be cancelled by
the Company.
The Company shall deposit to the account of the Company all monies
received in payment of the Exercise Price of any Warrant and any applicable
transfer taxes.
Section 6. Exercise Price. The Exercise Price of each Warrant shall be
equal to $7.19 per share of Series A Common Stock, subject to adjustment as
provided in Section 11.
Section 7. Payment of Taxes. The Company shall pay all documentary stamp
taxes, if any, attributable to the issuance of Warrants and the issuance of
Series A Common Stock upon the exercise of any Warrant; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance of any
certificates for shares of Series A Common Stock in a name other than that
of the Holder of a Warrant Certificate surrendered upon the exercise of a
Warrant and the Company shall not be required to issue or deliver such
certificates unless or until the persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, in exchange and substitution for and upon cancellation
of the mutilated Warrant Certificate, or in lieu of and in substitution for
the Warrant Certificate lost, stolen or destroyed, a new Warrant
Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence satisfactory to the Company of
such loss, theft or destruction of such Warrant Certificate and indemnity,
if requested, also satisfactory to the Company. Applicants for such
substitute Warrant Certificates shall also comply with such other
reasonable requirements and pay such other reasonable charges as the
Company may prescribe.
Section 9. Reservation of Series A Common Stock. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Series A Common Stock
and shares of Series A Common Stock held in its Treasury, for the purpose
of enabling it to satisfy any obligation to issue shares of Series A Common
Stock upon the exercise of Warrants, the maximum number of shares of Series
A Common Stock which are required to be delivered upon the exercise of all
outstanding Warrants.
The Company covenants that all shares of Series A Common Stock which may
be issued upon the exercise of Warrants will, upon issuance and payment
therefor, be duly issued and outstanding, fully paid and nonassessable and
free from all taxes, liens, charges and security interests with respect to
the issuance thereof.
The Company is authorized to requisition from time to time from a
transfer agent for the Series A Common Stock (including the Company if then
acting as a transfer agent) stock certificates required to honor the
exercise of outstanding Warrants. The Company hereby authorizes its present
and any future such transfer agent to comply with all such requests. The
Company will supply such transfer agent with duly executed Series A Common
Stock certificates for such purposes and will itself provide or otherwise
make available any cash which may be payable as provided in Section 12.
Section 10. Obtaining of Governmental Approvals and Stock Exchange
Listings. The Company will in good faith and as expeditiously as possible
take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and
authorities, and will make any and all filings under federal and state
securities laws necessary in connection with the issuance, distribution and
transfer of Warrant Certificates, the exercise of the Warrants and the
issuance, sale, transfer and delivery of shares of Series A Common Stock
upon the exercise of Warrants, provided, that the foregoing provisions of
this sentence shall not be deemed to require the registration under the
Securities Act of 1933, as amended (the ``Securities Act''), or similar
state securities laws of the Warrants or the shares of Series A Common
Stock issuable upon the exercise of the Warrants. The Company will use
reasonable efforts to have the shares of Series A Common Stock which are
issuable upon the exercise of the Warrants listed for trading on any
securities exchanges on which the then outstanding Series A Common Stock is
listed (or on the Nasdaq National Market or the Nasdaq Small Cap Market.
Section 11. Adjustment of Exercise Price and Number and Kind of
Securities Purchasable upon Exercise of Warrants.
(a) Adjustment of Exercise Price and Number of Warrants. The Exercise
Price shall be subject to adjustment from time to time as hereinafter
provided in this Section 11 . No adjustment of the Exercise Price, however,
shall be made in an amount less than $.01 per share, but any such lesser
adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment, which together with any
subsequent adjustments so carried forward shall amount to $.01 per share or
more. Upon each adjustment of the Exercise Price, except pursuant to
subsection (f) of this Section, the Holder shall thereafter, at or prior to
the Expiration Date, be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares issuable upon exercise
of the Warrants (calculated to the nearest whole share) obtained by
multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so obtained
by the Exercise Price resulting from such adjustment.
(b) Adjustment of Exercise Price upon Certain Issuances of Common Stock.
If and whenever after the date hereof, the Company shall issue or sell any
shares of Common Stock for a consideration per share less than the current
market price (as hereinafter defined) in effect immediately prior to the
time of such issue or sale, then, forthwith upon such issue or sale, the
Exercise Price shall be reduced to the price (calculated to the nearest
cent) determined by multiplying the Exercise Price in effect immediately
prior to the time of such issue or sale by a fraction, the numerator of
which shall be the sum of (i) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the
current market price immediately prior to such issue or sale, plus (ii) the
consideration received by the Company upon such issue or sale, and the
denominator of which shall be the product of (i) the total number of shares
of Common Stock outstanding immediately after such issue or sale,
multiplied by (ii) the current market price immediately prior to such issue
or sale.
(c) Constructive Issuances of Stock; Convertible Securities; Rights and
Options. For purposes of subsection (b) of this Section, the following
clauses shall also be applicable:
(i) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant any rights or options to subscribe for or to
purchase, or any options for the purchase of, Common Stock or stock or
securities convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being hereinafter called
``Convertible Securities''), whether or not such rights or options or
the right to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per share for which Common Stock
is issuable upon the exercise of such rights or options or upon
conversion or exchange of such Convertible Securities (determined as
provided below) shall be less than the current market price determined
as of the date of granting such rights or options, then the total
maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon conversion or exchange of the total
maximum amount of such Convertible Securities issuable upon the exercise
of such rights or options shall (as of the date of granting of such
rights or options) be deemed to be outstanding and to have been issued
for such price per share. For the purposes of calculations under this
clause (i), the price per share for which Common Stock is issuable upon
the exercise of any such rights or options or upon conversion or
exchange of any such Convertible Securities shall be determined by
dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional consideration payable to
the Company upon the exercise of all such rights or options, plus, in
the case of such rights or options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (b) the total maximum number
of shares of Common Stock issuable upon the exercise of such rights or
options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such rights or options. Except
as provided in clause (iii) of this subsection (c), no further
adjustments of any Exercise Price shall be made upon the actual issue of
such Common Stock or of such Convertible Securities upon exercise of
such rights or options or upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. In case at any time the
Company shall in any manner issue or sell any Convertible Securities,
whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock
is issuable upon conversion or exchange of such Convertible Securities
(determined as provided below) shall be less than the current market
price determined as of the date of such issue or sale of such
Convertible Securities, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale of
such Convertible Securities) be deemed to be outstanding and to have
been issued for such price per share, provided that if any such issue or
sale of such Convertible Securities is made upon exercise of any rights
to subscribe for or to purchase or any option to purchase any such
Convertible Securities for which adjustments of any Exercise Price have
been or are to be made pursuant to other provisions of this subsection
(c), no further adjustment of the Exercise Price shall be made by reason
of such issue or sale. For the purposes of calculations under this
clause (ii), the price per share for which Common Stock is issuable upon
conversion or exchange of Convertible Securities shall be determined by
dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, by (b)
the total maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. Except as
provided in clause (iii) of this subsection, no further adjustments of
any Exercise Price shall be made upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.
(iii) Change in Option Price or Conversion Rate; Expiration or
Termination of Rights or Convertible Securities. If the purchase price
provided for in any rights or options referred to in clause (i) above,
or the additional consideration, if any, payable upon the conversion or
exchange of Convertible Securities referred to in clause (i) or (ii)
above, or the rate at which any Convertible Securities referred to in
clause (i) or (ii) above are convertible into or exchangeable for Common
Stock, shall change (other than under or by reason of provisions
designed to protect against dilution), then the Exercise Price then in
effect shall forthwith be readjusted to the Exercise Price which would
have then been in effect had such then outstanding rights, options or
Convertible Securities provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. If the purchase price provided
for in any such right or option referred to in clause (i) above or the
rate at which any Convertible Securities referred to in clause (i) or
(ii) above are convertible into or exchangeable for Common Stock, shall
decrease at any time under or by reason of provisions with respect
thereto designed to protect against dilution, the Exercise Price then in
effect hereunder shall forthwith be decreased to such Exercise Price as
would have been obtained had the adjustments made upon issuance of such
right or option or such Convertible Securities been made upon the basis
of the actual issuance of (and the total consideration received for) the
shares of Common Stock delivered upon such exercise, conversion or
exchange. Upon the expiration of any rights, options or Convertible
Securities, if any thereof shall not have been exercised, converted or
exchanged, as the case may be, the Exercise Price and the number of
shares issuable upon exercise of the Warrants shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (a) the only shares of Common
Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise, conversion or exchange, as the case may be,
of such rights, options or Convertible Securities and (b) such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise, conversion or exchange, as
the case may be, plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all of such
rights, options or Convertible Securities, whether or not exercised,
converted or exchanged.
(iv) Stock Dividends. In case at any time the Company shall declare
a dividend or make any other distribution upon any stock of the Company
which is payable in shares of Common Stock or Convertible Securities,
any shares of Common Stock or Convertible Securities, as the case may
be, issuable in payment of such dividend or distribution shall be deemed
to have been issued or sold without consideration.
(v) Consideration for Stock. In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such
shares of Common Stock or Convertible Securities shall be issued or sold
for cash, the consideration received therefor shall be deemed to be the
issuance or sales price therefor, without deducting therefrom any
expenses incurred or any underwriting commissions or concessions or
discounts paid or allowed by the Company in connection therewith. In
case any shares of Common Stock or Convertible Securities or any rights
or options to purchase any such shares of Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined
reasonably and in good faith by the Board of Directors of the Company,
without deducting any expenses incurred or any underwriting commissions
or concessions or discounts paid or allowed by the Company in connection
therewith. In case any shares of Common Stock or Convertible Securities
or any rights or options to purchase any shares of Common Stock or
Convertible Securities shall be issued in connection with any merger of
another corporation into the Company, the amount of consideration
therefor shall be deemed to be the fair value as determined reasonably
and in good faith by the Board of Directors of the Company of such
portion of the assets of such merged corporation as the Board shall
determine to be attributable to such shares of Common Stock, Convertible
Securities, rights or options, as the case may be.
(vi) Definition of Current Market Price. For the purpose of any
computation hereunder, the ``current market price'' shall mean (1) if
the Common Stock is listed on one or more stock exchanges or is quoted
on the Nasdaq National Market or the Nasdaq Small Cap Market (the
``National Market System''), the average of the closing sales prices of
a share of such Common Stock on the primary national or regional stock
exchange on which such shares are listed or on the National Market
System if quoted thereon or (2) if the Common Stock is not so listed or
quoted but is traded in the over-the-counter market (other than the
National Market System), the average of the closing bid and asked prices
of a share of such Common Stock, in the case of clauses (1) and (2), for
the 30 trading days (or such lesser number of trading days as such
Common Stock shall have been so listed, quoted or traded) next preceding
the date of measurement; provided, however, that if no such sale prices
or bid and asked prices have been quoted during the preceding 30-day
period, ``current market price'' means the value as determined
reasonably and in good faith by the Board of Directors of the Company;
and provided, further, however,that in the event the current market
price of a share of such Common Stock is determined during a period
following the announcement by the Company of (i) a dividend or
distribution on the Common Stock payable in shares of Common Stock or
Convertible Securities, (ii) a dividend of the type referred to in
subsection (d) of this Section 11, or (iii) any subdivision, combination
or reclassification of the Common Stock, and prior to the expiration of
30 trading days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the ``current market
price'' shall be appropriately adjusted to take into account ex-dividend
trading. Anything herein to the contrary notwithstanding, in case the
Company shall issue any shares of Common Stock, rights, options or
Convertible Securities in connection with the acquisition by the Company
of the stock or assets of any other corporation or the merger of any
other corporation into the Company, the current market price shall be
determined as of the date the number of shares of Common Stock, rights,
options or Convertible Securities (or in the case of Convertible
Securities other than stock, the aggregate principal amount of
Convertible Securities) was determined (as set forth in a written
agreement between the Company and the other party to the transaction)
rather than on the date of issuance of such shares of Common Stock,
rights, options or Convertible Securities.
(d) Adjustment for Certain Special Dividends. In case the Company shall
declare a dividend upon the Common Stock payable otherwise than out of
earnings or earned surplus, determined in accordance with generally
accepted accounting principles, and otherwise than in shares of Common
Stock or Convertible Securities, the Exercise Price in effect immediately
subsequent to the declaration of such dividend shall be determined by
multiplying the Exercise Price in effect immediately prior to such
declaration by a fraction, the numerator of which shall be the current
market price immediately prior to such distribution less the amount of cash
(or, if the distribution is for property other than cash, the fair market
value of such property determined reasonably and in good faith by the Board
of Directors of the Company) distributed in respect of one share of Common
Stock, and the denominator of which shall be the current market price
immediately prior to such distribution. For the purposes of the foregoing,
a dividend other than in cash shall be considered payable out of earnings
or earned surplus (other than revaluation of paid-in-surplus) only to the
extent that such earnings or earned surplus are charged an amount equal to
the fair value of such dividend as determined, reasonably and in good
faith, by the Board of Directors of the Company. Such reductions shall take
effect as of the date on which a record is taken for the purpose of such
dividend, or, if a record is not taken, the date as of which the holders of
Common Stock of record entitled to such dividend are determined.
(e) Subdivision or Combination of Stock. In case the Company shall at
any time subdivide the outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares
issuable upon exercise of the Warrants immediately prior to such
subdivision shall be proportionately increased, and conversely, in case the
outstanding shares of Common Stock shall be combined at any time into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased and the number of
shares issuable upon exercise of the Warrants immediately prior to such
combination shall be proportionately reduced.
(f) Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company (i) consolidates with or merges
into any other corporation and is not the continuing or surviving
corporation of such consolidation or merger, or (ii) permits any other
corporation to consolidate with or merge into the Company and the Company
is the continuing or surviving corporation but, in connection with such
consolidation or merger, the Common Stock is changed into or exchanged for
stock or other securities of any other corporation or cash or any other
assets, or (iii) transfers all or substantially all of its properties and
assets to any other corporation, or (iv) effects a capital reorganization
or reclassification of the capital stock of the Company in such a way that
holders of Common Stock shall be entitled to receive stock, securities,
cash or assets with respect to or in exchange for Common Stock, then, and
in each such case, proper provision shall be made so that, upon the basis
and upon the terms and in the manner provided in this subsection (f), the
Holder, upon the exercise of the Warrants at any time after the
consummation of such consolidation, merger, transfer, reorganization or
reclassification, shall be entitled to receive (at the aggregate Exercise
Price in effect for shares issuable upon such exercise of the Warrants
immediately prior to such consummation), in lieu of shares issuable upon
such exercise of the Warrants prior to such consummation, the stock and
other securities, cash and assets to which such Holder would have been
entitled upon such consummation if such Holder had so exercised such
Warrants immediately prior thereto (subject to adjustments subsequent to
such corporate action as nearly equivalent as possible to the adjustments
provided for in this Section 11). Notwithstanding the foregoing, in the
event that a definitive agreement (a ``Sale Agreement'') is executed with
respect to an all cash transaction involving (i) either a merger or
consolidation of the Company with and into another corporation or (ii) the
sale of all or substantially all of the outstanding shares of Common Stock
of the Company, the Company shall have the right, on three (3) days prior
written notice to the Holder, to (a) accelerate all of the Warrants not
theretofore exercisable so that all of the Warrants issued pursuant to this
Agreement are immediately exercisable and (b) to pay or cause to be paid to
the Holder on or immediately prior to the closing date of the transactions
under the Sale Agreement in full and complete satisfaction and cancellation
of the Warrants, an amount in cash equal to (A) the product of (x) the
price per share of Common Stock payable to the holders of Common Stock
under the Sale Agreement and (y) the number of shares of Common Stock
issuable upon exercise of the Warrants on such date minus (B) the product
of (x) the Exercise Price in effect at such date and (y) the number of
shares of Common Stock issuable upon exercise of the Warrants on such date.
(g) Notice of Adjustment. Whenever the number of shares issuable upon
the exercise of the Warrants or the Exercise Price is adjusted, as provided
in this Section 11, the Company shall prepare and mail to the Holder a
certificate setting forth (i) the Exercise Price and the number of shares
issuable upon the exercise of the Warrants after such adjustment, (ii) a
brief statement of the facts requiring such adjustment and (iii) the
computation by which such adjustment was made.
(h) No Change of Warrant Necessary. Irrespective of any adjustment in
the Exercise Price or in the number or kind of shares issuable upon
exercise of the Warrants, unless the Holder otherwise requests, the
Warrants may continue to express the same price and number and kind of
shares as are stated in the Warrants as initially issued.
(i) Treasury Shares. The number of shares of Common Stock outstanding at
any given time shall not include shares of Common Stock owned or held by or
for the account of the Company. The disposition of any shares of Common
Stock owned or held by or for the account of the Company shall be
considered an issue of Common Stock for the purposes of this Section 11.
(j) Certain Adjustment Rules.
(i) The provisions of this Section 11 shall similarly apply to
successive transactions.
(ii) If the Company shall declare any dividend referred to in
paragraph (iv) of subsection (c) of this Section 11 or subsection (d) of
this Section 11 and if the Holder exercises all or any part of the
Warrants after such declaration but before the payment of such dividend,
the Company may elect to defer, until the payment of such dividend,
issuing to the Holder the shares issuable upon such exercise of the
Warrants over and above the shares issuable upon such exercise of the
Warrants on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to the
Holder a due bill or other appropriate instrument evidencing the
Holder's right to receive such additional shares upon the payment of
such dividend.
(iii) If the Company shall declare any dividend referred to in
paragraph (iv) of subsection (c) of this Section 11 or subsection (d) of
this Section 11 and shall legally abandon such dividend prior to
payment, then no adjustment shall be made pursuant to this Section 11 in
respect of such declaration.
(k) Exceptions to Adjustment to Purchase Price. Notwithstanding anything
herein to the contrary, no adjustment to the Exercise Price or the number
of shares issuable upon exercise of the Warrants shall be made in the case
of the following:
(i) the issuance of any Warrant or the issuance of any shares upon
any exercise of any Warrant or any adjustment of the Exercise Price with
respect thereto;
(ii) the issuance of any Creditor Warrant (as defined in the Plan)
or the issuance of any shares upon any exercise of any Creditor Warrant
or any adjustment of the Exercise Price (as defined therein) with
respect thereto in accordance with the terms thereof;
(iii) the grant of options to purchase shares of Series A Common
Stock to employees or officers of the Company, or the adjustment of the
exercise price thereof;
(iv) the issuance of shares of Series A Common Stock to any
employees or officers of the Company, including without limitation, upon
the exercise of any options to purchase Series A Common Stock (whether
such options were granted prior to the date hereof or are granted on or
after the date hereof);
(v) sales of shares of Series A Common Stock pursuant to a Company
plan for the reinvestment of dividends or stated interest; or
(vi) any change in the par value of the Series A Common Stock.
(l) Other Exercise Price Reductions. Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to reduce the
Exercise Price, in addition to those adjustments required by this Section
11, to the extent necessary so that any consolidation or subdivision of the
Common Stock, issuance wholly for cash of any Common Stock at less than the
current market price, issuance wholly for cash of Common Stock or
Convertible Securities or dividends on Common Stock payable in Common Stock
or other assets, hereafter made by the Company to the holders of its Common
Stock, shall not be taxable to them.
(m) Certain Events. In case any event shall occur as to which the other
provisions of this Section 11 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of such
provisions, then the Company shall make an adjustment, in its sole
discretion, in accordance with such essential intent and principles, so as
to protect, without dilution, the purchase rights represented by this
Warrant.
Section 12. Fractional Shares of Series A Common Stock. The Company may,
but will not be required to, issue fractions of shares of Series A Common
Stock or to distribute shares of Series A Common Stock certificates which
evidence fractions of shares upon the exercise of the Warrants; provided,
however, that in lieu of fractional shares of Series A Common Stock the
Company shall make a cash payment therefor equal in amount to the product
of the applicable fraction multiplied by the current market price then in
effect.
Section 13. Notices of Certain Events. In the event that the Company
shall propose (a) to pay any dividend payable in stock of any class to the
holders of shares of Common Stock or to make any other distribution to the
holders of shares of Common Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), (b) to offer
to the holders of shares of Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock
of any class or any other securities, rights or options, (c) to effect any
reclassification of its Common Stock, (d) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to permit
one or more of its subsidiaries to effect any sale or other transfer) in
one or more transactions, of more than fifty percent (50%) of the assets or
earning power of the Company and its subsidiaries (taken as a whole) to,
any other person or entity, or (e) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall
give to the Holder, in accordance with this Section 13, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least twenty (20) days prior to the
record date for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of Common
Stock whichever shall be the earlier. Notices authorized or required by
this Agreement to be given by the Company to the Holder shall be
sufficiently given if sent by first-class mail, postage prepaid, addressed
to the Holder's address as shown herein. Failure to mail or receive such
notice or any defect therein or in the mailing thereof shall not affect the
validity of any action taken in connection with such dividend, distribution
or subscription rights, or such proposed dissolution, liquidation or
winding up.
Section 14. Restrictions on Transferability.
The Warrant Certificates and the shares of capital stock issuable upon
exercise of the Warrants shall not be transferable except upon the
conditions specified in this Section 14, which conditions are intended to
insure compliance with the provisions of the Securities Act in respect of
the transfer of any Warrant Certificate or any shares of capital stock
issuable upon exercise of the Warrants.
(a) Restrictive Legend; Holder's Representation. Unless and until
otherwise permitted by this Section 14, each certificate representing
shares of capital stock issuable upon exercise of the Warrants, and any
certificate issued at any time upon transfer of, or in exchange for or
replacement of, any certificate bearing the legend set forth below, shall
be stamped or otherwise imprinted with a legend in substantially the
following form:
``THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS
AND, ACCORDINGLY, THE TRANSFER, RESALE OR OTHER DISPOSITION OF SUCH
SECURITIES MAY ONLY BE MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR A VALID EXEMPTION THEREFROM
AND IN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS, AND BY
DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL FOR THE
COMPANY THAT THERE IS SUCH AN EXEMPTION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF
DECEMBER 30, 1994, BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES
OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY
OF THE COMPANY.''
The Holder represents to the Company that it is acquiring the Warrants
and will acquire the shares of capital stock issuable upon exercise of the
Warrants (if at all) for its own account and not with a view to any public
distribution thereof, subject to any requirement of law that the
disposition of such securities shall at all times be within the control of
the owner thereof. The acquisition of any Warrants or shares of capital
stock issuable upon exercise of the Warrants by the Holder on the date of
this Agreement or upon exercise of a Warrant shall constitute the Holder's
reaffirmation of such representation. The Holder further represents to the
Company that it is an ``accredited investor'' as defined in Regulation D of
the Securities Act. The Holder understands that the Warrants and the shares
of capital stock issuable upon exercise of the Warrants have not been
registered under the Securities Act and may only be sold or otherwise
disposed of in compliance with the Securities Act. The Holder by its
acceptance of such security further understands that such security may bear
a legend as contemplated by this Section 14.
(b) Registration Rights. The Holder is entitled to the benefits of the
registration rights contained in that certain registration rights
agreement, dated as of the date hereof, between the Company and the Holder
(the ``Registration Rights Agreement'').
(c) Termination of Restrictions. Notwithstanding the foregoing
provisions of this Section 14, the restrictions imposed by this Section 14
upon the transferability of (i) the shares of capital stock issuable upon
exercise of the Warrants shall cease and terminate as to any particular
shares of capital stock when such shares of capital stock cease to be
Registrable Securities (as defined in the Registration Rights Agreement)
and (ii) the Warrant Certificates shall cease and terminate as to any
particular Warrant Certificate when (i) such Warrant Certificate shall have
been effectively registered under the Securities Act and sold by the Holder
in accordance with such registration or (ii) in the opinion of counsel for
the Holder, if such opinion is satisfactory in form and substance to the
Company, such restrictions are no longer required in order to insure
compliance with the Securities Act. If and whenever the restrictions
imposed by this Section 14 shall terminate as to a Warrant Certificate (or
to any shares of capital stock) as hereinabove provided, the Holder may and
the Company shall, as promptly as practicable upon the request of the
Holder and at the Company's expense, cause to be stamped or otherwise
imprinted upon such Warrant Certificate or such shares of capital stock a
legend in substantially the following form:
``The restrictions on transferability of this [these] [Warrant
Certificate/securities] terminated on ___________, 199__ [20__], and
are of no further force or effect.''
All Warrant Certificates issued upon transfer, division or combination
of, or in substitution for, any Warrant Certificate or Warrant Certificates
entitled to bear such legend shall have a similar legend endorsed thereon.
Whenever the restrictions imposed by this Section 14 shall terminate as to
any Warrant Certificate or as to any shares of capital stock, as
hereinabove provided, the Holder shall be entitled to receive from the
Company without expense, a new Warrant Certificate or new shares of capital
stock not bearing the restrictive legend set forth in subsection (a) of
this Section 14.
Section 15. Representations and Warranties.
The Company represents and warrants that:
(a) Organization, Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware; and has all requisite power and
authority to own or lease and operate its properties and to carry on its
business as now conducted.
(b) Authority. The Company has all requisite power and authority to
enter into and perform all of its obligations under this Agreement, to
issue the Warrants and to carry out the transactions contemplated
hereby. The Company has taken all corporate or stockholder actions
necessary to authorize it to enter into and perform all of its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(c) Validity. This Agreement and the Warrants are the legal, valid
and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the rights of creditors generally.
(d) Capitalization. As of the date hereof, the equity capitalization
of the Company consists of (i) 20,000,000 shares of Common Stock,
divided into two series, consisting of 14,388,394 shares of Series A
Common Stock and 5,611,606 shares of Series B Common Stock, and of which
14,388,394 shares of Series A Common Stock and 5,611,606 shares of
Series B Common Stock will be initially outstanding; (ii) 1,000,000
shares of preferred stock, $.01 per share, none of which will be
outstanding; (iii) warrants (including the Warrants) to purchase up to
1,060,129 shares of Series A Common Stock; and (iv) options, if granted,
to purchase up to 1,000,000 shares of Series A Common Stock. All of the
shares comprising the Common Stock will, when issued and paid for, be
validly issued, fully paid and non-assessable. Except as set forth in
the first sentence of this Section 15(d), as of the date hereof, there
will not be any outstanding securities convertible into, exchangeable
for, or carrying the right to acquire, equity securities of the Company,
or subscriptions, warrants, options, rights or other arrangements or
commitments obligating the Company to issue or dispose of any of its
equity securities or any ownership interest therein.
Section 16. Notice. Any notice, demand, request, instruction or other
communication which any party hereto may be required or may desire to give
shall be in writing and shall be deemed to have been properly given (a) if
by hand delivery or telecopy, upon delivery to such party at the address or
to the telecopier number specified below; (b) if by registered or certified
mail, on the third Business Day after the day deposited with the United
States Postal Service, postage prepaid, return receipt requested, addressed
to such party at the address specified below; or (c) if by Federal Express
or other reputable express mail service, on the next Business Day after
delivery to such express mail service, addressed to such party at the
address specified below:
To the Company, at: Telemundo Group, Inc.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Chief Financial Officer
Telecopier:(305)889-7997
To the Holder, at: Reliance Insurance Company
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attn: Lowell C. Freiberg
Senior Vice President
Telecopier: (212) 909-1241
or at such other address or telecopier number as the party to be served
with notice may have furnished in writing to the party seeking or desiring
to serve notice as a place or number for the service of notice.
Section 17. Identity of Transfer Agent. Forthwith upon the appointment
of any subsequent transfer agent for the Series A Common Stock, or any
other shares of the Company's capital stock issuable upon the exercise of
the Warrants, the Company will provide to the Holder a statement setting
forth the name and address of such subsequent transfer agent.
Section 18. Supplements and Amendments.
(a) The Company may from time to time supplement or amend this Agreement
without the approval of the Holder in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective
or inconsistent with any provisions herein, or to make any other provisions
with regard to matters or questions arising hereunder which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the Holder.
(b) Any term, covenant, agreement or condition contained in this
Agreement may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument signed by the Company and the
Holder.
Section 19. No Rights as Stockholders. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holder any rights of a stockholder, including without
limitation, the right to vote, to receive dividends or to consent to, or
receive notice as a stockholder in respect of, any meeting of stockholders
for the election of directors of the Company or for any other matter.
Section 20. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors, permitted assigns and
permitted designees hereunder and all references to the Holders herein
shall refer to the applicable successor, permitted assign or designee.
Section 21. Termination. This Agreement shall terminate and be of no
further force and effect at, and no Warrant may be exercised after, 5:00
p.m. New York City time on the last of the Expiration Dates provided for in
Section 5 of this Agreement. Notwithstanding the foregoing, this Agreement
will terminate on such earlier date when all Warrants have been exercised
and no Warrants remain outstanding.
Section 22. Governing Law. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made
and performed entirely within such state.
Section 23. Benefits of this Agreement; Rights of Action. Nothing in
this Agreement shall be construed to give to any person or corporation
other than the Company and the Holder any legal or equitable right, remedy
or claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Company and the Holder.
Section 24. Damages. The Company recognizes and agrees that the Holder
will not have an adequate remedy if the Company fails to comply with the
terms of this Agreement and the Warrant Certificates and that damages will
not readily be ascertainable, and the Company expressly agrees that, in the
event of such failure, it shall not oppose an application by the Holder
requiring specific performance of any and all provisions of the Warrant or
this Agreement or enjoining the Company from continuing to commit any such
breach of the terms of the Warrant or this Agreement.
Section 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 26. Headings. The headings used in this Agreement are inserted
for convenience only and neither constitute a portion of this Agreement nor
in any manner affect the construction of the provisions of this Agreement.
Section 27. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman II
_____________________________
Name: Peter J. Housman II
Title: President, Business
and Corporate Affairs
Attest:
/s/ Horace G. Dawson, III
____________________________
Horace G. Dawson III
Assistant Secretary
RELIANCE INSURANCE COMPANY
By: /s/ Lowell C. Freiberg
____________________________
Name: Lowell C. Freiberg
Title: Senior Vice President
Attest:
/s/ James E. Yacobucci
____________________________
James E. Yacobucci
Senior Vice President
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, THE
TRANSFER, RESALE OR OTHER DISPOSITION OF SUCH SECURITIES MAY ONLY BE MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
A VALID EXEMPTION THEREFROM AND IN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS, AND BY DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO
COUNSEL FOR THE COMPANY THAT THERE IS SUCH AN EXEMPTION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF DECEMBER 30, 1994,
BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
[FORM OF SERIES 1 WARRANT CERTIFICATE]
[FACE]
EXERCISABLE ONLY ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME
DECEMBER 30, 2000
No. W-1 138,889 Warrants
WARRANT CERTIFICATE
TELEMUNDO GROUP, INC.
This Warrant Certificate certifies that Cust. & Co., or registered assigns,
is the registered holder (the ``Holder'') of 138,889 Warrants (the
``Warrants'') expiring December 30, 2000 to purchase shares of common stock
of Telemundo Group, Inc., a Delaware corporation (the ``Company''). Each
Warrant entitles the Holder to purchase from the Company, on or after
December 30, 1995, and on or before 5:00 p.m. New York City time on
December 30, 2000 one fully paid and nonassessable share of series A common
stock of the Company, par value $.01 per share (``Series A Common Stock''),
at the exercise price (the ``Exercise Price'') at the time in effect under
the Warrant Agreement (as defined on the reverse hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of such Exercise Price to the Company in Hialeah,
Florida, but only subject to the conditions set forth herein and in the
Warrant Agreement; provided, however, that the number or kinds of shares of
Series A Common Stock or other securities (or in certain events other
property) purchasable upon exercise of the Warrants and the Exercise Price
referred to on the reverse hereof may as of the date of this Warrant
Certificate have been, or may after such date be, adjusted as a result of
the occurrence of certain events, as more fully provided in the Warrant
Agreement. Payment of the Exercise Price shall be made by certified or
official bank cashier's check or wire transfer payable to the order of the
Company. No Warrant may be exercised after 5:00 p.m. New York City time on
December 30, 2000 (the ``Expiration Date'').
