<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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OMB APPROVAL
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OMB Number 3235-0145
Expires: October 31, 1994
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
Telemundo Group, Inc.
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(Name of Issuer)
Common Stock $.01 Par Value
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(Title of Class of Securities)
87943M306/87943M405
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(CUSIP Number)
Alan J. Barton, Esq., Paul, Hastings, Janofsky & Walker, 555 S. Flower Street,
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23rd Floor, Los Angeles, CA 90071-2371
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 30, 1994
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [x]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ----------------------- -------------------------
CUSIP No. 87943M108 Page 2 of ______ Pages
- ----------------------- -------------------------
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hernandez Partners
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[_]
(b)[x]**
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0**
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 0**
PERSON WITH --------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
499,999 Shares **
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
499,999 Shares**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.99%**
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
**See Items 4 and 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP No. 87943M108 Page 3 of ______ Pages
- ----------------------- -------------------------
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GRS Partners II, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[_]
(b)[x]**
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0**
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 0**
PERSON WITH --------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
33,333 Shares **
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
33,333 Shares**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.33% **
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
**See Items 4 and 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- -------------------------
CUSIP No. 87943M108 Page 4 of ______ Pages
- ----------------------- -------------------------
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Value Realization Fund, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[_]
(b)[x]**
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0**
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 0**
PERSON WITH --------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
66,666 Shares **
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,666 Shares**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.67% **
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
**See Items 4 and 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. Security and Issuer.
This statement on Schedule 13D relates to shares of the Common
Stock, $.01 par value (the "Shares"), of Telemundo Group, Inc., a Delaware
corporation (the "Issuer"). The Common Stock of the Issuer consists of two
series: Series A ("Series A Shares") and Series B ("Series B Shares").
The address of the principal executive offices of the Issuer is 1740
Broadway, New York, New York 10019.
The information set forth in the Exhibits attached hereto is
expressly incorporated herein by reference and the response to each item of
this statement is qualified in its entirety by the provisions of such
Exhibits.
Item 2. Identity and Background.
This statement is being filed on behalf of each of Hernandez
Partners ("HP"), GRS Partners II, L.P. ("GRS") and The Value Realization
Fund, L.P. ("Value"). HP, GRS and Value are collectively referred to
herein as the "Reporting Persons" and individually as "Reporting Person."
HP
--
HP is a California general partnership with its principal place
of business at 900 South Garfield Avenue, Alhambra, CA 91801. The
principal business of Hernandez Partners is investing.
The general partners of HP are Roland A. Hernandez and Enrique
Hernandez, Jr. Roland A. Hernandez' principal occupation is acting as
President of Interspan Communications. The principal business of Interspan
Communications is the ownership and management of a television broadcast
license serving the market of Dallas/Fort Worth, Texas. Roland A.
Hernandez' principal business office is located at 900 South Garfield
Avenue, Alhambra, California 91801. Enrique Hernandez, Jr.'s principal
occupation is acting as President of Inter-Con Security Systems, Inc. The
principal business of Inter-Con Security Systems, Inc. is providing high-
level security and related services throughout the United States and
abroad. Enrique Hernandez' principal business office is located at 900
South Garfield Avenue, Alhambra, California 91801. Both Roland A.
Hernandez and Enrique Hernandez, Jr. are United States citizens.
Each of the General Partners in HP has sole dispositive and
voting power with respect to the securities held by HP.
GRS
---
GRS is an Illinois general partnership with its principal place
of business at 333 West Wacker Drive, Suite 1600, Chicago, Illinois 60606.
Its principal business is investing. There are two general partners of GRS:
Investment 2, L.L.C., and SDI Securities II, Inc. Investment 2, L.L.C. is
an Illinois limited liability company whose members are: Grosvenor Multi-
Strategy Fund, L.P., an Illinois limited partnership and Ranger Diversified
Investment Fund, a Delaware limited partnership. The general partner of
Grosvenor Multi-Strategy Fund is Grosvenor Capital Management L.P. ("GCM").
The sole general partner of GCM is Grosvenor Capital Management, Inc.
("GCMI"). The directors of GCMI are Richard Elden and Michael J. Sacks,
both United States citizens. The general partner of Ranger Diversified
Investment Fund, L.P. is Ranger Capital Management, L.P., a Delaware
limited partnership. The general partner of Ranger Capital Management, L.P.
is Ranger Capital Corporation, a Delaware "S" corporation whose sole
director is Stephen J. Malkin. The principal offices of all of the above
entities is 333 West Wacker Drive, Suite 1600, Chicago, Illinois 60606. SDI
Securities II, Inc. is a Nevada corporation with its principal office at
232 Court Street, Reno, Nevada 89501. GRS' administrator is GCM.
The administrator of GRS is Grosvenor Capital Management, L.P.
Grosvenor Capital Management, L.P. is an Illinois limited partnership with
its principal place of business at 333 West Wacker Drive, Suite 1600,
Chicago, Illinois 60606. Its principal business is investing.
The sole general partner of Grosvenor Capital Management, L.P. is
Grosvenor Capital Management, Inc. Grosvenor Capital Management is an
Illinois corporation with its principal place of business at 333 West
Wacker Drive, Suite 1600, Chicago, Illinois 60606. Its principal business
is investing.
Value
-----
Value is a Delaware limited partnership with its principal place
of business at 9665 Wilshire Boulevard, Suite 200, Beverly Hills,
California 90212.
The sole General Partner of Value is Canpartners Investments III,
L.P. ("Canpartners Investments"). Canpartners Investments is a California
limited partnership with its principal place of business in California. It
is principally engaged in investing. Canpartners Investments' business
address is 9665 Wilshire Boulevard, Suite 200, Beverly Hills, California
90212.
The sole General Partner of Canpartners Investments is Canyon
Capital Management, L.P. ("Canyon"). Canyon is a California limited
partnership with its principal place of business in California. Canyon is
principally engaged in acting as an investment adviser. Its business
address is 9665 Wilshire Boulevard, Suite 200, Beverly Hills, California
90212.
The sole General Partner of Canyon is Canpartners Incorporated
("Canpartners Incorporated"). Canpartners Incorporated is a California
corporation with its principal place of business at 9665 Wilshire
Boulevard, Suite 200 Beverly Hills, California 90212. Canpartners
Incorporated is principally engaged in the business of investing. The only
executive officers and directors of Canpartners Incorporated, each of whom
has sole power of direct disposition and voting of shares, are Rolf
Christian Banghart Evensen, Joshua Stephan Friedman and Mitchell Ralph
Julis. The principal occupation of each of Messrs. Evensen, Friedman and
Julis is acting as an investment banker and fund manager. Messrs. Evensen,
Friedman and Julis are United States citizens. Each of the directors is a
33.3% shareholder in Canpartners Incorporated.
None of the Reporting Persons nor any other person disclosed in
response to this Item 2 has during the last 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, final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding any violation in
respect to such laws.
<PAGE>
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 2, 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 and other consideration 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 other
consideration in respect of such securities, and holders of 12% Debentures
(as defined in the Plan of Reorganization) become entitled to receive
Warrants to purchase Series A Shares ("Warrants") in respect of such
securities. The 1992 Zero Coupon Notes, the 1993 Zero Coupon Notes, the 13
5/8 Debentures and the 12% Debentures are referred to hereinafter
collectively as the "Issuer Notes." 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 Issuer Notes, upon consummation of
the Plan of Reorganization, HP received 450,001 Series B Shares and 49,998
Series A Shares, GRS received 33,333 Series A Shares and Value received
66,666 Series A Shares. The Issuer Notes owned by the Reporting Persons
had been purchased by each of them in December 1994 from TLMD Partners II,
L.L.C., a Delaware limited liability company ("TLMD") for a cash purchase
price equal to $10 times the number of Shares that each of the Reporting
Persons became entitled to receive upon consummation of the Plan of
Reorganization, payable upon receipt of the certificates representing such
Shares. In addition, the Reporting Persons undertook to return to TLMD any
consideration other than Shares which may be distributed to the Reporting
Persons pursuant to the Plan of Reorganization in respect to the Issuer
Notes. The purchased Issuer Notes were pledged to TLMD to secure the
obligations of the Reporting Persons. Copies of the purchase agreements
between each of the Reporting Persons and TLMD are attached hereto as
Exhibits 6, 7 and 8, and a form of the Pledge Agreement executed by the
parties is attached hereto as Exhibit 10.3.
Hernandez Partners used personal funds to acquire its Shares.
GRS Partners II, L.P. and The Value Realization Fund, L.P. each used
working capital to acquire their 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. The Reporting Persons have entered into a Shareholders
Agreement, dated as of December 20, 1994 (the "Shareholders Agreement"), by
and among the Reporting Persons, TLMD, Bastion Capital Fund, L.P., a
Delaware limited partnership ("Bastion") and Leon Black ("Black")(TLMD,
Bastion and Black are referred to herein as the "Other Shareholders"),
pursuant to which each of the parties 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, Black (or his
nominee), a nominee of Bastion and a nominee of HP to be elected to the
Board of Directors of the Issuer. Effective December 30, 1994, Roland A.
Hernandez became a director of the Issuer. A copy of the Shareholders
Agreement is attached hereto as Exhibit 10.1
Pursuant to the Shareholders Agreement, HP, GRS, Value 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 the filing
of this statement, based on information provided to the Reporting Persons
by the Other Shareholders, the Reporting Persons and the Other Shareholders
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
"Certificates") 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 HP,
GRS, Value and the Other Shareholders and voted by the Voting Committee are
expected to have the ability to cause the nominees of each of TLMD, Black,
Bastion and HP to be elected to the Board of Directors of the Issuer and
may give the Reporting Persons and the Other Shareholders 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 described 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, 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 and the acquisition
and disposition of Shares set forth therein, 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 (1) through (j) of the instructions to Item 4 of
Schedule 13D.
<PAGE>
Item 5. Interest in Securities of the Issuer.
Note: The actual number of Shares and percentages reported in this
statement are approximate, due to the fact that the 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 those reported herein are expected to be
immaterial. Reference is made to 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 Shares.
(a) (i) HP is the beneficial owner of 450,001 Series B Shares
(constituting 8% of the Series B Shares) and 49,998 Series A Shares
(constituting 1.14% of the Series A Shares), which in the aggregate
constitute approximately 4.99% of the total Shares outstanding (based on
the Reporting Persons' understanding that there are 5,611,606 Series B
Shares and 4,388,394 A Shares outstanding, without giving effect to the
exercise of warrants, options or similar rights.
(ii) GRS is the beneficial owner of 33,333 Series A Shares
(constituting .76% of the Series A Shares and .33% of the total number of
Shares outstanding).
(iii) Value is the beneficial owner of 66,666 Series A Shares
(constituting 1.52% of the Series A Shares and .67% of the total number of
Shares outstanding).
(iv) By reason of the relationships described in Item 4 above,
each of 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. The Reporting Persons have been informed that the
Other Shareholders beneficially own Shares, as follows: TLMD--1,550,464
Series B Shares (approximately 15.5% of the total Shares outstanding);
Black--200,000 Series B Shares (approximately 2.0% of the total Shares
outstanding); Bastion--374,997 Series A Shares and 882,687 Series B Shares
(aggregating approximately 12.58% of the total 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).
(b) (i) Except as discussed in Item 4 the power to direct the
disposition and voting of the Shares held by HP is vested in its general
partners, Roland A. Hernandez and Enrique Hernandez, Jr., or either of
them. Pursuant to the provisions of the Shareholders Agreement, Shares
beneficially owned by HP will be voted by the Voting Committee.
(ii) Except as discussed in Item 4 the power to direct the
disposition and voting of the Shares held by GRS is vested
in Grosvenor Capital Management, L.P. Pursuant to the provisions of the
Shareholders Agreement, Shares beneficially owned by GRS will be voted by
the Voting Committee.
(iii) Except as discussed in Item 4 the power to direct the
disposition and voting of the Shares held by Value is vested in Canyon
Capital Management, L.P. Pursuant to the provisions of the Shareholders
Agreement, Shares beneficially owned by Value will be voted by the Voting
Committee.
(c) Except as disclosed in Item 3, none of the Reporting Persons
nor any other entity disclosed in response to Item 2 has effected any
transactions in the Shares in the past sixty days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships 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,
a copy of which is attached hereto as Exhibit 10.1.
In connection with the acquisition of the Issuer Notes described
in Item 3 above, held by Reporting Persons at the time of consummation of
the Plan of Reorganization, TLMD entered into letter agreements, dated
December 21, 1994, with each of the Reporting Persons 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 HP, GRS and Value,
respectively, to receive a maximum of $833,334, $55,555 and $111,111,
respectively. Members of TLMD, namely AIF II, L.P. and Artemis America
III, L.L.C., 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 and guarantee with each of the
Reporting Persons is attached hereto as Exhibit 10.2.
Except as set forth above, and as described in Items 3, 4 and 5
hereto, each Reporting Person does not have any contracts, arrangements,
understandings or relationships with respect to any securities of the
issuer.
Item 7. Material to be Filed as Exhibits.
The information set forth in the Exhibit Index is incorporated
herein by reference.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: January 8, 1995
HERNANDEZ PARTNERS
By: /s/ Roland A. Hernandez
_______________________
Roland A. Hernandez
General Partner
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: January 9, 1995
THE VALUE REALIZATION FUND, L.P.