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at
this place.
This Warrant Certificate shall not be valid unless countersigned by the
Holder or its designee by the manual signature of one of its authorized
officers.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
TELEMUNDO GROUP, INC.
By: _____________________________
Name: Peter J. Housman II
Title: President, Business
and Corporate Affairs
Dated: December 30, 1994
Attest:
____________________________
Horace G. Dawson III
Assistant Secretary
Countersigned:
CUST. & CO.
By: _____________________________
Authorized Officer
Void after December 30, 2000
[FORM OF SERIES 1 WARRANT CERTIFICATE]
[REVERSE]
TELEMUNDO GROUP, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated
as of December 30, 1994 (the ``Warrant Agreement''), duly executed and
delivered by the Company, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties
and immunities thereunder of the Company and the Holder. Initially
capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Warrant Agreement. A copy of the Warrant
Agreement is available for inspection at the Company, located at 2290 West
8th Avenue, Hialeah, Florida, during regular business hours.
Warrants may be exercised to purchase shares of Series A Common Stock
from the Company at any time, or from time to time on or after December 30,
2000 and on or before the Expiration Date, at the Exercise Price then in
effect. The Holder may exercise the Warrants represented by this Warrant
Certificate by surrendering the Warrant Certificate with the Form of
Exercise set forth hereon properly completed and executed, together with
payment of the Exercise Price at the time in effect, to the Company. In the
event that an exercise of Warrants evidenced hereby shall be an exercise of
less than the total number of Warrants evidenced hereby, there shall be
issued to the Holder or the Holder's assignee a new Warrant Certificate
evidencing the number of Warrants not exercised. No adjustment will be made
for any dividends on any shares of Common Stock issuable upon exercise of
this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price may, subject to certain conditions, be adjusted
and under certain circumstances the Warrant may become exercisable for
securities or other assets other than the shares of Common Stock referred
to on the face hereof. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be adjusted.
The Company may, but shall not be required to, issue fractions of shares
of Common Stock or any certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the current market price then in effect.
Subject to the terms and conditions contained in the Warrant Agreement,
the Warrants represented by this Warrant Certificate are transferable, in
whole or in part, upon surrender of this Warrant Certificate to the
Company, together with a written assignment of the Warrant on the Form of
Assignment or Partial Assignment, as the case may be, set forth hereon or
in other form satisfactory to the Company, duly executed by the Holder or
the Holder's duly appointed legal representative, and together with funds
to pay any transfer taxes payable in connection with such transfer. Upon
such surrender and payment, a new Warrant Certificate shall be issued and
delivered in the name of the assignee and in the denomination or
denominations specified in such instrument of assignment. If less than all
of the Warrants represented by this Warrant Certificate are being
transferred, a new Warrant Certificate or Certificates shall be issued for
the portion of this Warrant Certificate not being transferred.
This Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender hereof to the Company, together with a written
notice specifying the names and denominations in which new Warrant
Certificates are to be issued, signed by the Holder or the Holder's duly
appointed legal representative, and together with the funds to pay any
transfer taxes payable in connection with such transfer. Upon such
surrender and payment, a new Warrant Certificate or Certificates shall be
issued and delivered in accordance with such notice.
The Company shall make no service or other charge in connection with any
such transfer or exchange of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, any distribution to the Holder hereof, and
for all other purposes.
EXHIBIT B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, THE
TRANSFER, RESALE OR OTHER DISPOSITION OF SUCH SECURITIES MAY ONLY BE MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
A VALID EXEMPTION THEREFROM AND IN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS, AND BY DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO
COUNSEL FOR THE COMPANY THAT THERE IS SUCH AN EXEMPTION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF DECEMBER 30, 1994,
BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
[FORM OF SERIES 2 WARRANT CERTIFICATE]
[FACE]
EXERCISABLE ONLY ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME
DECEMBER 31, 2001
No. W-2 138,889 Warrants
WARRANT CERTIFICATE
TELEMUNDO GROUP, INC.
This Warrant Certificate certifies that Cust. & Co., or registered
assigns, is the registered holder (the ``Holder'') of 138,889 Warrants (the
``Warrants'') expiring December 31,, 2001 to purchase common stock of
Telemundo Group, Inc., a Delaware corporation (the ``Company''). Each
Warrant entitles the Holder to purchase from the Company, on or after
December 31, 1996, and on or before 5:00 p.m. New York City time on
December 31, 2001 one fully paid and nonassessable share of series A common
stock of the Company, par value $.01 per share (``Series A Common Stock''),
at the exercise price (the ``Exercise Price'') at the time in effect under
the Warrant Agreement (as defined on the reverse hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of such Exercise Price to the Company in Hialeah,
Florida, but only subject to the conditions set forth herein and in the
Warrant Agreement; provided, however, that the number or kinds of shares of
Series A Common Stock or other securities (or in certain events other
property) purchasable upon exercise of the Warrants and the Exercise Price
referred to on the reverse hereof may as of the date of this Warrant
Certificate have been, or may after such date be, adjusted as a result of
the occurrence of certain events, as more fully provided in the Warrant
Agreement. Payment of the Exercise Price shall be made by certified or
official bank cashier's check or wire transfer payable to the order of the
Company.
No Warrant may be exercised after 5:00 p.m. New York City time on
December 31, 2001 (the ``Expiration Date'').
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at
this place.
This Warrant Certificate shall not be valid unless countersigned by the
Holder or its designee by the manual signature of one of its authorized
officers.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
TELEMUNDO GROUP, INC.
By:_____________________________
Name: Peter J. Housman II
Title: President, Business
and Corporate Affairs
Dated: December 30, 1994
Attest:
____________________________
Horace G. Dawson III
Assistant Secretary
Countersigned:
CUST. & CO.
By: _____________________________
Authorized Officer
Void after December 31, 2001
[FORM OF SERIES 2 WARRANT CERTIFICATE]
[REVERSE]
TELEMUNDO GROUP, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated
as of December 30, 1994 (the ``Warrant Agreement''), duly executed and
delivered by the Company, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties
and immunities thereunder of the Company and the Holder. Initially
capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Warrant Agreement. A copy of the Warrant
Agreement is available for inspection at the Company, located at 2290 West
8th Avenue, Hialeah, Florida, during regular business hours.
Warrants may be exercised to purchase shares of Series A Common Stock
from the Company at any time, or from time to time on or after December 30,
1996 and on or before the Expiration Date, at the Exercise Price then in
effect. The Holder may exercise the Warrants represented by this Warrant
Certificate by surrendering the Warrant Certificate with the Form of
Exercise set forth hereon properly completed and executed, together with
payment of the Exercise Price at the time in effect, to the Company. In the
event that an exercise of Warrants evidenced hereby shall be an exercise of
less than the total number of Warrants evidenced hereby, there shall be
issued to the Holder or the Holder's assignee a new Warrant Certificate
evidencing the number of Warrants not exercised. No adjustment will be made
for any dividends on any shares of Common Stock issuable upon exercise of
this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price may, subject to certain conditions, be adjusted
and under certain circumstances the Warrant may become exercisable for
securities or other assets other than the shares of Common Stock referred
to on the face hereof. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be adjusted.
The Company may, but shall not be required to, issue fractions of shares
of Common Stock or any certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the current market price then in effect.
Subject to the terms and conditions contained in the Warrant Agreement,
the Warrants represented by this Warrant Certificate are transferable, in
whole or in part, upon surrender of this Warrant Certificate to the
Company, together with a written assignment of the Warrant on the Form of
Assignment or Partial Assignment, as the case may be, set forth hereon or
in other form satisfactory to the Company, duly executed by the Holder or
the Holder's duly appointed legal representative, and together with funds
to pay any transfer taxes payable in connection with such transfer. Upon
such surrender and payment, a new Warrant Certificate shall be issued and
delivered in the name of the assignee and in the denomination or
denominations specified in such instrument of assignment. If less than all
of the Warrants represented by this Warrant Certificate are being
transferred, a new Warrant Certificate or Certificates shall be issued for
the portion of this Warrant Certificate not being transferred.
This Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender hereof to the Company, together with a written
notice specifying the names and denominations in which new Warrant
Certificates are to be issued, signed by the Holder or the Holder's duly
appointed legal representative, and together with the funds to pay any
transfer taxes payable in connection with such transfer. Upon such
surrender and payment, a new Warrant Certificate or Certificates shall be
issued and delivered in accordance with such notice.
The Company shall make no service or other charge in connection with any
such transfer or exchange of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, any distribution to the Holder hereof, and
for all other purposes.
EXHIBIT C
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, THE
TRANSFER, RESALE OR OTHER DISPOSITION OF SUCH SECURITIES MAY ONLY BE MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
A VALID EXEMPTION THEREFROM AND IN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS, AND BY DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO
COUNSEL FOR THE COMPANY THAT THERE IS SUCH AN EXEMPTION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF DECEMBER 30, 1994,
BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
[FORM OF SERIES 3 WARRANT CERTIFICATE]
[FACE]
EXERCISABLE ONLY ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME
DECEMBER 31, 2002
No. W-3 138,889 Warrants
WARRANT CERTIFICATE
TELEMUNDO GROUP, INC.
This Warrant Certificate certifies that Cust. & Co., or registered
assigns, is the registered holder (the ``Holder'') of 138,889 Warrants (the
``Warrants'') expiring December 31, 2002 to purchase common stock of
Telemundo Group, Inc., a Delaware corporation (the ``Company''). Each
Warrant entitles the Holder to purchase from the Company, on or after
December 30, 1997, and on or before 5:00 p.m. New York City time on
December 31, 2002 one fully paid and nonassessable share of series A common
stock of the Company, par value $.01 per share (``Series A Common Stock''),
at the exercise price (the ``Exercise Price'') at the time in effect under
the Warrant Agreement (as defined on the reverse hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of such Exercise Price to the Company in Hialeah,
Florida, but only subject to the conditions set forth herein and in the
Warrant Agreement; provided, however, that the number or kinds of shares of
Series A Common Stock or other securities (or in certain events other
property) purchasable upon exercise of the Warrants and the Exercise Price
referred to on the reverse hereof may as of the date of this Warrant
Certificate have been, or may after such date be, adjusted as a result of
the occurrence of certain events, as more fully provided in the Warrant
Agreement. Payment of the Exercise Price shall be made by certified or
official bank cashier's check or wire transfer payable to the order of the
Company.
No Warrant may be exercised after 5:00 p.m. New York City time on
December 31, 2002 (the ``Expiration Date'').
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at
this place.
This Warrant Certificate shall not be valid unless countersigned by the
Holder or its designee by the manual signature of one of its authorized
officers.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
TELEMUNDO GROUP, INC.
By:_____________________________
Name: Peter J. Housman II
Title: President, Business
and Corporate Affairs
Dated: December 30, 1994
Attest:
____________________________
Horace G. Dawson III
Assistant Secretary
Countersigned:
CUST. & CO.
By: _____________________________
Authorized Officer
Void after December 31, 2002
[FORM OF SERIES 3 WARRANT CERTIFICATE]
[REVERSE]
TELEMUNDO GROUP, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated
as of December 30, 1994 (the ``Warrant Agreement''), duly executed and
delivered by the Company, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties
and immunities thereunder of the Company and the Holder. Initially
capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Warrant Agreement. A copy of the Warrant
Agreement is available for inspection at the Company, located at 2290 West
8th Avenue, Hialeah, Florida, during regular business hours.
Warrants may be exercised to purchase shares of Series A Common Stock
from the Company at any time, or from time to time on or after December 30,
1997 and on or before the Expiration Date, at the Exercise Price then in
effect. The Holder may exercise the Warrants represented by this Warrant
Certificate by surrendering the Warrant Certificate with the Form of
Exercise set forth hereon properly completed and executed, together with
payment of the Exercise Price at the time in effect, to the Company. In the
event that an exercise of Warrants evidenced hereby shall be an exercise of
less than the total number of Warrants evidenced hereby, there shall be
issued to the Holder or the Holder's assignee a new Warrant Certificate
evidencing the number of Warrants not exercised. No adjustment will be made
for any dividends on any shares of Common Stock issuable upon exercise of
this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price may, subject to certain conditions, be adjusted
and under certain circumstances the Warrant may become exercisable for
securities or other assets other than the shares of Common Stock referred
to on the face hereof. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be adjusted.
The Company may, but shall not be required to, issue fractions of shares
of Common Stock or any certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the current market price then in effect.
Subject to the terms and conditions contained in the Warrant Agreement,
the Warrants represented by this Warrant Certificate are transferable, in
whole or in part, upon surrender of this Warrant Certificate to the
Company, together with a written assignment of the Warrant on the Form of
Assignment or Partial Assignment, as the case may be, set forth hereon or
in other form satisfactory to the Company, duly executed by the Holder or
the Holder's duly appointed legal representative, and together with funds
to pay any transfer taxes payable in connection with such transfer. Upon
such surrender and payment, a new Warrant Certificate shall be issued and
delivered in the name of the assignee and in the denomination or
denominations specified in such instrument of assignment. If less than all
of the Warrants represented by this Warrant Certificate are being
transferred, a new Warrant Certificate or Certificates shall be issued for
the portion of this Warrant Certificate not being transferred.
This Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender hereof to the Company, together with a written
notice specifying the names and denominations in which new Warrant
Certificates are to be issued, signed by the Holder or the Holder's duly
appointed legal representative, and together with the funds to pay any
transfer taxes payable in connection with such transfer. Upon such
surrender and payment, a new Warrant Certificate or Certificates shall be
issued and delivered in accordance with such notice.
The Company shall make no service or other charge in connection with any
such transfer or exchange of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, any distribution to the Holder hereof, and
for all other purposes.
EXHIBIT D
[FORM OF EXERCISE]
[To be executed upon exercise of Warrant]
The undersigned (the ``Holder'') hereby irrevocably elects to exercise
the right, represented by Telemundo Group, Inc. Warrant Certificate No.
W____, to purchase ____________shares of Telemundo Group, Inc. Series A
Common Stock (``Series A Common Stock'') and herewith tenders payment for
such Series A Common Stock to the order of Telemundo Group, Inc., in the
amount of $____________ in accordance with the terms hereof. The
undersigned requests that a certificate for such Series A Common Stock be
registered in the name of ________________ (insert social security or other
identifying number) whose address is _____________________________. If said
number of ______________ shares of Series A Common Stock is less than all
of the shares of Series A Common Stock purchasable under Telemundo Group,
Inc. Warrant Certificate No. W , the Holder requests that a new Warrant
Certificate representing the remaining balance of the shares of Series A
Common Stock be registered in the name of the Holder and that such Warrant
Certificate be delivered to ______________________ whose address is
____________________________________.
Dated: ________________________
Signature:
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant Certificate.)
(Insert Social Security or Taxpayer Identification Number of Holder)
Signature Guaranteed:
[FORM OF ASSIGNMENT]
(To be executed to transfer the Warrant Certificate)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(print name and address of transferee) the Warrants represented by
Telemundo Group, Inc. Warrant Certificate No.W____ together with all right,
title and interest evidenced thereby, and does hereby irrevocably
constitute and appoint ________________________, attorney, to transfer the
said Warrants on the books of Telemundo Group, Inc., with full power of
substitution.
Dated:_____________________
Signature:
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant Certificate.)
(Insert Social Security or Taxpayer Identification
Number of Holder)
Signature Guaranteed:
[FORM OF PARTIAL ASSIGNMENT]
(To be executed to transfer the Warrant Certificate)
FOR VALUE RECEIVED _______________________________________________(the
``Holder'') hereby sells, assigns and transfers unto
________________________ ______________________________(print name and
address of transferee)________________ Warrants represented by Telemundo
Group, Inc. Warrant Certificate No. W_____, together with all right, title
and interest evidenced thereby, and does hereby irrevocably constitute and
appoint _________________________, attorney, to transfer said Warrants on
the books of Telemundo Group, Inc., with full power of substitution. The
Holder requests that a new Warrant Certificate representing the remaining
balance of Warrants represented by Telemundo Group, Inc. Warrant
Certificate No. W____ be registered in the name of the Holder and that such
Warrant Certificate be delivered to _____________________whose address
is_________________________
______________________________.
Dated: ___________________________
Signature:
(Signature must conform in all
respects to name of Holder as
specified on the face
of the Warrant Certificate.)
(Insert Social Security or Taxpayer Identification
Number of Holder)
Signature Guaranteed:
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the ``Agreement''), dated as of December
30, 1994, by and among Telemundo Group, Inc., a Delaware corporation (the
``Company''), Apollo Advisors, L.P., a Delaware limited partnership
(``Apollo''), and Reliance Insurance Company, a Pennsylvania corporation
(``Reliance'') (each, a ``Holder'' and collectively, the ``Holders'').
WHEREAS, in connection with the consummation of the plan of
reorganization of the Company, dated November 18, 1993 and filed with the
United States Bankruptcy Court for the Southern District of New York (the
``Bankruptcy Court'') on November 19, 1993, as amended or modified from
time to time (the ``Plan'') and as so confirmed by a final order of the
Bankruptcy Court, Apollo is to receive a certain aggregate principal amount
of New Senior Notes and certain shares of Series B Common Stock, and
Reliance is to receive certain shares of Series A Common Stock and 416,667
Warrants, each Warrant entitling Reliance to purchase (subject to
adjustment) one share of Series A Common Stock;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
(a) ``Affiliate'' means a Person who directly or through one or more
intermediaries controls, is controlled by or is under common control
with, another Person. The term ``control'' means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership
of stock, by contract or otherwise. With respect to Apollo Advisors,
L.P., "Affiliate", solely for purposes of this Agreement only, shall
also include Lion Advisors, L.P., a Delaware limited partnership
("Lion"), Apollo Investment Fund, L.P., a Delaware limited partnership
("AIF"), Apollo Investment Fund II, L.P., a Delaware partnership ("AIF
II"), TLMD Partners II, L.L.C., a Delaware limited liability company and
its members (including voting committee members), (collectively,
"TLMD"), or any investment fund, investment account or other entity
whose investing manager, investment advisor or general partner, or any
principal thereof, is Apollo, Lion, AIF, AIF II, TLMD or any principal
or Affiliate or any of them, or Bastion Capital Fund L.P., a Delaware
limited partnership, GRS Partners II, an Illinois general partnership,
Hernandez Partners, a California general partnership, The Value
Realization Fund, L.P., a Delaware limited partnership, or any of their
Affiliates as such term is defined in the preceding sentence; provided,
however, that no person shall be deemed to be an Affiliate of Apollo and
any person shall cease to be an Affiliate of Apollo, in either case, if
such person ceases to be an Affiliate of Apollo or TLMD, and ceases to
be an investment fund, investment account or other entity whose
investing manager, investment advisor or general partner, or any
principal thereof, is Apollo or TLMD or any principal or Affiliate
thereof.
(b) ``Business Day'' means a day other than a Saturday, Sunday or a
public or national bank holiday or the equivalent for banks generally
under the laws of the State of New York.
(c) ``Commission'' means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
(d) ``Common Stock'' means Series A Common Stock and Series B Common
Stock.
(e) ``Exchange Act'' means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time. Reference to a particular section of the Exchange Act shall
include a reference to the comparable section, if any, of any such
similar Federal statute.
(f) [Intentionally left blank]
(g) ``New Senior Notes'' means the New Senior Notes of the Company,
in the aggregate principal amount of $116,889,000 issued pursuant to
that certain Indenture dated as of the date hereof, by and between the
Company and Bankers Trust Company, as indenture trustee.
(h) ``Person'' means a corporation, an association, a partnership,
an organization, a limited liability company, a business, an individual,
a governmental or political subdivision thereof or a governmental
agency.
(i) ``Registrable Securities'' means (i) the New Senior Notes owned
by the Holders and their respective Affiliates, (ii) the Common Stock
owned by the Holders and their respective Affiliates and (iii) any
additional Common Stock issued to the Holders and their respective
Affiliates upon exercise, surrender, exchange or conversion of the
Warrants (the ``Warrant Common Stock''). The New Senior Notes and the
Common Stock shall each constitute a separate class of Registrable
Securities. As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities have
been sold thereunder, (b) in the opinion of counsel for the Company,
which should be addressed to the Holder and be reasonably acceptable to
the Holder and its counsel, public distribution of such securities shall
not require registration of such securities under the Securities Act and
new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company, or (c) such
securities shall have ceased to be outstanding.
(j) ``Registration Expenses'' means all expenses incident to the
Company's performance of or compliance with Section 2 of this Agreement,
including, without limitation, all registration, filing and applicable
national securities exchange fees, all fees and expenses of complying
with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), rating agency fees, all printing expenses,
messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and disbursements of
counsel for the Company and of its independent public accountants,
including the expenses of any special audits required by or incident to
such performance and compliance, and the fees and expenses of
underwriters customarily paid by issuers of securities; provided,
however, that Registration Expenses shall exclude, and the Holders shall
pay, the fees and expenses of their respective counsel and accountants,
underwriters' fees and expenses and underwriting discounts and
commissions and transfer taxes in respect of the Registrable Securities
being registered (the ``Excluded Expenses'').
(k) ``Securities Act'' means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
(l) ``Series A Common Stock'' means the Series A Common Stock, par
value $.01 per share, of the Company as constituted on the date hereof,
any stock into which such Common Stock shall have been changed or any
stock resulting from any stock split, reverse stock split, stock
dividend or any reclassification of such Common Stock.
(m) ``Series B Common Stock'' means the Series B Common Stock, par
value $.01 per share, of the Company as constituted on the date hereof,
any stock into which such Common Stock shall have been changed or any
stock resulting from any stock split, reverse stock split, stock
dividend or any reclassification of such Common Stock.
(n) ``Warrants'' means the Warrants issued to the Holders pursuant
to the Plan, and any Warrants issued in exchange, substitution or
otherwise in replacement therefor.
2. Registration under Securities Act.
2.1 Registration on Request.
(a) Request. At any time within (x) the five-year period commencing
on the date of this Agreement, in the case of the registration of New
Senior Notes or Common Stock (other than Warrant Common Stock) and (y)
the later of (A) the five year period commencing on the date of this
Agreement and (B) the two-year period commencing on the date any Warrant
Common Stock is issued, in the case of Warrant Common Stock, upon the
written request of the Holder requesting that the Company effect the
registration under the Securities Act of all or part of such Holder's
Registrable Securities and specifying the intended method of disposition
thereof (including, without limitation, the name of any proposed
managing underwriter to be selected in accordance with Section 2.1(f),
below), the Company will thereupon use reasonable diligence to effect
and maintain for not more than 90 days the registration under the
Securities Act of the Registrable Securities which the Company has been
so requested to register by such Holder to the extent requisite to
permit the disposition (in accordance with the intended methods thereof
as aforesaid, which shall include resale to the public on a continuing
basis) of the Registrable Securities so to be registered; provided, that
in the case of Apollo, the Company shall not be obligated to effect (i)
more than one (1) registration with respect to the New Senior Notes held
by Apollo and its Affiliates and (ii) more than two (2) registrations
with respect to the Common Stock held by Apollo and its Affiliates and,
in the case of Reliance, the Company shall not be obligated to effect
more than two (2) registrations of Common Stock held by Reliance and its
Affiliates, pursuant to this Section 2.1(a). A registration of
Registrable Securities requested by Apollo or Reliance pursuant to this
Section 2.1 will be deemed to have been effected if a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and not withdrawn or suspended
whether or not the Registrable Securities covered by such registration
statement have been sold thereunder.
(b) Registration of Other Securities; Priority in Requested
Registration. The Company may elect to include in any registration
statement and offering made pursuant to this Section 2.1, authorized
unissued shares of Common Stock or shares of Common Stock held by the
Company as treasury shares or currently outstanding shares, provided,
that such inclusion shall be permitted only to the extent that it is
pursuant to and subject to the terms of any underwriting agreement or
arrangements entered into by the Company and the Holder. Notwithstanding
the foregoing, if the managing underwriter of any underwritten offering
shall advise the Company in writing (with copies to the Holder) that, in
its opinion, the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering
within a price range acceptable to the Holder (or that inclusion of the
securities requested to be included by the Company in such registration
would otherwise adversely affect such offering), then there shall be
included in such registration the number of securities which in the
opinion of such managing underwriter can be sold under the terms and
conditions of the underwriting agreement; provided, however, that no
Registrable Securities of the Holder shall be excluded from such
registration unless and until all shares of Common Stock proposed to be
included in such registration by the Company and/or any other Holder
have been excluded from such registration.
(c) Registration Statement Form. Each registration requested
pursuant to this Section 2.1 shall be on such appropriate registration
form of the Commission as shall be selected by the Company.
(d) Expenses. The Company will pay all Registration Expenses
incurred in connection with each registration requested pursuant to this
Section 2.1, and the Holder will pay all Excluded Expenses incurred in
connection with each such registration.
(e) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 will not be deemed to have been effected
(i) unless a registration statement with respect thereto has become
effective, (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for
any reason not attributable to the Holder and has not thereafter become
effective, or (iii) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than by reason of a
failure on the part of the Holder.
(f) Selection of Underwriters. The underwriter or underwriters of
each underwritten offering of the Registrable Securities so to be
registered shall be selected by the mutual agreement of the Company and
the Holder, the approval of such underwriter or underwriters by either
party hereto not to be unreasonably withheld.
(g) Limitations on Registration on Request. The Company shall not be
required to effect a registration if (i) the Company has filed
previously a registration statement under the Securities Act which
became effective within the nine-month period immediately prior to
receipt of the written request and which was kept current for the period
referred to in Section 2.4(ii); (ii) the Company would be required to
undergo a special interim audit in order to comply with the request;
(iii) the Holder could sell in accordance with the provisions of Rule
144 (or any successor or supplemental rule) promulgated under the
Securities Act the number of shares of Common Stock that it proposes to
have registered; (iv) the Company is prohibited from effecting the
registration under the terms of any underwriting agreement, the terms of
which bind the Company and which is in effect at the time of receipt of
the written request; or (v) in the opinion of counsel for the Company,
the securities may be publicly sold without registration under the
Securities Act.
The Company shall be entitled to postpone for a reasonable period of
time (but not exceeding 135 days) the filing of any registration statement
otherwise required to be prepared and filed by it pursuant to this Section
2.1 if the Company determines, in its sole discretion, that such
registration and offering is not desirable or could interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates or would require
premature disclosure thereof and promptly gives the holders of Registrable
Securities requesting registration thereof pursuant to this Section 2.1
written notice of such determination. If the Company shall so postpone the
filing of a registration statement, the Holder shall have the right to
withdraw the request for registration by giving written notice to the
Company within 30 days after receipt of the notice of postponement and, in
the event of such withdrawal, such request shall not be counted for
purposes of the requests for registration to which the Holder is entitled
pursuant to this Section 2.1.
2.2 ``Piggyback'' and Incidental Registration.
(a) Right to Include Registrable Securities. So long as any Registrable
Securities are outstanding, if the Company at any time proposes to register
any of its securities under the Securities Act, whether or not for sale for
its own account (other than securities to be issued pursuant to an employee
compensation program or dividend reinvestment plan or securities issued in
a merger, recapitalization, consolidation, acquisition or similar
transaction), in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will each
such time give written notice to the Holders of its intention to do so and,
upon the written request of any Holder within 15 days after the receipt of
any such notice (seven days if the Company states in such written notice or
gives telephonic notice to the Holder, with written confirmation to follow
promptly thereafter, stating that (i) such registration will be on Form S-3
and (ii) such shorter period of time is required because of a planned
filing date) (which request shall specify the Registrable Securities
intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company will, subject to Section 2.1(g) of this
Agreement, use reasonable diligence to effect the registration of the
Registrable Securities that it has been so requested to register by the
Holder, to the extent requisite to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered; provided, however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the
Company may, at its election, give written notice of such determination to
the Holder and, thereupon, the Company, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith),
without prejudice, however, to the rights of the Holder to request that
such registration be effected as a registration under Section 2.1 of this
Agreement and (ii) in the case of a determination to delay registration,
shall be permitted to delay registering any Registrable Securities, for the
same period as the delay in registering such other securities. No
registration effected under this Section 2.2 shall relieve the Company of
its obligation to effect registrations upon request under Section 2.1,
except as otherwise expressly provided therein. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2, and the Holder shall pay
all Excluded Expenses in connection with such registration.
(b) Priority in Company Registrations. If the managing underwriter of
any underwritten offering pursuant to Section 2.2(a) shall advise the
Company in writing (with copies to the Holders) that, in its opinion, the
number of securities requested to be included in such registration exceeds
the number which can be sold in such offering within a price range
acceptable to the Company (or that inclusion of the securities requested to
be included by the Holders in such registration would otherwise adversely
affect such offering), the Company or the managing underwriter, at its
option, may require either that (i) all securities to be sold by the
Company or any Person who pursuant to contractual right has caused the
registration statement to be filed be included in the offering and the
number of securities to be sold for the account of the Holders and/or any
other selling stockholder having so-called ``piggyback'' registration
rights with respect to such offering (``Other Stockholders'') be reduced
proportionately to an aggregate number acceptable to the Company and the
managing underwriter, if any, and any partial rejection shall be made pro
rata among the Holders and all Other Stockholders requesting registration
(such proration to be in the ratio of the total number of shares proposed
to be sold in such offering by the Holders and the Other Stockholders to
the actual number to be so sold in such offering by the Holders and the
Other Stockholders); or (ii) the offering of securities for the account of
the Holders and/or all Other Stockholders requesting registration be
postponed until 90 days after the effective date of the registration
statement (in which case the Company will keep the registration statement
current until at least 180 days after the effective date thereof), provided
that no securities of the Company shall be excluded from such registration
unless and until all Registrable Securities of each Holder have been
excluded from such registration. In any such case, each Holder shall have
the right to withdraw its request for inclusion of any or all of its
Registrable Securities in the registration statement.
2.3 Registration of Series B Common Stock. Notwithstanding anything in
this Agreement to the contrary, the Company shall not be required to effect
the registration of any shares of Series B Common Stock pursuant to Section
2.1 or 2.2 of this Agreement and the obligation of the Company to effect
the registration of such shares pursuant to this Agreement shall be
conditioned upon the conversion of such shares into shares of Series A
Common Stock pursuant to Section 4(d) of Article FOURTH of the Company's
Restated Certificate of Incorporation.
2.4 Registration Procedures. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities
Act as provided in Section 2.1 or 2.2 of this Agreement, the Company will
as expeditiously as possible:
(i) prepare and file with the Commission a registration statement
with respect to such securities and use reasonable diligence to cause
such registration statement to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and current and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered
by such registration statement until such time as all of such securities
have been disposed of in accordance with the intended methods of
disposition by the Holder set forth in such registration statement, but,
subject to Section 2.2(b)(ii), in no event for a period of more than 90
days after such registration statement becomes effective;
(iii) furnish to the Holder and each underwriter, if any, of such
securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
Holder or such underwriter may reasonably request in order to facilitate
the disposition of the securities owned by such Holder, but only while
the Company is required under the provisions hereof to cause the
registration statement to remain current;
(iv) use reasonable diligence to register or qualify such securities
covered by such registration statement under such securities or blue sky
laws of such jurisdictions where an exemption is not available and as
the sellers of Registrable Securities covered by such registration
statement shall reasonably request, and to take any and all other action
which may be necessary or advisable to enable such sellers to consummate
the disposition in such jurisdictions of the securities owned by such
sellers; provided, however, that the Company shall not for any such
purpose be required (A) to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the
requirements of this clause (iv) be obligated to be so qualified, (B) to
conform the composition of its assets at the time to the securities or
blue sky laws of any jurisdiction, (C) to subject itself to taxation in
any such jurisdiction, or (D) to consent to general service of process
in any such jurisdiction;
(v) furnish to the Holder a signed counterpart of (x) an opinion of
counsel for the Company to the underwriters, if any, of such offering,
and (y) a ``comfort'' letter signed by the independent public
accountants who have certified the Company's financial statements
included or incorporated by reference in such registration statement,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities;
(vi) notify the Holder at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing
(whereupon the Holder shall forthwith discontinue use of such prospectus
until receipt of notice from the Company that use of such prospectus may
be resumed or receipt of the prospectus supplement or amendment
hereinafter referred to), and, at the request of the Holder, promptly
prepare and file with the Commission and furnish to the Holder and each
underwriter, if any, a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances then existing;
(vii) otherwise use reasonable diligence to comply with all
applicable rules and regulations of the Commission, and make available
to its securities holders, as soon as reasonably practicable, an
earnings statement covering the period of twelve months beginning with
the first month of the Company's first fiscal quarter commencing after
the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder; and
(viii) use reasonable diligence to list all Registrable Securities
covered by such registration statement on any national securities
exchange on which the Company's securities of the same class are then
listed (or, if not so listed, to qualify for trading on the Nasdaq
National Market or the Nasdaq Small Cap Market, if eligible and if
securities of the same class are then so traded), if such securities are
not already so listed or qualified and if such listing or qualification
is then permitted under the rules of such exchange or market system.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company with such
information regarding such seller and the intended method of distribution
of such securities as the Company may from time to time reasonably request
in writing and as shall be required by law in connection therewith,
including, without limitation, notice of sales effected by such seller
under such registration statement. In the event that the Company seeks
registration of securities under this Agreement and a registration
statement does not become effective notwithstanding the Company's
compliance with the procedures contained in this Section 2.4, the Company
shall not be liable in any manner whatsoever to the Holder with respect to
the same.
2.5 Underwritten Offerings.
(a) Underwriting Agreement. If requested by the underwriters for any
offering pursuant to a registration requested under Section 2.1, the
Company will use reasonable efforts to enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company, the Holder and the
underwriters and to contain such representations and warranties by the
Company, the Holder and any other selling securityholders and such other
terms and provisions as are customarily contained in agreements of this
type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.7 of this Agreement. The Holder shall be a
party to such underwriting agreement and the representations and warranties
by, and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit of
the Holder, and the Holder may, at its option, require that any or all of
the conditions precedent to the obligations of the underwriters under such
underwriting agreement be conditions precedent to the obligations of the
Holder. In addition, the Holder shall pay all Excluded Expenses in
connection with each underwriting pursuant to this Section 2.5.
(b) Incidental Underwritten Offerings. Subject to Section 2.2 of this
Agreement, if the Company proposes to register any of its securities under
the Securities Act for sale for its own account and such securities are to
be distributed by or through one or more underwriters, the Company will,
subject to Sections 2.2(b) and 2.1(g) of this Agreement, if requested by
the Holder, use its best efforts to arrange for such underwriters to, and
the Holder will, if requested by the Company, include the Registrable
Securities to be offered and sold by the Holder among those to be
distributed by such underwriters. The Holder shall be a party to the
underwriting agreement between the Company and such underwriters and the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such Holder and the Holder may, at its option,
require that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent
to the obligations of the Holder.
(c) Holdback Agreements. (i) If any registration of any class of
Registrable Securities shall be in connection with an underwritten public
offering, each Holder agrees not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities of such class, and not to effect any such public
sale or distribution of any other equity security of the Company or of any
security convertible into or exchangeable or exercisable for any equity
security of the Company (in each case, other than as part of such
underwritten public offering) during the 15 days prior to, and during the
90-day period (or such longer period as each Holder agrees with the
underwriter of such offering) beginning on, the effective date of such
registration statement (except as part of such registration), provided that
each Holder has received written notice of such registration at least 15
days prior to such effective date.
(ii) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Company agrees not to
effect any public sale or distribution of any of its equity securities or
of any security convertible into or exchangeable or exercisable for any
equity security of the Company (other than any such sale or distribution of
such securities in connection with any merger or consolidation by the
Company or any subsidiary of the Company of the capital stock or
substantially all the assets of any other Person or in connection with an
employee compensation or other benefit plan or a dividend reinvestment
plan) during the 15 days prior to, and during the 90-day period (or such
longer period as the underwriters retained by the Company may reasonably
request) beginning on, the effective date of such registration statement
(except as part of such registration).
2.6 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering
Registrable Securities under the Securities Act pursuant to this Agreement,
the Company will give the Holders, their respective underwriters, if any,
and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and, to the
extent practicable, each amendment thereof or supplement thereto, and will
give each of them (provided such Person agrees not to use the information
so obtained for any purpose other than preparation of the registration
statement) such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall be
necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
2.7 Indemnification.
(a) Indemnification by the Company. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to Section 2.1
or 2.2 of this Agreement, the Company will, and hereby does, indemnify and
hold harmless the Holder, its directors, officers, partners, agents and
Affiliates and each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who
controls such Holder or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such Holder or any such director, officer, partner,
agent or Affiliate or participating or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or (ii) any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse such Holder and each such
director, officer, partner, agent, Affiliate, participating person and
controlling person for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder or such
underwriter, as the case may be; and provided, further, that the Company
shall not be liable to the Holder or any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act, in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Holder's or Person's failure to send or give a
copy of the final prospectus, as the same may be then supplemented or
amended, to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder or any such director,
officer, partner, agent, Affiliate, participating person or controlling
person and shall survive the transfer of such securities by such Holder.
(b) Indemnification by the Holder. The Company may require, as a
condition to including any Registrable Securities in any registration
statement, that the Company shall have received an undertaking satisfactory
to it from the Holder to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 2.7(a)) the Company, each
director of the Company, each officer of the Company, each other Person, if
any, who controls the Company within the meaning of the Securities Act and
any underwriter of the Registrable Securities, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder or such
underwriter, as the case may be. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall
survive the transfer of such securities by the Holder.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 2.7(a) or (b), such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its
obligations under Section 2.7(a) or (b), except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
In case any action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of such indemnified party, and in the opinion of such
indemnified party's counsel, a conflict of interest may exist between such
indemnified party and the indemnifying party with respect to such claim,
each indemnified party agrees to permit the indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investigation. If
the indemnifying party is not entitled to, or elects not to, assume the
defense of a claim, it will not be obligated to pay the fees and expenses
of more than one counsel for all indemnified parties with respect to such
claim, unless in the reasonable judgment of an indemnified party, and in
the opinion of such indemnified party's counsel, a conflict of interest may
exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party
shall be obligated to pay the fees and expenses of such additional counsel
or counsels. No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. No
indemnified party will enter into any settlement without the written
consent of the indemnifying party (which consent will not be unreasonably
withheld).
(d) Contribution. If the indemnification provided for in this Section
2.7 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
fault of such indemnifying party and indemnified parties in connection with
the actions which resulted in such losses, claims, damages or liabilities,
as well as any other relevant equitable considerations or, if the
allocation provided above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits
received by the indemnifying party and the indemnified parties from the
offering of the securities covered by the registration statement that gave
rise to the indemnification claim. The relative fault of such indemnifying
party and indemnified parties 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 made by, or relates to information
supplied by, such indemnifying party or indemnified parties and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party as
a result of the losses, claims, damages and liabilities referred to above
shall be deemed to include, subject to the limitations set forth in Section
2.7, any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding. The parties hereto
agree that it would not be just and equitable if contribution pursuant to
this Section 2.7(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in this Section 2.7(d). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent,
which consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 2.7 (with appropriate
modifications) shall be given by the Company and the Holder with respect to
any required registration or other qualification of Registrable Securities
under any Federal or state law or regulation of any governmental authority
other than the Securities Act.
(f) Indemnification Payments. The indemnification and contribution
required by this Section 2.7 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
(g) Additional Rights. Any indemnification agreements contained herein
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party.
3. Rule 144. From and after the date any of the Registrable Securities
may be sold by the Holders without registration under the Securities Act
within the limitations of the exemptions provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time or any
similar rule or regulation hereafter adopted by the Commission, the Company
shall use its best efforts to file in a timely fashion all reports required
to be filed by it pursuant to the Exchange Act in order to enable the
Holders to exercise their rights under Rule 144. Upon the request of each
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
4. Notices. All notices or communications provided for hereunder shall
be in writing (including facsimile transmission) and shall be addressed as
follows:
(a) If to the Company:
Telemundo Group, Inc.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn.: Chief Financial Officer
Fax: (305) 889-7997
(b) If to Apollo:
Apollo Advisors, L.P.
Suite 1900
1999 Avenue of the Stars
Los Angeles, California 90067
Attn.: Ms. Pandora Pang
Fax: (310) 201-4197
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
Attn.: Edward S. Weisfelner, Esq.
Fax: (212) 704-0196
(c) If to Reliance:
Reliance Insurance Company
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attn.: Lowell C. Freiberg
Senior Vice President
Fax: (212) 909-1241
with a copy to:
Reliance Group Holdings, Inc.
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attn.: Howard E. Steinberg, Esq.
Senior Vice President
and General Counsel
Fax: (212) 909-1864
Notices given by mail shall be deemed to have been given no later than five
Business Days after the date sent, if sent by registered or certified mail,
postage prepaid, and addressed to the applicable party at the address shown
above (or such other address designated by such party subsequent to the
date hereof). Notices given by facsimile transmission or hand delivery
shall be deemed to have been given when sent or delivered, if properly
addressed to the party to whom sent or delivered. Any party may, by notice
to the other party given in accordance with this Section 4, designate
another address or Person for receipt of notices or communications
hereunder.
5. Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the matters described
herein, and supersedes all prior discussions, agreements and undertakings,
written or oral, of any and every nature with respect thereto.
6. Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by
a written instrument signed by authorized representatives of the parties
or, in the case of a waiver, by an authorized representative of the party
waiving compliance. No such written instrument shall be effective unless it
expressly recites that it is intended to amend, supersede, cancel, renew or
extend this Agreement or to waive compliance with one or more of the terms
hereof, as the case may be. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any
other such right, power or privilege.
7. Governing Law. This Agreement shall be governed in all respects,
including validity, construction, interpretation and effect, by the laws of
the State of New York without giving effect to the conflict of laws
provisions thereof. To the extent permitted by law, each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the
United States of America located in the City of New York for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any action,
suit or proceeding relating thereto except in such courts), and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in Section 4 shall be
effective service of process for any action, suit or proceeding brought
against it in any such court. Each of the parties hereto hereby irrevocably
and unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in the courts of the State of New York or
the United States of America located in the City of New York, and hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
8. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns except that neither Apollo nor Reliance may assign its
rights hereunder without the prior written consent of the Company.
9. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts which together shall constitute one and the same
instrument.
10. Further Assurances. Each party shall, at the request of any other
party hereto, at any time and from time to time following the date of this
Agreement promptly execute and deliver, or cause to be executed and
delivered, to such requesting party all such further instruments and take
all such further action as may be reasonably necessary or appropriate to
confirm or carry out the provisions and intents of this Agreement.
11. Captions. All section titles or captions contained in this Agreement
are for convenience only, shall not be deemed a part of this Agreement and
shall not affect the meaning or interpretation of this Agreement. All
references herein to sections shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
[Signatures on following page]
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman II
______________________________
Name: Peter J. Housman II
Title: President-Business
and Corporate Affairs
APOLLO ADVISORS, L.P.
By: /s/ Michael D. Weiner
_______________________________
Name: Michael D. Weiner
Title: Vice President
RELIANCE INSURANCE COMPANY
By: /s/ Lowell C. Freiberg
_____________________________
Name: Lowell C. Freiberg
Title: Senior Vice President
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, is entered into as of December 31,
1994, between FOOTHILL CAPITAL CORPORATION, a California corporation
("Foothill"), with a place of business located at 11111 Santa Monica
Boulevard, Suite 1500, Los Angeles, California 90025-3333, on the one hand,
and, on the other hand, TELEMUNDO GROUP, INC., a Delaware corporation
("Group"), with its chief executive office located at 2290 West 8th Avenue,
Hialeah, Florida 33010, ESTRELLA COMMUNICATIONS, INC., a Delaware corporation
("Estrella"), with its chief executive office located at 2290 West 8th
Avenue, Hialeah, Florida 33010, ESTRELLA LICENSE CORPORATION, a Delaware
corporation ("Estrella/License"), with its chief executive office located at
2290 West 8th Avenue, Hialeah, Florida 33010, NEW JERSEY TELEVISION
BROADCASTING CORPORATION, a New York corporation ("New Jersey"), with its
chief executive office located at 2290 West 8th Avenue, Hialeah, Florida
33010 TELEMUNDO NETWORK, INC., a Delaware corporation ("Network"), with its
chief executive office located at 2290 West 8th Avenue, Hialeah, Florida
33010, TELEMUNDO OF AUSTIN, INC., a Delaware corporation ("Tel/Aus"), with
its chief executive office located at 2290 West 8th Avenue, Hialeah, Florida
33010, TELEMUNDO OF FLORIDA, INC., a Delaware corporation ("Tel/FL"), with
its chief executive office located at 2290 West 8th Avenue, Hialeah, Florida
33010, TELEMUNDO OF GALVESTON-HOUSTON, INC., a Delaware corporation
("Tel/Hou"), with its chief executive office located at 2290 West 8th Avenue,
Hialeah, Florida 33010, TELEMUNDO OF MEXICO, INC., a Delaware corporation
("Tel/Mex"), with its chief executive office located at 2290 West 8th Avenue,
Hialeah, Florida 33010, TELEMUNDO OF NORTHERN CALIFORNIA, INC., a California
corporation ("Tel/NorCal"), with its chief executive office located at 2290
West 8th Avenue, Hialeah, Florida 33010, TELEMUNDO OF SAN ANTONIO, INC., a
Texas corporation ("Tel/SanAn"), with its chief executive office located at
2290 West 8th Avenue, Hialeah, Florida 33010, TELEMUNDO OF SANTA FE, INC., a
Delaware corporation ("Tel/SanFe"), with its chief executive office located
at 2290 West 8th Avenue, Hialeah, Florida 33010, TU MUNDO MUSIC, INC., a
Delaware corporation ("Tu Mundo"), with its chief executive office located at
2290 West 8th Avenue, Hialeah, Florida 33010, SACC ACQUISITION CORPORATION, a
Delaware corporation ("SACC/Acq"), with its chief executive office located at
2290 West 8th Avenue, Hialeah, Florida 33010, SAT CORPORATION, a Delaware
corporation ("SAT"), with its chief executive office located at 2290 West 8th
Avenue, Hialeah, Florida 33010, SPANISH AMERICAN COMMUNICATIONS CORPORATION,
a Delaware corporation ("SACC"), with its chief executive office located at
2290 West 8th Avenue, Hialeah, Florida 33010, WNJU-TV BROADCASTING
CORPORATION, a New Jersey corporation ("WNJU"), with its chief executive
office located at 2290 West 8th Avenue, Hialeah, Florida 33010, and WNJU
LICENSE CORPORATION, a Delaware corporation ("WNJU/License"), with its chief
executive office located at 2290 West 8th Avenue, Hialeah, Florida 33010.
The parties agree as follows:
DEFINITIONS AND CONSTRUCTION.
Definitions. As used in this Agreement, the following
terms shall have the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of an Account.
"Accounts" means all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to a
Debtor arising out of the sale or lease of goods or the rendition of services
by such Debtor, irrespective of whether earned by performance, and any and
all credit insurance, guaranties, or security therefor.
"Advertising Agency Account Debtor" means any Account Debtor
that is an advertising agency.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For purposes of this definition, "control" as applied to
any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Loan and Security Agreement and any
extensions, riders, supplements, joinders, notes, amendments, or
modifications to or in connection with this Loan and Security Agreement.
"AIF" means Apollo Investment Fund, L.P., a Delaware limited
partnership.
"AIF II" means Apollo Investment Fund II, L.P., a Delaware
limited partnership.
"Allowed" means, with respect to claims and interests, (a) any
claim against or interest in Group, proof of which was timely filed or by
order of the Bankruptcy Court was not required to be filed, or (b) any claim
or interest that was listed in the schedules of liabilities filed by Group as
liquidated in amount and not disputed or contingent and, in each such case in
(a) and (b) above, as to which either (i) no objection to the allowance
thereof was interposed within the applicable period of time fixed by the
Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or
(ii) such an objection was so interposed and the claim or interest has been
allowed by a Final Order (but only to the extent so allowed).
"Apollo" means, collectively, AIF, AIF II, Lion, Apollo
Advisors, L.P., or any investment fund, investment account, or other entity
whose investing manager, investment advisor, or general partner, or any
principal thereof, is Apollo Advisors, L.P., AIF, AIF II, Lion, or any
principal or Affiliate of any of them; provided, however, that no Person
shall be deemed to be within the definition of Apollo when the Person ceases
to be an Affiliate of AIF, AIF II, Apollo Advisors, L.P. or Lion, or an
investment fund, investment account, or other entity whose investing manager,
investment advisor, or general partner, or any principal thereof, is AIF, AIF
II, Apollo Advisors, L.P. or Lion, or any principal or Affiliate of any of
them.
"Authorized Officer" means any officer of Borrower.
"Average Unused Portion of Maximum Amount" means (a) the
Maximum Amount; less (b) the sum of: (i) the average Daily Balance of
advances made by Foothill under Section 2.1 that were outstanding during the
immediately preceding month, plus (ii) the average Daily Balance of the
undrawn L/Cs and L/C Guarantees issued by Foothill under Section 2.2 that
were outstanding during the immediately preceding month.
"Bankruptcy Code" means the United States Bankruptcy Code (11
U.S.C. Section 101 et seq.), as amended, and any successor statute.
"Bankruptcy Court" means the United State Bankruptcy Court for
the Southern District of New York.
"Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure, as amended from time to time.
"Benefit Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which Borrower or any ERISA Affiliate sponsors or
maintains or to which Borrower or any ERISA Affiliate makes, is making, or is
obligated to make contributions, including any Multiemployer Plan or
Qualified Plan.
"Blair Settlement Agreement" means that settlement agreement
by and between, inter alia, the Blair Entities, Group, Reliance Capital Group,
L.P., Reliance Associates, L.P., Reliance Capital Group, Inc., Reliance Group
Holdings, Inc., Deloitte & Touche, Mr. Henry R. Silverman, Mr. Donald G.
Raider, Mr. Peter J. Housman II, and the Creditors' Committee, a copy of
which is attached to the Plan as Exhibit P-1.
"Blair Entities" means any one or more of John Blair
Communications, Inc., John Blair & Company, Inc., Blair Entertainment
Corporation, and JHR Acquisition Corp.
"Borrower" means Group, Estrella, Estrella/License, New Jersey,
Network, Tel/Aus, Tel/FL, Tel/Hou, Tel/Mex, Tel/NorCal, Tel/SanAn, Tel/SanFe,
Tu Mundo, SACC/Acq, SAT, SACC, WNJU, and WNJU/License, individually and
collectively, and jointly and severally.
"Borrower Real Property" means the parcel of real property and
the related improvements thereto identified on Schedule B-1, and any parcels
of real property hereafter acquired by Borrower.
"Borrower's Books" means all of each Debtor's books and records
including: ledgers; records indicating, summarizing, or evidencing such
Debtor's properties or assets (including the Collateral or the Real Property)
or liabilities; all information relating to such Debtor's business operations
or financial condition; and all computer programs, disc or tape files,
printouts, runs, or other computer prepared information.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Broadcast System" means all of the properties and operating
rights constituting a complete, fully integrated system for transmitting full
power televisions signals from a transmitter licensed by the FCC, together
with any sub-system which is ancillary to any such system.
"Business Day" means any day which is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close.
"Cash Equivalents" means and refers to: (a) marketable direct
obligations issued or unconditionally guaranteed by the United States or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one (1) year from the date of
acquisition thereof; (b) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one (1) year from the
date of acquisition thereof and, at the time of acquisition, having the
highest rating obtainable from either S&P or Moody's; (c) commercial paper
maturing no more than one (1) year from the date of acquisition thereof and,
at the time of acquisition, having a rating of A-1 or P-1, or better, from
S&P or Moody's; (d) certificates of deposit or bankers' acceptances maturing
within one (1) year from the date of acquisition thereof either (i) issued by
any bank organized under the laws of the United States or any state thereof
or the District of Columbia which bank has a rating of A or A2, or better,
from S&P or Moody's, or (ii) certificates of deposit less than or equal to
One Hundred Thousand Dollars ($100,000) in the aggregate issued by any other
bank insured by the Federal Deposit Insurance Corporation.
"Change of Control" means an event or series of events by which
(i) any "Person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly of indirectly, of more than 50% of
the aggregate voting power of all the capital stock of Group normally
entitled to vote in the election of directors, or (ii) during any period of
two consecutive calendar years, individuals who at the beginning of such
period constituted the board of directors of Group (together with any new
directors whose election by the board of directors of Group or whose
nomination for election by Group's stockholders was approved by a vote of at
least a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination was
previously so approved) cease for any reason to constitute a majority of the
directors then in office, unless either the nomination or election of such
new directors that would otherwise cause a Change of Control under clause
(ii) above was approved by a vote of at least a majority of the directors
then still in office who were either directors at the beginning of such
period or whose nomination or election was previously so approved; provided,
however, that it shall not constitute a Change of Control for purposes of
this Agreement if, in the case of clause (i) above, Apollo or TLMD or
Reliance (collectively, the "Reliance Parties") become the beneficial owners,
directly or indirectly, of more than 50% of the aggregate voting power of all
the capital stock of Group entitled to vote in the election of directors or,
in the case of clause (ii) above, such Change of Control would be caused by
the designation of directors by Apollo, TLMD, or the Reliance Parties.
Anything set forth above in this definition to the contrary notwithstanding,
a "Change of Control" shall not be deemed to have occurred for purposes of
this Agreement upon the happening of any of the events specified in clauses
(i) and (ii) of this definition, if and so long as any shares of Series B
Common Stock are issued and outstanding and the holders of such shares have
the power to elect at least a majority of the board of directors of Group.
"Chapter 11 Case" means the case under chapter 11 of the
Bankruptcy Code that was commenced by Group on the Filing Date.
"Closing Date" means the date of the initial advance hereunder
or the date of the initial issuance of an L/C or an L/C Guaranty hereunder,
whichever occurs first.
"Code" means the California Uniform Commercial Code.
"Collateral" means each of the following: the Accounts;
Borrower's Books; the Equipment; the General Intangibles; the Inventory; the
Negotiable Collateral; any money, or other assets of Borrower which now or
hereafter come into the possession, custody, or control of Foothill; and the
proceeds and products, whether tangible or intangible, of any of the
foregoing including proceeds of insurance covering any or all of the
Collateral, and any and all Accounts, Borrower's Books, Equipment, General
Intangibles, Inventory, Negotiable Collateral, money, deposit accounts, or
other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion
thereof or interest therein, and the proceeds thereof. Anything contained
herein to the contrary notwithstanding, the "Excluded Equipment" shall not
constitute a portion of the "Collateral" and Foothill's security interest
therein shall not attach thereto unless and until such Excluded Equipment, or
any portion thereof, is no longer being provided to New News Service pursuant
to Section 6.17 of the Agreement of Limited Partnership regarding New News
Service at which time the "Excluded Equipment" automatically shall be
included within "Collateral" and Foothill's security interest therein
automatically shall attach.
"Collateral Assignments of Key Leases" means a mortgage or deed
of trust, in form and substance reasonably satisfactory to Foothill, between
one of the FPTV Debtors or Network, as applicable, and Foothill respecting
the hypothecation of such FPTV Debtor's or Network's, as applicable, rights
under the Key Leases.
"Collateral Assignments of Tower Leases" means a mortgage or
deed of trust, in form and substance reasonably satisfactory to Foothill,
between one of the FPTV Debtors and Foothill respecting the hypothecation of
such FPTV's rights under the Tower Leases.
"Communications Franchise" means a franchise, license, right,
permit, authorization, consent, or other instrument granted by the United
States, or any state, city, town, county, or other municipality or other
political subdivision thereof, whether pursuant to or in any franchise,
ordinance, license or other agreement or otherwise, pursuant to which a
Person has, or is given, the right to construct, maintain or operate a
Communications System, or any part thereof.
"Communication Franchise Agreements" means all of Borrower's
agreements related to any Communications Franchise or Communication System.
"Communications System" means any Broadcast System or any
business or activity (including the ownership or leasing of property)
directly relating to the ownership or operation thereof other than the
development or syndication of programming for others.
"Concentration Account" shall mean (a) the depositary accounts
of Group at the Concentration Account Bank bearing account numbers 31732984
and 01017904, respectively, (b) the New Concentration Account, or (c) any
substitute concentration deposit account of Borrower established pursuant to
Section 6.17 hereof.
"Concentration Account Bank" means Citibank, N.A., New
Concentration Account Bank, or any substitute depositary at which any
Concentration Account is maintained pursuant to Section 6.17 hereof.
"Confirmation Order" means the order of the Bankruptcy Court
dated July 20, 1994 confirming the Plan.
"Consolidated Current Assets" means, as of any date of
determination, the aggregate amount of all current assets of Borrower and its
Subsidiaries calculated on a consolidated basis that would, in accordance
with GAAP, be classified on a balance sheet as current assets.
"Consolidated Current Liabilities" means, as of any date of
determination, the aggregate amount of all current liabilities of Borrower
and its Subsidiaries, calculated on a consolidated basis that would, in
accordance with GAAP, be classified on a balance sheet as current
liabilities. For purposes of this definition, all advances outstanding under
this Agreement shall be deemed to be long term liabilities without regard to
whether they would be deemed to be so under GAAP.
"Consummation Date" means the date that is the first Business
Day on which all conditions to consummation of the Plan shall have been
satisfied; provided, however, that no stay of the Confirmation Order is then
in effect or, in the event a stay of the Confirmation Order is then in
effect, the first Business Day after such stay of the Confirmation Order is
no longer in effect.
"Creditors' Committee" means the Official Committee of
Unsecured Creditors in the Chapter 11 Case.
"Daily Balance" means the amount of an Obligation owed at the
end of a given day.
"Debtor" means any one of Group, Estrella, Estrella/License,
New Jersey, Network, Tel/Aus, Tel/FL, Tel/Hou, Tel/Mex, Tel/NorCal, Tel/SanAn,
Tel/SanFe, Tu Mundo, SACC/Acq, SAT, SACC, WNJU, or WNJU/License.
"Early Termination Premium" has the meaning set forth in
Section 3.6.
"Effective Date" means the date on which this Agreement is
executed and delivered by Borrower and Foothill.
"Eligible Accounts" means those Accounts created by an Obligee
in the ordinary course of business that arise out of such Obligee's sale of
goods or rendition of services, that strictly comply with all of Borrower's
representations and warranties to Foothill; provided, however, that, from and
after the occurrence and during the continuation of an Event of Default,
standards of eligibility may be fixed and revised from time to time by
Foothill in Foothill's reasonable credit judgment. Eligible Accounts shall
not include the following:
Accounts that the Account Debtor has failed to pay
within ninety (90) days of invoice date or Accounts with selling terms of
more than thirty (30) days, all Accounts owed by an Account Debtor that has
failed to pay fifty percent (50%) or more of its Accounts owed to Borrower,
taken as a whole, within ninety (90) days of invoice date;
Accounts with respect to which the Account Debtor is
an officer, employee, Affiliate, or agent of such Obligee;
Accounts with respect to which the payment by the
Account Debtor may be conditional, except for the obligation to make
additional advertising time available in certain circumstances;
Accounts with respect to which the Account Debtor is
not a resident of the United States, and which are not either (i) covered by
credit insurance in form and amount, and by an insurer, satisfactory to
Foothill, or (ii) supported by one or more letters of credit that are
assignable by their terms and have been delivered to Foothill in an amount,
of a tenor, and issued by a financial institution, acceptable to Foothill;
Accounts with respect to which the Account Debtor is
the United States;
Accounts with respect to which Borrower, taken as a
whole, is or may become liable to the Account Debtor for goods sold or
services rendered by the Account Debtor, except for the obligation to make
additional advertising time available in certain circumstances;
(i) Accounts with respect to an Account Debtor whose
total obligations owing to Borrower, taken as a whole, exceed fifteen percent
(15%) of all Eligible Accounts owing to Borrower, taken as a whole, to the
extent of the obligations owing by such Account Debtor in excess of such
percentage; provided, however, that in the case of Accounts as to which
either Font & Vaamonde, Focus, DMB&B/Sosa, Casanova, Mendoza, or Young &
Rubican is the Account Debtor, Eligible Accounts only shall exclude Accounts
thereof owing to Borrower to the extent that the total obligations of such
Account Debtor owing to Borrower exceed twenty percent (20%) of all Eligible
Accounts owing to Borrower, taken as a whole, and (ii) Accounts with respect
to a Person whose total obligations owing to Borrower, taken as a whole,
together with (but without duplication) the total obligations of Advertising
Agency Account Debtors created with respect to advertising placed for such
Person exceed fifteen percent (15%) of all Eligible Accounts owing to
Borrower, taken as a whole, to the extent of the obligations owing by such
Person or Advertising Agency Account Debtors on its behalf in excess of such
percentage; provided, however, that in the case of Accounts as to which
Procter & Gamble, Co. is such Person, Eligible Accounts only shall exclude
Accounts owing to Borrower to the extent that the total obligations of such
Person or Advertising Agency Account Debtors on its behalf owing to Borrower
exceed twenty percent (20%) of all Eligible Accounts owing to Borrower, taken
as a whole;
Accounts with respect to which the Account Debtor
disputes liability or makes any claim with respect thereto (to the extent of
the amount of the dispute or claim), or is subject to any Insolvency
Proceeding, or becomes insolvent, or goes out of business;
Accounts the collection of which Foothill, in its
reasonable credit judgment, believes to be doubtful by reason of the Account
Debtor's financial condition;
Accounts that are payable in other than United
States Dollars; and
Accounts that represent progress payments or other
advance billings that are due prior to the completion of performance by
Borrower of the subject contract for goods or services.
"Equipment" means all of each Debtor's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts,
dies, jigs, goods (other than consumer goods, farm products, or Inventory),
wherever located, and any interest of any Debtor in any of the foregoing, and
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any predecessor, successor, or
superseding laws of the United States, together with all regulations
promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is a member of Borrower's "controlled group" within the
meaning of Section 4001(a)(14) of ERISA.