By: Canpartners Investments III, L.P.
its General Partner
By: Canyon Capital Management, L.P.
its General Partner
By: Canpartners Incorporated,
its General Partner
By: /s/ Mitchell R. Julis
_______________________________
Title: Vice President
______________________________
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: January 9, 1995
GRS PARTNERS II
By: /s/ Michael J. Sacks
_______________________________
Michael J. Sacks, Vice President of
Grosvenor Capital Management, Inc.
General Partner of Grosvenor Capital
Management, L.P.,
Administrator of GRS Partners II
<PAGE>
Exhibit Index
2 Plan of Reorganization (without exhibits).
10.1 Shareholders Agreement dated December 20, 1994, among TLMD Partners II,
L.L.C., Bastion Capital Fund, L.P., Leon Black, Hernandez Partners, GRS
Partners II, L.P. and The Value Realization Fund, L.P.
10.2 Form of Letter Agreement with each of the Reporting Persons and TLMD
Partners II, L.L.C. together with guarantee of AIF II, L.P. and Artemis
America III, L.L.C.
10.3 Form of Pledge Agreement, dated December 21, 1994, between Hernandez
Partners and TLMD Partners II, L.L.C.
10.4 Agreement to Purchase Securities and Claims, dated December 21, 1994,
between Hernandez Partners and TLMD Partners II, L.L.C. and modification
of Purchase Agreement dated December 29, 1994.
10.5 Agreement to Purchase Securities and Claims, dated December 21, 1994,
between GRS Partners II, L.P. and TLMD Partners II, L.L.C.
10.6 Agreement to Purchase Securities and Claims, dated December 21, 1994,
between The Value Realization Fund, L.P. and TLMD Partners II, L.L.C.
99 Joint Filing Agreement among Hernandez Partners, GRS Partners II, L.P.
and The Value Realization Fund, L.P.
<PAGE>
EXHIBIT 2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
x
:
In re: Chapter 11
: Case No. 93-B-42967(JLG)
TELEMUNDO GROUP, INC., :
Debtor. :
x
---------------------------------------------------
TELEMUNDO GROUP, INC., DEBTOR,
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
----------------------------------------------------
New York, New York
April 29, 1994
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON
(A Partnership Including
Professional Corporations)
Attorneys for Telemundo Group, Inc.,
Debtor and Debtor-In-Possession
One New York Plaza
New York, New York 10004-1980
Attn: Brad Eric Scheler, Esq.
(212) 820-8000 (BES-4862)
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS .............................................................. 1
ARTICLE TWO
PROVISIONS FOR TREATMENT OF ADMINISTRATIVE
EXPENSES AND GAP CLAIMS
2.01. Administrative Expenses ................................ 13
2.02. Gap Claims ............................................. 13
ARTICLE THREE
PROVISIONS FOR TREATMENT OF PRIORITY TAX CLAIMS
3.01. Priority Tax Claims .................................... 13
3.02. Prepayment of Allowed Priority
Tax Claims ............................................. 14
ARTICLE FOUR
CLASSIFICATION OF CLAIMS AND INTERESTS
4.01. Priority Claims ........................................ 14
4.02. Secured Claims ......................................... 14
4.03. Unsecured Claims ....................................... 14
4.04. Interests .............................................. 14
ARTICLE FIVE
IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS
IMPAIRED AND NOT IMPAIRED BY THIS PLAN
5.01. Classes of Claims and Interests Not
Impaired by this Plan .................................. 15
5.02. Classes of Claims and Interests
Impaired by this Plan and Entitled
to Vote ................................................ 15
i
<PAGE>
5.03. Classes of Interests Impaired by this Plan and
Deemed to Reject this Plan ............................. 15
ARTICLE SIX
PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS
6.01. Priority Claims ........................................ 15
6.02. Miscellaneous Secured Claims ........................... 16
6.03. General Claims ......................................... 16
6.04. Convenience Claims ..................................... 16
6.05. Zero Coupon Note Claims ................................ 16
6.06. 13-5/8% Debenture Claims ............................... 16
6.07. 12% Debenture Claims ................................... 16
6.08. Telemundo Common Stock ................................. 20
6.09. Telemundo Options ...................................... 20
6.10. Telemundo Warrants and Other Equity
Interests in the Debtor ................................ 20
ARTICLE SEVEN
NEW INVESTMENT
7.01. Investment by Telemundo Common
Stockholders and Others ................................ 20
7.02. Payment to Reliance for Acting as
Standby Purchaser ...................................... 21
ARTICLE EIGHT
PROVISIONS OF DEBT AND OTHER SECURITIES TO BE ISSUED
PURSUANT TO THIS PLAN
8.01. New Senior Notes ....................................... 21
8.02. Reorganized Telemundo Common Stock ..................... 26
8.03. Creditor Warrants ...................................... 27
8.04. Reliance Warrants ...................................... 28
ii
<PAGE>
ARTICLE NINE
ACCEPTANCE OR REJECTION OF THIS PLAN; EFFECT OF
REJECTION BY ONE OR MORE IMPAIRED CLASSES OF CLAIMS
OR INTERESTS
9.01. Each Impaired Class Entitled
to Vote Separately ..................................... 29
9.02. Acceptance by a Class of Creditors ..................... 29
9.03. Acceptance of this Plan by Debtor ...................... 29
9.04. Rejection by a Class of Interests ...................... 29
9.05. Confirmation Notwithstanding Rejection by
a Class ................................................ 29
ARTICLE TEN
CONDITIONS PRECEDENT
10.01. Conditions to Confirmation ............................ 29
10.02. Conditions to Consummation ............................ 29
10.03. Effect of Nonoccurrence of the Conditions ............. 29
ARTICLE ELEVEN
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
11.01. Assumption and Rejection of Executory
Contracts ............................................. 32
11.02. Bar for Rejection Damages ............................. 32
ARTICLE TWELVE
DIRECTORS AND OFFICERS
12.01. Directors of Reorganized Telemundo .................... 32
12.02. Executive Officers of Reorganized
Telemundo ............................................. 32
iii
<PAGE>
ARTICLE THIRTEEN
IMPLEMENTATION OF THIS PLAN
13.01. Vesting of Property ................................... 29
13.02. Surrender and Cancellation of
Securities, Notes or Other
Instruments; Discharge of
Indenture Obligations ................................. 33
13.03. Undeliverable Distributions ........................... 29
13.04. Stock Option Plans .................................... 29
ARTICLE FOURTEEN
PROVISIONS COVERING DISTRIBUTIONS
14.01. Time of Distributions Under
this Plan ............................................. 34
14.02. No Fractional Securities .............................. 35
14.03. Allocation Between Principal
and Accrued Interest .................................. 35
ARTICLE FIFTEEN
PROCEDURES FOR RESOLVING DISPUTED
CLAIMS AND INTERESTS
15.01. Objections to and Estimation of Claims
and Interests ......................................... 35
15.02. Procedure ............................................. 36
15.03. Payments and Distributions With Respect to
Ultimately Allowed Claims ............................. 36
15.04. Timing of Payments and Distributions
With Respect to Disputed Claims ....................... 36
15.05. Retention and Enforcement of Causes
of Action ............................................. 36
ARTICLE SIXTEEN
COMPROMISE, SETTLEMENT AND DISTRIBUTIONS
WITH RESPECT TO CERTAIN CLAIMS
16.01. The Blair Settlement Agreement ........................ 37
16.02. The O & Y Letter Agreement ............................ 37
iv
<PAGE>
16.03. Additional Payment .................................... 37
ARTICLE SEVENTEEN
RELEASES, TERMINATIONS AND SETTLEMENTS OF CLAIMS
17.01. Discharge of All Claims and
Interests ............................................. 37
17.02. Guaranties and Claims of
Subordination ......................................... 42
17.03. Survival of Indemnification
Obligations ........................................... 43
17.04. Survival of Indemnification
Obligations to Indemnitees ............................ 43
ARTICLE EIGHTEEN
MISCELLANEOUS PROVISIONS
18.01. Bankruptcy Court to Retain
Jurisdiction .......................................... 45
18.02. Binding Effect of this Plan ........................... 46
18.03. Nonvoting Equity Securities ........................... 46
18.04. Authorization of Corporate Action ..................... 46
18.05. Withdrawal of this Plan ............................... 46
18.06. Captions .............................................. 47
18.07. Method of Notice ...................................... 47
18.08. Dissolution of Creditors'
Committee ............................................. 47
18.09. Section 1125(e) of the
Bankruptcy Code ....................................... 48
18.10. Continued Confidentiality
Obligations ........................................... 48
18.11. Amendments and Modifications
to Plan ............................................... 48
v
<PAGE>
EXHIBITS
Exhibit P-1 Blair Settlement Agreement
Exhibit P-2 Creditor Warrant Agreement
Exhibit P-3 New Senior Note Indenture
Exhibit P-4 1994 Stock Option Plan
Exhibit P-5 O & Y Letter Agreement
Exhibit P-6 Reliance Warrant Agreement
Exhibit P-7 Restated By-Laws of Telemundo Group, Inc.
Exhibit P-8 Restated Certificate of Incorporation of
Telemundo Group, Inc.
Exhibit P-9 Rights Plan
Exhibit P-10 Standby Purchase Agreement
Exhibit P-11 Registration Rights Agreement
vi
<PAGE>
DEBTOR'S SECOND AMENDED CHAPTER 11 PLAN
TELEMUNDO GROUP, INC., a Delaware corporation, the above-captioned
Debtor and Debtor-in-Possession, proposes the following Second Amended Chapter
11 Plan pursuant to section 1121(a) of the Bankruptcy Code:
ARTICLE ONE
DEFINITIONS
Whenever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and
each pronoun stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. Unless the context requires
otherwise, the following words and phrases shall have the meanings set forth
below when used in initially-capitalized form in this Plan:
Additional Payment: The additional payment to be made on the
------------------
Consummation Date calculated as provided herein and payable in the form of (a)
New Senior Notes in an aggregate principal amount equal to the interest on
$107,694,460 calculated at a rate per annum equal to 10.25% from and including
January 31, 1994 through the last day of the month immediately prior to the
Consummation Date plus (b) cash in an aggregate amount equal to the interest on
----
$107,694,460 calculated at a rate per annum equal to 10.25% from the first day
of the month in which the Consummation Date occurs through the Consummation
Date. Interest hereunder shall be computed on the basis of a 365-day year for
the actual number of days elapsed.
Administrative Expense: Collectively, (a) any cost or expense of
----------------------
administration of the Chapter 11 Case allowed under section 503(b) of the
Bankruptcy Code or (b) any fees or charges assessed against the Debtor's estate
under title 28, United States Code, section 1930.
Administrator: The person designated by Section 17.04(a) of this Plan
-------------
to administer payments required to be made by Reorganized Telemundo pursuant to
such Section 17.04(a) of this Plan.
AIF: Apollo Investment Fund, L.P., a Delaware limited
---
partnership.
AIF II: Apollo Investment Fund II, L.P., a Delaware limited
------
partnership.
<PAGE>
Allowed: With respect to Claims and Interests, (a) any Claim against
-------
or Interest in the Debtor, 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
has been or is hereafter listed in the schedules of liabilities filed by the
Debtor 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 has been interposed within the applicable period of time fixed by this
Plan, the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court or (ii)
such an objection has been so interposed and the Claim or Interest has been
allowed by a Final Order (but only to the extent so allowed).
Apollo: 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 Entity shall be deemed to be within the definition of
- -------- -------
Apollo when that Entity ceases to be an affiliate of 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
Apollo Advisors, L.P. or Lion, or any principal or affiliate of either of them.
Ballot: The form distributed, together with the Disclosure Statement,
------
to holders of Claims in classes that are impaired and entitled to vote on this
Plan for the purpose of indicating acceptance or rejection of this Plan.
Bankers Trust: Bankers Trust Company, as successor indenture
-------------
trustee under the 13-5/8% Indenture.
Bankruptcy Code: Title 11 of the United States Code, as amended
---------------
from time to time.
Bankruptcy Court: The United States Bankruptcy Court for the
----------------
Southern District of New York.
Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure, as
----------------
amended from time to time.
Bar Date: November 12, 1993.
--------
Blair Claim: The proof of Claim (claim No. 71) filed by the Blair
-----------
Entities with the Bankruptcy Court against the Debtor in the amount of
$157,705,704.87 in connection with the subject matter of the New York Action.
2
<PAGE>
Blair Entities: Any one or more of John Blair Communications, Inc.,
--------------
John Blair & Company, Inc., Blair Entertainment Corporation and JHR Acquisition
Corp.
Blair Settlement Agreement: That certain settlement agreement by and
--------------------------
between, inter alia, the Blair Entities, the Debtor, 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, attached hereto as
Exhibit P-1.
Business Day: Any day other than a Saturday, Sunday or "legal
------------
holiday", as such term is defined in Bankruptcy Rule 9006(a).
Buy-In Price Appreciation: An amount equal to the product of (i) $7
-------------------------
per share times (ii) a rate equal to 5% per annum applied for the period from
-----
January 31, 1994 through and including the day that is thirty (30) days after
the Confirmation Date.
Canceled Security: A security, note or other instrument evidencing a
-----------------
Claim or Interest outstanding immediately prior to the Consummation Date, which
security, note or other instrument represents a Claim or Interest that is
impaired by this Plan.
Cap: An amount not to exceed $2.5 million that shall be used to pay
---
Covered Expenses incurred by Indemnitees arising out of or incurred in
connection with Covered Claims.
Causes of Action: Any and all actions, causes of action (including,
----------------
without limitation, any causes of action on behalf of the Debtor, whether such
actions or causes of action arose before or after the Filing Date, including the
rights and powers of a trustee pursuant to sections 510, 542, 544, 545, 547,
548, 549, 550, 551, 552 and 553 of the Bankruptcy Code), liabilities, suits,
debts, sums of money, accounts, reckonings, covenants, contracts, controversies,
agreements, promises, rights, variances, trespasses, damages, judgments,
executions, claims, objections to claims and demands whatsoever, whether known
or unknown, in law, equity or otherwise.
Chapter 11 Case: The case under chapter 11 of the Bankruptcy Code
---------------
that was commenced on the Filing Date.
3
<PAGE>
Claim: Any right, that arises on or before July 30, 1993, the date of
-----
the order for relief in the Chapter 11 Case, to (a) payment from the Debtor,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (b) an equitable remedy for breach of performance if
such breach gives rise to a right to payment from the Debtor, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
Confirmation Date: The date upon which the Confirmation Order shall
-----------------
be entered on the docket maintained by the Clerk of the Bankruptcy Court with
respect to the Chapter 11 Case.
Confirmation Hearing: The hearing before the Bankruptcy Court on
--------------------
the confirmation of this Plan.
Confirmation Order: The order of the Bankruptcy Court confirming
------------------
this Plan.
Consummation Date: The date which is the first Business Day on which
-----------------
all conditions to consummation of this 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.
Continental: Continental Bank N.A., as indenture trustee under the
-----------
Zero Coupon Indenture.
Convenience Claim: Any General Claim against the Debtor that (i) is
-----------------
Allowed in an amount of $2,500 or less or (ii) is Allowed in an amount greater
than $2,500, but which is reduced to $2,500 by election of the holder thereof
pursuant to such holder's Ballot. All General Claims owned by a holder and any
successor, predecessor, assignee, assignor, parent, subsidiary or stockholder of
or to such holder shall be aggregated and treated as a single General Claim when
determining whether such Claims qualify as Convenience Claims.
CoreStates: CoreStates Bank, N.A., as successor indenture trustee
----------
under the 12% Indenture.
Covered Claims: Any claims, proceedings, suits or arbitrations,
--------------
pending or threatened, against an Indemnitee arising out of such Indemnitee's
actions taken or omissions as an officer or director of Telemundo including the
Gandal Litigation and the Profit Sharing Litigation.
4
<PAGE>
Covered Expenses: Litigation costs, attorneys' fees and settlement
----------------
amounts, but not including judgments, to the extent not covered by insurance, as
approved by the Administrator pursuant to this Plan.
Creditor: Any Entity that is the holder of a Claim against the Debtor
--------
that arose on or before the order for relief in the Chapter 11 Case or a Claim
against the Debtor's estate of the kind specified in section 502(f), 502(g),
502(h) or 502(i) of the Bankruptcy Code.
Creditor Litigations: Collectively, the cases captioned as follows:
--------------------
(i) Bankers Trust Company, as successor indenture trustee, v. Telemundo Group,
--------------------------------------------------------------------------
Inc., et. al., Supreme Court of the State of New York, County of New York, Index
- -------------
No. 93/103863; (ii) State Mutual Life Assurance Company of America and Executive
------------------------------------------------------------
Life Insurance Company of New York, In Rehabilitation v. Continental Bank N.A.,
- ------------------------------------------------------------------------------
United States District Court for the Southern District of New York, 92 Civ.
7032; (iii) Bankers Trust Company, as successor indenture trustee, v. Reliance
------------------------------------------------------------------
Group Holdings, Inc., et al., Supreme Court of the State of New York, County of
- ----------------------------
New York, Index No. 92-35022; and (iv) CoreStates Bank, N.A. v. Reliance Group
---------------------------------------
Holdings, Inc., et al., Supreme Court of the State of New York, County of New
- ----------------------
York, Index No. 92-35260.
Creditor Stock: The 8,550,000 shares of Reorganized Telemundo Common
--------------
Stock to be issued pursuant to the terms of this Plan.
Creditor Warrant Agreement: The Warrant Agreement, by and between
--------------------------
Reorganized Telemundo and ________, as warrant agent, substantially in the form
of Exhibit P-2 to this Plan, to be dated as of the Consummation Date.
Creditor Warrants: Warrants to purchase 643,462 shares of Series A
-----------------
Common Stock at $7 per share on the terms and conditions set forth in Section
8.03 of this Plan and the Creditor Warrant Agreement.
Creditors' Committee: The Official Committee of Unsecured Creditors
--------------------
in the Chapter 11 Case.
Debenture Claim: Any Claim in respect of any of the Debentures.
---------------
Debentures: The collective reference to the 12% Debentures, 13-5/8%
----------
Debentures, KSTS Notes, 1992 Zero Coupon Notes and 1993 Zero Coupon Notes.
5
<PAGE>
Debtor: Telemundo Group, Inc., a Delaware corporation.
------
Disclosure Statement: The second amended disclosure statement
--------------------
describing this Plan, prepared in accordance with section 1125 of the Bankruptcy
Code and approved by order of the Bankruptcy Court, distributed to the holders
of Claims whose votes with respect to this Plan will be solicited.
Disputed: With respect to Claims or Interests, any Claim or
--------
Interest that is not Allowed.
Distributable Cash: An amount of cash equal to $30,639,375.
------------------
Distributable Notes: New Senior Notes in the aggregate principal
-------------------
amount of $81,694,460; provided, however, that in no event shall the term
-------- -------
Distributable Notes include any New Senior Notes paid in respect of the
Additional Payment or any New Senior Notes distributed pursuant to the Blair
Settlement Agreement.
Entity: Any individual, corporation, limited or general partnership,
------
joint venture, association, joint stock company, limited liability company,
estate, entity, trust, trustee, United States Trustee, unincorporated
organization, government, governmental unit (as defined in the Bankruptcy Code),
agency or political subdivision thereof.
Equity Interests in the Debtor: The equity interests in the Debtor
------------------------------
existing prior to the Confirmation Date represented by Telemundo Common Stock,
Telemundo Options, Telemundo Warrants or any other options, warrants, calls,
subscriptions or other similar rights or other agreements, commitments or
outstanding securities obligating the Debtor to issue, transfer or sell any
shares of capital stock of the Debtor.
Estimated General Claims: General Claims that are estimated in
------------------------
accordance with section 502(c) of the Bankruptcy Code or Bankruptcy Rule
3018(a).
Filing Date: June 8, 1993.
-----------
Final Order: An order, ruling or judgment that is no longer subject
-----------
to review, reversal, modification or amendment by appeal or writ of certiorari.
----------
Gandal Litigation: The action styled Alvin Gandal v. Telemundo Group,
----------------- --------------------------------
Inc. et al., in the United States District Court for the District of Columbia,
- -----------
Civil Action No. CV89-2563 (Sporkin J.), and any related litigation and appeals.
6
<PAGE>
Gap Claim: Any claim which is entitled to priority in payment under
---------
section 507(a)(2) of the Bankruptcy Code.
General Claim: Any Unsecured Claim other than a Debenture Claim.
-------------
GUC Cash: The cash that would be distributable on the Consummation
--------
Date pursuant to Section 6.03 of this Plan to holders of General Claims that
have theretofore not been disallowed.
GUC Notes: The New Senior Notes that would be distributable on the
---------
Consummation Date pursuant to Section 6.03 of this Plan to holders of General
Claims that have theretofore not been disallowed.
GUC Stock: The shares of Series A Common Stock that would be
---------
distributable on the Consummation Date pursuant to Section 6.03 of this Plan to
holders of General Claims that have theretofore not been disallowed.
GUC Warrants: The Creditor Warrants that would be distributable on
------------
the Consummation Date pursuant to Section 6.03 of this Plan to holders of
General Claims that have theretofore not been disallowed.
Indemnitees: All present and former officers and directors of
-----------
Telemundo which officers and directors are not covered by Section 17.03 of this
Plan and have (i) filed with the Bankruptcy Court, prior to the Bar Date, a
proof of Claim for indemnification or contribution and (ii) prior to the
commencement of the Confirmation Hearing, withdrawn or allowed to be expunged
such proof of Claim with prejudice. No such withdrawal shall prejudice or limit
in any way the right to participate as a Indemnitee.
Indemnitees' Committee: The committee comprised of Indemnitees who
----------------------
are co-defendants to any litigation covered by Section 17.04(a) of this Plan.
Such committee shall act by majority vote.
Indenture Trustees: Collectively, Bankers Trust, Continental and
------------------
CoreStates.
Initial Stock Price: $7 per share.
-------------------
Interests: Any Equity Interests in the Debtor.
---------
KSTS Note Claims: The $2,595,984 (which amount includes $1,389,328 of
----------------
unpaid principal and $175,326
7
<PAGE>
of pre-Filing Date accrued interest with respect to the Note originally issued
to Opportunity Capital Corporation and $1,031,330 of unpaid principal with
respect to the Note originally issued to Alliance Credit Corporation) of Claims
represented by the KSTS Notes, and, in addition thereto, all Claims, if any,
based upon or arising out of the ownership, purchase or sale thereof.
KSTS Notes: The zero coupon notes, due August 14, 1992, issued on
----------
August 14, 1987 to Opportunity Capital Corporation and Alliance Credit
Corporation in connection with the purchase of station KSTS, which serves the
San Francisco/San Jose markets.
Lion: Lion Advisors, L.P., a Delaware limited partnership.
----
Market Rate: The rate of interest per annum (rounded upward, if
-----------
necessary, to the nearest whole 1/100 of 1%) equal to the coupon issued yield
equivalent (as determined by the Secretary of the Treasury) of the average
accepted auction price for the last auction of 90-day United States Treasury
bills settled at least fifteen (15) days prior to the Consummation Date.
Miscellaneous Secured Claims: Any and all Secured Claims against
----------------------------
the Debtor.
New Senior Note Indenture: The Indenture, by and between Reorganized
-------------------------
Telemundo and __________, as trustee, substantially in the form of Exhibit P-3
to this Plan, to be dated as of the Consummation Date, which will govern the New
Senior Notes.
New Senior Notes: All New Senior Notes issued under this Plan
----------------
pursuant to the terms of the New Senior Note Indenture.
New York Action: The action styled John Blair Communications, Inc.,
--------------- --------------------------------
et al. v. Reliance Capital Group, L.P., et al., (Shainswit, J.), Supreme Court
- ----------------------------------------------
of the State of New York, County of New York, Index No. 5204/88.
1994 Stock Option Plan: The stock option plan of Reorganized
----------------------
Telemundo, substantially in the form of Exhibit P-4 to this Plan.
1992 Zero Coupon Notes: The Zero Coupon Senior Notes due August 15,
----------------------
1992, issued and outstanding under the Zero Coupon Indenture.
1992 Zero Coupon Note Claims: The $110,146,068 (which amount includes
----------------------------
$99,975,000 of unpaid principal and $10,171,068 of pre-Filing Date accrued
inter-
8
<PAGE>
est) of Claims represented by the 1992 Zero Coupon Notes, and, in addition
thereto, all Claims, if any, based upon or arising out of the ownership,
purchase or sale thereof.
1993 Zero Coupon Notes: The Zero Coupon Senior Notes due August 15,
----------------------
1993, issued and outstanding under the Zero Coupon Indenture.
1993 Zero Coupon Note Claims: The $98,626,016 (consisting of unpaid
----------------------------
principal) of Claims represented by the 1993 Zero Coupon Notes, and, in addition
thereto, all Claims, if any, based upon or arising out of the ownership,
purchase or sale thereof.
O & Y Letter Agreement: That certain letter agreement, dated April
----------------------
25, 1994, by and between the Debtor and the 1290 Landlord, resolving and
settling all Claims related to and arising from the 1290 Lease, attached hereto
as Exhibit P-5.
Plan: This second amended chapter 11 plan of the Debtor, filed with
----
Bankruptcy Court on April 29, 1994, as amended or modified from time to time
pursuant to Section 18.11 of this Plan and applicable provisions of the
Bankruptcy Code and the Bankruptcy Rules.
Post-GUC Stock Distribution: An amount, expressed in dollars, equal
---------------------------
to the product of (a) the number of shares of Creditor Stock less the number of
----
shares of GUC Stock multiplied by (b) the Initial Stock Price.
---------- --
Priority Claim: Any Claim, other than a Priority Tax Claim, an
--------------
Administrative Expense or a Gap Claim, which is entitled to priority in payment
under section 507(a) of the Bankruptcy Code.
Priority Creditor: Any Creditor that holds a Priority Claim.
-----------------
Priority Tax Claim: Any Claim which is entitled to priority
------------------
in payment under section 507(a)(7) of the Bankruptcy Code.