"ERISA Event" means any one or more of the following: (i) a
Reportable Event with respect to a Qualified Plan or a Multiemployer Plan;
(ii) a Prohibited Transaction with respect to any Benefit Plan; (iii) a
complete or partial withdrawal by Borrower or any ERISA Affiliate from a
Multiemployer Plan; (iv) the complete or partial withdrawal of Borrower or an
ERISA Affiliate from a Qualified Plan during a plan year in which it was, or
was treated as, a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (v) a failure to make full payment when due of all amounts which,
under the provisions of any Benefit Plan or applicable law, Borrower or any
ERISA Affiliate is required to make; (vi) the filing of a notice of intent to
terminate, or the treatment of a plan amendment as a termination, under
Sections 4041 or 4041A of ERISA; (vii) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Qualified Plan or Multiemployer Plan; (viii) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate; and (ix) a
violation of the applicable requirements of Sections 404 or 405 of ERISA, or
the exclusive benefit rule under Section 403(c) of ERISA, by any fiduciary or
disqualified person with respect to any Benefit Plan for which Borrower or
any ERISA Affiliate may be directly or indirectly liable; provided, however,
that no ERISA Event shall be deemed to have occurred if the same would not
have a material adverse effect on Borrower taken as a whole.
"Estrella" has the meaning ascribed thereto in the preamble to
this Agreement.
"Estrella/License" has the meaning ascribed thereto in the
preamble to this Agreement.
"Event of Default" has the meaning set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Equipment" shall have the meaning ascribed thereto on
Schedule E-1 attached hereto.
"FCC" means the United States Federal Communications Commission
(or any successor agency, commission, bureau, or department).
"FCC License" means any license, permit, certificate of
compliance, franchise, approval, or authorization, granted, or issued by the
FCC for the operation of a Broadcast System.
"FEIN" means Federal Employer Identification Number.
"Filing Date" means June 8, 1993.
"Final Order" means an order, ruling, or judgment that is no
longer subject to review, reversal, modification, or amendment by appeal or
writ of certiorari.
"Foothill" has the meaning set forth in the preamble to this
Agreement.
"Foothill Expenses" means all reasonable: costs or expenses
(including taxes, photocopying, notarization, telecommunication and insurance
premiums) required to be paid by any Debtor under any of the Loan Documents
that are paid or advanced by Foothill; documentation, filing, recording,
publication, and search fees assessed, paid, or incurred by Foothill in
connection with Foothill's transactions with Borrower; costs and expenses
incurred by Foothill in the disbursement of funds to Borrower (by wire
transfer or otherwise); charges paid or incurred by Foothill resulting from
the dishonor of checks; costs and expenses paid or incurred by Foothill to
correct any default or enforce any provision of the Loan Documents, or in
gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral or the
Real Property, or any portion thereof, irrespective of whether a sale is
consummated; subject to the limitations set forth in Section 2.7(e), costs
and expenses paid or incurred by Foothill in examining Borrower's Books;
costs and expenses of third party claims or any other suit paid or incurred
by Foothill in enforcing or defending the Loan Documents; and Foothill's
reasonable attorneys fees and expenses incurred in advising, structuring,
drafting, reviewing, administering, amending, terminating, enforcing
(including attorneys fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning one or
more Debtor or any guarantor of the Obligations), defending, or concerning
the Loan Documents, irrespective of whether suit is brought. The foregoing
to the contrary notwithstanding, it is agreed that Borrower has agreed to pay
and its sole responsibility shall be to pay a flat fee of $125,000 for
attorneys fees and attorneys expenses incurred by Foothill in connection with
the negotiation, execution, and delivery of this Agreement, the other Loan
Documents executed on or before the Closing Date, and the preparation of
documentation and negotiation thereof in connection with the completion of
the conditions subsequent set forth in Section 3.3 hereof.
"FPTV Accounts" means shall mean (a) the depositary accounts of
Estrella at its respective FPTV Account Bank bearing account numbers
530582761 and 5300121863, (b) the depositary account of Tel/FL at its
respective FPTV Account Bank bearing account number 1595614069, (c) the
depositary account of Tel/Hou at its respective FPTV Account Bank bearing
account number 9350062643, (d) the depositary account of WNJU at its
respective FPTV Account Bank bearing account number 01019272, (e) the
depositary account of Tel/NorCal at its respective FPTV Account Bank bearing
account number 12621-04789, (f) the depositary account of Guarantor at its
respective FPTV Account Bank bearing account number 011-047496, and (g) the
depositary account of Tel/SanAn at its respective FPTV Account Bank bearing
account number 01-0339830), or (b) any substitute concentration deposit
account of the FPTV Debtors established pursuant to Section 6.17 hereof.
"FPTV Account Banks" means (a) in the case of Estrella, Union
Bank, (b) in the case of Tel/Fl, Barnett Bank, (c) in the case of Tel/Hou,
BankOne, (d) in the case of WNJU, Citibank, N.A., (e) in the case of
Tel/NorCal, Bank of America, (f) in the case of Guarantor, Banco Popular de
Puerto Rico, and (g) in the case of Tel/SanAn, First National Bank.
"FPTV Debtor" means Estrella, WNJU, Tel/Fl, Tel/NorCal,
Tel/SanAn, Tel/Hou, and Guarantor.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Claims" means any Unsecured Claim other than a
Debenture Claim (as those terms are defined in the Plan).
"General Intangibles" means all of each Debtor's present and
future general intangibles and other personal property (including contract
rights, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due
or recoverable from pension funds, route lists, rights to payment and other
rights under any royalty or licensing agreements (including, all FCC Licenses
to the extent not prohibited by law), leases with respect to personal
property, Communication Franchise Agreements (to the extent not prohibited by
law), infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), other than goods, Accounts, and
Negotiable Collateral.
"Group" has the meaning ascribed thereto in the preamble to
this Agreement.
"Guarantor" means Telemundo of Puerto Rico, Inc., a Puerto Rico
corporation.
"Guarantor Mortgage" means a mortgage or deed of trust, in form
and substance reasonably satisfactory to Foothill and Guarantor, between
Guarantor and Foothill, that encumbers the Guarantor Real Property and the
improvements related thereto.
"Guarantor Puerto Rico Security Agreements" means personal
property mortgages and assignments of accounts, prepared under the laws of
the Commonwealth of Puerto Rico, in form and substance reasonably
satisfactory to Foothill and Guarantor, between Guarantor and Foothill.
"Guarantor Real Property" means the parcel of real property and
the related improvements thereto identified on Schedule G-1, and any parcels
of real property hereafter acquired by Guarantor.
"Guarantor UCC Security Agreement" means a Security Agreement,
in form and substance reasonably satisfactory to Foothill and Guarantor,
between Guarantor and Foothill.
"Guaranty" means that certain General Continuing Guaranty,
dated as of even date herewith, executed by Guarantor in favor of Foothill,
in form and substance reasonably satisfactory to Foothill and Guarantor.
"Hazardous Materials" means all or any of the following:
(a) substances that are defined or listed in, or otherwise classified
pursuant to, any applicable laws or regulations as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances," or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or "EP toxicity"; (b) oil, petroleum,
or petroleum derived substances, natural gas, natural gas liquids, synthetic
gas, drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or
geothermal resources; (c) any flammable substances or explosives or any
radioactive materials; and (d) asbestos in any form or electrical equipment
which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts per million.
"Indebtedness" means: (a) all obligations of any Debtor for
borrowed money; (b) all obligations of any Debtor evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or
other obligations of a Debtor in respect of letters of credit, letter of
credit guaranties, bankers acceptances, interest rate swaps, controlled
disbursement accounts, or other financial products; (c) all obligations of
any Debtor under capital leases; (d) all obligations or liabilities of others
secured by a lien or security interest (other than a Permitted Lien) on any
property or asset of any Debtor, irrespective of whether such obligation or
liability is assumed; and (e) any obligation of a Debtor guaranteeing or
intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or
sold with recourse to such Debtor) any indebtedness, lease, dividend, letter
of credit, or other obligation of any other Person.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any
other bankruptcy or insolvency law, including assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally
with its creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.
"Inventory" means all present and future inventory in which any
Debtor has any interest, including goods held for sale or lease or to be
furnished under a contract of service and all of each Debtor's present and
future raw materials, work in process, finished goods, and packing and
shipping materials, wherever located, and any documents of title representing
any of the above.
"IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"Key Leases" means (a) those certain leases between a FPTV
Debtor and a third Person relative to the lease by such FPTV Debtor of the
principal location at which it conducts its broadcasting business, and (b)
that certain lease between Network and a third Person relative to the lease
by Network of the principal location at which it conducts its programming
production business.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section 2.2(a).
"License Subs" mean Estrella/License, WNJU/License, and each of
the Subsidiaries of Borrower formed pursuant to the requirements of Section
3.3(f) hereof.
"Lion" means Lion Advisors, L.P., a Delaware limited
partnership.
"Loan Documents" means this Agreement, the Collateral
Assignments of the FPTV Leases, the Collateral Assignments of Tower Leases,
the Guaranty, the Guarantor Mortgage, the Guarantor Security Agreements, the
Mortgage, the Notification Letters, the Stock Pledge Agreement, the
Subordination Agreement, the Sweep Letters, any note or notes executed by
Borrower and payable to Foothill, and any other agreement entered into, now
or in the future, in connection with this Agreement.
"Material Claim" means one or more claimed rights to payment of
money asserted against Borrower that, individually or in the aggregate,
involve asserted claims of Two Million Five Hundred Thousand Dollars
($2,500,000), or more.
"Material Property" means property or assets of Borrower that,
individually or in the aggregate, have a value of Two Million Five Hundred
Thousand Dollars ($2,500,000), or more.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Amount" has the meaning set forth in Section 2.1.
"Mortgage" means a deed of trust executed by Borrower in favor
of Foothill, in form and substance reasonably satisfactory to Foothill and
Borrower, that encumbers the Borrower Real Property and the related
improvements thereto.
"Multiemployer Plan" means a multiemployer plan as defined in
Sections 3(37) or 4001(a)(3) of ERISA or Section 414 of the IRC in which
employees of Borrower or an ERISA Affiliate participate or to which Borrower
or any ERISA Affiliate contribute or are required to contribute.
"Negotiable Collateral" means all of each Debtor's present and
future letters of credit, notes, drafts, instruments, certificated and
uncertificated securities (including the shares of stock of Subsidiaries of
Borrower), documents, personal property leases (wherein a Debtor is the
lessor), chattel paper, and Borrower's Books relating to any of the
foregoing.
"Network" has the meaning ascribed thereto in the preamble to
this Agreement.
"Network Concentration Account" shall mean (a) the depositary
account of Network at the Network Concentration Account Bank bearing account
number 03601155141, or (b) any substitute concentration deposit account of
Borrower established pursuant to Section 6.17 hereof.
"Network Concentration Account Bank" means NationsBank of
Florida, N.A., or any substitute depositary at which any Concentration
Account is maintained pursuant to Section 6.17 hereof.
"New Concentration Account" means the depositary account of
Group established at the New Concentration Account Bank pursuant to Section
3.3(k) hereof.
"New Concentration Account Bank" means NationsBank of Florida,
N.A.
"New Jersey" has the meaning ascribed thereto in the preamble to
this Agreement.
"New News Service" means a service provided by Borrower or a
corporation, partnership, joint venture, or similar entity in which Borrower
owns, directly or indirectly, at least a 25% equity interest, which service
will provide Spanish-language news programming.
"Notification Letters" means letters from Foothill to the
depositaries at which Borrower maintains its deposit accounts in order to
perfect Foothill's security interest in such deposit accounts, which letter
or letters shall be acknowledged and agreed to by Borrower.
"Obligee" means any one of the Debtors or Guarantor.
"O & Y Letter Agreement" means that certain letter agreement,
dated April 25, 1994, by and between Group and the 1290 Landlord, resolving
and settling all claims related to and arising from 1290 Lease, a copy of
which is attached to the Plan as Exhibit P-5.
"Obligations" means all loans, advances, debts, principal,
interest (including any interest that, but for the provisions of the
Bankruptcy Code, would have accrued), contingent reimbursement obligations
owing to Foothill under any outstanding L/Cs or L/C Guarantees, premiums
(including Early Termination Premiums), liabilities (including all amounts
charged to Borrower's loan account pursuant to any agreement authorizing
Foothill to charge Borrower's loan account), obligations, fees, lease
payments, guaranties, covenants, and duties owing by Borrower (or any Debtor
composing Borrower) to Foothill of any kind and description (whether pursuant
to or evidenced by the Loan Documents, by any note or other instrument, or
pursuant to any other agreement between Foothill and Borrower, and
irrespective of whether for the payment of money, but exclusive of any
obligation that arose on or before the Effective Date and that was not
incurred in connection with the financing transaction that is the subject of
this Agreement), whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including any debt,
liability, or obligation owing from Borrower to others that Foothill may have
obtained by assignment or otherwise, and further including all interest not
paid when due and all Foothill Expenses that Borrower is required to pay or
reimburse by the Loan Documents, by law, or otherwise.
"Overadvance" has the meaning set forth in Section 2.3.
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"Permitted Asset Disposition" means (a) the use of cash in the
ordinary course of business as currently conducted, (b) dispositions of goods
and services to buyers in the ordinary course of business, (c) the sale or
other disposition of obsolete or worn-out Equipment in the ordinary course of
business or the sale or other disposition of Equipment in connection with the
purchase of replacement Equipment, (d) isolated dispositions of any other
property or asset of Borrower that do not exceed $1,000,000 individually or
that do not aggregate in excess of $2,500,000 during any consecutive twelve
(12) month period, and (e) the sale of Telemundo of Colorado Springs, Inc., a
Delaware corporation.
"Permitted Investments" means (a) investments by one Debtor in
another Debtor, (b) investments in Cash Equivalents, and (c) investments in
the New News Service in the form of advances, loans or extensions of credit
in an amount which shall not exceed $20,000,000 in aggregate principal amount
at any one time outstanding, (d) investments in Indebtedness of one Debtor to
another Debtor, (e) investments in ventures formed to produce or acquire
programming, so long as prior to making any such investment, Borrower shall
use its reasonable best efforts to hypothecate to Foothill, pursuant to
agreements in form and substance reasonably satisfactory to Foothill, the
investment to be acquired, (f) investments made in connection with the
acquisition of all or substantially all of the assets or property of another
Person or in the capital stock or other securities of a Person that becomes a
Subsidiary of Group (and becomes a party to this Agreement by the execution
of an appropriate joinder document) in an aggregate amount not in excess of
$7,500,000 in any fiscal year, (g) other investments (not in New News Service
or the Persons being acquired pursuant to clause (f) above) not in excess of
$5,000,000 in any fiscal year.
"Permitted Liens" means: (a) liens and security interests held
by Foothill; (b) liens for unpaid taxes, assessments, or charges that are not
yet due and payable or that are the subject of a Permitted Protest; (c) liens
and security interests set forth on Schedule P-1 attached hereto; (d)
purchase money security interests and liens of lessors under capital leases
to the extent that the acquisition or lease of the underlying asset was
permitted under Section 7.11, and so long as the security interest or lien
only secures the purchase price of the asset; (e) easements, rights of way,
reservations, covenants, conditions, restrictions, zoning restrictions, and
other similar encumbrances that do not materially interfere with the use or
value of the property subject thereto; (f) obligations and duties as lessee
under any lease existing on the date of this Agreement; (g) mechanics',
materialmen's, warehousemen's, or similar liens that arise by operation of
law; (h) exceptions (other than any with respect to Indebtedness) listed in
the title reports delivered by Borrower pursuant to Section 3.3 hereof in
respect of the Real Property; (i) liens to secure pledges or deposits made in
the ordinary course of business to secure nondelinquent obligations arising
under statutory or regulatory requirements, including worker's compensation,
unemployment insurance, and similar legislation; (j) liens to secure the
performance of public statutory obligations that are not delinquent, appeal
bonds, judgment bonds, surety bonds, performance bonds, and other obligations
of a like nature (other than for borrowed money); and (k) extensions,
renewals, or substitutions of the foregoing, provided that the lien permitted
by this clause (k) shall not be spread to cover any additional Indebtedness.
"Permitted Protest" means the right of Borrower to protest any
lien, tax, rental payment, or other charge, other than any such lien or
charge that secures the Obligations, provided (i) a reserve with respect to
such obligation is established on the books of Borrower in an amount in
accordance with GAAP, or, if GAAP does not require the maintenance of a
reserve, that is reasonably satisfactory to Foothill, (ii) any such protest
is instituted and diligently prosecuted by Borrower in good faith, and
(iii) Foothill is reasonably satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of the liens or security interests of Foothill on account of
Material Claims and with respect to Material Property.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they
are legal entities, and governments and agencies and political subdivisions
thereof.
"Plan" means the second amended chapter 11 plan of Group filed
with the Bankruptcy Court on April 29, 1994, as amended or modified from time
to time pursuant to Section 18.11 of said chapter 11 plan and applicable
provisions of the Bankruptcy Code and the Bankruptcy Rules.
"Prohibited Transaction" means any transaction described in
Section 406 of ERISA which is not exempt by reason of Section 408 of ERISA,
and any transaction described in Section 4975(c) or (d) of the IRC which is
not exempt by reason of Section 4975(c) of the IRC.
"Qualified Plan" means a pension plan (as defined in Section
3(2) of ERISA) intended to be tax-qualified under Section 401(a) of the IRC
which Borrower or any ERISA Affiliate sponsors, maintains, or to which any
such person makes, is making, or is obligated to make, contributions, or, in
the case of a multiple-employer plan (as described in Section 4064(a) of
ERISA), has made contributions at any time during the immediately preceding
period covering at least five (5) plan years, but excluding any Multiemployer
Plan.
"RCG" means Reliance Capital Group, L.P., a New York limited
partnership.
"Real Property" means, depending upon the context, the Borrower
Real Property and the Guarantor Real Property, or either of them.
"Reference Rate" means the highest of the variable rates of
interest, per annum, most recently announced by (a) Bank of America, N.T. &
S.A., (b) Mellon Bank, N.A., and (c) Citibank, N.A., or any successor to any
of the foregoing institutions, as its "prime rate" or "reference rate," as
the case may be, irrespective of whether such announced rate is the best rate
available from such financial institution.
"Reliance" means Reliance Insurance Company, a Pennsylvania
corporation.
"Reliance Capital" means Reliance Capital Group, L.P., a New
York limited partnership.
"Reliance Entities" means any one or more of Reliance Capital,
Reliance Associates, L.P., RCG, RGH, and Reliance.
"RGH" means Reliance Group Holdings, Inc., a Delaware
corporation.
"Reportable Event" means any event described in Section 4043
(other than for which the notice requirement has been waived by the PBGC) of
ERISA.
"Rights Plan" means the rights plan, substantially in the form
of Exhibit P-9 to the Plan.
"SACC" has the meaning ascribed thereto in the preamble to this
Agreement.
"SACC/Acq" has the meaning ascribed thereto in the preamble to
this Agreement.
"SAT" has the meaning ascribed thereto in the preamble to this
Agreement.
"Senior Notes" means the approximately $117,000,000 of 10.25%
senior notes due 2001 that are issued under the Plan pursuant to the terms of
the Senior Notes Indenture.
"Senior Notes Indenture" means the Indenture, by and between
Group and Bankers Trust Company as trustee, substantially in the form of
Exhibit P-3 to the Plan, to be dated as of the Consummation Date relative to
the Senior Notes.
"Series B Common Stock" means the Series B Common Stock, par
value $.01 per share, of Group.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) at fair valuations, all of the properties and
assets of such Person are greater than the sum of the debts, including
contingent liabilities, of such Person, (b) the present fair salable value of
the properties and assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it
will, incur debts beyond such Person's ability to pay as such debts mature,
and (e) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
properties and assets would constitute unreasonably small capital after
giving due consideration to the prevailing practices in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at
any time, it is intended that such liabilities will be computed at the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that reasonably can be expected to become an actual or
matured liability. In computing the amount of assets of a Person there shall
be included such Person's intangible assets at a fair valuation.
"Standby Purchase Agreement" means the standby purchase
agreement, by and between Group and Reliance, substantially in the form of
Exhibit P-10 to the Plan.
"Stock Pledge Agreement" means a Stock Pledge Agreement, in
form and substance reasonably satisfactory to Foothill, dated as of the
Closing Date, between Group, Estrella, SACC/Acq, SACC, WNJU, and Foothill
pursuant to which such entities grant a first priority perfected security
interest in all of the issued and outstanding shares of stock of Group's
Subsidiaries (other than the shares of Telemundo of Colorado Springs, Inc.,
a Delaware corporation, and Telemundo News Network, Inc., a Delaware
corporation) in order to secure the obligations of Borrower owing to Foothill.
"Subordination Agreement" means that certain Subordination
Agreement, dated as of even date herewith, executed by Group in favor of
Foothill, in form and substance reasonably satisfactory to Foothill and
Group.
"Subsidiary" means any corporation, association, partnership,
joint venture, or other business entity of which Borrower, directly or
indirectly, either (i) with respect to a corporation, owns or controls fifty
percent (50%) or more of the voting power and has the ability to elect at
least a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power
by reason of the happening of any contingency, or (ii) with respect to an
association, partnership, joint venture or other business entity, is entitled
to share in fifty percent (50%) or more of the profits and losses, however
determined, and has voting control with respect thereto.
"Sweep Letters" means (a) an irrevocable letter from Borrower to
the Concentration Account Bank instructing such bank to remit the proceeds
received into the Concentration Account to an identified deposit account
maintained by Foothill, (b) an irrevocable letter from Network to the Network
Concentration Account Bank instructing such bank to remit the proceeds
received into the Network Concentration Account to an identified deposit
account maintained by Foothill, and (c) irrevocable letters from each of the
FPTV Debtors to their respective FPTV Account Banks instructing such banks to
remit the proceeds received into the FPTV Accounts to an identified deposit
account maintained by Foothill.
"Tangible Net Worth" means, as of the date any determination
thereof is to be made, the difference of: (a) Borrower's total stockholder's
equity; minus (b) the sum of: (i) all intangible assets of Borrower; and
(ii) all amounts due to Borrower from Affiliates (net of amounts due to
Affiliates by Borrower), calculated on a consolidated basis.
"Tel/Aus" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/FL" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/Hou" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/Mex" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/NorCal" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/SanAn" has the meaning ascribed thereto in the preamble to
this Agreement.
"Tel/SanFe" has the meaning ascribed thereto in the preamble to
this Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended.
"TLMD" means TLMD Partners II, L.L.C., a Delaware limited
liability company, and its Affiliates, members (including voting committee
members, investing managers, and investment advisors, or any investment fund,
investment account, or other entity whose investing manager, investment
advisor, or general partner, or any principal thereof, is any of the
foregoing entities or individuals or any principal of Affiliates of any of
them; provided, however, that no entity or individual shall be deemed within
the definition of TLMD when that entity or individual ceases to be an
Affiliate of any of the foregoing entities or individuals or an investment
fund, investment account or other entity whose investing manager, investment
advisor, or general partner, or any principal thereof, is any of the
foregoing entities or individuals or any principal or Affiliate of any of
them.
"Tower Leases" means those certain leases between a FPTV Debtor
and a third Person relative to the lease by the FPTV Debtor of a transmitting
tower, antenna, or the real property on which either or both is situated.
"Tri-Party Agreements" means (a) an agreement, in form and
substance reasonably satisfactory to Foothill and Group, providing for the
establishment of the New Concentration Account, such New Concentration
Account to be in Foothill's name, that unless an Event of Default has
occurred and is continuing or Foothill reasonably deems itself insecure (in
accordance with Section 1208 of the Code), Group shall be entitled to use the
funds deposited into the New Concentration Account in the ordinary course of
its business and consistent with the terms of this Agreement, and that from
and after the occurrence and during the continuation of an Event of Default
or at such time as Foothill deems itself insecure (in accordance with Section
1208 of the Code), but not before, Foothill shall be entitled to instruct the
New Concentration Account Bank to remit the proceeds of all of the cash
receipts, checks, and other items of payment received in such New
Concentration Account directly to an identified deposit account maintained by
Foothill, and (b) an agreement, in form and substance reasonably satisfactory
to Foothill and Network, providing for the establishment of the Network
Concentration Account, that such Network Concentration Account to be in
Foothill's name, that unless an Event of Default has occurred and is
continuing or Foothill reasonably deems itself insecure (in accordance with
Section 1208 of the Code), Network shall be entitled to use the funds
deposited into the Network Concentration Account in the ordinary course of
its business and consistent with the terms of this Agreement, and that from
and after the occurrence and during the continuation of an Event of Default
or at such time as Foothill deems itself insecure (in accordance with Section
1208 of the Code), but not before, Foothill shall be entitled to instruct the
Network Concentration Account Bank to remit the proceeds of all of the cash
receipts, checks, and other items of payment received in such Network
Concentration Account directly to an identified deposit account maintained by
Foothill.
"Tu Mundo" has the meaning ascribed thereto in the preamble to
this Agreement.
"1290 Landlord" means 1290 Associates, as successor-in-interest
to O & Y Equity Corp., Olympia & York Holdings Corporation, and Fame
Associates.
"1290 Lease" means that certain lease agreement, dated as of
April 1, 1983, as amended, by and between Group and the 1290 Landlord,
concerning certain premises located at 1290 Avenue of the Americas, New York,
New York.
"1290 Subleases" means, collectively, the sublease agreements by
and between Group, as sublessor, and the parties, as sublessees, listed on
Exhibit A to the O & Y letter Agreement, concerning certain premises located
at 1290 Avenue of the Americas, New York, New York.
"Unfunded Benefit Liability" means the excess of a Benefit
Plan's benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over
the current value of such Benefit Plan's assets, determined in accordance
with the assumptions used by the Benefit Plan's actuaries for funding the
Benefit Plan pursuant to Section 412 of the IRC for the applicable plan year.
"United States" means the United States of America, or any
department, agency, or instrumentality of the United States of America, its
territories and possessions and the Commonwealth of Puerto Rico.
"Voidable Transfer" has the meaning set forth in Section 15.9.
"WNJU" has the meaning ascribed thereto in the preamble to this
Agreement.
"WNJU/License" has the meaning ascribed thereto in the preamble
to this Agreement.
Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein,
the term "financial statements" shall include the notes and schedules
thereto. Whenever the term "Borrower" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Borrower on
a consolidated basis unless the context clearly requires otherwise.
Code. Any terms used in this Agreement that are defined
in the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein.
Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement. Section, subsection, clause, schedule, and exhibit references are
to this Agreement unless otherwise specified. Any reference in this
Agreement or in the Loan Documents to this Agreement or any of the Loan
Documents shall include all alterations, amendments, changes, extensions,
modifications, joinders, renewals, replacements, substitutions, and
supplements, thereto and thereof, as applicable. Any reference in this
Agreement to "per annum" (other than in Section 2.7(e)) shall, for any period
less than a full year, be pro rated for the actual number of days elapsed in
the partial year.
Schedules and Exhibits. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
LOAN AND TERMS OF PAYMENT.
Revolving Advances. (a) Subject to the terms and
conditions of this Agreement, Foothill agrees to make revolving advances to
Borrower in an amount at any one time outstanding not to exceed the Borrowing
Base less the undrawn or unreimbursed amount of L/Cs and L/C Guarantees
outstanding hereunder. For purposes of this Agreement, "Borrowing Base", as
of any date of determination, shall mean the sum of: (i) eighty percent
(80%) of the amount of Eligible Accounts, plus (ii) Five Million Dollars
($5,000,000). The Borrowing Base shall be calculated and determined once per
month as of the first day of each month; provided, however, that, upon the
occurrence and continuation of an Event of Default, the Borrowing Base shall
be calculated and determined on a daily basis.
Anything to the contrary in Section 2.1(a) above
notwithstanding, from and after the occurrence and during the continuance of
an Event of Default, Foothill may reduce its advance rates based upon
Eligible Accounts without declaring an Event of Default.
Foothill shall have no obligation to make advances
hereunder to the extent they would cause the outstanding Obligations to
exceed Twenty Million Dollars ($20,000,000) (the "Maximum Amount").
Foothill is authorized to make advances under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Officer of Borrower, or without instructions
if pursuant to Section 2.4(d). Borrower agrees to establish and maintain a
single designated deposit account for the purpose of receiving the proceeds
of the advances requested by Borrower and made by Foothill hereunder. Unless
otherwise agreed in writing by Foothill and Borrower, any advance requested
by Borrower and made by Foothill hereunder shall be made to such designated
deposit account. Amounts borrowed pursuant to this Section 2.1 may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
Letters of Credit and Letter of Credit Guarantees.
Subject to the terms and conditions of this
Agreement, Foothill agrees to issue commercial or standby letters of credit
for the account of Borrower (each, an "L/C") or to issue standby letters of
credit or guarantees of payment (each such letter of credit or guaranty, an
"L/C Guaranty") with respect to commercial or standby letters of credit
issued by another Person for the account of Borrower in an aggregate face
amount not to exceed the lesser of: (i) the Borrowing Base less the amount of
advances outstanding pursuant to Section 2.1, and (ii) Two Million Five
Hundred Thousand Dollars ($2,500,000). Borrower expressly understands and
agrees that Foothill shall have no obligation to arrange for the issuance by
other financial institutions of letters of credit that are to be the subject
of L/C Guarantees. Borrower and Foothill acknowledge and agree that certain
of the letters of credit that are to be the subject of L/C Guarantees may be
outstanding on the Closing Date. Each L/C and each letter of credit that is
the subject of an L/C Guaranty shall have an expiry date no later than sixty
(60) days prior to the date on which this Agreement is scheduled to terminate
under Section 3.4 (without regard to any potential renewal term) and all such
L/Cs and letters of credit (and the applicable L/C Guarantees) shall be in
form and substance acceptable to Foothill in its sole discretion. Foothill
shall not have any obligation to issue L/Cs or L/C Guarantees to the extent
that the face amount of all outstanding L/Cs and L/C Guarantees, plus the
amount of advances outstanding pursuant to Section 2.1, would exceed the
lesser of: (y) the Maximum Amount, or (z) the Maximum Foothill Amount plus
the Syndicated Amount. The L/Cs and the L/C Guarantees issued under this
Section 2.2 shall be used by Borrower, consistent with this Agreement, for
its general working capital purposes or to support its obligations with
respect to workers' compensation premiums or other similar obligations. If
Foothill is obligated to advance funds under an L/C or L/C Guaranty, the
amount so advanced immediately shall be deemed to be an advance made by
Foothill to Borrower pursuant to Section 2.1 and, thereafter, shall bear
interest at the rates then applicable under Section 2.4.
Borrower hereby agrees to indemnify, save, defend,
and hold Foothill harmless from any loss, cost, expense, or liability,
including payments made by Foothill, expenses, and reasonable attorneys fees
incurred by Foothill arising out of or in connection with any L/Cs or L/C
Guarantees. Borrower agrees to be bound by the issuing bank's regulations
and interpretations of any letters of credit guarantied by Foothill and
opened to or for Borrower's account or by Foothill's interpretations of any
L/C issued by Foothill to or for Borrower's account, even though this
interpretation may be different from Borrower's own, absent manifest error or
a violation of law, and Borrower understands and agrees that Foothill shall
not be liable for any error, negligence, or mistakes, whether of omission or
commission, in following Borrower's instructions or those contained in the
L/Cs or any modifications, amendments, or supplements thereto, other than
gross negligence or willful misconduct. Borrower understands that the L/C
Guarantees may require Foothill to indemnify the issuing bank for certain
costs or liabilities arising out of claims by Borrower against such issuing
bank. Borrower hereby agrees to indemnify, save, defend, and hold Foothill
harmless with respect to any loss, cost, expense (including attorneys fees),
or liability incurred by Foothill under any L/C Guaranty as a result of
Foothill's indemnification of any such issuing bank. The foregoing
indemnification shall not constitute a waiver of the right of Borrower to
assert any claim that it may have against such issuing bank.
Borrower hereby authorizes and directs any bank that
issues a letter of credit guaranteed by Foothill to deliver to Foothill all
instruments, documents, and other writings and property received by the
issuing bank pursuant to such letter of credit, and to accept and rely upon
Foothill's instructions and agreements with respect to all matters arising in
connection with such letter of credit and the related application. Borrower
may or may not be the "applicant" or "account party" with respect to such
letter of credit.
Any and all service charges, commissions, fees, and
costs incurred by Foothill relating to the letters of credit guaranteed by
Foothill shall be considered Foothill Expenses for purposes of this Agreement
and immediately shall be reimbursable by Borrower to Foothill. On the first
day of each month, Borrower will pay Foothill a fee equal to two and one-half
percent (2.5%) per annum times the average Daily Balance of the L/Cs and L/C
Guarantees that were outstanding during the immediately preceding month.
Service charges, commissions, fees, and costs may be charged to Borrower's
loan account at the time the service is rendered or the cost is incurred.
Immediately upon the termination of this Agreement,
Borrower agrees to either: (i) provide cash collateral to be held by
Foothill in an amount equal to the maximum amount of Foothill's obligations
under L/Cs plus the maximum amount of Foothill's obligations to any Person
under outstanding L/C Guarantees, or (ii) cause to be delivered to Foothill
releases of all of Foothill's obligations under its outstanding L/Cs and L/C
Guarantees. At Foothill's discretion, any proceeds of Collateral received by
Foothill after the occurrence and during the continuation of an Event of
Default may be held as the cash collateral required by this Section 2.2(e).
Overadvances. If, at any time or for any reason, the
amount of Obligations owed by Borrower to Foothill pursuant to Sections 2.1
and 2.2 is greater than either the dollar or percentage limitations set forth
in Sections 2.1 or 2.2 (an "Overadvance"), Borrower immediately shall pay to
Foothill, in cash, the amount of such excess to be used by Foothill first, to
repay non-contingent Obligations and, thereafter, to be held by Foothill as
cash collateral to secure Borrower's obligation to repay Foothill for all
amounts paid pursuant to L/Cs or L/C Guarantees.
Interest: Rates, Payments, and Calculations.
Interest Rate. All Obligations, except for undrawn
L/Cs and L/C Guarantees, shall bear interest, on the average Daily Balance,
at a per annum rate equal to one and three-quarters (1.75) percentage points
above the Reference Rate.
Default Rate. (i) All Obligations, except for
undrawn L/Cs and L/C Guarantees, shall bear interest, from and after the
occurrence and during the continuance of an Event of Default, at a per annum
rate equal to four and three-quarters (4.75) percentage points above the
Reference Rate. (ii) From and after the occurrence and during the
continuance of an Event of Default, the fee provided in Section 2.2(d) shall
be increased to a fee equal to five and one-half percent (5.5%) per annum
times the average Daily Balance of the undrawn L/Cs and L/C Guarantees that
were outstanding during the immediately preceding month.
Minimum Interest. In no event shall the rate of
interest chargeable hereunder be less than eight percent (8.0%) per annum,
nor shall the amount of interest accrued and payable to Foothill during the
first two (2) years of the term of this Agreement be less than Three Hundred
Sixty Thousand Dollars ($360,000) (the "Minimum Interest Amount") per annum.
To the extent that interest accrued hereunder at the rate set forth herein
(including the minimum interest rate) would yield less than the foregoing
minimum amount, the interest rate chargeable hereunder for the year in
question automatically shall be deemed increased during the last month for
that year to that rate that would result in the minimum amount of interest
being accrued and payable hereunder. The foregoing to the contrary
notwithstanding, if Borrower prepays the obligations and terminates this
Agreement prior to the Maturity Date and on a date other than the last day of
a calendar year, Borrower shall be liable to Foothill for, and shall include
in such payoff amount, an amount equal to the amount by which (a)(i) the
Minimum Interest Amount, times (ii) a fraction, the numerator of which is the
number of days elapsed in such year to the date of the payoff, and the
denominator of which is 360, exceeds (b) the amount of interest that was
accrued and payable hereunder during such year.
Payments. Interest hereunder shall be due and
payable, in arrears, on the first day of each month during the term hereof.
Borrower hereby authorizes Foothill, and Foothill hereby agrees that it will,
without prior notice to Borrower, charge such interest, all Foothill Expenses
(as and when incurred), and all installments or other payments due under any
note or other Loan Document to Borrower's loan account, which amounts
thereafter shall accrue interest at the rate then applicable hereunder. Any
interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate
then applicable hereunder.
Computation. The Reference Rate as of the date of
this Agreement is eight and one-half percent (8.5%) per annum. In the event
the Reference Rate is changed from time to time hereafter, the applicable
rate of interest hereunder automatically and immediately shall be increased
or decreased by an amount equal to such change in the Reference Rate. All
interest and fees chargeable under the Loan Documents shall be computed on
the basis of a three hundred sixty (360) day year for the actual number of
days elapsed.
Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable. Borrower and Foothill, in executing
this Agreement, intend legally to agree upon the rate or rates of interest
and manner of payment stated within it; provided, however, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto as of the date of this Agreement, Borrower is and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrower in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.
Crediting Payments; Application of Collections. The
receipt of any wire transfer of funds, check, or other item of payment by
Foothill (whether from transfers to Foothill by the Concentration Account
Bank, the Network Concentration Account Bank, the FPTV Account Banks, or
otherwise) immediately shall be applied to provisionally reduce the
Obligations, but shall not be considered a payment on account unless such
wire transfer is of immediately available federal funds and is made to the
appropriate deposit account of Foothill or unless and until such check or
other item of payment is honored when presented for payment. Anything to the
contrary contained herein notwithstanding, any wire transfer, check, or other
item of payment received by Foothill on account of the Obligations shall be
deemed received by Foothill only if it is received by Foothill on or before
11:00 a.m. Los Angeles time. If any wire transfer, check, or other item of
payment received by Foothill on account of the Obligations is received by
Foothill after 11:00 a.m. Los Angeles time it shall be deemed to have been
received by Foothill as of the opening of business on the immediately
following Business Day.
Statements of Obligations. Foothill shall render monthly
statements to Borrower of the Obligations, including principal, interest,
fees, and including an itemization of all charges and expenses constituting
Foothill Expenses owing in reasonable detail so as to enable Borrower to
determine the nature and amount of the relevant charges and payments, and
such statements shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrower and Foothill unless, within
thirty (30) days after receipt thereof by Borrower, Borrower shall deliver to
Foothill by registered or certified mail at its address specified in Section
12, written objection thereto describing the error or errors contained in any
such statements. Borrower and Foothill agree to negotiate in good faith
relative to any claimed error or errors and, if an adjustment is made,
Foothill also agrees to reverse the allocable interest charged hereunder with
respect to the adjusted amount.
Fees. Borrower shall pay to Foothill the following fees:
Closing Fee. A one time closing fee of Two Hundred
Thousand Dollars ($200,000) which is earned, in full, on the Effective Date
and is due and payable by Borrower to Foothill in connection with this
Agreement on the Effective Date;
Unused Line Fee. On the first day of each month
following the Effective Date and during the term of this Agreement, a fee, in
arrears, in an amount equal to one-half of one percent (0.5%) per annum times
the Average Unused Portion of the Maximum Amount;
Monthly Fee. On the first day of each month
following the Effective Date and during the term of this Agreement, a fee, in
arrears, equal to Twelve Thousand Five Hundred Dollars ($12,500);
Annual Facility Fee. On each anniversary of the
Effective Date, a fee in an amount equal to one-quarter of one percent
(0.25%) of the Maximum Amount, such fee to be fully earned on each such
anniversary;
Financial Examination Fees. Foothill's customary
fee of Six Hundred Fifty Dollars ($650) per day per examiner, plus reasonable
out-of-pocket expenses for each financial analysis and examination of
Borrower performed by Foothill or its agents; it being understood and agreed
that, in the absence of an Event of Default, Foothill will not perform an
audit examination of Borrower and its businesses more frequently than once
per quarter and, in the absence of an Event of Default, Borrower shall not be
obligated to pay more than $25,000 per annum for financial examination fees
(exclusive of reasonable out-of-pocket expenses); and
Servicing Fee. On the first day of each month
occurring after the Effective Date and during the term of this Agreement, and
thereafter so long as any Obligations are outstanding, a servicing fee, in
arrears, in an amount equal to Three Thousand Five Hundred Dollars ($3,500)
per month.
CONDITIONS; TERM OF AGREEMENT.
Conditions Precedent to Initial Advance, L/C, or L/C
Guaranty. The obligation of Foothill to make the initial advance or to
provide the initial L/C or L/C Guaranty is subject to the fulfillment, to the
reasonable satisfaction of Foothill and its counsel, of each of the following
conditions on or before the Closing Date:
the Closing Date shall occur on or after the
Consummation Date and on or before March 31, 1995;
Foothill shall have received searches regarding each
entity composing Borrower in each of the material jurisdictions and shall
have received original executed financing statements and fixture filings;
Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
the Guaranty;
the Guarantor UCC Security Agreement and
appropriate UCC-1 financing statements;
the Notification Letters;
the Subordination Agreement;
the Stock Pledge Agreement; and
the Sweep Letters;
Foothill shall have received possession of the
original stock certificates respecting all of the issued and outstanding
shares of stock of each of Estrella, Estrella/License, New Jersey, Network,
Tel/Aus, Tel/FL, Tel/Hou, Tel/Mex, Tel/NorCal, Tel/SanAn, Tel/SanFe, Tu
Mundo, SACC/Acq, SAT, SACC, WNJU, and WNJU/License, together with stock
powers with respect thereto endorsed in blank;
Foothill shall have received a certificate from the
Secretary of each Debtor attesting to the resolutions of such Debtor's Board
of Directors authorizing its execution and delivery of this Agreement and the
other Loan Documents to which such Debtor is a party and authorizing officers
of such Debtor to execute same;
Foothill shall have received a certificate from the
Secretary of Guarantor attesting to the resolutions of Guarantor's Board of
Directors authorizing its execution and delivery of the Loan Documents to
which Guarantor is a party and authorizing officers of Guarantor to execute
same;
Foothill shall have received a certificate of
corporate status with respect to each Debtor and Guarantor, dated within
fifteen (15) days of the Effective Date, by the Secretary of State of the
state of incorporation of such Debtor or Guarantor, as applicable, which
certificate shall indicate that such Debtor or Guarantor, as applicable, is
in good standing in such state;
Foothill shall have received certificates of
corporate status with respect to each Debtor and Guarantor, each dated within
fifteen (15) days of the Effective Date, such certificates to be issued by
the Secretary of State of the states in which its failure to be duly
qualified or licensed would have a material adverse effect on the financial
condition or properties and assets of the Debtors and Guarantor, taken as a
whole, which certificates shall indicate that such Debtor or Guarantor is in
good standing;
Foothill shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.13 hereof, the form and substance of which shall be reasonably satisfactory
to Foothill and its counsel;
Foothill shall have received an opinion of
Borrower's corporate counsel in form and substance reasonably satisfactory to
Foothill;
Foothill shall have received executed disbursement
instructions from Borrower, addressed to Foothill, with respect to the
advances to be made on the Closing Date, directing Foothill to disburse the
proceeds of such advances in accordance with the terms of Section 7.18
hereof;
the Confirmation Order shall have been signed by the
Bankruptcy Court and Foothill shall have received a copy thereof certified to
on behalf of Group;
there shall not be any stay in effect with respect to
the Confirmation Order;
there shall have been obtained all regulatory approvals
necessary or appropriate to the consummation of the Plan including (i) any
required approvals of the FCC, (ii) the termination or expiration of the
applicable waiting period (and any extension thereof) under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and (iii)
qualification of the Senior Notes Indenture under the TIA;
Group shall (i) have sufficient cash as of the
Consummation Date to (y) make the distributions provided for in the Plan, and
(z) satisfy its working capital requirements (inclusive of amounts available
under this Agreement) and (ii) have received all cash payments required to be
made pursuant to (y) the terms and conditions of the Rights Plan, and (z) the
Standby Purchase Agreement;
the Bankruptcy Court shall authorize and approve the
Blair Settlement Agreement by Final Order;
the Bankruptcy Court shall authorize and approve the
motion to assume and assign, pursuant to section 365 of the Bankruptcy Code,
the 1290 Lease and the 1290 Subleases and pay $7,000,000 to the 1290 Landlord
under the terms and conditions of the O & Y Letter Agreement by Final Order;
there shall have been filed with the Bankruptcy Court a
document or other submission (the "Consummation Date Filing") that states
that the conditions precedent to the Consummation Date have occurred, such
Consummation Date Filing to have been signed by Group and attorneys for the
Creditors' Committee, and Foothill shall have received a copy thereof
certified to on behalf of Group; it being understood and agreed that at such
time as (i) Foothill has received such certified copy of the Consummation
Date Filing, and (ii) Foothill has received either (y) a copy of the FCC
approval referred to in subclause (n)(i) above, or (z) an affidavit from
Borrower's special FCC counsel regarding its receipt of verbal confirmation
from the FCC of such FCC approval and a letter indicating the practice and
justification for relying upon such verbal confirmations, Borrower shall be
deemed to have satisfied each of the conditions set forth in clauses (m)
through (q), inclusive;
Foothill shall have received a consolidated pro
forma balance sheet for Borrower, dated as of June 30, 1994, which gives
effect to the Plan;
Foothill shall have received consolidated cash flow
projections for Borrower for a period of not less than three (3) years, set
forth on a quarterly basis for 1995; and
all other documents and legal matters in connection
with the transactions contemplated by this Agreement to occur on or before
the Closing Date shall have been delivered or executed or recorded and shall
be in form and substance satisfactory to Foothill and its counsel.
Conditions Precedent to All Advances, L/Cs, or L/C
Guarantees. The following shall be conditions precedent to all advances,
L/Cs, or L/C Guarantees hereunder:
the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such advance, L/C, or L/C
Guaranty, as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date);
no Event of Default or event which with the giving
of notice or passage of time would constitute an Event of Default shall have
occurred and be continuing on the date of such advance, L/C, or L/C Guaranty,
nor shall either result from the making thereof; and
no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the making of such
advance or the issuance of such L/C or L/C Guaranty shall have been issued
and remain in force by any governmental authority against Borrower, Foothill,
or any of their Affiliates.
Conditions Subsequent to All Advances, L/Cs, and L/C
Guarantees. The following shall be conditions subsequent to all advances,
L/Cs, and L/C Guarantees hereunder, from and after the applicable date set
forth herein, shall be conditions precedent to the making of additional
advances, L/Cs, and L/C Guarantees, and the failure to comply with any
provision of this Section 3.3 shall constitute an Event of Default hereunder:
on or before the date that is thirty (30) days following
the Effective Date, Borrower shall execute, deliver, and record the Mortgage
with respect to the Real Property;
on or before the date that is thirty (30) days following
the Effective Date, Borrower shall cause Guarantor to execute, deliver, and
record the Guarantor Mortgage with respect to the Guarantor Real Property;
on or before the date that is sixty (60) days following
the Effective Date, Borrower shall use its reasonable best efforts to obtain
any necessary consent to enable it to hypothecate its rights under the Tower
Leases and, to the extent that such consents are obtained or are not
necessary, shall have executed, delivered, and recorded (or, in the case of
Guarantor, caused the execution, delivery, and recordation of) the Collateral
Assignments of Tower Leases with respect to the Tower Leases;
on or before the date that is sixty (60) days following
the Effective Date, Borrower shall use its reasonable best efforts to obtain
any necessary consent to enable it to hypothecate its rights under the Key
Leases and, to the extent that such consents are obtained or are not
necessary, shall have executed, delivered, and recorded (or, in the case of
Guarantor, caused the execution, delivery, and recordation of) the Collateral
Assignments of Tower Leases with respect to the Tower Leases;
on or before the date that is sixty (60) days following
the Effective Date, Foothill shall have used its reasonable best efforts to
obtain landlord waivers from the lessors of the Key Lease locations to the
extent that Borrower was unable to obtain Collateral Assignments of Key
Leases with respect thereto;
on or before the date that is sixty (60) days following
the Effective Date, Group shall have created a separate, special purpose
first tier Subsidiary to hold each of the FPTV Debtor's FCC Licenses and
shall have submitted the necessary FCC approval to the transfer of such
licenses to such License Subs. Promptly upon receipt of each individual FCC
approval, Group shall transfer the applicable FCC License(s) to the
respective License Subs, shall cause such License Subs to execute and deliver
an appropriate joinder document to make them a party to this Agreement, shall
cause such License Subs to execute and deliver to Foothill UCC-1 financing
statements, shall execute and deliver an appropriate supplement to the Stock
Pledge Agreement, and shall deliver to Foothill possession of the original
stock certificates respecting all of the issued and outstanding shares of
stock of such License Sub(s), together with stock powers with respect thereto
endorsed in blank;
on or before the date that is thirty (30) days following
the date on which Group has filed its Form 10-K with the Securities and
Exchange Commission, Borrower and Foothill shall have agreed upon the levels
of performance to be provided in the financial covenants that are set forth
on Schedule 6.14 attached hereto; it being understood and agreed that
Borrower and Foothill will negotiate reasonably and in good faith to
establish such financial covenants based upon Borrower's projected financial
performance;
on or before the date that is thirty (30) days following
the date on which Group has filed its Form 10-K with the Securities and
Exchange Commission, Borrower and Foothill shall have agreed upon the level
of capital expenditures to be provided in the covenant that is set forth on
Schedule 7.11 attached hereto; it being understood and agreed that Borrower
and Foothill will negotiate reasonably and in good faith to establish such
covenant based upon Borrower's historical and projected capital expenditure
requirements;
on or before the date that is thirty (30) days following
the Effective Date, Borrower shall cause Guarantor to execute, deliver, and
record the Guarantor Puerto Rico Security Agreements;
on or before the date that is thirty (30) days
following the Effective Date, Foothill shall have received consolidating cash
flow projections for each entity composing Borrower for a period of not less
than three (3) years, set forth on a quarterly basis for 1995;
on or before the date that is thirty (30) days following
the Effective Date, Group, Foothill, and the New Concentration Account Bank
shall have entered into the Tri-Party Agreement relative to the New
Concentration Account and on or before the date that is thirty (30) days
following the Effective Date, Network, Foothill, and the Network
Concentration Account Bank shall have entered into the Tri-Party Agreement
relative to the Network Concentration Account; and
on or before the date that is ten (10) days
following the Closing Date, Foothill shall have received copies of each
Debtor's and Guarantor's By-laws and Articles or Certificate of
Incorporation, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Debtor or Guarantor, as applicable;
on or before the date that is ten (10) days following
the Closing Date, Foothill shall have received a copy of the Senior Notes
Indenture, together with a certificate of the Secretary of Group certifying
same to be a true and correct copy thereof.
Term. This Agreement shall become effective upon the
Effective Date and Foothill and shall continue in full force and effect for a
term ending on the date that is five (5) years from the Effective Date
("Maturity Date"). The foregoing notwithstanding, Foothill shall have the
right to terminate its obligations under this Agreement immediately and
without notice upon the occurrence and during the continuation of an Event of
Default.
Effect of Termination. On the date of termination, all
Obligations (including contingent reimbursement obligations under any
outstanding L/Cs or L/C Guarantees) immediately shall become due and payable
without notice or demand. No termination of this Agreement, however, shall
relieve or discharge Borrower of Borrower's duties, Obligations, or covenants
hereunder, and Foothill's continuing security interests in the Collateral and
the Real Property shall remain in effect until all Obligations have been
fully and finally discharged and Foothill's obligation to provide advances
hereunder is terminated.
Early Termination by Borrower. The provisions of Section
3.4 notwithstanding, Borrower has the option, at any time upon ninety (90)
days prior written notice to Foothill, to terminate this Agreement by paying
to Foothill, in cash, the Obligations (including an amount equal to the full
amount of the L/Cs or L/C Guarantees), together with a premium (the "Early
Termination Premium") equal to: (a) during the period of time from and after
the date of the execution and delivery of this Agreement up to, but not
including, the first anniversary of the Closing Date, three percent (3.0%)
times the Maximum Amount; (b) during the period of time from and after the
first anniversary of the Closing Date up to, but not including, the second
anniversary of the Closing Date, one and one-half percent (1.5%) times the
Maximum Amount; and (c) thereafter, three-quarters of one percent (0.75%)
times the Maximum Amount. The foregoing notwithstanding, in the event that
Borrower terminates this Agreement and pays to Foothill, in cash, the
Obligations on any date that is within sixty (60) days after the third
anniversary of the Closing Date or within sixty (60) days after the fourth
anniversary of the Closing Date, Borrower shall be relieved of its obligation
to pay the Early Termination Premium. Upon written request therefor from
Borrower received by Foothill, Foothill agrees that it promptly will provide
a written statement of the then current outstanding amount of the Obligations
so as to enable Borrower to terminate this Agreement within the sixty day
periods set forth in the preceding sentence.
Termination Upon Event of Default. If Foothill terminates
this Agreement upon the occurrence of an Event of Default (unless Borrower is
entitled to terminate this Agreement pursuant to the penultimate sentence of
Section 3.6 and properly does so after being notified of the existence of an
Event of Default), in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of Foothill's lost profits as a result thereof,
Borrower shall pay to Foothill upon the effective date of such termination, a
premium in an amount equal to the Early Termination Premium. The Early
Termination Premium shall be presumed to be the amount of damages sustained
by Foothill as the result of the early termination and Borrower agrees that
it is reasonable under the circumstances currently existing. The Early
Termination Premium provided for in this Section 3.7 shall be deemed included
in the Obligations.
CREATION OF SECURITY INTEREST.
Grant of Security Interest. Borrower hereby grants to
Foothill a continuing security interest in all currently existing and
hereafter acquired or arising Collateral in order to secure prompt repayment
of any and all Obligations and in order to secure prompt performance by
Borrower of each of its covenants and duties under the Loan Documents.
Foothill's security interests in the Collateral shall attach to all
Collateral without further act on the part of Foothill or Borrower. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Asset Dispositions to the extent
permitted hereby, Borrower has no authority, express or implied, to dispose
of any item or portion of the Collateral or the Real Property. Anything to
the contrary in this Agreement or the other Loan Documents notwithstanding,
to the extent this Agreement or any Loan Document purports to grant to
Foothill, a security interest in the FCC Licenses, Foothill shall only have a
security interest in such FCC Licenses at such times and to the extent that a
security interest in such FCC Licenses is permitted under applicable law and
Foothill agrees that, to the extent prior FCC approval is required pursuant
to the Communications Act of 1934, as amended, or the rules and regulations
of the FCC for (a) the operation and effectiveness of any right, or remedy
hereunder or under any Loan Document, or (b) taking any action that may be
taken by Foothill hereunder or under any Loan Document, such right, remedy,
or action will be subject to such prior FCC approval having been obtained by
or in favor of Foothill (and Borrower will use its reasonable best efforts to
obtain any such approval as promptly as possible after Foothill first becomes
entitled to exercise such right, remedy, or action).
Negotiable Collateral. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral,
Borrower shall, immediately upon the request of Foothill, endorse and assign
such Negotiable Collateral to Foothill and deliver physical possession of
such Negotiable Collateral (exclusive of Borrower's Books unless an Event of
Default has occurred and is continuing) to Foothill.
Collection of Accounts, General Intangibles, Negotiable
Collateral. Borrower agrees that it will, and will cause Guarantor to,
continue to consolidate their net receipts into the Concentration Account in
accordance with their past practices as they exist on the Effective Date and
that such consolidation will occur not less frequently than weekly (or,
following the occurrence and during the continuation of an Event of Default,
daily) and will not fail to consolidate their receipts into the Concentration
Account during any week (or, following the occurrence and during the
continuation of an Event of Default, any day) without the prior written
consent of Foothill. In this regard, the net proceeds (as determined in
accordance with Borrower's and Guarantor's past practices as they exist on
the Effective Date) of all of Borrower's and Guarantor's cash receipts,
checks, and other items of payment (including, insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds) automatically will be
transferred, directly or indirectly, on a weekly (or, following the
occurrence and during the continuation of an Event of Default, daily) basis
from the original deposit account to which they are deposited into the
Concentration Account. Unless an Event of Default has occurred and is
continuing or Foothill reasonably deems itself insecure (in accordance with
Section 1208 of the Code), Borrower and Guarantor shall be entitled to use
the proceeds of the funds deposited into the Concentration Account in the
ordinary course of their business and consistent with the terms of this
Agreement. From and after the occurrence and during the continuation of an
Event of Default or at such time as Foothill deems itself insecure (in
accordance with Section 1208 of the Code), but not before, Foothill shall be
entitled to send the Sweep Letters to the Concentration Account Bank, the
Network Concentration Account Bank, or the FPTV Account Banks, or exercise
its rights under the Tri-Party Agreements, as applicable, instructing the
Concentration Account Bank, the Network Concentration Account Bank, or the
FPTV Account Bank to remit the proceeds of all of Group's, Network's, or the
FPTV Debtor's cash receipts, checks, and other items of payment directly to
an identified deposit account maintained by Foothill and, upon receipt
therein, Foothill shall apply same to reduce the amount of the Obligations.
At any time that an Event of Default has occurred and is continuing, Foothill
or Foothill's designee may: (a) notify customers or Account Debtors of
Borrower that the Accounts, General Intangibles, or Negotiable Collateral
have been assigned to Foothill or that Foothill has a security interest
therein; and (b) collect the Accounts, General Intangibles, and Negotiable
Collateral directly and charge the reasonable collection costs and expenses
to Borrower's loan account. Borrower agrees that it will hold in trust for
Foothill, as Foothill's trustee, any cash receipts, checks, and other items
of payment (including, insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) that it receives and weekly, or daily, as
applicable hereinabove, will deliver said cash receipts, checks, and other
items of payment to the Concentration Account Bank in their original form as
received by Borrower.
Delivery of Additional Documentation Required. At any
time upon the reasonable request of Foothill, Borrower shall execute and
deliver to Foothill all financing statements, continuation financing
statements, fixture filings, security agreements, chattel mortgages, pledges,
assignments, endorsements of certificates of title, applications for title,
affidavits, reports, notices, schedules of accounts, letters of authority,
and all other documents that Foothill may reasonably request, in form
reasonably satisfactory to Foothill, to perfect and continue perfected
Foothill's security interests in the Collateral and the Real Property, and in
order to fully consummate all of the transactions contemplated hereby and
under the other the Loan Documents. In addition, Borrower agrees to cause
Guarantor to provide to Foothill an update schedule of accounts on a monthly
basis and an updated schedule of equipment on a quarterly basis, the form of
such schedules being such as to amend the Guarantor Security Agreements;
provided, however, that, upon the occurrence and continuation of an Event of
Default, the schedules of accounts and schedules of equipment of Guarantor
shall be provided as frequently as Foothill may require, but not more
frequently than once per week.
Power of Attorney. Borrower hereby irrevocably makes,
constitutes, and appoints Foothill (and any of Foothill's officers,
employees, or agents designated by Foothill) as Borrower's true and lawful
attorney, with power to: (a) if, upon a reasonable request therefor,
Borrower refuses to, or fails timely to execute and deliver any of the
documents described in Section 4.4, sign the name of Borrower on any of the
documents described in Section 4.4; (b) at any time that an Event of Default
has occurred and is continuing, sign Borrower's name on any invoice or bill
of lading relating to any Account, drafts against Account Debtors, schedules
and assignments of Accounts, verifications of Accounts, and notices to
Account Debtors; (c) send requests for verification of Accounts; it being
agreed that unless an Event of Default has occurred and is continuing, such
verifications shall not indicate that they are being conducted on behalf of a
financier to Borrower; (d) at any time that an Event of Default has occurred
and is continuing, endorse Borrower's name on any checks, notices,
acceptances, money orders, drafts, or other item of payment or security that
may come into Foothill's possession; (e) at any time that an Event of Default
has occurred and is continuing, notify the post office authorities to change
the address for delivery of Borrower's mail to an address designated by
Foothill, to receive and open all mail addressed to Borrower, and to retain
all mail relating to the Collateral and promptly forward all other mail to
Borrower; (f) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under Borrower's policies of
insurance and make all determinations and decisions with respect to such
policies of insurance; and (g) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting
the Accounts directly with Account Debtors, for amounts and upon terms which
Foothill determines to be reasonable, and Foothill may cause to be executed
and delivered any documents and releases which Foothill reasonably determines
to be necessary. The appointment of Foothill as Borrower's attorney, and
each and every one of Foothill's rights and powers, being coupled with an
interest, is irrevocable (although conditional upon certain events occurring
and continuing in existence) until all of the Obligations have been fully and
finally repaid and performed and Foothill's obligation to extend credit
hereunder is terminated.
Right to Inspect. Prior to the time that an Event of
Default has occurred and is continuing or Foothill deems itself insecure (in
accordance with Section 1208 of the Code), Foothill (through any of its
officers, employees, or agents) shall have the right, from time to time
hereafter upon prior reasonable notification to Borrower and during normal
business hours, to inspect Borrower's Books and to check, test, and appraise
the Collateral in order to verify Borrower's financial condition or the
amount, quality, value, condition of, or any other matter relating to, the
Collateral. After the time that an Event of Default has occurred and is
continuing or Foothill deems itself insecure (in accordance with Section 1208
of the Code), Foothill (through any of its officers, employees, or agents)
shall have the right, from time to time hereafter without prior notification
to Borrower and at any time or times determined by Foothill, to inspect
Borrower's Books and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
REPRESENTATIONS AND WARRANTIES.
In order to induce Foothill to enter into this Agreement,
Borrower makes the following representations and warranties, which shall be
true, correct, and complete in all material respects as of the Effective
Date, the Closing Date, and at and as of the date of each advance under the
Loan, as though made on and as of the date of such advance under the Loan
(except to the extent that such representations and warranties expressly
relate solely to an earlier date), such representations and warranties to
survive the execution and delivery of this Agreement:
No Prior Encumbrances. Borrower has good and indefeasible
title to the Collateral (other than with respect to the FCC Licenses, which
are subject to periodic renewal) and the Real Property, free and clear of
liens, claims, security interests, or encumbrances, except for Permitted
Liens.
Eligible Accounts. The Eligible Accounts are, at the time
of the creation thereof and as of each date on which Borrower includes them
in a Borrowing Base calculation or certification, bona fide existing
obligations created by the sale and delivery of broadcasting time or the
production and syndication of television programming to Account Debtors in
the ordinary course of the Obligee's business, unconditionally owed to an
Obligee without defenses, disputes, offsets, counterclaims, or rights of
return or cancellation. The services giving rise to such Eligible Accounts
have been fully performed, except for the obligation to make additional
advertising time available in certain circumstances. At the time of the
creation of an Eligible Account and as of each date on which Borrower
includes an Eligible Account in a Borrowing Base calculation or
certification, Borrower has not received notice of actual or imminent
bankruptcy, insolvency, or material impairment of the financial condition of
any applicable Account Debtor regarding such Eligible Account and, in the
case of an Advertising Agency Account Debtor, of the underlying client of
such Advertising Agency Account Debtor.