Profit Sharing Litigation: The action styled John Blair
------------------------- ----------
Communications, Inc. Profit Sharing Plan et al. v. Telemundo Group, Inc. Profit
- -------------------------------------------------------------------------------
Sharing Plan, et al., in the United States District Court for the Southern
- --------------------
District of New York, Civil Action No. 90 Civ. 5499 (Cedarbaum, J.), and any
related litigation and appeals.
Reliance: Reliance Insurance Company, a Pennsylvania corporation.
--------
9
<PAGE>
Reliance Entities: Any one or more of Reliance Capital Group, L.P.,
-----------------
Reliance Associates, L.P., Reliance Capital Group, Inc., Reliance Group
Holdings, Inc. and Reliance Insurance Company.
Reliance Warrant Agreement: The Warrant Agreement, by and between
--------------------------
Reorganized Telemundo and Reliance, substantially in the form of Exhibit P-6 to
this Plan, to be dated as of the Consummation Date.
Reliance Warrants: Warrants to purchase 416,667 shares of Series A
-----------------
Common Stock on the terms and conditions set forth in Section 8.04 of this Plan
and the Reliance Warrant Agreement.
Reorganized Telemundo: Telemundo from and after the Consummation
---------------------
Date.
Reorganized Telemundo Common Stock: The collective reference to the
----------------------------------
shares of Series A and Series B Common Stock, par value $.01 per share, of
Reorganized Telemundo.
Restated By-Laws: The by-laws of Reorganized Telemundo, as restated
----------------
pursuant to this Plan, substantially in the form of Exhibit P-7 to this Plan.
Restated Certificate of Incorporation: The certificate of
-------------------------------------
incorporation of Reorganized Telemundo, as restated pursuant to this Plan,
substantially in the form of Exhibit P-8 to this Plan.
Rights: The rights to purchase shares of Series A Common Stock to be
------
issued under the Rights Plan and in accordance with Section 7.01 of this Plan.
Rights Plan: The rights plan, substantially in the form of Exhibit
-----------
P-9 to this Plan.
Rights Record Date: The record date for the receipt of Rights under
------------------
the Rights Plan as set forth in the Confirmation Order, which record date shall
be on or prior to the Confirmation Date.
Secured Claim: Any Claim that is an allowed secured Claim under
-------------
section 506(a) of the Bankruptcy Code.
Series A Common Stock: The shares of Series A common stock of
---------------------
Reorganized Telemundo to be issued pursuant to the terms of this Plan having the
relative rights as set forth in the Restated Certificate of Incorporation.
Series B Common Stock: The shares of Series B common stock of
---------------------
Reorganized Telemundo to be issued pursu-
10
<PAGE>
ant to the terms of this Plan having the relative rights as set forth in the
Restated Certificate of Incorporation.
Standby Purchase Agreement: The standby purchase agreement by and
--------------------------
between the Debtor and Reliance, substantially in the form of Exhibit P-10 to
this Plan.
Stock Option Plan: The 1987 stock option plan of the Debtor, as
-----------------
amended as of April 4, 1991.
Telemundo: The Debtor.
---------
Telemundo Common Stock: The shares of common stock, par value $.01
----------------------
per share, of the Debtor, including all Claims, if any, arising from or in
connection with the purchase or sale thereof.
Telemundo Options: The options to purchase Telemundo Common Stock
-----------------
issued pursuant to the Stock Option Plan, which are outstanding from time to
time, including all Claims, if any, arising from or in connection with the
purchase or sale thereof.
Telemundo Preferred Stock: The 10,000,000 shares, par value $.01 per
-------------------------
share, of the Debtor's authorized but unissued preferred stock.
Telemundo Warrants: The warrants to purchase Telemundo Common Stock
------------------
which are outstanding from time to time, including all Claims, if any, arising
from or in connection with the purchase or sale thereof.
13-5/8% Debentures: The 13-5/8% Subordinated Debentures due January
------------------
15, 1998, issued and outstanding under the 13-5/8% Indenture.
13-5/8% Debenture Claims: The $59,408,587 (which amount includes
------------------------
$47,206,000 of unpaid principal and $12,202,587 of pre-Filing Date accrued
interest) of Claims represented by the 13-5/8% Debentures, and, in addition
thereto, all Claims, if any, based upon or arising out of the ownership,
purchase or sale thereof.
13-5/8% Indenture: The Indenture, dated December 15, 1982, as
-----------------
amended, by and between the Debtor (as successor in interest to John Blair &
Company) and Bankers Trust, as successor indenture trustee to Manufacturers
Hanover Trust Company, governing the 13-5/8% Debentures.
Total Bondholder Distribution: An aggregate amount, expressed in
-----------------------------
dollars, equal to the sum of (a) the amount of the Zero Coupon Cash
Distribution, (b) the aggre-
11
<PAGE>
gate principal amount of the Zero Coupon Note Distribution, and (c) the
aggregate amount of the Post-GUC Stock Distribution.
1290 Landlord: 1290 Associates, as successor-in-interest to O & Y
-------------
Equity Corp., Olympia & York Holdings Corporation and Fame Associates.
1290 Lease: That certain lease agreement, dated as of April 1, 1983,
----------
as amended, by and between the Debtor and the 1290 Landlord, concerning certain
premises located at 1290 Avenue of the Americas, New York, New York.
1290 Subleases: Collectively, the sublease agreements by and between
--------------
the Debtor, 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.
12% Debentures: The 12% Junior Subordinated Discount Debentures due
--------------
December 24, 2001, issued and outstanding under the 12% Indenture.
12% Debenture Claims: The $38,224,828 (which amount includes
--------------------
$32,541,000 of unpaid principal and $5,683,828 of pre-Filing Date accrued
interest) of Claims represented by the 12% Debentures, and, in addition thereto,
all Claims, if any, based upon or arising out of the ownership, purchase or sale
thereof.
12% Indenture: The Indenture, dated December 24, 1986, as amended,
-------------
between the Debtor (as successor in interest to JB Acquisition Corp.) and
CoreStates, as successor indenture trustee to The Philadelphia National Bank,
governing the 12% Debentures.
Ultimately Allowed Claim: Any Disputed Claim to the extent that it
------------------------
becomes an Allowed Claim in accordance with Article Fifteen of this Plan.
Unsecured Claim: Any Claim other than a Miscellaneous Secured Claim,
---------------
an Administrative Expense, a Gap Claim, a Convenience Claim, a Priority Claim, a
Priority Tax Claim, the Blair Claim or any Claims of the Blair Entities arising
under or relating to the Blair Settlement Agreement.
Zero Coupon Cash Distribution: An amount of cash equal to (i) the
-----------------------------
Distributable Cash less (ii) the GUC Cash.
----
Zero Coupon Distribution Percentage: 88.3505%.
-----------------------------------
12
<PAGE>
Zero Coupon Indenture: The Indenture, dated August 15, 1987, as
---------------------
amended, by and between the Debtor and Continental, as indenture trustee,
governing the 1992 Zero Coupon Notes and the 1993 Zero Coupon Notes.
Zero Coupon Note Claim: Any Debenture Claim other than a 13-5/8%
----------------------
Debenture Claim or a 12% Debenture Claim.
Zero Coupon Note Distribution: An aggregate principal amount of New
-----------------------------
Senior Notes equal to (i) the aggregate principal amount of the Distributable
Notes less (ii) the aggregate principal amount of the GUC Notes.
----
Zero Coupon Notes: Collectively, the KSTS Notes, the 1992 Zero
-----------------
Coupon Notes, and the 1993 Zero Coupon Notes.
Zero Coupon Stock: An amount of shares of Series B Common Stock equal
-----------------
to (A) the quotient of (x) an amount equal to (i) the product of (a) the Total
Bondholder Distribution multiplied by (b) the Zero Coupon Distribution
---------- --
Percentage less (ii) the amount of the Zero Coupon Cash Distribution less (iii)
---- ----
the aggregate principal amount of the Zero Coupon Note Distribution divided by
------- --
(y) the Initial Stock Price, less
----
(B) 60,000 shares.
ARTICLE TWO
PROVISIONS FOR TREATMENT OF ADMINISTRATIVE
EXPENSES AND GAP CLAIMS
2.01. Administrative Expenses. Each Administrative Expense that the
-----------------------
Debtor does not dispute or which has theretofore been allowed by the Bankruptcy
Court shall be paid in full in cash on the Consummation Date, or on such other
terms as the Debtor and the holder of such Administrative Expense may agree;
provided, however, that each Administrative Expense with respect to liabilities
- -------- -------
incurred in the ordinary course of business of the Debtor after the entry of the
order for relief in the Chapter 11 Case shall be assumed by Reorganized
Telemundo on the Consummation Date and paid by Reorganized Telemundo in
accordance with the terms and conditions of the particular transactions giving
rise to such liabilities and any agreements relating thereto; provided, further,
-------- -------
that Administrative Expenses representing compensation or reimbursement of
expenses awarded by the Bankruptcy Court under sections 503(b)(2), 503(b)(3) or
503(b)(4) of the Bankruptcy Code shall be paid by Reorganized Telemundo (a) in
full in cash
13
<PAGE>
in such amounts as are allowed by the Bankruptcy Court upon the later of (i) the
Consummation Date or (ii) the date upon which the Bankruptcy Court enters an
order allowing such Administrative Expense or (b) upon such other terms as may
be agreed upon by Reorganized Telemundo and the holder of such Administrative
Expense Claim.
2.02. Gap Claims. Each holder of an Allowed Gap Claim shall be paid
----------
in full in cash on the Consummation Date or on such other terms as the Debtor
and the holder of such Allowed Gap Claim may agree.
ARTICLE THREE
PROVISIONS FOR TREATMENT OF PRIORITY TAX CLAIMS
3.01. Priority Tax Claims. Each holder of an Allowed Priority Tax Claim
-------------------
shall be paid the full amount of its Allowed Priority Tax Claim as follows:
(a) 10% on each anniversary of the Consummation Date which occurs
prior to the sixth anniversary of the date of assessment of such Allowed
Priority Tax Claim, together with accrued and unpaid interest on the unpaid
balance of such Allowed Priority Tax Claim from and after the Consummation
Date through such anniversary at the Market Rate; and
(b) the balance of its Allowed Priority Tax Claim on the sixth
anniversary of the date of assessment of such Allowed Priority Tax Claim,
together with any unpaid interest from the Consummation Date accrued
through the date of such anniversary at the Market Rate.
3.02. Prepayment of Allowed Priority Tax Claims. Notwithstanding the
-----------------------------------------
foregoing, at any time on or after the Consummation Date, Reorganized Telemundo
may, at its option and in its sole discretion, prepay any Allowed Priority Tax
Claim, in whole or in part, without penalty, together with unpaid interest
accrued thereon from the Consummation Date to the date of prepayment at the
Market Rate.
ARTICLE FOUR
CLASSIFICATION OF CLAIMS AND INTERESTS
Pursuant to section 1122 of the Bankruptcy Code, set forth below is a
designation of classes of Claims and Interests. Administrative Expenses, Gap
Claims and Priority Tax Claims of the kinds specified in sections 507(a)(1),
507(a)(2) and 507(a)(7) of the Bankruptcy Code (set forth in
14
<PAGE>
Articles Two and Three, above) have not been classified and are excluded from
the following classes in accordance with section 1123(a)(1) of the Bankruptcy
Code.
4.01. Priority Claims.
----------------
Class 1. Class 1 consists of all Allowed Priority Claims.
-------
4.02. Secured Claims.
---------------
Class 2. Class 2 consists of all Allowed Miscellaneous Secured
-------
Claims.
4.03. Unsecured Claims.
-----------------
Class 3. Class 3 consists of all Allowed General Claims.
-------
Class 4. Class 4 consists of all Allowed Convenience Claims.
-------
Class 5. Class 5 consists of all Allowed Zero Coupon Note
-------
Claims.
Class 6. Class 6 consists of all Allowed 13-5/8% Debenture
-------
Claims.
Class 7. Class 7 consists of all Allowed 12% Debenture Claims.
-------
4.04. Interest.
---------
Class 8. Class 8 consists of all Allowed Equity Interests in
-------
the Debtor represented by shares of Telemundo Common Stock.
Class 9. Class 9 consists of all Allowed Equity Interests in
-------
the Debtor represented by Telemundo Options.
Class 10. Class 10 consists of all Allowed Equity Interests in
--------
the Debtor represented by Telemundo Warrants.
15
<PAGE>
ARTICLE FIVE
IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED AND NOT IMPAIRED BY THIS PLAN
5.01. Classes of Claims and Interests Not Impaired by this Plan.
---------------------------------------------------------
Priority Claims (Class 1), Miscellaneous Secured Claims (Class 2) and
Convenience Claims (Class 4) are not impaired by this Plan. Under section
1126(f) of the Bankruptcy Code, the holders of such Claims are conclusively
presumed to accept this Plan, and the votes of such holders will not be
solicited.
5.02. Classes of Claims and Interests Impaired by this Plan and
---------------------------------------------------------
Entitled to Vote. General Claims (Class 3), Zero Coupon Note Claims (Class 5),
- ----------------
13-5/8% Debenture Claims (Class 6) and 12% Debenture Claims (Class 7) are
impaired by this Plan and the holders of such Claims are entitled to vote to
accept or reject this Plan. Notwithstanding the foregoing, each holder of a
Disputed Claim in Classes 3, 5, 6 or 7 is not entitled to vote unless otherwise
ordered by the Bankruptcy Court.
5.03. Classes of Interests Impaired by this Plan and Deemed to Reject
---------------------------------------------------------------
this Plan. Telemundo Common Stock (Class 8), Telemundo Options (Class 9) and
- ---------
Telemundo Warrants (Class 10) are impaired and do not receive or retain any
property under this Plan. Under section 1126(g) of the Bankruptcy Code, the
holders of such Interests are conclusively presumed to reject this Plan and the
votes of such holders will not be solicited.
ARTICLE SIX
PROVISIONS FOR TREATMENT OF
CLAIMS AND INTERESTS
PRIORITY CLAIMS
- ---------------
6.01. Priority Claims (Class 1). On the Consummation Date, each
-------------------------
holder of an Allowed Priority Claim shall be entitled to receive the full amount
of its Allowed Priority Claim in cash in full satisfaction, release and
discharge of such Allowed Priority Claim. Class 1 is not impaired.
SECURED CLAIMS
- --------------
6.02. Miscellaneous Secured Claims (Class 2). With respect to
--------------------------------------
each Allowed Miscellaneous Secured Claim, at the sole option of the Debtor, (a)
the legal, equitable and contractual rights of the holder of the Allowed
Miscellaneous Secured Claim shall remain unaltered; (b) the holder
16
<PAGE>
of such Claim shall be entitled to receive the full amount of its Allowed
Miscellaneous Secured Claim in cash on the Consummation Date; or (c) the Debtor
shall provide other treatment that will render the Allowed Miscellaneous Secured
Claim unimpaired under section 1124 of the Bankruptcy Code. Class 2 is not
impaired.
UNSECURED CLAIMS
- ----------------
6.03. General Claims (Class 3).
------------------------
(a) Treatment. On the Consummation Date, each holder of an
---------
Allowed General Claim shall be entitled to receive its pro rata share
(determined by dividing the amount of such holder's Allowed General Claim by
the total amount of Unsecured Claims that have not been disallowed as of the
Consummation Date) of the following:
(i) the Distributable Cash;
(ii) the Distributable Notes;
(iii) the Creditor Stock (which shall be distributed
to the holders of Allowed General Claims as
Series A Common Stock); and
(iv) the Creditor Warrants.
(b) Full Settlement. The distributions provided in this
---------------
Section 6.03 are in full settlement, release and discharge of the holder's
Allowed General Claim and all other Claims, if any, of such holder directly or
indirectly related to or arising out of the transactions, agreements or
instruments upon which such Allowed General Claim was based. Class 3 is
impaired.
6.04. Convenience Claims (Class 4). On the Consummation Date,
----------------------------
each holder of an Allowed Convenience Claim shall be entitled to receive the
full amount of its Allowed Convenience Claim in cash. Class 4 is not impaired.
6.05. Zero Coupon Note Claims (Class 5).
---------------------------------
(a) Treatment. The Zero Coupon Note Claims are Allowed in
---------
the amount of $211,368,068. On the Consummation Date each holder of an Allowed
Zero Coupon Note Claim shall be entitled to receive its pro rata share
(determined by dividing the amount of such holder's Allowed Zero Coupon Note
Claim by the total amount of Allowed Zero Coupon Note Claims) of: (A) (i) the
Zero Coupon Cash Distribution; (ii) the Zero Coupon Note Distribution; and (iii)
the Zero Coupon Stock and (B) if Class 7 does not accept this Plan,
17
<PAGE>
an amount of Creditor Warrants equal to the product of (i) the aggregate amount
of Creditor Warrants to be distributed under this Plan less the GUC Warrants
----
multiplied by (ii) .70.
- ---------- --
(b) Subordination. If there had not been any seniority
-------------
and/or subordination rights among Classes 5, 6 and 7, each holder of an Allowed
Zero Coupon Note Claim would have been entitled to receive on the Consummation
Date its pro rata share (determined by dividing the amount of such holder's
Allowed Zero Coupon Note Claim by the total amount of Unsecured Claims that have
not been disallowed as of the Consummation Date) of the consideration described
in Sections 6.03(a)(i)-(iv) of this Plan. However, in full and complete
settlement, release, satisfaction and discharge of all seniority and
subordination rights and other claims among the holders of Claims against the
Debtor relating in any manner whatsoever to the Chapter 11 Case, each holder of
an Allowed Zero Coupon Note Claim will be entitled to receive the distributions
provided for in Section 6.05(a) of this Plan.
(c) Full Settlement. The distributions provided in this
---------------
Section 6.05 are in full settlement, release and discharge of each holder's
Allowed Zero Coupon Note Claim and all other Claims, if any, of such holder
directly or indirectly related to or arising out of the transactions, agreements
or instruments upon which such Allowed Zero Coupon Note Claim was based.
(d) Indenture Trustee Expenses. Continental shall be
--------------------------
entitled to payment in full, in cash, for its reasonable fees, costs and
expenses as provided under Section 17.01 of this Plan. Class 5 is impaired.
6.06. 13-5/8% Debenture Claims (Class 6).
----------------------------------
(a) Treatment. The 13-5/8% Debenture Claims are Allowed in
---------
the amount of $59,408,587. On the Consummation Date, subject to Section 6.06
(b) of this Plan, each holder of an Allowed 13-5/8% Debenture Claim shall be
entitled to receive its pro rata share (determined by dividing the amount of
such holder's Allowed 13-5/8% Debenture Claim by the total amount of Allowed
13-5/8% Debenture Claims) of: (A) an amount of shares of Series A Common Stock
equal to (i) the aggregate amount of Creditor Stock to be distributed under this
Plan, less (ii) the amount of the GUC Stock, less (iii) the amount of the Zero
---- ----
Coupon Stock and (B) if Class 7 does not accept this Plan, an amount of Creditor
Warrants equal to the product of (i) the aggregate amount of Creditor Warrants
to be distributed under this Plan less the GUC Warrants multiplied by (ii) .30.
---- ---------- --
18
<PAGE>
(b) Purchase by Reliance. On the Consummation Date,
--------------------
Reliance shall purchase from the holders of the Allowed 13-5/8% Debenture Claims
(on a pro rata basis (as defined in Section 6.06(a)), and the holders of the
Allowed 13-5/8% Debenture Claims shall sell to Reliance, 300,000 shares of
Series A Common Stock at a purchase price per share of $7, or an aggregate
purchase price of $2,100,000 in cash. Such purchase and sale shall be
accomplished by Reliance delivering $2,100,000 in immediately available funds to
Bankers Trust and Bankers Trust delivering to Reliance, in exchange therefor,
300,000 shares of Series A Common Stock which Bankers Trust will have received
pursuant to Section 14.01 of this Plan. The purchase price per share referred to
in the first sentence of this paragraph shall be increased by the Buy-In Price
Appreciation.
(c) Treatment if Class 7 does not Accept this Plan. If the
----------------------------------------------
class of Allowed 12% Debenture Claims does not accept this Plan, each holder of
an Allowed 13-5/8% Debenture Claim will be entitled to receive, in addition to
the distributions provided for in Sections 6.06(a) and (b) of this Plan, its pro
rata share (determined by dividing the amount of such holder's Allowed 13-5/8%
Debenture Claim by the total amount of Allowed 13-5/8% Debenture Claims) of
Rights to purchase up to 1,450,000 shares of Series A Common Stock. However, in
consideration for the holders of Telemundo Common Stock not objecting to, and
otherwise helping facilitate, the confirmation of this Plan, the holders of
Allowed 13-5/8% Debenture Claims hereby direct the Debtor to issue the Rights to
the holders of Telemundo Common Stock as provided in Section 7.01 of this Plan.
(d) Subordination. If there had not been any seniority
-------------
and/or subordination rights among Classes 5, 6 and 7, each holder of an Allowed
13-5/8% Debenture Claim would have been entitled to receive on the Consummation
Date its pro rata share (determined by dividing the amount of such holder's
Allowed 13-5/8% Debenture Claim by the total amount of Unsecured Claims that
have not been disallowed as of the Consummation Date) of the consideration
described in Sections 6.03(a)(i)-(iv) of this Plan. However, in full and
complete settlement, release, satisfaction and discharge of all seniority and
subordination rights and other claims among the holders of Claims against the
Debtor relating in any manner whatsoever to the Chapter 11 Case, each holder of
an Allowed 13-5/8% Debenture Claim will be entitled to receive the distributions
provided for in Sections 6.06(a), (b) and (c) of this Plan.
(e) Full Settlement. Except as provided in clause (c)
---------------
above, the distributions provided in this Section 6.06 are in full settlement,
release and discharge of each
19
<PAGE>
holder's Allowed 13-5/8% Debenture Claim and all other Claims, if any, of such
holder directly or indirectly related to or arising out of the transactions,
agreements or instruments upon which such Allowed 13-5/8% Debenture Claim was
based.
(f) Indenture Trustee Expenses. Bankers Trust shall be
--------------------------
entitled to payment in full, in cash, for its reasonable fees, costs and
expenses as provided under Section 17.01 of this Plan. Class 6 is impaired.
6.07. 12% Debenture Claims (Class 7).
------------------------------
(a) Treatment. The 12% Debenture Claims are allowed in the
---------
amount of $38,244,828. If Class 7 accepts this Plan, on the Consummation Date,
each holder of an Allowed 12% Debenture Claim shall be entitled to receive its
pro rata share (determined by dividing the amount of such holder's Allowed 12%
Debenture Claim by the total amount of Allowed 12% Debenture Claims) of an
amount of Creditor Warrants equal to (i) the total number of Creditor Warrants
to be distributed under this Plan less (ii) the number of GUC Warrants.
----
(b) Treatment if Class 7 does not Accept this Plan. If this
----------------------------------------------
Plan is not accepted by the class of Allowed 12% Debenture Claims, all 12%
Debentures shall be canceled and become null and void, and the holders of
Allowed 12% Debenture Claims shall not be entitled to receive any distributions
under this Plan.
(c) Subordination. If there had not been any seniority
-------------
and/or subordination rights among Classes 5, 6 and 7, each holder of an Allowed
12% Debenture Claim would have been entitled to receive on the Consummation Date
its pro rata share (determined by dividing the amount of such holder's Allowed
12% Debenture Claim by the total amount of Unsecured Claims that have not been
disallowed as of the Consummation Date) of the consideration described in
Sections 6.03(a)(i)-(iv) of this Plan. However, in full and complete settlement,
release, satisfaction and discharge of all seniority and subordination rights
and other claims among the holders of Claims against the Debtor relating in any
manner whatsoever to the Chapter 11 Case and provided that this Plan has been
accepted by the class of Allowed 12% Debenture Claims in accordance with section
1126(c) of the Bankruptcy Code and Bankruptcy Rules 3017 and 3018, each holder
of an Allowed 12% Debenture Claim will be entitled to receive the distributions
provided for in Section 6.07(a) of this Plan.
(d) Full Settlement. The distributions and other treatment
---------------
provided in this Section 6.07 are in full settlement, release and discharge of
each holder's Allowed
20
<PAGE>
12% Debenture Claim and all other Claims, if any, of such holder directly or
indirectly related to or arising out of the transactions, agreements or
instruments upon which such Allowed 12% Debenture Claim was based.
(e) Indenture Trustee Expenses. CoreStates shall be
--------------------------
entitled to payment in full, in cash, for its reasonable fees, costs and
expenses as provided under Section 17.01 of this Plan. Class 7 is impaired.
INTERESTS
- ---------
6.08. Telemundo Common Stock (Class 8). On the Consummation
--------------------------------
Date, any and all Telemundo Common Stock and any and all certificates
representing Telemundo Common Stock shall be canceled and become null and void,
and the holders of Telemundo Common Stock shall not be entitled to receive any
distributions under this Plan. Pursuant to Section 7.01 of this Plan, and with
the express agreement of the holders of Allowed Zero Coupon Note Claims, holders
of Telemundo Common Stock as of the Rights Record Date will receive Rights to
purchase up to 1,450,000 shares of Series A Common Stock in the aggregate on the
terms and conditions set forth in the Rights Plan. Class 8 is impaired.
6.09. Telemundo Options (Class 9). On the Consummation Date,
---------------------------
any and all Telemundo Options shall be canceled and become null and void, and
the holders of Telemundo Options shall not be entitled to receive any
distributions under this Plan. Class 9 is impaired.
6.10. Telemundo Warrants and Other Equity Interests in the Debtor
-----------------------------------------------------------
(Class 10). On the Consummation Date, any and all Telemundo Warrants and Equity
- ----------
Interests in the Debtor (other than Telemundo Common Stock and Telemundo
Options, which are treated in Classes 8 and 9) shall be canceled and become null
and void, and the holders of Telemundo Warrants and Equity Interests in the
Debtor (other than Telemundo Common Stock and Telemundo Options, which are
treated in Classes 8 and 9) shall not be entitled to receive any distributions
under this Plan. Class 10 is impaired. The Telemundo Warrants expired on
August 25, 1993 pursuant to their terms.