Location of Inventory and Equipment. The Inventory and
Equipment are not stored with a bailee, warehouseman, or similar party
(without Foothill's prior written consent) and (except for Inventory and
Equipment that, in the aggregate, has a value of not more than $1,000,000)
are located only at the locations identified on Schedule 6.16 or otherwise
permitted by Section 6.16.
Location of Chief Executive Office; FEINS. The chief
executive office of each Debtor is located at its respective address
indicated in the preamble to this Agreement and (a) Group's FEIN is 13-
3348686, (b) Estrella's FEIN is 13-3272365, (c) Estrella/License's FEIN is
13-3464780, (d) New Jersey's FEIN is 13-2535420, (e) Network's FEIN is 22-
2892128, (f) Tel/Aus's FEIN is 22-3172288, (g) Tel/FL's FEIN is 59-2444938,
(h) Tel/Hou's FEIN is 13-3464774, (i) Tel/Mex's FEIN is pending, (j)
Tel/NorCal's FEIN is 94-2599863, (k) Tel/SanAn's FEIN is 74-2523998, (l)
Tel/SanFe's FEIN is 22-3172281, (m) Tu Mundo's FEIN is pending, (n)
SACC/Acq's FEIN is 13-3398460, (o) SAT's FEIN is 13-3469719, (p) SACC's FEIN
is 22-2322318, (q) WNJU's FEIN is 22-1696557, and (r) WNJU/License's FEIN is
13-3465158.
Due Organization and Qualification. Each Debtor is a
corporation existing and in good standing under the laws of the state of its
incorporation and qualified and licensed to do business in, and in good
standing in, any state where the failure to be so licensed or qualified could
reasonably be expected to have a material adverse effect on the business,
operations, condition (financial or otherwise), finances, or prospects of
Borrower, taken as a whole, or on the value of any Material Property.
Guarantor is a corporation existing and in good standing under the laws of
the jurisdiction of its incorporation and qualified and licensed to do
business in, and in good standing in, any state where the failure to be so
licensed or qualified could reasonably be expected to have a material adverse
effect on the business, operations, condition (financial or otherwise),
finances, or prospects of Guarantor. Other than the ownership of FCC
Licenses by each of the License Subs, the License Subs conduct no material
business activities and have no liabilities (other than with respect to their
organization and continued existence) whatsoever.
Due Authorization; No Conflict. The execution, delivery,
and performance of the Loan Documents are within Borrower's corporate powers,
have been duly authorized, and are not in conflict with nor constitute a
breach of any provision contained in Borrower's Articles or Certificate of
Incorporation, or By-laws, nor will they constitute an event of default under
any material agreement to which Borrower is a party or by which its
properties or assets may be bound.
Licenses and Permits. All material licenses, permits, and
consents and similar rights (including FCC Licenses) required from any
Federal, state, or local governmental body for the ownership, construction,
use, and operation of the Communications Systems and other properties now
owned and operated by Borrower, have been validly issued and are in full
force and effect and Borrower is in compliance, in all material respects,
with all of the provisions thereof and none of such licenses, permits, or
consents is the subject of any pending or, to the best of Borrower's
knowledge and belief, threatened proceeding for the revocation, cancellation,
suspension, or non-renewal thereof. Borrower owns or possesses all material
patents, trademarks, trade names, copyrights, and other similar rights
necessary for the conduct of its business as now carried on, without any
known conflict of the rights of others.
Governmental Consent. No approval, consent, or
withholding of objection on the part of any regulatory body, Federal, state,
or local, is necessary in connection with the execution and delivery by
Borrower of this Agreement or the Loan Documents or, except as contemplated
by Section 4.1 hereof, compliance by Borrower with any of the provisions of
this Agreement or the Loan Documents.
No Default In Communication Franchise Agreements. No
material default by Borrower exists under any Communication Franchise
Agreement to which it is a party and no event has occurred or exists which,
with notice or lapse of time or both, would constitute a default by Borrower
thereunder and each such Communication Franchise Agreement has been duly
authorized, executed, and delivered by Borrower and is in full force and
effect.
Governmental Authority. No consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other Person is required
(i) for the grant by Borrower of the security interest in the Collateral
granted hereby or for the execution, delivery, or performance of this
Agreement by Borrower, (ii) except for filings, recordings, or the taking of
possession, in each case, that are required by law to perfect Foothill
security interests or liens in the Collateral and Real Property and except as
contemplated by Section 4.1 hereof, for the perfection of such security
interest or the exercise by Foothill of the rights and remedies provided for
in this Agreement, or (iii) except for the consents, authorizations,
approvals, actions, notices, and filings with the FCC and other governmental
authorities, all of which have been duly obtained, taken, given, or made and
are in full force and effect and are not subject to any conditions (other
than those conditions generally applicable to entities holding licenses,
permits, consents, or authorizations granted or issued by the FCC and other
governmental authorities with respect to Broadcast Systems and Communications
Systems), except for the FCC consent required in connection with the
completion of the condition subsequent set forth in Section 3.3(f) hereof,
and except for immaterial consents, authorizations, approvals, actions,
notices, and filings with the FCC and other governmental authorities, for the
performance of Borrower's obligations hereunder or the conduct of its
business.
Litigation. There are no actions or proceedings pending
or against Borrower before any court or administrative agency and Borrower
does not have knowledge of any pending or threatened litigation, governmental
investigations, or claims, complaints, actions, or prosecutions involving
Borrower or Guarantor, except for: (a) ongoing collection matters in which
Borrower is the plaintiff; (b) matters disclosed on Schedule 5.11; and (c)
matters that, if decided adversely to Borrower, would not materially impair
the enforceability, validity, or priority of the liens or security interests
of Foothill with respect to Material Property.
No Material Adverse Change in Financial Condition. All
financial statements relating to Borrower or Guarantor that have been
delivered by Borrower to Foothill have been prepared in accordance with GAAP
(except, in the case of interim financial statements, to normal year-end
audit adjustments and the lack of footnotes) and fairly present Borrower's
(or Guarantor's, as applicable) financial condition as of the date thereof
and Borrower's results of operations for the period then ended. There has
not been a material adverse change in the financial condition of Borrower (or
such guarantor, as applicable) since the date of the latest financial
statements (which, as of the Closing Date, include Group's Form 10-Q for the
quarter ended September 30, 1994) submitted to Foothill on or before the
Closing Date.
Solvency. Borrower, taken as a whole, is Solvent. No
transfer of property is being made by any Debtor and no obligation is being
incurred by any Debtor in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay,
or defraud either present or future creditors of any Debtor.
Employee Benefits. Except for any Benefit Plan being
submitted for Internal Revenue Service review and that is described on
Schedule 5.14 hereto, each Benefit Plan is in compliance in all material
respects with the applicable provisions of ERISA and the IRC. Each Qualified
Plan and Multiemployer Plan has been determined by the Internal Revenue
Service to qualify under Section 401 of the IRC, and the trusts created
thereunder have been determined to be exempt from tax under Section 501 of
the IRC, and, to the best knowledge of Borrower, nothing has occurred that
would cause the loss of such qualification or tax-exempt status. There are
no outstanding liabilities under Title IV of ERISA with respect to any
Benefit Plan maintained or sponsored by Borrower or any ERISA Affiliate, nor
with respect to any Benefit Plan to which Borrower or any ERISA Affiliate
contributes or is obligated to contribute which could reasonably be expected
to have a material adverse effect on the financial condition of Borrower. No
Benefit Plan subject to Title IV of ERISA has any Unfunded Benefit Liability
which could reasonably be expected to have a material adverse effect on the
financial condition of Borrower. Neither Borrower nor any ERISA Affiliate
has transferred any Unfunded Benefit Liability to a person other than
Borrower or an ERISA Affiliate or has otherwise engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA which could reasonably
be expected to have a material adverse effect on the financial condition of
Borrower. Neither Borrower nor any ERISA Affiliate has incurred nor
reasonably expects to incur (x) any liability (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan, or (y) any liability under Title IV of ERISA (other than
premiums due but not delinquent under Section 4007 of ERISA) with respect to
a Benefit Plan, which could, in either event, reasonably be expected to have
a material adverse effect on the financial condition of Borrower. No
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the IRC has been made with respect to any Benefit
Plan. No ERISA Event has occurred or is reasonably expected to occur with
respect to any Benefit Plan which could reasonably be expected to have a
material adverse effect on the financial condition of Borrower, other than
the pending litigation styled John Blair Communications, Inc. Profit Sharing
Plan, et al v. Telemundo Group, Inc. Profit Sharing Plan, et al that is more
particularly described on Schedule 5.11 hereto and except for an approximate
$250,000 underfunding of the pension plan of Guarantor that is more
particularly described on Schedule 5.14 hereto. Borrower and each ERISA
Affiliate have complied in all material respects with the notice and
continuation coverage requirements of Section 4980B of the IRC.
Environmental Condition. None of Borrower's properties or
assets has ever been used by Borrower in the disposal of, or to produce,
store, handle, treat, release, or transport, any Hazardous Materials in
violation of any applicable law or regulation. To the best of Borrower's
knowledge, none of Borrower's properties or assets has ever been designated
or identified in any manner pursuant to any environmental protection statute
as a Hazardous Materials disposal site, or a candidate for closure pursuant
to any environmental protection statute. To the best of Borrower's
knowledge, no lien arising under any environmental protection statute has
attached to any revenues or to any real or personal property owned or
operated by Borrower. Borrower has not received a summons, citation, notice,
or directive from the Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by Borrower
resulting in the releasing or disposing of Hazardous Materials into the
environment.
Capital Stock of Group's Subsidiaries.
Set forth on Schedule 5.16 is a complete and
accurate list of Group's Subsidiaries, showing: (i) the jurisdiction of
their incorporation; and (ii) the number outstanding and the percentage of
the outstanding shares of each such class owned (directly or indirectly) by
Group or one or more of its Subsidiaries. All of the outstanding capital
stock of each of Group's Subsidiaries has been validly issued and is fully
paid and non-assessable.
Except as set forth on Schedule 5.16, no capital
stock (or any securities, instruments, warrants, option, or purchase rights,
conversion or exchange rights, calls, commitments, or claims of any character
convertible into or exercisable for capital stock) of Group's Subsidiaries is
subject to issuance under any security, instrument, warrant, option or
purchase rights, conversion or exchange rights, call, commitment, or claim of
any right, title, or interest therein or thereto.
Reliance by Foothill; Cumulative. Each warranty and
representation contained in this Agreement automatically shall be deemed
repeated (except for those that expressly relate solely to an earlier date)
with each advance or issuance of an L/C or L/C Guaranty and shall be
conclusively presumed to have been relied on by Foothill regardless of any
investigation made or information possessed by Foothill. The warranties and
representations set forth herein shall be cumulative and in addition to any
and all other warranties and representations that Borrower now or hereafter
shall give, or cause to be given, to Foothill.
AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, and unless Foothill shall otherwise consent in writing, each
Debtor shall do all of the following:
Accounting System. Borrower shall maintain a system of
accounting in accordance with GAAP with ledger and account cards or computer
tapes, discs, printouts, and records pertaining to the Collateral which
contain information as from time to time reasonably may be requested by
Foothill. Borrower also shall keep proper books of account showing all
sales, claims, and allowances on its Inventory.
Collateral Reports. Borrower shall deliver to Foothill,
(a) no later than the twentieth (20th) day of each month during the term of
this Agreement, a detailed aging, by total, of the Accounts, a reconciliation
statement, and a summary aging, by vendor, of all accounts payable and any
book overdraft, and (b) on a weekly basis, a report of all deposits made to
the Concentration Account and the Network Concentration Account. Original
sales invoices evidencing sales shall be mailed by Borrower to each Account
Debtor on a monthly basis with, at Foothill's request, a copy to Foothill.
With such regularity as Foothill shall require, but not more frequently than
once per month, Borrower shall deliver to Foothill collection reports, sales
journals, invoices, original delivery receipts, customer's purchase orders,
shipping instructions, bills of lading, and other documentation respecting
shipment arrangements; provided, however, that, upon the occurrence and
continuation of an Event of Default, such information shall be provided on a
daily basis. Absent such a request by Foothill, copies of all such
documentation shall be held by Borrower as custodian for Foothill. In
addition, from time to time, Borrower shall deliver to Foothill such other
and additional information or documentation as Foothill reasonably may
request.
Government Authorization. Borrower shall deliver to
Foothill, as soon as practicable, and in any event within twenty (20) days
after the receipt by Borrower from the FCC or any other governmental agency
having jurisdiction over the operations of Borrower or filing or receipt
thereof by Borrower, (i) copies of any order or notice of the FCC or such
other agency or court of competent jurisdiction which designates any material
FCC License or other material franchise, permit, or other governmental
operating authorization of Borrower, or any application therefor, for a
hearing or which refuses renewal or extension of, or revokes or suspends the
authority of Borrower to construct or operate a Communications System (or
portion thereof), (ii) a copy of any competing application filed with respect
to any such FCC License or other authorization, or application therefor, of
Borrower, or any citation, notice of violation, or order to show cause issued
by the FCC or other agency or any complaint filed by the FCC or other agency
which is available to Borrower, and (iii) a copy of any notice or application
by Borrower requesting authority to or notifying the FCC of its intent to
cease broadcasting on any broadcast station for any period in excess of
twenty (20) days.
Off-the-Air Reports. Borrower shall deliver promptly to
Foothill notice of each occurrence of a period of twenty-four (24)
consecutive hours or more during which any Communications System owned or
operated by Borrower was not broadcasting.
Schedules of Accounts. With such regularity as Foothill
shall require, but not more frequently than once per month, Borrower shall
provide Foothill with schedules describing all Accounts; provided, however,
that, upon the occurrence and continuation of an Event of Default, such
information shall be provided on a daily basis. Foothill's failure to
request such schedules or Borrower's failure to execute and deliver such
schedules shall not affect or limit Foothill's security interests or other
rights in and to the Accounts.
Financial Statements, Reports, Certificates. Borrower
agrees to deliver to Foothill: (a) as soon as available, but in any event
within fifty (50) days after the end of each March, June, and September, a
company prepared consolidated balance sheet, income statement, and cash flow
statement covering Borrower's operations during such period; and (b) as soon
as available, but in any event within one hundred five (105) days after the
end of each of Borrower's fiscal years, consolidated financial statements of
Borrower for each such fiscal year, audited by independent certified public
accountants reasonably acceptable to Foothill (it being agreed that any of
the "Big Six" accounting firms are acceptable to Foothill) and certified,
without any material qualifications, by such accountants to have been
prepared in accordance with GAAP, together with a written report of such
accountants addressed to Foothill stating that in making the examination
necessary for certification of such audited financial statements nothing has
come to their attention that would lead them to believe that there then
exists, or existed during the period covered by such audited financial
statements, any Event of Default. Such audited financial statements shall
include a balance sheet, profit and loss statement, and cash flow statement,
and, if prepared, such accountants' letter to management. In addition to the
financial statements referred to above, with the delivery of each quarterly
and year-end financial statement Borrower agrees to deliver supplemental
financial schedules consisting of a balance sheet and income statement
prepared on a consolidating basis so as to present each Debtor separately.
Together with the above, Borrower also shall deliver to
Foothill Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual Reports,
and Form 8-K Current Reports, and any other filings made by Borrower with the
Securities and Exchange Commission, if any, within five (5) days of filing,
or any other information that is provided by Borrower to its shareholders,
and any other report reasonably requested by Foothill relating to the
Collateral, the Real Property, or the financial condition of Borrower.
Each quarter, together with the financial statements provided
pursuant to Section 6.6(a), Borrower shall deliver to Foothill a certificate
signed by its chief financial officer to the effect that: (i) all financial
statements delivered or caused to be delivered to Foothill hereunder have
been prepared in accordance with GAAP (except, in the case of interim
financial statements, to normal year-end audit adjustments and the lack of
footnotes) and fairly present the financial condition of Borrower; (ii)
Borrower is in timely compliance with all of its covenants and agreements
hereunder; (iii) the representations and warranties of Borrower contained in
this Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of such certificate, as though made
on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date); and (iv) on the date of
delivery of such certificate to Foothill there does not exist any condition
or event that constitutes an Event of Default (or, in each case, to the
extent of any non-compliance, describing such non-compliance as to which he
or she may have knowledge and what action Borrower has taken, is taking, or
proposes to take with respect thereto).
Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to Foothill, upon the
occurrence and during the continuation of an Event of Default and at
Borrower's expense, copies of Borrower's financial statements, papers related
thereto, and other accounting records of any nature in their possession, and
to disclose to Foothill any information they may have regarding Borrower's
business affairs and financial conditions.
Tax Returns. Borrower agrees to deliver to Foothill
copies of each of Borrower's future federal income tax returns, and any
amendments thereto, within thirty (30) days of the filing thereof with the
Internal Revenue Service.
Guarantor Reports. Borrower agrees to cause any guarantor
of any of the Obligations to deliver its annual financial statements at the
time when Borrower provides its audited financial statements to Foothill and
copies of all federal income tax returns as soon as the same are available
and in any event no later than thirty (30) days after the same are required
to be filed by law.
Returns. Returns and allowances, if any, as between
Borrower and its Account Debtors shall be on the same basis and in accordance
with the usual customary practices of Borrower, as they exist at the time of
the execution and delivery of this Agreement and as they may be modified from
time to time in accordance with industry practice and the requirements of
Borrower's business. On a monthly basis, Borrower shall notify Foothill of
all material returns and recoveries and of all material disputes and claims;
provided, however, that, upon the occurrence and continuation of an Event of
Default, such information shall be provided on a daily basis.
Title to Equipment. Upon Foothill's reasonable request,
Borrower immediately shall deliver to Foothill, properly endorsed, any and
all evidences of ownership of, certificates of title, or applications for
title to any items of Equipment.
Maintenance of Equipment. Borrower shall keep and
maintain the Equipment in reasonably good operating condition and repair
(ordinary wear and tear excepted), and make all reasonably necessary
replacements thereto so that the value and operating efficiency thereof shall
at all times be reasonably maintained and preserved. Borrower shall not
permit any item of Equipment to become a fixture to real estate or an
accession to other property, and the Equipment is now and shall at all times
remain personal property.
Taxes. All assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against
Borrower or any of its property have been paid, and shall hereafter be paid
in full, before delinquency or before the expiration of any extension period.
Borrower shall make due and timely payment or deposit of all federal, state,
and local taxes, assessments, or contributions required of it by law, and
will execute and deliver to Foothill, on demand, appropriate certificates
attesting to the payment thereof or deposit with respect thereto. Borrower
will make timely payment or deposit of all tax payments and withholding taxes
required of it by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon reasonable request, furnish Foothill with proof satisfactory to
Foothill indicating that Borrower has made such payments or deposits. The
foregoing to the contrary notwithstanding, Borrower shall not be required to
pay or discharge any such assessment, tax (other than payroll taxes), or
contribution so long as the validity thereof shall be the subject of a
Permitted Protest.
Insurance.
Borrower, at its expense, shall keep the Collateral
and the Real Property insured against loss or damage by fire, theft,
explosion, sprinklers, and all other hazards and risks, and in such amounts,
as are ordinarily insured against by other owners in similar businesses.
Borrower also shall maintain business interruption, public liability,
broadcaster's liability, and property damage insurance relating to Borrower's
ownership and use of the Collateral and the Real Property, as well as
insurance against larceny, embezzlement, and criminal misappropriation.
All such policies of insurance (except those of
public liability and property damage) shall contain a 438BFU lender's loss
payable endorsement, or an equivalent endorsement in a form satisfactory to
Foothill, showing Foothill as sole loss payee thereof, and shall contain a
waiver of warranties, and shall specify that the insurer must give at least
ten (10) days prior written notice to Foothill before canceling its policy
for any reason. Borrower shall deliver to Foothill certified copies of such
policies of insurance and reasonable evidence of the payment of all premiums
therefor. All proceeds payable under any such policy shall be payable to
Foothill to be applied on account of the Obligations.
Financial Covenants. Borrower shall maintain the
financial covenants set forth on Schedule 6.14 attached hereto, to be agreed
upon pursuant to Section 3.3(g) hereof.
No Setoffs or Counterclaims. All payments hereunder and
under the other Loan Documents made by or on behalf of Borrower shall be made
without setoff or counterclaim and free and clear of, and without deduction
or withholding for or on account of, any federal, state, or local taxes.
Location of Inventory and Equipment. Borrower shall keep
the Inventory and Equipment only at one or more of the locations identified
on Schedule 6.16; provided, however, that Borrower may amend Schedule 6.16 so
long as such amendment occurs by written notice to Foothill not less than
thirty (30) days prior to the date on which the Inventory or Equipment is
moved to such new location, so long as such new location is within the United
States, and so long as, at the time of such written notification, Borrower
provides any financing statements or fixture filings necessary to perfect and
continue perfected Foothill's security interests in such assets and also
provides to Foothill a landlord's waiver in form and substance reasonably
satisfactory to Foothill.
Location of Concentration Account; Location of Network
Concentration Account; Location of Other Deposit Accounts. Group shall
maintain the Concentration Account with the Concentration Account Bank;
provided, however, that Group may change the depositary with which the
Concentration Account is maintained so long as such change occurs by written
notice to Foothill not less than thirty (30) days prior to the date on which
the change is to occur, so long as the new depositary is located within the
continental United States of America, and so long as, at the time of such
written notification from Borrower to Foothill, Borrower provides any
Notification Letters or financing statements necessary to perfect and
continue perfected Foothill's security interests in such deposit account.
Network shall maintain the Network Concentration Account with the Network
Concentration Account Bank; provided, however, that Network may change the
depositary with which the Network Concentration Account is maintained so long
as such change occurs by written notice to Foothill not less than thirty (30)
days prior to the date on which the change is to occur, so long as the new
depositary is located within the continental United States of America, and so
long as, at the time of such written notification from Borrower to Foothill,
Borrower provides any Notification Letters or financing statements necessary
to perfect and continue perfected Foothill's security interests in such
deposit account. Each Debtor shall maintain only those deposit accounts
reflected on Schedule 6.17 attached hereto; provided, however, that any
Debtor may change the depositary with which any such deposit account is
maintained so long as such change occurs by written notice to Foothill not
less than thirty (30) days prior to the date on which the change is to occur,
so long as the new depositary is located within the continental United States
of America, and so long as, at the time of such written notification from
Borrower to Foothill, such Debtor provides any Notification Letters or
financing statements necessary to perfect and continue perfected Foothill's
security interests in such deposit account.
Compliance with Laws. Borrower shall comply with the
requirements of all applicable laws, rules, regulations, and orders of any
governmental authority, including the Fair Labor Standards Act and the
Americans With Disabilities Act, the non-compliance with which, individually
or in the aggregate, would have or could reasonably be expected to have a
material adverse effect on the business, operations, condition (financial or
otherwise), finances, or prospects of Borrower, taken as a whole, or on the
value of Material Property.
Employee Benefits.
(a) Borrower promptly shall deliver to Foothill a written
statement by the chief financial officer of Borrower specifying the nature of
any of the following events and the actions which Borrower proposes to take
with respect thereto after the Closing Date, and in any event within ten (10)
days of becoming aware of any of them, and when known, any action taken or
threatened by the Internal Revenue Service, PBGC, Department of Labor, or
other party with respect thereto: (i) an ERISA Event with respect to any
Benefit Plan; (ii) the incurrence of an obligation to pay additional premium
to the PBGC under Section 4006(a)(3)(E) of ERISA with respect to any Benefit
Plan; and (iii) any lien on the assets of Borrower arising in connection with
any Benefit Plan.
(b) Borrower shall also promptly furnish to Foothill copies
prepared or received by Borrower or an ERISA Affiliate of: (i) at the
request of Foothill, each annual report (Internal Revenue Service Form 5500
series) and all accompanying schedules, actuarial reports, financial
information concerning the financial status of each Benefit Plan, and
schedules showing the amounts contributed to each Benefit Plan by or on
behalf of Borrower or its ERISA Affiliates for the most recent three (3) plan
years; (ii) all notices of intent to terminate or to have a trustee appointed
to administer any Benefit Plan that is subject to Title IV of ERISA or
Section 412 of the IRC; (iii) all written demands by the PBGC under Subtitle
D of Title IV of ERISA; (iv) all notices required to be sent to employees or
to the PBGC under Section 302 of ERISA or Section 412 of the IRC; (v) all
written notices received with respect to a Multiemployer Benefit Plan
concerning (x) the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA, (y) a termination described in Section 4041A of ERISA,
or (z) a reorganization or insolvency described in Subtitle E of Title IV of
ERISA; (vi) the adoption of any new Benefit Plan that is subject to Title IV
of ERISA or Section 412 of the IRC by Borrower or any ERISA Affiliate;
(vii) the adoption of any amendment to any Benefit Plan that is subject to
Title IV of ERISA or Section 412 of the IRC, if such amendment results in a
material increase in benefits or Unfunded Benefit Liability; or (viii) the
commencement of contributions by Borrower or any ERISA Affiliate to any
Benefit Plan that is subject to Title IV of ERISA or Section 412 of the IRC;
provided, however, that no action is required of Borrower unless the
foregoing would have a material adverse effect on Borrower taken as a whole.
Leases. Borrower shall pay when due all rents and other
material amounts payable under any leases to which Borrower is a party or by
which Borrower's properties and assets are bound, unless such payments are
the subject of a Permitted Protest. To the extent that Borrower fails timely
to make payment of such rents and other amounts payable when due under its
leases, Foothill shall be entitled, in its discretion, and without the
necessity of declaring an Event of Default, to reserve an amount equal to
such unpaid amounts from the loan availability created under Section 2.1
hereof.
Notices. Borrower promptly shall deliver to Foothill all
material written notices received by it with respect to the Collateral,
including, the Communication Franchise Agreements.
NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, each Debtor will not do any of the following without Foothill's
prior written consent:
Indebtedness. Create, incur, assume, permit, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except:
Indebtedness evidenced by this Agreement;
Indebtedness set forth on Schedule 7.1 attached
hereto;
Indebtedness of Group evidenced by the Senior
Notes;
Indebtedness of any Debtor owing to any other
Debtor;
Indebtedness permitted under Section 7.7 hereof;
Indebtedness in the form of surety bonds or appeal
bonds required in the ordinary course of business in connection with the
enforcement of rights or claims of Borrower in connection with judgments that
do not result in an Event of Default under this Agreement;
Indebtedness secured by Permitted Liens; and
refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b), (c), (d), (e), (f), and (g) of this
Section 7.1 (and continuance or renewal of any Permitted Liens associated
therewith) so long as: (i) the terms and conditions of such refinancings,
renewals, or extensions do not materially impair the prospects of repayment
of the Obligations by Borrower, (ii) the net cash proceeds of such
refinancings, renewals, or extensions do not result in an increase in the
aggregate principal amount of the Indebtedness so refinanced, renewed, or
extended, (iii) such refinancings, renewals, refundings, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness
so refinanced, renewed, or extended, and (iv) to the extent that Indebtedness
that is refinanced was subordinated in right of payment to the Obligations,
then the subordination terms and conditions of the refinancing Indebtedness
must be at least as favorable to Foothill as those applicable to the
refinanced Indebtedness.
Liens. Create, incur, assume, or permit to exist,
directly or indirectly, any lien on or with respect to any of its property or
assets, of any kind, whether now owned or hereafter acquired, or any income
or profits therefrom, except for Permitted Liens (including liens that are
replacements of Permitted Liens to the extent that the original Indebtedness
is refinanced under Section 7.1(h) and so long as the replacement liens
secure only those assets or property that secured the original Indebtedness).
Restrictions on Fundamental Changes. Enter into any
acquisition, merger, consolidation, reorganization, or recapitalization, or
reclassify its capital stock, or liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, assign, lease,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business, property, or
assets, where such business, property, or assets are material to Borrower
taken as a whole, and except for transfers of any property or assets to Group
from any other Debtor, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all of the properties, assets,
stock, or other evidence of beneficial ownership of any Person; provided,
however, that so long as no Event of Default has occurred and is continuing,
the foregoing shall not preclude Borrower from making one or more Permitted
Investments.
Extraordinary Transactions and Disposal of Assets. Enter
into any material transaction not in the ordinary and usual course of
Borrower's business (as now conducted or as presently contemplated),
including the sale, lease, or other disposition of, moving, relocation, or
transfer, whether by sale or otherwise, of any of Borrower's properties or
assets; provided, however, that so long as no Event of Default has occurred
and is continuing, the foregoing shall not preclude Borrower from making
Permitted Asset Dispositions. The foregoing to the contrary notwithstanding,
Foothill agrees that its consent to the sale of property or assets may not be
unreasonably withheld if the proceeds of such sale are sufficient to prepay
in full the Obligations and, upon the receipt thereof, Borrower prepays the
Obligations (including any applicable Early Termination Premium) and
terminates this Agreement.
Communication Franchise Agreements. Borrower shall not,
except solely as, and solely to the extent, expressly permitted pursuant to
this Agreement (i) cancel or terminate any of the Communication Franchise
Agreements or consent to or accept any cancellation or termination thereof,
(ii) sell, assign, or otherwise dispose of (by operation of law or otherwise)
any part of its respective interest or rights under any Communication
Franchise Agreements, (iii) amend, supplement, or otherwise modify any of the
Communication Franchise Agreements in any way that could reasonably be
expected to be materially adverse to Borrower, taken as a whole, (iv) waive
any material default under or breach of any of the Communication Franchise
Agreements or waive, fail to enforce, forgive, or release any material right,
interest, or entitlement of any kind, howsoever arising under or in respect
of any of the Communication Franchise Agreements or vary or agree to the
variation in any respect of any of the material provisions of any of the
Communication Franchise Agreements in a manner that would be materially
adverse to Borrower, taken as a whole, or (v) petition, request, or take any
other legal or administrative action which seeks, or may reasonably be
expected, to rescind, terminate, or suspend any of the Communication
Franchise Agreements or amend or modify any of the Communication Franchise
Agreements in any respect of any of the material provisions of any of the
Communication Franchise Agreements in a manner that would be materially
adverse to Borrower, taken as a whole. Borrower, at its expense, will
perform and comply, in all material respects, with all terms and provisions
of each of the Communication Franchise Agreements required to be performed or
complied with by it, will maintain each of the Communication Franchise
Agreements in full force and effect, will enforce each of the Communication
Franchise Agreements in accordance with their respective terms.
Change Name. Change any Debtor's name, FEIN, business
structure, or identity, or add any new fictitious name; provided, however,
that any Debtor may change its name or add new fictitious names so long as
such change or addition occurs by written notice to Foothill not less than
thirty (30) days prior to the effectiveness thereof, so long as at the time
of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue perfected Foothill's
security interests.
Guarantee. Guarantee or otherwise become in any way
liable with respect to the obligations of any third Person except by
endorsement of instruments or items of payment for deposit to the account of
Borrower or which are transmitted or turned over to Foothill; provided,
however, that Group may guaranty the obligations of any other Debtor so long
as such obligation of such other Debtor was not prohibited under the other
terms of this Agreement.
Restructure. Make any material change in Borrower's
financial structure, the principal nature of Borrower's business operations,
or the date of its fiscal year.
Prepayments. Except in connection with a refinancing
permitted by Section 7.1(h), prepay, purchase, acquire, redeem, or retire any
Indebtedness of any Debtor owing to any third Person, except that Group shall
be entitled to make the sinking fund payments provided for in the Senior
Notes Indenture.