21
<PAGE>
ARTICLE SEVEN
NEW INVESTMENT
7.01. Investment by Telemundo Common Stockholders and Others.
------------------------------------------------------
Pursuant to the Rights Plan, and with the express agreement of the holders of
Allowed Zero Coupon Note Claims, each holder of Telemundo Common Stock as of the
Rights Record Date shall receive Rights to purchase, at $7 per share, such
holder's pro rata share (determined by reference to the ratio between the number
of such holder's shares of Telemundo Common Stock and the aggregate outstanding
number of shares of Telemundo Common Stock, in each case as of the Rights Record
Date) of up to 1,450,000 shares of Series A Common Stock and the Blair Entities
shall receive Rights to purchase 285,000 shares of Series A Common Stock. The
Rights, which will not be issued prior to the Confirmation Date, shall not be
transferable (other than as expressly set forth in the Rights Plan, the Blair
Settlement Agreement or as ordered by the Bankruptcy Court) and shall be
exercisable through the date that is thirty (30) days after the Confirmation
Date (other than as set forth in the Blair Settlement Agreement). To the extent
that any Rights expire unexercised, Reliance will be obligated, pursuant to the
Standby Purchase Agreement, to purchase, at $7 per share, a number of shares of
Series A Common Stock corresponding to the number of such shares subject to the
unexercised Rights. For purposes of the preceding sentence, unexercised Rights
shall not include Rights transferred by Reliance Capital Group, L.P. to the
Debtor and extinguished by the Debtor pursuant to the terms and conditions of
the Blair Settlement Agreement and the Rights Plan. The purchase price set
forth in the first and third sentences of this Section 7.01 shall be increased
by the Buy-In Price Appreciation.
7.02. Payment to Reliance for Acting as Standby Purchaser. In
---------------------------------------------------
consideration for entering into the Standby Purchase Agreement, and with the
express agreement of the holders of Allowed Zero Coupon Note Claims, on the
Consummation Date, the Debtor will issue the Reliance Warrants, having the terms
and conditions set forth in Section 8.04 of this Plan and the Reliance Warrant
Agreement, to Reliance.
ARTICLE EIGHT
PROVISIONS OF DEBT AND OTHER SECURITIES TO
BE ISSUED PURSUANT TO THIS PLAN
8.01. New Senior Notes. The following is a summary of certain of
----------------
the principal economic terms of the New Senior Notes which shall be issued by
Reorganized Telemundo under this Plan substantially in the form contained in the
New
22
<PAGE>
Senior Note Indenture. A copy of the New Senior Note Indenture is attached to
this Plan as Exhibit P-3, and the terms of the New Senior Note Indenture are
incorporated herein by reference as if fully set forth at length. The following
summary is qualified in its entirety by reference to Exhibit P-3.
(i) Issuer:
Reorganized Telemundo.
(ii) Aggregate
Principal
Amount: $107,694,460 plus the New Senior
----
Note component of the Additional Payment.
(iii) Final Maturity:
Seven (7) years from the Consummation Date.
(iv) Interest Rate:
10.25% per annum, payable semi-annually, in
cash, with such payments commencing
approximately six months after the
Consummation Date.
(v) Security: The New Senior Notes will be unsecured
obligations of Reorganized Telemundo.
(vi) Three-Year
Call Protection:
Reorganized Telemundo may not redeem the New
Senior Notes at any time from the
Consummation Date through the third
anniversary of the Consummation Date.
(vii) Optional Market
Purchases:
Reorganized Telemundo shall have the right,
at any time after the Consummation Date, to
acquire New Senior Notes through open market
purchases, tender offers, and other market
transactions.
23
<PAGE>
(viii) Optional
Prepayment:
Reorganized Telemundo will have the right to
prepay the New Senior Notes, at any time after
the third anniversary of the Consummation Date,
in whole or in part, by payment of the accrued
and unpaid interest thereon to the date of
prepayment and payment of the following prices
for each $100 of principal amount thereof:
<TABLE>
<CAPTION>
Year Price
------- ---------
<S> <C>
4 $105
5 $103
6 $101
</TABLE>
(ix) Mandatory
Prepayment:
In the event of a "change of control" (as
defined in the New Senior Note Indenture),
Reorganized Telemundo shall prepay the New
Senior Notes, by payment of the accrued and
unpaid interest thereon to the date of
prepayment and payment of $101 for each $100 of
principal amount thereof; provided, however,
-------- -------
that Apollo shall execute and deliver a waiver
letter to Reorganized Telemundo specifying that
for as long as Apollo or any of its affiliates
holds any New Senior Notes, Apollo will not
benefit (either by receipt of premium or
acceleration of the New Senior Notes held by
Apollo or any of its affiliates) from the
"change of control" clause if a "change of
control" results solely from the sale of
Reorganized Telemundo Common Stock by Apollo
and/or its affiliates.
24
<PAGE>
(x) Sinking Fund:
On each of the fifth, sixth and seventh
anniversaries of the Consummation Date,
Reorganized Telemundo will make mandatory
sinking fund payments with respect to the New
Senior Notes designed to retire the following
principal amount of the New Senior Notes:
<TABLE>
<CAPTION>
Year
Amount Principal
------ ---------
<S> <C>
5 $25,000,000
6 $25,000,000
7 Balance
</TABLE>
Reorganized Telemundo may credit against such
required sinking fund obligations, in the order
of the scheduled sinking fund payments with
respect to the New Senior Notes set forth above,
the principal amount of any and all New Senior
Notes acquired by Reorganized Telemundo through
open market purchases, tender offers, and other
market transactions.
(xi) Covenants:
Customary covenants for public debt, binding
Reorganized Telemundo and all direct and
indirect subsidiaries, taken as a whole,
including limitations on the incurrence of
additional indebtedness; limitations on
affiliated transactions; limitations on liens;
maintenance of corporate existence; limitations
on mergers/sales; limitations on investments;
restrictions on certain payments; dividend
restrictions; change of control; and asset sales
tests.
25
<PAGE>
8.02 Reorganized Telemundo Common Stock. The following is a summary of
----------------------------------
certain of the principal terms of the Reorganized Telemundo Common Stock, which
shall be issued by Reorganized Telemundo under this Plan and having the relative
rights as set forth in the Restated Certificate of Incorporation. A copy of the
Restated Certificate of Incorporation is attached to this Plan as Exhibit P-8.
The following summary is qualified in its entirety by reference to Exhibit P-8
including the definitions therein of certain terms not defined herein.
(i) Issuer:
Reorganized Telemundo.
(ii) Aggregate Number
of Shares to be
issued on the
Consummation
Date:
10,000,000
(iii) Class:
Reorganized Telemundo Common Stock, par value
$.01 per share, will be issued in one class
comprised of two series, Series A and Series B.
Pursuant to the terms of this Plan, on the
Consummation Date, the Series A Common Stock
will be issued to the holders of Allowed General
Claims, holders of Allowed 13-5/8% Debenture
Claims and under the terms and conditions of the
Rights Plan and the Series B Common Stock will
be issued to holders of Allowed Zero Coupon Note
Claims. After the Consummation Date, Series A
Common Stock will be issuable upon exercise of
the Creditor Warrants and the Reliance Warrants.
Each share of Series B Common Stock will
automatically convert into a share of Series A
Common Stock upon the Transfer of such Series B
Common Stock to any Person other than a Transfer
by Apollo Advisors, L.P., Lion or a Permitted
Transferee to
26
<PAGE>
a Permitted Transferee. In connection with any
Transfer to a Permitted Transferee, such shares
will remain shares of Series B Common Stock only
if simultaneously with such Transfer, the
transferor or transferee provides Reorganized
Telemundo with (i) a legal opinion in form and
substance reasonably satisfactory to Reorganized
Telemundo to the effect that the transferee is a
Permitted Transferee or (ii) evidence reasonably
satisfactory to Reorganized Telemundo and its
counsel that such transferee is a Permitted
Transferee. In addition, shares of Series B
Common Stock held by any Person which is a
Permitted Transferee will remain Series B Common
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 Common Stock
will automatically convert into an equal amount
of shares of Series A Common Stock. All
outstanding shares of Series B Common Stock will
automatically convert into shares of Series A
Common Stock on the basis of one share of Series
A Common Stock for one share of Series B Common
Stock immediately upon the earlier of (i) ____,
1999 or (ii) such time as there are less than
2,000,000 shares of Series B Common Stock issued
and outstanding; provided, however, that the
-------- -------
foregoing number will be appropriately
27
<PAGE>
adjusted upwards or downwards for any changes
resulting in an increase or decrease,
respectively, in the number of shares of the
Series B Common Stock resulting from a
recapitalization, stock dividend, combination or
stock split-up in the Series B Common Stock
effected prior to the first date on which there
are no outstanding shares of Series B Common
Stock. The holder of any shares of Series B
Common Stock shall have the right at such
holder's option to convert any such shares of
Series B Common Stock into shares of Series A
Common Stock.
(iv) Dividends:
The Series A Common Stock and the Series B
Common Stock shall have the same rights to and
the respective holders of the Series A Common
Stock and Series B Common Stock will participate
ratably in all dividends of Reorganized
Telemundo, whether paid in cash, property or
stock of Reorganized Telemundo, as may be from
time to time declared by the Board of Directors
out of the legally available assets or funds of
Reorganized Telemundo. Any dividend paid in
shares of Reorganized Telemundo Common Stock may
only be paid in shares of Series A Common Stock.
28
<PAGE>
(v) Voting Rights:
After the Consummation Date, in accordance with
the provisions of the Restated Certificate of
Incorporation and Restated By-Laws, the holders
of the Reorganized Telemundo Common Stock will
have the same voting rights, except that so long
as any shares of Series B Common Stock are
outstanding, the holders of the Series B Common
Stock will be entitled to elect a majority of
the members of the Reorganized Telemundo Board
of Directors. Accordingly, the holders of
Series B Common Stock will be entitled to elect
five (5) members of the initial nine (9) members
of the Reorganized Telemundo Board of Directors
and the holders of the Series A Common Stock
will be entitled to elect four (4) members of
the initial nine (9) members of the Reorganized
Telemundo Board of Directors.
(vi) Stock Dividends,
Splits,
Combinations:
Reorganized Telemundo may not pay a dividend
with respect to shares of Reorganized Telemundo
Common Stock payable in shares of Reorganized
Telemundo Common Stock or other securities or
effect a stock split-up or combine its
outstanding shares of Reorganized Telemundo
Common Stock, unless all of the outstanding
shares of Reorganized Telemundo Common Stock
participate on the same basis in such dividend,
split-up or combination.
29
<PAGE>
(vii) No Additional
Issuance of
Series B Common
Stock:
Reorganized Telemundo may not issue any
additional shares of Series B Common Stock or
other options, warrants, calls, subscriptions or
other similar rights or other agreements,
commitments or outstanding securities
obligating Reorganized Telemundo to issue,
transfer or sell any shares of Series B Common
Stock.
8.03. Creditor Warrants. The following is a summary of certain of
-----------------
the principal economic terms of the Creditor Warrants which shall be issued by
Reorganized Telemundo under this Plan substantially in the form contained in the
Creditor Warrant Agreement. A copy of the Creditor Warrant Agreement is
attached to this Plan as Exhibit P-2, and the terms of the Creditor Warrant
Agreement are incorporated herein by reference as if fully set forth at length.
The following summary is qualified in its entirety by reference to Exhibit P-2.
(i) Issuer:
Reorganized Telemundo.
(ii) Exercisable For:
643,462 shares of Series A Common Stock.
(iii) Exercise Price:
$7 per share.
(iv) Exercise Date:
At any time after the Consummation Date.
(v) Expiration Date:
The fifth anniversary of the Consummation Date.
(vi) Anti-Dilution:
Customary anti-dilution provisions for warrants
issued by public companies.
30
<PAGE>
8.04. Reliance Warrants. The following is a summary of certain of
-----------------
the principal economic terms of the Reliance Warrants which shall be issued by
Reorganized Telemundo under this Plan substantially in the form contained in the
Reliance Warrant Agreement. A copy of the Reliance Warrant Agreement is
attached to this Plan as Exhibit P-6, and the terms of the Reliance Warrant
Agreement are incorporated herein by reference as if fully set forth at length.
The following summary is qualified in its entirety by reference to Exhibit P-6.
(i) Issuer:
Reorganized Telemundo.
(ii) Exercisable For:
416,667 shares of Series A Common Stock.
(iii) Exercise Price:
$7 per share, plus the Buy-In Price
Appreciation.
(iv) Exercisability:
33-1/3% of the Reliance Warrants will become
exercisable on each of the first, second and
third anniversaries of the Consummation Date
(each an "Exercise Date") and may be exercised
until the expiration date.
(v) Expiration Date:
The fifth anniversary of the Exercise Date.
(vi) Anti-Dilution:
Customary anti-dilution provisions for warrants
issued by public companies.
31
<PAGE>
ARTICLE NINE
ACCEPTANCE OR REJECTION OF THIS PLAN;
EFFECT OF REJECTION BY ONE OR MORE IMPAIRED
CLASSES OF CLAIMS OR INTERESTS
9.01. Each Impaired Class Entitled to Vote Separately. The holders of
-----------------------------------------------
Claims or Interests in each impaired class of Claims or Interests (other than
Classes 8, 9 and 10, which are deemed to reject this Plan) shall be entitled to
vote separately as a class to accept or reject this Plan.
9.02. Acceptance by a Class of Creditors. Consistent with section 1126(c)
----------------------------------
of the Bankruptcy Code and except as provided in section 1126(e) of the
Bankruptcy Code, a class of Claims shall have accepted this Plan if this Plan is
accepted by at least two-thirds in dollar amount and more than one-half in
number of the holders of the Allowed Claims of such class that have timely and
properly voted to accept or reject this Plan.
9.03. Acceptance of this Plan by Debtor. As the proponent of this Plan,
---------------------------------
the Debtor hereby accepts this Plan and will take all corporate action necessary
to accept this Plan.
9.04. Rejection by a Class of Interests. A class of Interests that is
---------------------------------
impaired under this Plan and whose Interests are extinguished is deemed to have
rejected this Plan, and the Debtor will not solicit votes from holders of
Interests in such class. Accordingly, Classes 8, 9 and 10 are deemed to reject
this Plan.
9.05. Confirmation Notwithstanding Rejection by a Class. In the event
-------------------------------------------------
that any impaired class of Claims fails to accept this Plan in accordance with
section 1129(a) of the Bankruptcy Code, then with respect to any such class, the
Debtor may request, with the written consent of the Creditors' Committee, that
the Bankruptcy Court confirm this Plan in accordance with section 1129(b) of the
Bankruptcy Code.
ARTICLE TEN
CONDITIONS PRECEDENT TO CONSUMMATION
10.01. Conditions to Confirmation. The following conditions must occur
--------------------------
and be satisfied on or before the Confirmation Date:
(a) Claims Cap. On the date of the Confirmation Hearing, there
----------
shall be no
32
<PAGE>
unliquidated General Claims and the sum of Allowed General Claims,
Estimated General Claims and face amount of timely-filed liquidated
General Claims which have not yet been Allowed or estimated shall not
exceed $2.5 million. The condition set forth in this Section 10.01(a)
is waivable in whole or in part only by Apollo;
(b) Approval of Blair Settlement Agreement. The Bankruptcy
--------------------------------------
Court shall authorize and approve the Blair Settlement Agreement; and
(c) Approval of O & Y Settlement. 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 million to the 1290 Landlord under the terms and
conditions of the O & Y Letter Agreement.
10.02. Conditions to Consummation. The following conditions must
--------------------------
occur and be satisfied on or before the Consummation Date for the Plan to be
effective on the Consummation Date.
(a) Entry of Confirmation Order. The Confirmation Order
---------------------------
shall have been signed by the Bankruptcy Court and duly entered on the
docket for the Chapter 11 Case by the Clerk of the Bankruptcy Court in
form and substance reasonably satisfactory to the Debtor, to the
Creditors' Committee, the Reliance Entities and the Blair Entities;
(b) No Stay. There shall not be any stay in effect with
-------
respect to the Confirmation Order;
(c) Regulatory Approvals. There shall have been obtained
--------------------
all regulatory approvals including, without limitation, (i) any
required approvals of the Federal Communications Commission, (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 New Senior
Note Indenture under the Trust Indenture Act of 1939, as amended;
(d) Sufficient Cash. The Debtor shall (x) have sufficient
---------------
cash as of the Consummation Date to (i) make the distributions
33
<PAGE>
provided for in this Plan and (ii) satisfy its working capital
requirements (or the Debtor shall have obtained a working capital line
of credit on such terms as shall be mutually acceptable to the Debtor
and Apollo) and (y) have received all cash payments required to be
made pursuant (i) to the terms and conditions of the Rights Plan and
(ii) the Standby Purchase Agreement;
(e) Claims Cap. There shall be no unliquidated General
----------
Claims and the sum of Allowed General Claims, Estimated General Claims
and face amount of timely-filed liquidated General Claims which have
not yet been Allowed or estimated shall not exceed $2.5 million. The
condition set forth in this Section 10.02(e) is waivable in whole or
in part only by Apollo;
(f) Approval of Blair Settlement Agreement. The Bankruptcy
--------------------------------------
Court shall authorize and approve the Blair Settlement Agreement by
Final Order; and
(g) Approval of O & Y Settlement. 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 million to the 1290 Landlord under the terms and
conditions of the O & Y Letter Agreement by Final Order.
10.03. Effect of Nonoccurrence of the Conditions. Other than as
-----------------------------------------
expressly set forth herein, the conditions contained in Sections 10.01, 10.02
and this Section 10.03 may be waived by the Creditors' Committee or Apollo. If
any of the conditions to the Consummation Date have not been satisfied or duly
waived by the Creditors' Committee or Apollo, as the case may be, on or before
120 days after the Confirmation Date, and the Creditors' Committee has not
waived the requirement of this Section 10.03 (i.e., has not waived the 120-day
----
time period for satisfying and/or waiving the conditions referred to herein),
then the Confirmation Order shall be vacated by the Bankruptcy Court and the
Plan shall be null and void in all respects. Notwithstanding the foregoing, (a)
the conditions contained in Section 10.01(b) and Section 10.02(f) may not be
waived by the Creditors' Committee or Apollo, as the case may be, without the
consent of the Blair Entities and (b) the conditions contained in Section
10.02(c) shall not be waivable.
34
<PAGE>
ARTICLE ELEVEN
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
11.01. Assumption and Rejection of Executory Contracts. Any
-----------------------------------------------
executory contract or unexpired lease that has not been rejected by the Debtor
with the Bankruptcy Court's approval on or prior to the Consummation Date shall
be deemed to have been assumed by the Debtor on the Consummation Date unless
there is then pending before the Bankruptcy Court a motion to reject such
executory contract or unexpired lease. Notwithstanding anything to the contrary
contained in the preceding sentence, the Debtor has agreed to file a motion to
reject executory contracts or unexpired leases with the Bankruptcy Court not
later than thirty (30) days after the Bankruptcy Court enters an order approving
the adequacy of the Disclosure Statement pursuant to section 1125 of the
Bankruptcy Code.
11.02. Bar for Rejection Damages. Unless otherwise provided by an
-------------------------
order of the Bankruptcy Court entered prior to the Confirmation Date, a proof of
any Claim against the Debtor arising from the rejection of any executory
contract or unexpired lease pursuant to a Final Order entered after November 12,
1993 (the date designated by the Bankruptcy Court as the last date for filing
proofs of Claim in the Chapter 11 Case) must be filed with the Bankruptcy Court
within the later of (a) the time period established by the Bankruptcy Court in a
Final Order approving such rejection, or (b) if no such time period is or was
established, thirty days from and after the date of entry of such Final Order
approving such rejection. Any Entity that fails to file proof of its Claim
arising from such a rejection within the period set forth above shall be forever
barred from asserting a Claim against the Debtor, Reorganized Telemundo or any
of their respective affiliates or the property or interests in property of the
Debtor, Reorganized Telemundo or any of their respective affiliates.
ARTICLE TWELVE
DIRECTORS AND OFFICERS
12.01. Directors of Reorganized Telemundo. The initial Board of
----------------------------------
Directors of Reorganized Telemundo will consist of nine (9) directors.
12.02. Executive Officers of Reorganized Telemundo. On the
-------------------------------------------
Consummation Date, it is expected that the Executive Officers of Reorganized
Telemundo shall be as designated in the Disclosure Statement, each of whom shall
serve in the capacity indicated until his successor shall
35
<PAGE>
have been duly elected and qualified or until his earlier death, resignation or
removal in accordance with the Restated Certificate of Incorporation and the
Restated By-Laws of Reorganized Telemundo and the laws of the State of Delaware.
ARTICLE THIRTEEN
IMPLEMENTATION OF THIS PLAN
13.01. Vesting of Property. In accordance with sections 1123(a)(5)
-------------------
and 1141 of the Bankruptcy Code, on the Consummation Date, title to all property
of the Debtor's estate shall pass to Reorganized Telemundo free and clear of all
Claims and Interests (except as otherwise provided in this Plan). Confirmation
of this Plan shall be binding and the Debtor's debts shall be discharged as
provided in section 1141 of the Bankruptcy Code.
13.02. Surrender and Cancellation of Securities, Notes or Other
--------------------------------------------------------
Instruments; Discharge of Indenture Obligations.
- -----------------------------------------------
(a) As of the Consummation Date, any security, note or instrument
evidencing a Claim or Interest that is impaired by this Plan shall become a
Canceled Security. On the Consummation Date, each of the respective transfer
books maintained for the Canceled Securities shall be closed.
Except for the right to receive the distributions, if any, called
for by this Plan, the holder of a Canceled Security shall have no rights arising
from or relating to such Canceled Security after the Consummation Date,
including, without limitation, any rights of subordination or subrogation that
may be construed to be contained in such Canceled Security. Each holder of a
Canceled Security evidencing an Allowed Claim shall surrender such Canceled
Security to Reorganized Telemundo (or its designee), and Reorganized Telemundo
(or its designee) shall distribute to the holder thereof the appropriate
consideration therefor in accordance with this Plan. No distribution under this
Plan shall be made to or on behalf of any holder of an Allowed Claim evidenced
by a Canceled Security unless and until such Canceled Security is received by
Reorganized Telemundo (or its designee) and, if such Canceled Security was
issued under an indenture qualified under the Trust Indenture Act of 1939,
Reorganized Telemundo shall have certified to the relevant indenture trustee its
receipt of the same. In the event of any lost or destroyed Canceled Security,
the holder of such Canceled Security must deliver an affidavit of loss or
destruction to Reorganized Telemundo (or its designee) and any relevant
indenture trustee, as well as an agreement to indemnify Reorganized
36
<PAGE>
Telemundo and any such indenture trustee, in form and substance reasonably
acceptable to Reorganized Telemundo and any such indenture trustee, and
Reorganized Telemundo must certify its receipt of the same to the relevant
indenture trustee before such holder may receive any distribution under this
Plan in respect of such lost or destroyed Canceled Security. Any holder of an
Allowed Claim that fails to surrender a Canceled Security related thereto or
deliver an affidavit and an indemnity agreement before the later to occur of (a)
five years from the Consummation Date and (b) six months following the date such
holder's Claim becomes an Ultimately Allowed Claim shall be deemed to have no
further Claim and shall not participate in any distribution under this Plan.
(b) Except to the extent otherwise provided in this Plan, the Zero
Coupon Indenture, the 13-5/8% Indenture and the 12% Indenture and the respective
obligations of the indenture trustees thereunder shall be canceled and
discharged on the Consummation Date.
13.03. Undeliverable Distributions. If Reorganized Telemundo (or its
---------------------------
designees) is unable to make payment or distribution to the holder of an Allowed
Claim under the Plan for lack of a current address for the holder or otherwise,
Reorganized Telemundo will file with the Bankruptcy Court the name, if known,
and last known address of the holder and the reason for inability to make
payment, and if, after the passage of 60 days and after any additional effort to
locate the holder that the Bankruptcy Court may direct, the payment or
distribution still cannot be made, the payment or distribution and any further
payment or distribution to the holder shall be retained by Reorganized Telemundo
and the Claim shall be deemed satisfied to the same extent as if payment or
distribution had been made to the holder of the Claim.
13.04. Stock Option Plans. Reorganized Telemundo has adopted,
------------------
effective as of the Consummation Date and subject to approval by the holders of
a majority of the voting shares of Reorganized Telemundo, the 1994 Stock Option
Plan. As of the Consummation Date, the Stock Option Plan shall be terminated,
and all Telemundo Options and Telemundo Warrants issued or issuable thereunder
shall be canceled and become null and void in accordance with Sections 6.09 and
6.10 of this Plan.
37
<PAGE>
ARTICLE FOURTEEN
PROVISIONS COVERING DISTRIBUTIONS
14.01. Time of Distributions Under this Plan. Except as otherwise
-------------------------------------
provided in this Plan, and without in any way limiting Section 13.03 and Article
Fifteen of this Plan, payments and distributions in respect of Allowed Claims
shall be made by Reorganized Telemundo (or its designees) on the Consummation
Date. Any proof of Claim filed by the direct, indirect, or beneficial holder of
such Claims in Classes 5, 6 and 7 shall be disallowed as duplicative of the
Claims of Continental, Bankers Trust and CoreStates, as the case may be.
14.02. No Fractional Securities. Reorganized Telemundo (or its
------------------------
designees) will not distribute any fractional interests in New Senior Notes,
shares of Reorganized Telemundo Common Stock or Creditor Warrants. New Senior
Notes will be issued in denominations of $1,000 or integral multiples thereof
and the principal amount thereof to be issued in respect of any Allowed
Unsecured Claim will be rounded to the nearest integral multiple of $1,000. The
number of shares of Reorganized Telemundo Common Stock or Creditors Warrants, as
the case may be, to be issued in respect of any Allowed Unsecured Claim
hereunder will be rounded to the nearest whole share; for purposes of this
Section 14.02, $500 or more will be rounded to the next higher integral multiple
of $1,000 and a 50% fractional interest or more of any share or warrants will be
rounded to the next higher whole number of shares or warrants. In connection
with any such rounding, all Allowed Unsecured Claims held by a holder shall be
aggregated.