Change of Control. Other than as a result of
distributions made pursuant to the terms of the Plan, cause, permit, or
suffer, directly or indirectly, any Change of Control.
Capital Expenditures. Make any capital expenditure, or
any commitment therefor, in excess of the amounts set forth on Schedule 7.11
attached hereto, to be agreed upon pursuant to Section 3.3(h) hereof.
Conditional Sales. Sell any goods or services on
conditional terms of sale; it being understood that, in the ordinary course
of business, Borrower sells commercial advertising time based upon certain
ratings levels and the failure to achieve such ratings levels may require
that Borrower provide additional commercial advertising time to such customer
at no additional cost to such customer.
Distributions. Make any distribution or declare or pay
any dividends (in cash or in stock) on, or purchase, acquire, redeem, or
retire any of Borrower's capital stock, of any class, whether now or
hereafter outstanding, except that Group may purchase, acquire, redeem, or
retire any of the capital stock of any of the other Debtors and any
Subsidiary of Group may declare and pay dividends or other distributions to
Group.
Accounting Methods. Modify or change, in any material
respect, its method of accounting. After the occurrence and during the
continuation of an Event of Default, Borrower waives the right to assert a
confidential relationship, if any, it may have with any accounting firm or
service bureau in connection with any information requested by Foothill
pursuant to or in accordance with this Agreement and agrees that Foothill may
contact directly any such accounting firm or service bureau in order to
obtain such information.
Investments. Directly or indirectly make or acquire any
beneficial interest in (including stock, partnership interest, or other
securities of), or make any loan, advance, or capital contribution to, any
Person; provided, however, that so long as no Event of Default has occurred
and is continuing, the foregoing shall not preclude Borrower from making
Permitted Investments.
Transactions with Affiliates. Directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of
Borrower (other than a Debtor) except for transactions that are no less
favorable to Borrower than would be obtained in arm's length transaction with
a non-Affiliate.
Suspension. Suspend or go out of a substantial portion of
its business where such business is material to Borrower taken as a whole.
Use of Proceeds. Use the proceeds of the advances made
hereunder for any purpose other than: (a) on or about the Closing Date,
together with other funds of Group and funds received pursuant to the terms
of the Plan, to make the distributions provided for in the Plan; (b) to pay
transactional costs and expenses incurred in connection with this Agreement;
and (c) thereafter, consistent with the terms and conditions hereof, for its
lawful and permitted corporate purposes.
Change in Location of Chief Executive Office; Inventory
and Equipment with Bailees. Borrower covenants and agrees that it will not,
without thirty (30) days prior written notification to Foothill, relocate its
chief executive office to a new location and so long as, at the time of such
written notification, Borrower provides any financing statements or fixture
filings necessary to perfect and continue perfected Foothill's security
interests and also provides to Foothill a landlord's waiver in form and
substance satisfactory to Foothill. The Inventory and Equipment shall not at
any time now or hereafter be stored with a bailee, warehouseman, or similar
party without Foothill's prior written consent.
Amendment of Certain Documents.
Agree to any amendment to, or waive any of its
rights with respect to, the terms and provisions regarding interest rates,
principal or interest payment amounts, total principal amounts or similar
material terms and provisions of the Senior Notes or the Senior Notes
Indenture, without in each case obtaining the prior written consent of
Foothill to such amendment or waiver which consent shall not be unreasonably
withheld; provided, however, that the foregoing shall not restrict any
amendment of the Senior Notes Indenture in order to conform such documents
with the provisions of the TIA.
Agree to any material amendment to or waiver of the
events of default, redemption provisions, or affirmative and negative
covenants of the Senior Notes or the Senior Notes Indenture (including the
defined terms related to any of the foregoing), which would make such terms
or conditions materially more onerous or restrictive to Borrower, without
obtaining the prior written consent of Foothill to such amendment or waiver.
EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
If Borrower fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of
the Bankruptcy Code, would have accrued on such amounts), fees and charges
due Foothill, reimbursement of Foothill Expenses, or other amounts
constituting Obligations); provided, however, that in the case of
Overadvances that are caused by the charging of interest, fees, or Foothill
Expenses to Borrower's loan account with Foothill such event shall not
constitute an Event of Default if, within three (3) Business Days prior
telephonic notice of such Overadvance, Borrower prepays, or otherwise
eliminates, such Overadvance;
(a) If Borrower fails or neglects to perform, keep, or
observe, in any material respect, any term, provision, condition, covenant,
or agreement contained in Sections 6.2 (Collateral Reports), 6.5 (Schedules
of Accounts), and 6.6 (Financial Statements) of this Agreement and such
failure continues for a period of five (5) days from the date Foothill sends
Borrower telephonic or written notice of such failure or neglect; (b) If
Borrower fails or neglects to perform, keep, or observe, in any material
respect, any term, provision, condition, covenant, or agreement contained in
Sections 6.7 (Tax Returns), 6.8 (Guarantor Reports), 6.10 (Title to
Equipment), 6.16 (Location of Inventory and Equipment), 6.18 (Compliance with
Laws), 6.19 (Employee Benefits), or 6.20 (Leases) of this Agreement and such
failure continues for a period of fifteen (15) days from the date of such
failure or neglect; (c) If Borrower fails or neglects to perform, keep, or
observe, in any material respect, any term, provision, condition, covenant,
or agreement contained in Sections 6.1 (Accounting System), 6.11 (Maintenance
of Equipment) and 6.9 (Returns) of this Agreement and such failure continues
for a period of fifteen (15) days from the date Foothill sends Borrower
telephonic or written notice of such failure or neglect; or (d) If Borrower
fails or neglects to perform, keep, or observe, in any material respect, any
other term, provision, condition, covenant, or agreement contained in this
Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Foothill (other than any such term, provision,
condition, covenant, or agreement that is the subject of another provision of
this Section 8);
If there is a material impairment of the prospect of
repayment of any portion of the Obligations owing to Foothill or a material
impairment of the value or priority of Foothill's security interests in
Material Property;
If any Material Property is attached, seized, subjected to
a writ or distress warrant, or is levied upon, or comes into the possession
of any third Person and such attachment, seizure, writ, warrant, or levy is
not released, discharged, or bonded against before the earlier of thirty (30)
days of the date it first arises or five (5) days of the date when such
property or asset is subject to being forfeited by Borrower;
If an Insolvency Proceeding is commenced by a Debtor;
If an Insolvency Proceeding is commenced against any
Debtor and any of the following events occur: (a) such Debtor consents to
the institution of the Insolvency Proceeding against it; (b) the petition
commencing the Insolvency Proceeding is not timely controverted; (c) the
petition commencing the Insolvency Proceeding is not dismissed within sixty
(60) calendar days of the date of the filing thereof; provided, however,
that, during the pendency of such period, Foothill shall be relieved of its
obligation to make additional advances; (d) an interim trustee is appointed
to take possession of all or a substantial portion of the properties or
assets of, or to operate all or any substantial portion of the business of,
any Debtor; or (e) an order for relief shall have been issued or entered
therein;
If any FPTV Debtor is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part
of its business affairs and such injunction, restraining order, or other
court order is not stayed within thirty (30) days of the date on which it
first arises;
(a) If a notice of lien, levy, or assessment is filed of
record with respect to any of a Debtor's properties or assets by the United
States, or if any taxes or debts owing at any time hereafter to the United
States becomes a lien, whether choate or otherwise, upon any of a Debtor's
properties or assets and, in any such case, the aggregate amount of such
taxes or debts is less than Two Hundred Fifty Thousand Dollars ($250,000) and
within five (5) days of the filing or attachment of same, Borrower does not
instruct Foothill to reserve the entire amount thereof (together with
interest and penalties projected to be added thereto) from the Borrowing
Base; or (b) If a notice of lien, levy, or assessment is filed of record with
respect to any of a Debtor's properties or assets by any state, county,
municipal, or other non-federal governmental agency, or if any taxes or debts
owing at any time hereafter to any one or more of such entities becomes a
lien, whether choate or otherwise, upon any of a Debtor's properties or
assets and, in any such case, such taxes or debts are not the subject of a
Permitted Protest, and the lien, levy, or assessment is not released,
discharged, or bonded against before the earlier of thirty (30) days of the
date it first arises or five (5) days of the date when such property or asset
is subject to being forfeited by Borrower;
If a judgment or other claim becomes a lien or encumbrance
upon any Material Property and the same is not released, discharged, or
bonded against before the earlier of thirty (30) days of the date it first
arises or five (5) days of the date when such property or asset is subject to
being forfeited by Borrower; provided, however, that during such period
Foothill shall be entitled to create a reserve against the Borrowing Base in
an amount sufficient to discharge such lien or encumbrance and any and all
penalties or interest payable in connection therewith;
(a) If there is a payment default in any agreement to
which a Debtor is a party with one or more third Persons involving One
Million Dollars ($1,000,000), or more, that results in a right by such third
Persons, irrespective of whether exercised, to accelerate the maturity of
such Debtor's obligations thereunder or if there is a nonpayment default in
any agreement to which a Debtor is a party with one or more third Persons
involving One Million Dollars ($1,000,000), or more, that results in the
acceleration of the maturity of such Debtor's obligations thereunder, and, in
either such case, such Debtor is not diligently and in good faith contesting
its default thereunder; or (b) If there is a payment default in any agreement
to which a Debtor is a party with one or more third Persons involving Ten
Million Dollars ($10,000,000), or more, that results in a right by such third
Persons, irrespective of whether exercised, to accelerate the maturity of
such Debtor's obligations thereunder or if there is a nonpayment default in
any agreement to which a Debtor is a party with one or more third Persons
involving Ten Million Dollars ($10,000,000), or more, that results in the
acceleration of the maturity of such Debtor's obligations thereunder;
If a Debtor makes any payment on account of Indebtedness
that has been contractually subordinated in right of payment to the payment
of the Obligations, except to the extent such payment is permitted by the
terms of the subordination provisions applicable to such Indebtedness;
If any material misstatement or misrepresentation exists
now or hereafter in any warranty, representation, statement, or report at the
time when made to Foothill by a Debtor or any officer, employee, agent, or
director of Debtor, or if any such warranty or representation is withdrawn;
If the obligation of any guarantor or other third Person
under any Loan Document is limited or terminated by operation of law or by
the guarantor or other third Person thereunder, or any such guarantor or
other third Person becomes the subject of an Insolvency Proceeding; or
If (a) with respect to any Benefit Plan, there shall occur
any of the following which could reasonably be expected to have a material
adverse effect on the financial condition of Borrower, taken as a whole: (i)
the violation of any of the provisions of ERISA; (ii) the loss by a Benefit
Plan intended to be a Qualified Plan of its qualification under Section
401(a) of the IRC; (iii) the incurrence of liability under Title IV of ERISA;
(iv) a failure to make full payment when due of all amounts which, under the
provisions of any Benefit Plan or applicable law, Borrower or any ERISA
Affiliate is required to make; (v) the filing of a notice of intent to
terminate a Benefit Plan under Sections 4041 or 4041A of ERISA; (vi) a
complete or partial withdrawal of Borrower or an ERISA Affiliate from any
Benefit Plan that is subject to Title IV of ERISA or Section 412 of the IRC;
(vii) the receipt of a notice by the plan administrator of a Benefit Plan
that the PBGC has instituted proceedings to terminate such Benefit Plan or
appoint a trustee to administer such Benefit Plan; (viii) a commencement or
increase of contributions to, or the adoption of or the amendment of, a
Benefit Plan; and (ix) the assessment against Borrower or any ERISA Affiliate
of a tax under Section 4980B of the IRC, and, in any such case, such act or
event shall continue uncured or unremedied for a period of thirty (30) days
after the first occurrence thereof; or (b) the Unfunded Benefit Liability of
all of the Benefit Plans of Borrower and its ERISA Affiliates shall, in the
aggregate, exceed One Million Dollars ($1,000,000).
If Borrower fails to keep in full force and effect,
suffers the termination or revocation of, terminates, forfeits, or suffers a
materially adverse amendment to, any Communications Franchise or
Communications Franchise Agreement at any time held by Borrower that is
necessary to the operation of any Communications System owned by Borrower.
FOOTHILL'S RIGHTS AND REMEDIES.
Rights and Remedies. Upon the occurrence, and during the
continuation, of an Event of Default Foothill may, at its election, without
notice of its election and without demand, do any one or more of the
following, all of which are authorized by Borrower:
Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due
and payable;
Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the Loan
Documents, or under any other agreement between any Debtor and Foothill;
Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Foothill, but without
affecting Foothill's rights and security interests in the Collateral or the
Real Property and without affecting the Obligations;
Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Foothill considers
advisable, and in such cases, Foothill will credit Borrower's loan account
with only the net amounts received by Foothill in payment of such disputed
Accounts after deducting all Foothill Expenses incurred or expended in
connection therewith;
Borrower agrees that, upon the occurrence of and
during the continuance of an Event of Default and at Foothill's request, each
Borrower will immediately file such applications for approval and shall take
all other and further actions required by Foothill to obtain such approvals
or consents of regulatory authorities as are necessary to transfer ownership
and control to Foothill, of the FCC Licenses held by it, or its interest in
any Person holding any such FCC License. To enforce the provisions of this
Section 9.1(e), Foothill is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer of control of any FCC
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. Borrower hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed
and, if Borrower shall refuse to authorize the transfer, its approval may be
required by the court. Upon the occurrence and continuance of an Event of
Default, Borrower shall further use its reasonable best efforts to assist in
obtaining approval of the FCC, if required, for any action or transactions
contemplated by this Agreement or the Loan Documents, including, 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 FCC
License or transfer of control necessary or appropriate under the FCC's rules
and regulations for approval of the transfer or assignment of any portion of
the Collateral, together with any FCC License or other authorization.
Borrower acknowledges that the assignment or transfer of FCC Licenses is
integral to Foothill's realization of the value of the Collateral, that there
is no adequate remedy at law for failure by Borrower to comply with the
provisions of this Section 9.1(e) and that such failure would not be
adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 9.1(e) may be specifically enforced.
Cause Borrower to hold all returned Inventory in
trust for Foothill, segregate all returned Inventory from all other property
of Borrower or in Borrower's possession and conspicuously label said returned
Inventory as the property of Foothill;
Without notice to or demand upon any Debtor or any
guarantor, make such payments and do such acts as Foothill considers
necessary or reasonable to protect its security interests in the Collateral.
Borrower agrees to assemble the Collateral if Foothill so requires, and to
make the Collateral available to Foothill as Foothill may designate.
Borrower authorizes Foothill to enter the premises where the Collateral is
located, to take and maintain possession of the Collateral, or any part of
it, and to pay, purchase, contest, or compromise any encumbrance, charge, or
lien that in Foothill's determination appears to conflict with its security
interests and to pay all expenses incurred in connection therewith. With
respect to any of Borrower's owned premises, Borrower hereby grants Foothill
a license to enter into possession of such premises and to occupy the same,
without charge, for up to one hundred twenty (120) days in order to exercise
any of Foothill's rights or remedies provided herein, at law, in equity, or
otherwise;
Without notice to any Debtor (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of Section 9505 of the
Code), set off and apply to the Obligations any and all (i) balances and
deposits of any Debtor held by Foothill (including any amounts received from
the Concentration Account, the Network Concentration Account, or the FPTV
Accounts), or (ii) indebtedness at any time owing to or for the credit or the
account of any Debtor held by Foothill;
Hold, as cash collateral, any and all balances and
deposits of any Debtor held by Foothill, and any amounts received from the
Concentration Account, the Network Concentration Account, or the FPTV
Accounts, to secure the full and final repayment of all of the Obligations;
Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Foothill is hereby granted a license or
other right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for
sale, and selling any Collateral and Borrower's rights under all licenses and
all franchise agreements shall inure to Foothill's benefit;
Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or
on terms, in such manner and at such places (including Borrower's premises)
as is commercially reasonable. It is not necessary that the Collateral be
present at any such sale;
Foothill shall give notice of the disposition of the
Collateral as follows:
(1) Foothill shall give the Debtor with rights in
the Collateral that is being disposed of and each holder of a security
interest in the Collateral who has filed with Foothill a written request for
notice, a notice in writing of the time and place of public sale, or, if the
sale is a private sale or some other disposition other than a public sale is
to be made of the Collateral, then the time on or after which the private
sale or other disposition is to be made;
(2) The notice shall be personally delivered or
mailed, postage prepaid, to the applicable Debtor as provided in Section 12,
at least five (5) days before the date fixed for the sale, or at least five
(5) days before the date on or after which the private sale or other
disposition is to be made; no notice needs to be given prior to the
disposition of any portion of the Collateral that is perishable or threatens
to decline speedily in value or that is of a type customarily sold on a
recognized market. Notice to Persons other than a Debtor claiming an
interest in the Collateral shall be sent to such addresses as they have
furnished to Foothill;
(3) If the sale is to be a public sale,
Foothill also shall give notice of the time and place by publishing a notice
one time at least five (5) days before the date of the sale in a newspaper of
general circulation in the county in which the sale is to be held;
Foothill may credit bid and purchase at any public sale; and
Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower. Any
excess will be returned, without interest and subject to the rights of third
Persons, by Foothill to Borrower.
Anything to the contrary contained in this Section 9.1 notwithstanding, the
parties hereto acknowledge that the Code requires that the time, place,
terms, and manner of a secured party's sale of collateral must be in good
faith and in a commercially reasonable manner and that the Code prohibits the
waiver or variance of the debtor's rights and the secured party's duties in
respect thereof.
Remedies Cumulative. Foothill's rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Foothill shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Foothill of one right or remedy shall be deemed an election, and
no waiver by Foothill of any Event of Default shall be deemed a continuing
waiver. No delay by Foothill shall constitute a waiver, election, or
acquiescence by it.
TAXES AND EXPENSES.
If any Debtor fails to pay any material monies (whether taxes, rents,
assessments, insurance premiums, or otherwise) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all
as required under the terms of this Agreement, then, to the extent that
Foothill reasonably determines that such failure by such Debtor could have a
material adverse effect on Foothill's interests in the Collateral or the Real
Property, and to the extent that such amounts are not then the subject of a
Permitted Protest, in its discretion and with at least one (1) day prior
telephonic notice to Borrower, Foothill may do any or all of the following:
(a) make payment of the same or any part thereof; (b) set up such reserves in
Borrower's loan account as Foothill reasonably deems necessary to protect
Foothill from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type described in Section 6.12, and take
any action with respect to such policies as Foothill deems prudent. Any such
amounts paid by Foothill shall constitute Foothill Expenses. Any such
payments made by Foothill shall not constitute an agreement by Foothill to
make similar payments in the future or a waiver by Foothill of any Event of
Default under this Agreement. Foothill need not inquire as to, or contest
the validity of, any such expense, tax, security interest, encumbrance, or
lien and the receipt of the usual official notice for the payment thereof
shall be conclusive evidence that the same was validly due and owing.
WAIVERS; INDEMNIFICATION.
Demand; Protest; etc. Each Debtor waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Foothill on
which any Debtor may in any way be liable.
Foothill's Liability for Collateral. So long as Foothill
complies with its obligations, if any, under Section 9207 of the Code,
Foothill shall not in any way or manner be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring
or arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person. All risk of loss, damage, or
destruction of the Collateral shall be borne by Borrower.
Indemnification. Borrower agrees to defend, indemnify,
save, and hold Foothill and its officers, employees, and agents harmless
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other Person arising out of or relating to the transactions
contemplated by this Agreement or any other Loan Document, and (b) all losses
(including reasonable attorneys fees and disbursements) in any way suffered,
incurred, or paid by Foothill as a result of or in any way arising out of,
following, or consequential to the transactions contemplated by this
Agreement or any other Loan Document, but excluding any obligations, demands,
claims, liabilities, and losses caused by Foothill's gross negligence or
willful misconduct. This provision shall survive the termination of this
Agreement. In addition, Borrower agrees to pay, indemnify, and hold Foothill
harmless from any and all recording and filing fees, any and all documentary
stamp taxes and intangibles taxes and any and all other stamp, excise, or
other taxes (other than any taxes that are determined based solely upon the
income or revenues of Foothill), if any, that may be payable or determined to
be payable in connection with the execution and delivery of, or consummation
of any of the transactions contemplated by, this Agreement, including any
advances or loans made pursuant hereto or the other Loan Documents, and any
and all liabilities with respect to, or resulting from, any delay in paying
any of such fees or taxes.
11.4 Suretyship Waivers and Consents. Each Debtor
acknowledges that the obligations of such Debtor undertaken herein might be
construed to consist, at least in part, of the guaranty of obligations of
Persons or entities other than such Debtor (including the other Debtors party
hereto) and, in full recognition of that fact, each Debtor consents and agrees
that Foothill may (if it has so agreed with another Debtor), at any time and
from time to time, without notice or demand, whether before or after any
actual or purported termination, repudiation or revocation of this Agreement
by any one or more Debtors, and without affecting the enforceability or
continuing effectiveness hereof as to each Debtor: (a) supplement, restate,
modify, amend, increase, decrease, extend, renew, accelerate or otherwise
change the time for payment or the terms of the Obligations or any part
thereof, including any increase or decrease of the rate(s) of interest
thereon; (b) supplement, restate, modify, amend, increase, decrease or waive,
or enter into or give any agreement, approval or consent with respect to,
the Obligations or any part thereof, or any of the Loan Documents or any
additional security or guarantees, or any condition, covenant, default,
remedy, right, representation or term thereof or thereunder; (c) accept new
or additional instruments, documents or agreements in exchange for or
relative to any of the Loan Documents or the Obligations or any part thereof;
(d) accept partial payments on the Obligations; (e) receive and hold
additional security or guarantees for the Obligations or any part thereof;
(f) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer or enforce any security or
guarantees, and apply any security and direct the order or manner of sale
thereof as Foothill in its sole and absolute discretion may determine;
(g) release any Person from any personal liability with respect to the
Obligations or any part thereof; (h) settle, release on terms satisfactory
to Foothill or by operation of applicable laws or otherwise liquidate or
enforce any Obligations and any security therefor or guaranty thereof in any
manner, consent to the transfer of any security and bid and purchase at any
sale; or (i) consent to the merger, change or any other restructuring or
termination of the corporate or partnership existence of any Debtor or any
other Person, and correspondingly restructure the Obligations, and any such
merger, change, restructuring or termination shall not affect the liability
of any Debtor or the continuing effectiveness hereof, or the enforceability
hereof with respect to all or any part of the Obligations.
Upon the occurrence and during the continuance of any Event of
Default, Foothill may enforce this Agreement independently as to each Debtor
and independently of any other remedy or security Foothill at any time may
have or hold in connection with the Obligations, and it shall not be
necessary for Foothill to marshal assets in favor of any Debtor or any other
Person or to proceed upon or against or exhaust any security or remedy before
proceeding to enforce this Agreement. Each Debtor expressly waives any right
to require Foothill to marshal assets in favor of any Debtor or any other
Person or to proceed against any other Debtor or any collateral provided by
any Person, and agrees that Foothill may proceed against Debtors or any
collateral in such order as it shall determine in its sole and absolute dis-
cretion.
Foothill may file a separate action or actions against any
Debtor, whether action is brought or prosecuted with respect to any security
or against any other Person, or whether any other Person is joined in any
such action or actions. Each Debtor agrees that Foothill and any Debtor and
any Affiliate of any Debtor may deal with each other in connection with the
Obligations or otherwise, or alter any contracts or agreements now or
hereafter existing between any of them, in any manner whatsoever, all without
in any way altering or affecting the continuing efficacy of this Agreement.
Foothill's rights hereunder shall be reinstated and revived,
and the enforceability of this Agreement shall continue, with respect to any
amount at any time paid on account of the Obligations which thereafter shall
be required to be restored or returned by Foothill, all as though such amount
had not been paid. The rights of Foothill created or granted herein and the
enforceability of this Agreement at all times shall remain effective to cover
the full amount of all the Obligations even though the Obligations, including
any part thereof or any other security or guaranty therefor, may be or
hereafter may become invalid or otherwise unenforceable as against any Debtor
and whether or not any other Debtor shall have any personal liability with
respect thereto.
To the maximum extent permitted by applicable law, each Debtor
expressly waives any and all defenses now or hereafter arising or asserted by
reason of (a) any disability or other defense of any other Debtor with
respect to the Obligations, (b) the unenforceability or invalidity of any
security or guaranty for the Obligations or the lack of perfection or
continuing perfection or failure of priority of any security for the
Obligations, (c) the cessation for any cause whatsoever of the liability of
any other Debtor (other than by reason of the full payment and performance of
all Obligations), (d) any failure of Foothill to marshal assets in favor of
any Debtor or any other Person, (e) any failure of Foothill to give notice of
sale or other disposition of collateral to any Debtor or any other Person or
any defect in any notice that may be given in connection with any sale or
disposition of collateral; provided, however, that the foregoing shall not be
deemed to include a waiver by the Debtor that owns the subject collateral of
notice of sale or other disposition thereof, (f) any failure of Foothill to
comply with applicable law in connection with the sale or other disposition
of any collateral or other security for any Obligation, including any failure
of Foothill to conduct a commercially reasonable sale or other disposition of
any collateral or other security for any Obligation; provided, however, that
the foregoing shall not be deemed to include a waiver, by the Debtor that
owns the subject collateral, of the requirement of commercial reasonableness
in connection with any such sale or other disposition, (g) any act or
omission of Foothill or others that directly or indirectly results in or aids
the discharge or release of any of any Debtor or the Obligations or any
security or guaranty therefor by operation of law or otherwise, (h) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the prin-
cipal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligation, (i) any failure of Foothill to file or enforce a
claim in any bankruptcy or other proceeding with respect to any Person,
(j) the election by Foothill of the application or non-application of Sec-
tion 1111(b)(2) of the Bankruptcy Code, (k) any extension of credit or the
grant of any lien under Section 364 of the Bankruptcy Code, (l) any use of
cash collateral under Section 363 of the Bankruptcy Code, (m) any agreement
or stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person, (n) the avoidance of any lien in favor
of Foothill for any reason, or (o) any action taken by Foothill that is
authorized by this section or any other provision of any Loan Document.
Until such time as all of the Obligations have been fully, finally, and
indefeasibly paid in full in cash: (i) each Debtor hereby waives and
postpones any right of subrogation it has or may have as against any other
Debtor with respect to the Obligations; and (ii) in addition, each Debtor
also hereby waives and postpones any right to proceed or to seek recourse
against or with respect to any property or asset of any other Debtor. Each
Debtor expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor, and all notices of
acceptance of this Agreement or of the existence, creation or incurring of
new or additional Obligations.
In the event that all or any part of the Obligations at any time are
secured by any one or more deeds of trust or mortgages or other instruments
creating or granting liens on any interests in real property, each Debtor
authorizes Foothill (or the Collateral Agent (or its agents) on Foothill's
behalf), upon the occurrence of and during the continuance of any Event of
Default, at its sole option, without notice or demand and without affecting
the obligations of any Debtor, the enforceability of this Agreement, or the
validity or enforceability of any liens of, or for the benefit of, Foothill
on any collateral, to foreclose any or all of such deeds of trust or
mortgages or other instruments by judicial or nonjudicial sale.
To the fullest extent permitted by applicable law, each Debtor
expressly waives any defenses to the enforcement of this Agreement or any
rights of Foothill created or granted hereby or to the recovery by Foothill
against any Debtor or any other Person liable therefor of any deficiency
after a judicial or nonjudicial foreclosure or sale, even though such a fore-
closure or sale may impair the subrogation rights of Debtors and may preclude
Debtors from obtaining reimbursement or contribution from other Debtors.
Each Debtor expressly waives any defenses or benefits that may be derived
from California Code of Civil Procedure Sections 580a, 580b, 580d or 726, or
comparable provisions of the laws of any other jurisdiction, and all other
suretyship defenses it otherwise might or would have under California law or
other applicable law. Each Debtor expressly waives any right to receive
notice of any judicial or nonjudicial foreclosure or sale of any real
property or interest therein of another Debtor that is subject to any such
deeds of trust or mortgages or other instruments and any Debtor's failure to
receive any such notice shall not impair or affect such Debtor's obligations
or the enforceability of this Agreement or any rights of Foothill created or
granted hereby; provided, however, that the foregoing shall not be deemed to
include a waiver, by the Debtor that owns the subject collateral, of any
right to notice. WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR
OTHER PROVISION SET FORTH IN THIS SECTION, EACH DEBTOR WAIVES ALL RIGHTS AND
DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY FOOTHILL, EVEN THOUGH THAT
ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO
SECURITY FOR THE OBLIGATIONS, HAS DESTROYED SUCH DEBTOR'S RIGHTS OF
SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL DEBTOR BY THE OPERATION
OF SECTION 580d OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE.
Debtors and each of them warrant and agree that each of the
waivers and consents set forth herein are made after consultation with legal
counsel and 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 Debtors
otherwise may have against other Debtors, Foothill or others, or against
Collateral. If any of the waivers or consents herein are determined to be
contrary to any applicable law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage
prepaid and except for notices under Section 2.6 which must be sent by
registered or certified mail, return receipt requested) shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or by telefacsimile to the applicable Debtor or to
Foothill, as the case may be, at its address set forth below:
If to Group: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Estrella: ESTRELLA COMMUNICATIONS, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to
Estrella/License: ESTRELLA LICENSE CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to New Jersey: NEW JERSEY TELEVISION BROADCASTING
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Network: TELEMUNDO NETWORK, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/Aus: TELEMUNDO OF AUSTIN, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/FL: TELEMUNDO OF FLORIDA, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/Hou: TELEMUNDO OF GALVESTON-HOUSTON, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/Mex: TELEMUNDO OF MEXICO, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/NorCal: TELEMUNDO OF NORTHERN CALIFORNIA, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/SanAn: TELEMUNDO OF SAN ANTONIO, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tel/SanFe: TELEMUNDO OF SANTA FE, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Tu Mundo: TU MUNDO MUSIC, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to SACC/Acq: SACC ACQUISITION CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to SAT: SAT CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to SACC: SPANISH AMERICAN COMMUNICATIONS
CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to WNJU: WNJU-TV BROADCASTING CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to WNJU/License: WNJU LICENSE CORPORATION
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Mr. Peter J. Housman II
Telefacsimile No.: (305) 889-7997
with copies to: TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
Attn: Jose M. Sariego, Esq.
Telefacsimile No.: (305) 889-7980
If to Foothill: FOOTHILL CAPITAL CORPORATION
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attn: Business Finance Division Manager
Telefacsimile No.: (310) 575-3435
with copies to: BROBECK, PHLEGER & HARRISON
550 South Hope Street
Los Angeles, California 90071
Attn: John Francis Hilson, Esq.
Telefacsimile No.: (213) 239-1324
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given
to the other. All notices or demands sent in accordance with this Section
12, other than notices by Foothill in connection with Sections 9504 or 9505
of the Code, shall be deemed received on the earlier of the date of actual
receipt or three (3) days after the deposit thereof in the mail. Borrower
acknowledges and agrees that notices sent by Foothill in connection with
Sections 9504 or 9505 of the Code shall be deemed sent when deposited in the
mail or transmitted by telefacsimile.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE
OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT FOOTHILL'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE FOOTHILL ELECTS TO BRING SUCH ACTION OR
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH DEBTOR AND
FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE
TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
EACH DEBTOR AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH DEBTOR AND FOOTHILL REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Foothill may be destroyed or otherwise disposed of by Foothill
four (4) months after they are delivered to or received by Foothill, unless
Borrower requests, in writing, the return of said documents, schedules, or
other papers and makes arrangements, at Borrower's expense, for their return.
GENERAL PROVISIONS.
Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Foothill.
Successors and Assigns. This Agreement shall bind and
inure to the benefit of the respective successors and assigns of each of the
parties; provided, however, that Borrower may not assign this Agreement or
any rights or duties hereunder without Foothill's prior written consent and
any prohibited assignment shall be absolutely void. No consent to an
assignment by Foothill shall release Borrower from its Obligations. Foothill
may assign this Agreement and its rights and duties hereunder and no consent
or approval by Borrower is required in connection with any such assignment.
Foothill reserves the right to sell, assign, transfer, negotiate, or grant
participations in all or any part of, or any interest in Foothill's rights
and benefits hereunder. In connection with any such assignment or
participation, Foothill may disclose all documents and information which
Foothill now or hereafter may have relating to Borrower or Borrower's
business; provided, however, that, with respect to any potential participants
or assignees that are first contacted by Foothill on or after the Closing
Date, Foothill agrees to obtain a confidentiality agreement from such
potential participants or assignees containing substantially similar terms
and conditions to those contained in Section 15.3 hereof. To the extent that
Foothill assigns its rights and obligations hereunder to a third Person,
Foothill thereafter shall be released from such assigned obligations to
Borrower and such assignment shall effect a novation between Borrower and
such third Person. Anything to the contrary contained herein
notwithstanding, Foothill agrees that so long as no Event of Default has
occurred and is continuing, Foothill will not assign any of its rights and
obligations hereunder without the prior written consent of Borrower which
consent shall not be unreasonably withheld; provided, however, that
Borrower's consent shall not be required in connection with the assignment of
Foothill's rights hereunder made in connection with the sale of all or a
substantial portion of Foothill's commercial loan portfolio. No such consent
of Borrower shall be required in connection with the grant by Foothill of any
participation interest in its rights and benefits hereunder. Anything to the
contrary contained herein notwithstanding, Foothill agrees that it will not
participate any of its rights and obligations hereunder to a third Person
known to be engaged in a business that is directly competitive with the
business of Borrower, nor to any Affiliate of any such Person.
Confidentiality. Foothill agrees to hold all material
information obtained by it pursuant to the requirements of this Agreement in
accordance with its reasonable customary procedures for handling confidential
information; it being understood and agreed by Borrower that in any event
Foothill may make disclosures (a) reasonably required by any bona fide
potential or actual assignee, transferee, or participant in connection with
any contemplated or actual assignment or transfer by Foothill of an interest
herein or any participation interest in Foothill's rights hereunder, (b) of
information that has become public by disclosures made by Persons other than
Foothill, its Affiliates, assignees, transferees, or participants, or (c) as
required or requested by any court, governmental or administrative agency,
pursuant to any subpoena or other legal process, or by any law, statute,
regulation, or court order; provided, however, that, unless prohibited by
applicable law, statute, regulation, or court order, Foothill shall notify
Borrower of any request by any court, governmental or administrative agency,
or pursuant to any subpoena or other legal process for disclosure of any such
non-public material information concurrent with, or where practicable, prior
to the disclosure thereof.
Section Headings. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
Interpretation. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against
Foothill or Borrower, whether under any rule of construction or otherwise.
On the contrary, this Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all parties hereto.
Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific
provision.
Amendments in Writing. This Agreement can only be amended
by a writing signed by both Foothill and Borrower.
Counterparts; Telefacsimile Execution. This Agreement may
be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective
as delivery of a manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver a manually executed counterpart of this Agreement but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.
Revival and Reinstatement of Obligations. If the
incurrence or payment of the Obligations by Borrower or any guarantor of the
Obligations or the transfer by either or both of such parties to Foothill of
any property of either or both of such parties should for any reason
subsequently be declared to be void or voidable under any state or federal
law relating to creditors' rights, including provisions of the Bankruptcy
Code relating to fraudulent conveyances, preferences, and other voidable or
recoverable payments of money or transfers of property (collectively, a
"Voidable Transfer"), and if Foothill is required to repay or restore, in
whole or in part, any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such Voidable Transfer, or
the amount thereof that Foothill is required or elects to repay or restore,
and as to all reasonable costs, expenses, and attorneys fees of Foothill
related thereto, the liability of Borrower or such guarantor automatically
shall be revived, reinstated, and restored and shall exist as though such
Voidable Transfer had never been made.
Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Los Angeles, California.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Patricia McLoughlin
------------------------
Title: Vice President
TELEMUNDO GROUP, INC.,
a Delaware corporation
By: /s/ Jose M. Sariego
---------------------
Title: Attorney in Fact
For Peter J. Housman II
Authorized Officer
ESTRELLA COMMUNICATIONS, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
ESTRELLA LICENSE CORPORATION,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
NEW JERSEY TELEVISION
BROADCASTING CORPORATION,
a New York corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO NETWORK, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF AUSTIN, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF FLORIDA, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF GALVESTON-HOUSTON, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF MEXICO, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF NORTHERN
CALIFORNIA, INC.,
a California corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF SAN ANTONIO, INC.,
a Texas corporation
By: Corporate Counsel
Title:_______________________
TELEMUNDO OF SANTA FE, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
TU MUNDO MUSIC, INC.,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
SACC ACQUISITION CORPORATION,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
SAT CORPORATION,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
SPANISH AMERICAN COMMUNICATIONS
CORPORATION,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
WNJU-TV BROADCASTING
CORPORATION,
a New Jersey corporation
By: Corporate Counsel
Title:_______________________
WNJU LICENSE CORPORATION,
a Delaware corporation
By: Corporate Counsel
Title:_______________________
LOAN AND SECURITY AGREEMENT
by and between
TELEMUNDO GROUP, INC.,
CERTAIN OF ITS SUBSIDIARIES,
and
FOOTHILL CAPITAL CORPORATION
Dated as of December 31, 1994
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION. 2
1.1 Definitions 2
1.2 Accounting Terms 22
1.3 Code 22
1.4 Construction 22
1.5 Schedules and Exhibits. 23
2. LOAN AND TERMS OF PAYMENT 23
2.1 Revolving Advances. 23
2.2 Letters of Credit and Letter of Credit Guarantees. 24
2.3 Overadvances 26
2.4 Interest: Rates, Payments, and Calculations 26
2.5 Crediting Payments; Application of Collections 27
2.6 Statements of Obligations 28
2.7 Fees 28
3. CONDITIONS; TERM OF AGREEMENT 29
3.1 Conditions Precedent to Initial Advance, L/C, or L/C
Guaranty 29
3.2 Conditions Precedent to All Advances, L/Cs, or L/C
Guarantees. 32
3.3 Conditions Subsequent to All Advances, L/Cs, and L/C
Guarantees. 32
3.4 Term 35
3.5 Effect of Termination 35
3.6 Early Termination by Borrower 35
3.7 Termination Upon Event of Default 36
4. CREATION OF SECURITY INTEREST 36
4.1 Grant of Security Interest 36
4.2 Negotiable Collateral 36
4.3 Collection of Accounts, General Intangibles, Negotiable
Collateral 37
4.4 Delivery of Additional Documentation Required 37
4.5 Power of Attorney 38
4.6 Right to Inspect 39
5. REPRESENTATIONS AND WARRANTIES. 39
5.1 No Prior Encumbrances 39
5.2 Eligible Accounts 39
5.3 Location of Inventory and Equipment 40
5.4 Location of Chief Executive Office; FEIN 40
5.5 Due Organization and Qualification 40
5.6 Due Authorization; No Conflict 40
5.7 Licenses and Permits 41
5.8 Governmental Consent 41
5.9 No Default In Communication Franchise Agreements 41
5.10 Governmental Authority 41
5.11 Litigation 42
5.12 No Material Adverse Change in Financial Condition 42
5.13 Solvency 42
5.14 Employee Benefits 42
5.15 Environmental Condition 43
5.16 Capital Stock of Group's Subsidiaries 44
5.17 Reliance by Foothill; Cumulative 44
6. AFFIRMATIVE COVENANTS. 44
6.1 Accounting System 44
6.2 Collateral Reports 45
6.3 Government Authorization 45
6.4 Off-the-Air Reports 45
6.5 Schedules of Accounts 45
6.6 Financial Statements, Reports, Certificates 46
6.7 Tax Returns 47
6.8 Guarantor Reports 47
6.9 Returns. 47
6.10 Title to Equipment 47
6.11 Maintenance of Equipment 47
6.12 Taxes 48
6.13 Insurance 48
6.14 Financial Covenants 49
6.15 No Setoffs or Counterclaims 49
6.16 Location of Inventory and Equipment 49
6.17 Location of Concentration Account; Location of Network
Concentration Account; Location of Other Deposit
Accounts 49
6.18 Compliance with Laws 50
6.19 Employee Benefits 50
6.20 Leases 51
6.21 Notices. 51
7. NEGATIVE COVENANTS 51
7.1 Indebtedness 51
7.2 Liens 52
7.3 Restrictions on Fundamental Changes 52
7.4 Extraordinary Transactions and Disposal of Assets 52
7.5 Communication Franchise Agreements 52
7.6 Change Name 53
7.7 Guarantee 53
7.8 Restructure 53
7.9 Prepayments 53
7.10 Change of Control 54
7.11 Capital Expenditures 54
7.12 Conditional Sales 54
7.13 Distributions 54
7.14 Accounting Methods 54
7.15 Investments 54
7.16 Transactions with Affiliates 54
7.17 Suspension 54
7.18 Use of Proceeds. 55
7.19 Change in Location of Chief Executive Office;
Inventory and Equipment with Bailees. 55
7.20 Amendment of Certain Documents. 55
8. EVENTS OF DEFAULT. 55
9. FOOTHILL'S RIGHTS AND REMEDIES. 59
9.1 Rights and Remedies 59
9.2 Remedies Cumulative 62
10. TAXES AND EXPENSES 62
11. WAIVERS; INDEMNIFICATION 63
11.1 Demand; Protest; etc. 63
11.2 Foothill's Liability for Collateral 63
11.3 Indemnification 63
11.4 Suretyship Waivers and Consents. 63
12. NOTICES 67
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 74
14. DESTRUCTION OF BORROWER'S DOCUMENTS 75
15. GENERAL PROVISIONS 75
15.1 Effectiveness 75
15.2 Successors and Assigns 75
15.3 Confidentiality 76
15.4 Section Headings 76
15.5 Interpretation 76
15.6 Severability of Provisions 76
15.7 Amendments in Writing 76
15.8 Counterparts; Telefacsimile Execution 76
15.9 Revival and Reinstatement of Obligations 77
15.10 Integration 77
SCHEDULES
Schedule B-1 Borrower Real Property
Schedule E-1 Excluded Equipment
Schedule G-1 Guarantor Real Property
Schedule P-1 Permitted Liens
Schedule 5.11 Litigation
Schedule 5.14 ERISA
Schedule 6.14 Financial Covenants
Schedule 6.16 Location of Inventory and Equipment
Schedule 6.17 Deposit Accounts
Schedule 7.1 Indebtedness
Schedule 7.11 Capital Expenditures
FACILITY NAME
ADDRESS
CITY
COUNTY
OWNER
San Antonio,
Texas
Tel/SanAn
Schedule B-1
FACILITY NAME
ADDRESS
CITY
COUNTY
OWNER
San Juan
Guarantor
Schedule G-1
Schedule P-1
Schedule 5.11
Current Ratio. A ratio of Consolidated Current
Assets divided by Consolidated Current Liabilities of at least __________ to
one (__________: 1.0), measured on a fiscal quarter-end basis; and
Tangible Net Worth. Tangible Net Worth of at least
__________ Dollars ($__________), measured on a fiscal quarter-end basis.
THIS SCHEDULE IS TO BE AGREED UPON AND COMPLETED BY FOOTHILL AND
BORROWER WITHIN THE TIME SET FORTH IN, AND IN ACCORDANCE WITH
THE PROVISIONS OF, SECTION 3.3(g) OF THE AGREEMENT.
Schedule 6.14
Schedule 6.16
Schedule 6.17
Make any capital expenditure, or any commitment therefor, in excess of
__________ Dollars ($__________) for any individual transaction or where the
aggregate amount of such capital expenditures, made or committed for in any
fiscal year, is in excess of __________ Dollars ($__________) (the "Annual
Amount"); provided, however, that if any amount so permitted to be expended
for capital expenditures during any such fiscal year is not expended during
such fiscal year (the "unexpended amount"), Borrower may make additional
capital expenditures in excess of the Annual Amount in the succeeding fiscal
year so long as the amount of such additional capital expenditures does not
exceed the sum of the Annual Amount plus the unexpended amount for such prior
year; it being understood and agreed that in each year the prior year's
unexpended amount shall be deemed expended prior to the expenditure of any of
that year's Annual Amount.
.
THIS SCHEDULE IS TO BE AGREED UPON AND COMPLETED BY FOOTHILL AND
BORROWER WITHIN THE TIME SET FORTH IN, AND IN ACCORDANCE WITH
THE PROVISIONS OF, SECTION 3.3(h) OF THE AGREEMENT.
Schedule 7.11
ITEM 2. IDENTITY AND BACKGROUND
(a)-(f) This statement is being filed on behalf of each of
TLMD Partners II, L.L.C. ("TLMD") and Mr. Leon Black ("Mr. Black", and
together with TLMD, the "Reporting Persons").
TLMD
TLMD is a Delaware Limited Liability company with its
principal place of business at c/o CIBC Bank and Trust Company (Cayman)
Limited, Edward Street, Georgetown, Grand Cayman, Cayman Islands, British
West Indies. TLMD was formed primarily to invest in the securities of the
Issuer.
AIF II, L.P., a Delaware Limited partnership, ("AIF") is the
manager of TLMD and has sole dispositive power with respect to the
securities held by TLMD. AIF has its principal place of business at c/o
CIBC Bank and Trust Company (Cayman) Limited, Edward Street, Georgetown,
Grand Cayman, Cayman Islands, British West Indies.
The managing general partner of AIF is Apollo Advisors, L.P., a
Delaware Limited partnership ("Advisors"). Apollo Capital Management,
Inc., a Delaware corporation ("Apollo Capital"), is the sole general
partner of Advisors. The administrative general partner of AIF is Apollo
Fund Administration Limited, a Cayman Islands corporation ("Apollo
Administration"). Advisors is principally engaged in the business of
serving as managing general partner of AIF and another investment fund.
Apollo Administration is principally engaged in the business of serving as
the administrative general partner of AIF and another investment fund. AIF
has no other general partners. The respective addresses of the principal
business and principal office of each of Advisors and Apollo Administration
are: Apollo Advisors, L.P., Two Manhattanville Road, Purchase, New York
10577; and Apollo Fund Administration Limited, c/o CIBC Bank and Trust
Company (Cayman) Limited, Edward Street, Georgetown, Grand Cayman, Cayman
Islands, British West Indies.
Attached as Appendix A to Item 2 is information concerning the
principals, executive officers, directors and principal shareholders of
Advisors, Apollo Capital, Apollo Administration, and other entities as to
which such information is required to be disclosed in response to this Item
2 and General Instruction C to Schedule 13D.
Mr. Black
Mr. Black is a United States citizen whose principal occupation
is as an investment advisor. Mr. Black's principal business office is c/o
Apollo Advisors, L.P., Two Manhattanville Road, Purchase, New York 10577.
Mr. Black serves as an officer and director and is a stockholder of both
Apollo Capital and Lion Capital and as principal of both Advisors and Lion
Advisors. The information set forth in the Appendix to Item 2 is
incorporated herein by reference.
Neither of the Reporting Persons nor any other person disclosed
in response to this Item 2 has, during the past five years, been (a)
convicted in a criminal proceeding, or (b) a party to any civil proceeding
as a result of which it has been subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws, or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION.
Pursuant to the Second Amended Chapter 11 Plan of
Reorganization of the Issuer under Chapter 11 of the Bankruptcy Code, Title
11 of the United States Code, filed by the Issuer and administered as Case
No. 93-B-42967 (JLG) (the "Plan of Reorganization"), a copy of which
(without Exhibits) is attached hereto as Exhibit (a), upon consummation of
the Plan of Reorganization, holders of 1992 Zero Coupon Notes and 1993 Zero
Coupon Notes (each as defined in the Plan of Reorganization) became
entitled to receive Series B Shares, cash and New Senior Notes (as defined
in the Plan of Reorganization) in respect of such securities, holders of 13
5/8% Debentures (as defined in the Plan of Reorganization) became entitled
to receive Series A Shares and cash in respect of such securities, and
holders of 12% Debentures (as defined in the Plan of Reorganization) became
entitled to receive Warrants to purchase Series A Shares ("Warrants") in
respect of such securities. The Plan of Reorganization was confirmed by
order of the Bankruptcy Court on July 20, 1994 and consummated on December
30, 1994, when Shares were issued to the Reporting Persons pursuant to the
Plan of Reorganization.
As a result of ownership of $59,741,254 principal amount of
1993 Zero Coupon Notes, TLMD received, upon consummation of the Plan of
Reorganization, 1,550,464 Series B Shares. As a result of ownership of
$6,837,615 principal amount of 1992 Zero Coupon Notes, Mr. Black received,
upon consummation of the Plan of Reorganization, 200,000 Series B Shares.
Based upon information provided to the Reporting Persons by
each of Hernandez Partners, a California general partnership ("Hernandez"),
The Value Realization Fund, L.P., a Delaware Limited partnership ("Value"),
and GRS Partners II, an Illinois partnership ("GRS"), as a result of the
consummation of the Plan of Reorganization and pursuant to purchase
agreements (the "Purchase Agreements"), copies of which are attached hereto
as Exhibits (b), (c), and (d), Hernandez became the beneficial owner of
49,998 Series A Shares and 450,001 Series B Shares, Value became the
beneficial owner of 66,666 Series A Shares, and GRS became the beneficial
owner of 33,333 Series A Shares. The purchase price for such Shares was
$10.00 per Share (to be paid upon delivery of certificates representing the
Shares). In connection with the execution of the Purchase Agreements, each
of Hernandez, Value and GRS executed a pledge agreement in favor of TLMD
(the "Pledge Agreement"), a form of which is attached hereto as Exhibit
(e).
Based upon information provided to the Reporting Persons by
Bastion Capital Fund, L.P., a Delaware Limited partnership ("Bastion", and
collectively with Hernandez, Value and GRS, the "Other Shareholders"), as a
result of the consummation of the Plan of Reorganization and pursuant to a
purchase agreement and a trust agreement (the "Bastion Agreements"), copies
of which are attached hereto as Exhibits (f) and (g), respectively, Bastion
became the beneficial owner of 179,497 Series A Shares and 882,687 Series B
Shares. The purchase price for such Shares was $10.00 per Share (which is
expected to be paid on or about January 10, 1995). Based upon information
provided to the Reporting Persons by Bastion, Bastion has become
unconditionally obligated to purchase an aggregate of 195,500 Series A
Shares from unrelated third parties.
As a result of the consummation of the Plan of Reorganization
and pursuant to a purchase agreement, a copy of which is attached hereto as
Exhibit (h)(collectively with the pledge agreement referred to below, the
"Black Agreements"), Mr. Black became the beneficial owner of 200,000
Series B Shares. The purchase price for such Shares was $10.00 per Share
(to be paid upon delivery of certificates representing the Shares), and in
connection therewith, Mr. Black entered into a pledge agreement in favor of
TLMD, a copy of which is attached hereto as Exhibit (e). Mr. Black used
personal funds in connection with the acquisition of such Shares.
ITEM 4. PURPOSE OF TRANSACTION.
The responses to Items 3, 5 and 6 are incorporated herein by
this reference.
Each of the Reporting Persons acquired beneficial ownership of
the Shares to which this Statement on Schedule 13D relates for investment
purposes. Depending upon each Reporting Person's evaluation of the
Issuer's business and prospects, future development, market conditions and
other factors, including any applicable legal or regulatory requirements,
TLMD or Mr. Black may, from time to time, purchase additional Shares or
sell or cause to be sold all or a portion of the Shares over which such
Reporting Person exercises voting and dispositive power, in open market
transactions, privately negotiated transactions or otherwise.
The Reporting Persons have entered into a Shareholders
Agreement, dated as of December 20, 1994 (the "Shareholders Agreement"), by
and among the Reporting Persons and the Other Shareholders, pursuant to
which each of the parties thereto has agreed, during the term of the
Shareholders Agreement and subject to the provisions thereof (including the
continued ownership of a specified minimum number of Series B Shares, as
set forth in the Shareholders Agreement), among other things, to use its
reasonable best efforts to cause two nominees of TLMD, Mr. Black (or his
nominee), a nominee of Bastion and a nominee of Hernandez to be elected to
the Board of Directors of the Issuer. A copy of the Shareholders Agreement
is attached hereto as Exhibit (i).
Pursuant to the Shareholders Agreement, TLMD, Mr. Black and the
Other Shareholders have agreed that Shares Beneficially Owned (as defined
in the Shareholders Agreement) by each of them will be voted by a Voting
Committee comprised of three members, one of which will be appointed by
TLMD, one of which will be appointed by Bastion, and one of which is an
Independent Member (as defined in the Shareholders Agreement). The parties
to the Shareholders Agreement have appointed the Voting Committee as their
attorney-in-fact and proxy to vote all Shares owned by such parties as to
which a vote of the shareholders is required. As of the date of this
filing, the Reporting Persons and the Other Shareholders, based on
information provided by the Other Shareholders to the Reporting Persons,
own an aggregate of approximately 54.9% of the Series B Shares outstanding
and approximately 36.08% of the total Shares (Series A and Series B)
outstanding. The Issuer's Restated Certificate of Incorporation (the
"Certificate") provides that the Series B Shares, while outstanding, shall
be entitled to elect a majority of the Board of Directors of the Issuer.
As a consequence of the foregoing, the Series B Shares presently owned by
TLMD, Mr. Black and the Other Shareholders and voted by the Voting
Committee are expected to have the ability to cause the nominees of each of
TLMD, Mr. Black, Bastion and Hernandez to be elected to the Board of
Directors of the Issuer and may give the Reporting Persons the power to
control or influence the Issuer, which power may be exercised from time to
time. Pursuant to the provisions of the Certificate, Series B Shares will
automatically convert to Series A Shares upon the Transfer (as defined in
the Certificate) of such Series B Shares other than to a Permitted
Transferee (as defined in the Certificate) or upon the earlier to occur of
December 30, 1999 or such time as there are less than 2,000,000 shares of
Series B Shares issued and outstanding.
The Shareholders Agreement also provides that in the event TLMD
or any Apollo Permitted Transferee (as defined in the Shareholders
Agreement) proposes to sell any Shares, the Other Shareholders shall have
the right to participate in such sale on a pro rata basis.
As a result of the provisions of the Shareholders Agreement
relating to the nomination and election of directors, the Reporting Persons
and the Other Shareholders may be deemed to constitute a "group" within the
meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Pursuant to Rule 13d-4, the filing of this Statement
shall not be construed as an admission that any of the Reporting Persons or
any other person named in Item 2 hereto is, for the purposes of Section
13(d) or 13(g) of the Exchange Act (or pursuant to Rule 16a-1(a)(1)
thereunder), the beneficial owner of any Shares held by other members of
any such group.
Except as disclosed in this Item 4, each Reporting Person has
no current plans or proposals which relate to or would result in any of the
events described in Items (a) through (j) of the instructions to Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Note: The actual number of Shares and the corresponding
percentages reported in this statement are approximate numbers, due to the
fact that certificates representing the Shares have not yet been delivered
by the exchange agent for the Plan of Reorganization. Any difference
between the actual numbers and percentages and the numbers and percentages
reported herein are expected to be immaterial.
(a) i) The aggregate number of Shares of which TLMD may be considered
the direct beneficial owner is 1,550,464 Series B Shares (approximately
15.5% of the total Shares outstanding (based upon the Reporting Persons'
understanding that 5,611,606 Series B Shares and 4,388,394 Series A Shares
will be outstanding), and without giving effect to the exercise of
warrants, options or similar rights).
ii) The aggregate number of Shares of which Mr. Black may be
considered the direct beneficial owner is 200,000 Series B Shares
(approximately 2.0% of the total number of Shares outstanding) (based upon
the Reporting Persons' understanding that 5,611,606 Series B Shares and
4,388,394 Series A Shares are outstanding), and without giving effect to
the exercise of warrants, options or similar rights).
iii) By reason of the relationships described in Item 4 above,
each of TLMD, Mr. Black and the Other Shareholders may be deemed to
constitute a "group" within the meaning of Rule 13d-5 under the Exchange
Act. The Reporting Persons have been informed that Bastion beneficially
owns 374,997 Series A Shares and 882,687 Series B Shares, Hernandez
beneficially owns 49,998 Series A Shares and 450,001 Series B Shares, GRS
beneficially owns 33,333 Series A Shares and Value beneficially owns 66,666
Series A Shares, representing, in the aggregate, approximately, 1,857,682
Shares (approximately 18.57% of the total Shares outstanding), which amount
includes 1,332,688 Series B Shares (approximately 23.75% of the Series B
Shares outstanding). As a result of agreements relating to, among other
things, the nomination and election of directors, such group (if so
constituted) may be deemed to have shared voting power over all of the
3,608,146 Shares owned by the Reporting Persons and the Other Shareholders
in the aggregate (approximately 36.08% of the total Shares outstanding)
immediately following the consummation of the Plan of Reorganization, which
number includes 3,083,152 Series B Shares (approximately 54.9% of the
Series B Shares outstanding). (Reference is made to such statements on
Schedule 13D as have been or may be filed with the Securities and Exchange
Commission by the Other Shareholders for information regarding the Other
Shareholders and their respective ownership of Series B Shares.) TLMD and
Mr. Black disclaim beneficial ownership of any Shares held by each other or
by the Other Shareholders.
AIF, by virtue of its ownership of 12% Debentures at the time
of consummation of the Plan of Reorganization, is entitled to receive and
is deemed the beneficial owner of 29,242 Warrants. Lion Advisors, L.P., a
Delaware Limited partnership affiliated with AIF and Mr. Black ("Lion
Advisors"), by virtue of the ownership of 12% Debentures at the time of the
consummation of the Plan of Reorganization for the benefit of an investment
account over which Lion Advisors has sole voting and dispositive power, is
entitled to receive and is deemed the beneficial owner of 12,532 Warrants.
Each Warrant represents the right to receive one Series A Share upon the
payment of the exercise price of $7.00 per Warrant (such number of Warrants
represents less than 1% of the total Shares outstanding). A copy of the
form of Warrant Agreement and form of Warrant is attached hereto as Exhibit
(j). TLMD and Mr. Black disclaim beneficial ownership of the Warrants held
by AIF and Lion Advisors.
(b) i) Except as discussed in Items 4 and 6, the power to direct
the disposition and voting of the Shares held by TLMD is vested in AIF, its
Manager. Advisors, as the managing general partner of AIF, is vested with
the power to direct the disposition and voting of the securities over which
AIF exercises control.
ii) Except as discussed in Items 4 and 6, the power to direct
the disposition and voting of the Shares held by Mr. Black is held by Mr.
Black.
(c) Except as described in Item 3, neither of the Reporting Persons
nor any other entity disclosed in response to Item 2 has undertaken any
transactions in the Shares in the past sixty days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS IN
RELATIONSHIP WITH RESPECT TO SECURITIES OF THE ISSUER.
As discussed in Item 4, on December 20, 1994, the Reporting
Persons and the Other Shareholders entered into the Shareholders Agreement.
As discussed in Item 4, TLMD entered into the Purchase Agreements, the
Pledge Agreements and Bastion Agreements and TLMD and Black entered into
the Black Agreements.
Pursuant to a Registration Rights Agreement dated as of
December 30, 1994 by and among the Issuer and Reliance Insurance Company, a
Pennsylvania corporation ("Reliance"), and Advisors, the Issuer has granted
to Reliance, Advisors, and their Affiliates (as defined in the Registration
Rights Agreement) certain registration rights with respect to the Shares
and the New Senior Notes owned by such parties and their Affiliates (as
defined in the Registration Rights Agreement). A copy of the Registration
Rights Agreement is attached hereto as Exhibit (k).
In connection with the acquisition of the Shares held by
Hernandez, GRS and Value at the time of consummation of the Plan of
Reorganization, TLMD entered into letter agreements, with each of
Hernandez, GRS and Value pursuant to which TLMD agreed to pay each of such
parties the amount by which the total sales proceeds received by such party
from the sale of any Shares sold during the year following the consummation
of the Plan of Reorganization is less than the product of $10.00 multiplied
by the total number of Shares sold during such one year period. The
aggregate amount payable to the parties pursuant to such Letter Agreements
is $1 million, with each of Hernandez, GRS, and Value, respectively, to
receive a maximum of $833,334, $55,555 and $111,111, respectively. Lion
Advisors, on behalf of its client, and AIF have severally agreed (on a 70%
- - 30% basis) to guarantee the performance of TLMD of its obligations under
such Letter Agreements. A copy of the form of Letter Agreement with each
of Hernandez, GRS and Value is attached hereto as Exhibit (l).
Except as set forth above and as described in Item 4 and Item 5
hereto, each Reporting Person does not have any contracts, arrangements,
understandings or relationships with respect to any securities of the
Issuer.
APPENDIX A TO ITEM 2
The principal occupation of each of Leon Black, Craig Cogut and
John Hannan, each of whom is a Untied States citizen, is to act as an
executive officer and director of Apollo Capital Management, Inc. ("Apollo
Capital") and of Lion Capital Management, Inc;. ("Lion Capital"), the
general partners of Apollo Advisors, L.P. ("Advisors") and Lion Advisors,
L.P. ("Lion Advisors"), respectively, and each is a limited partner of
Advisors and Lion Advisors, L.P. The principal business of Advisors and of
Lion Advisors is to provide advice regarding investments in securities.
The principal offices of Advisors and Lion Advisors are located at Two
Manhattanville Road, Purchase, New York 10577.
Mr. Black is the President and a director of Lion Capital and
the President and a director of Apollo Capital. Mr. Black's business
address is Two Manhattanville Road, Purchase, New York 10577.
Mr. Cogut is a Vice President and a director of Lion Capital
and a Vice President and a director of Apollo Capital. Mr. Cogut's
business address is Two Manhattanville Road, Purchase, New York 10577.
Mr. Hannan is a Vice President and director of Lion Capital
and a Vice President and director of Apollo Capital. Mr. Hannan's business
address is Two Manhattanville Road, Purchase, New York 10577.
Peter Henry Larder, Michael Francis Benedict Gillooly, Ian
Thomas Patrick and Martin William LaidLaw, each of whom is a British
citizen, each serves as a director of Administration. Each of the above
four individuals is principally employed by CIBC Bank and Trust Company
(Cayman) Limited ("CIBC") in the following positions: Mr. Larder, Managing
Director; Mr. Gillooly, Deputy Managing Director; Mr. Patrick, Manager-
Accounting Services; and Mr. LaidLaw, Senior Fund Accountant. CIBC is a
Cayman Islands corporation which is principally engaged in the provision of
trust, banking and corporate administration services, the principal address
of which is Edward Street, Grand Cayman, Cayman Islands, British West
Indies. It provides accounting, administrative and other services to
Administration pursuant to a contract. Messrs. Black, Cogut and Hannan
are the beneficial owners of the stock of Administration.