14.03. Allocation Between Principal and Accrued Interest. On the
-------------------------------------------------
Consummation Date, the aggregate consideration paid to Creditors in respect of
their Claims shall be treated as allocated between the principal amount of such
Claims and the accrued interest thereon (through the Filing Date), in proportion
to the relative amounts thereof. In the case of Creditors receiving more than
one form of consideration in satisfaction of their Claims, each form of
consideration received shall be treated as distributed ratably between the
principal amount of such Claims and the accrued interest thereon.
38
<PAGE>
ARTICLE FIFTEEN
PROCEDURES FOR RESOLVING DISPUTED
CLAIMS AND INTERESTS
15.01. Objections to and Estimation of Claims and Interests. The
----------------------------------------------------
Debtor has agreed to file objections to Claims or Interest or motions pursuant
to section 502 of the Bankruptcy Code to estimate any Claim or Interest not
later than thirty (30) days after the Bankruptcy Court enters an order approving
the adequacy of the Disclosure Statement pursuant to section 1125 of the
Bankruptcy Code; provided, however, that, without limiting the Creditors'
-------- -------
Committee's right to file an objection to a Claim or Interest or motion pursuant
to section 502 of the Bankruptcy Code at any time, if the Debtor fails to file
any such objection or motion within the time periods above, the Creditors'
Committee shall have the right to object to or make a motion to estimate any
such Claim or Interest. Reorganized Telemundo may object to a Claim or Interest
by filing an objection with the Bankruptcy Court and serving such objection upon
the holder of such Claim or Interest not later than ninety (90) days after the
Consummation Date.
15.02. Procedure. Subject to Section 15.01 of this Plan, the Debtor
---------
or Reorganized Telemundo shall litigate the merits of each Disputed Claim and
each Disputed Interest until determined by a Final Order; provided, however,
-------- -------
that (a) prior to the Consummation Date, the Debtor with the Creditors'
Committee's consent, subject to the approval of the Bankruptcy Court, and (b)
after the Consummation Date, Reorganized Telemundo, subject to the approval of
the Bankruptcy Court, may compromise and settle any objection to any Claim or
Interest.
15.03. Payments and Distributions With Respect to Ultimately Allowed
-------------------------------------------------------------
Claims. No payments or distributions shall be made in respect of a Disputed
- ------
Claim until such Disputed Claim becomes an Ultimately Allowed Claim.
15.04. Timing of Payments and Distributions With Respect to Disputed
-------------------------------------------------------------
Claims. Subject to the further provisions of this Plan, payments and
- ------
distributions with respect to each Disputed Claim that becomes an Ultimately
Allowed Claim that would have otherwise been made had the Ultimately Allowed
Claim been an Allowed Claim on the Consummation Date shall be made within thirty
(30) days after the date that such Disputed Claim becomes an Ultimately Allowed
Claim. Holders of Disputed Claims that become Ultimately Allowed Claims shall
be bound, obligated and governed in all respects by the further provisions of
this Plan. Upon disallowance of a Disputed Claim, the
39
<PAGE>
consideration reserved for such Claim shall be retained by Reorganized
Telemundo.
15.05. Retention and Enforcement of Causes of Action. Pursuant to
---------------------------------------------
section 1123(b)(3) of the Bankruptcy Code, Reorganized Telemundo (as
representative of the Debtor's estate) will retain and will have the exclusive
right to enforce against any Entity any and all Causes of Action of the Debtor
that arose before the Consummation Date, including all Causes of Action of a
trustee and debtor-in-possession under the Bankruptcy Code, other than those
released or compromised as part of or pursuant to this Plan.
ARTICLE SIXTEEN
COMPROMISE, SETTLEMENT AND DISTRIBUTIONS WITH
RESPECT TO CERTAIN CLAIMS
16.01. The Blair Settlement Agreement. On the Consummation Date
------------------------------
(unless otherwise specifically provided in the Blair Settlement Agreement), the
Blair Entities (other than JHR Acquisition Corp.) shall be treated as provided
in the Blair Settlement Agreement and the Blair Entities shall receive
distributions under this Plan as set forth in the Blair Settlement Agreement. A
copy of the Blair Settlement Agreement is attached to this Plan as Exhibit P-1.
The Blair Settlement Agreement shall constitute a good faith compromise and
settlement of the New York Action, which compromise and settlement is in the
best interests of the Debtor and its Creditors and is fair, equitable and
reasonable. The Blair Settlement Agreement shall be authorized and approved by
the Bankruptcy Court pursuant to Bankruptcy Rule 9019.
16.02. The O & Y Letter Agreement. Upon authorization and approval
--------------------------
by the Bankruptcy Court of the O & Y Letter Agreement, any and all Claims by the
1290 Landlord against the Debtor shall be treated as provided in the O & Y
Letter Agreement and the 1290 Landlord shall receive distributions under this
Plan as set forth in the O & Y Letter Agreement. A copy of the O & Y Letter
Agreement is attached to this Plan as Exhibit P-5. The provisions of the O & Y
Letter Agreement shall constitute a good faith compromise and settlement of the
Debtor's obligations under the 1290 Lease as between the Debtor and the 1290
Landlord, which compromise and settlement is in the best interests of the Debtor
and its Creditors and is fair, equitable and reasonable. The O & Y Letter
Agreement and the motion to assume and assign the 1290 Lease and the 1290
Subleases shall be authorized and approved by the Bankruptcy Court pursuant to
sections 105 and 365 of the Bankruptcy Code and Bankruptcy Rule 9019.
40
<PAGE>
16.03. Additional Payment. On the Consummation Date, each holder of
------------------
New Senior Notes shall receive its pro rata share of the Additional Payment,
determined by dividing the aggregate principal amount of such holders New Senior
Notes by the aggregate amount of New Senior Notes issued on the Consummation
Date (in each case before giving effect to the Additional Payment).
ARTICLE SEVENTEEN
RELEASES, TERMINATIONS AND SETTLEMENTS OF CLAIMS
17.01. Discharge of All Claims and Interests. Except as otherwise
-------------------------------------
specifically provided by this Plan and by the Blair Settlement Agreement, the
distributions and rights that are provided in this Plan shall be in complete
satisfaction, discharge and release of (i) all Claims against, liabilities of,
liens on, obligations of and Interests in the Debtor or Reorganized Telemundo or
the assets and properties of the Debtor or Reorganized Telemundo, whether known
or unknown, and (ii) all Causes of Action, whether known or unknown, either
directly or derivatively through the Debtor or Reorganized Telemundo, against
successors or assigns of the Debtor or any of the Debtor's or Reorganized
Telemundo's direct or indirect subsidiaries, as the case may be, and present and
former directors, officers, agents, attorneys, advisors, financial advisors,
investment bankers, employees of the Debtor and the members of, and
professionals engaged by, the Creditors' Committee based on the same subject
matter as any Claim or Interest, in each case regardless of whether a proof of
Claim or Interest was filed, whether or not Allowed, and whether or not the
holder of the Claim or Interest has voted on this Plan, or based on any act or
omission, transaction or other activity or security, instrument or other
agreement of any kind or nature occurring, arising or existing prior to the
Consummation Date that was or could have been the subject of any Claim or
Interest, in each case regardless of whether a proof of Claim or Interest was
filed, whether or not Allowed and whether or not the holder of the Claim or
Interest has voted on this Plan.
Furthermore, but in no way limiting the generality of the foregoing,
except as otherwise specifically provided by this Plan, any Entity accepting any
distribution pursuant to this Plan shall be presumed conclusively to have
released the Debtor and Reorganized Telemundo, successors and assigns of the
Debtor, each of the Debtor's and Reorganized Telemundo's direct and indirect
subsidiaries, as the case may be, directors, officers, agents, attorneys,
advisors, financial advisors, investment bankers, employees of the
41
<PAGE>
Debtor and the members of, and professionals engaged by, the Creditors'
Committee from any Cause of Action based on the same subject matter as the Claim
or Interest on which the distribution is received; provided, however, that to
-------- -------
the extent that this Section 17.01 is inconsistent with the provisions of the
Blair Settlement Agreement or the O & Y Letter Agreement, the provisions of the
Blair Settlement Agreement and the O & Y Letter Agreement shall control. The
release provided for in the preceding sentence shall be enforceable as a matter
of contract against any Entity that accepts any distribution pursuant to this
Plan. Notwithstanding anything to the contrary contained in this Plan, any and
all releases by the Blair Entities are only as set forth in the Blair Settlement
Agreement; provided, however, that releases of the Debtor by the Blair Entities
-------- -------
shall be governed by this Plan in addition to the Blair Settlement Agreement.
By reason of and in consideration for the aggregate value contributed by the
Reliance Entities to fund and facilitate the implementation of this Plan, which
contribution includes, without limitation, (i) the contribution of at least $8.5
million in aggregate value under the Blair Settlement Agreement (with $2,639,375
being paid directly to the Debtor and at least $5.8 million being made available
to Blair), (ii) the agreement to act as the standby purchaser of shares of
Reorganized Telemundo Common Stock pursuant to the terms of the Standby Purchase
Agreement, (iii) the agreement to purchase 300,000 shares of Series A Common
Stock from the holders of Allowed 13-5/8% Debenture Claims pursuant to Section
6.06(b) of this Plan, and (iv) the agreement not to object to and to support
confirmation and consummation of this Plan, the Reliance Entities shall receive,
and shall be deemed to have received from all holders of any Claim against or
Equity Interest in the Debtor and, with respect to any and all matters arising
from, in connection with and related to the Debtor and the Debtor's estate, a
complete discharge and release of (a) all claims against, liabilities of, liens
on, obligations of the Reliance Entities or the assets and properties of the
Reliance Entities, whether known or unknown, held by any holder of any Claim or
Interest and (b) all Causes of Action, whether known or unknown, either directly
or derivatively through the Reliance Entities, against successors or assigns of
the Reliance Entities or any of the Reliance Entities' direct or indirect
subsidiaries and present and former directors, officers, agents, attorneys,
advisors, financial advisors, investment bankers and employees of the Reliance
Entities. The claims, liabilities, liens, obligations and Causes of Action
released pursuant to this paragraph are limited to those which are based on the
same subject matter as any Claim or Interest held by any holder of any Claim or
Interest, in each case regardless of whether a proof of Claim or Interest was
filed, whether or not Allowed, and whether or not the holder of the Claim or
Interest has voted on this Plan, or
42
<PAGE>
based on any act or omission, transaction or other activity or security,
instrument or other agreement of any kind or nature occurring, arising or
existing prior to the Consummation Date that was or could have been the subject
of any Claim or Interest, in each case regardless of whether a proof of Claim or
Interest was filed, whether or not Allowed, and whether or not the holder of the
Claim or Interest has voted on this Plan.
In furtherance of the foregoing, on the Consummation Date, each
plaintiff in each of the Creditor Litigations shall dismiss such actions with
prejudice as against all defendants, and the Creditor Litigations shall in any
event be deemed dismissed with prejudice as of such date. In addition, as a
good faith compromise and full and complete settlement of certain Claims against
the Debtor pursuant to Bankruptcy Rule 9019 and any applicable state law, in
addition to any such payments by the Debtor prior to the order for relief which
are confirmed, (i) the unpaid fees and unreimbursed expenses of (a) Berlack,
Israels & Liberman in the amount of $62,077.81 (with respect to periods through
July 30, 1993) and (b) Moses & Singer in the amount of $364,261.20 (with respect
to periods through July 30, 1993) and (ii) the unpaid fees and unreimbursed
expenses of (a) Continental in the amount of $219,474.70 (with respect to
periods through and including January 31, 1994), (b) Bankers Trust in the amount
of $99,149.73 (with respect to periods through and including January 31, 1994)
and (c) CoreStates in the amount of $76,236.91 (with respect to periods through
and including January 31, 1994) will be paid in cash by the Debtor to such firms
and Indenture Trustees on the Consummation Date.
In addition to the Indenture Trustees' fees and expenses provided for
above (which cover such Indenture Trustees' fees and expenses incurred through
January 31, 1994, and shall be paid in cash on the Consummation Date), not less
than twenty (20) days prior to the Confirmation Hearing, the Indenture Trustees
shall submit to the Debtor and the Creditors' Committee backup for their fees
and expenses after January 31, 1994, accrued through not later than thirty (30)
days prior to the Confirmation Hearing. If neither the Debtor nor the
Creditors' Committee has advised the Indenture Trustee in writing of its
specific objections to such further and subsequent fees and expenses by the
Confirmation Hearing, the Debtor shall pay such fees and expenses in cash on the
Consummation Date. The Indenture Trustees' reasonable fees and expenses (as
determined in accordance with the applicable Indenture), accrued after the time
period set forth in the first sentence hereof, including reasonable fees and
expenses incurred in securing payments hereunder and in otherwise implementing
this Plan,
43
<PAGE>
shall be paid in cash, on the later of the Consummation Date or twenty (20) days
after the receipt of backup for such fees and expenses by the Debtor and the
Creditors' Committee, unless the Creditors' Committee and/or the Debtor notify
the Indenture Trustees in writing of its specific objections to such fees and
expenses within such twenty (20) day time period in which case all fees and
expenses not specifically objected to shall be paid in cash by Reorganized
Telemundo. With respect to those Indenture Trustees fees and expenses that are
specifically disputed, the Indenture Trustee may submit appropriate applications
for payment to the Bankruptcy Court within the time set by the Bankruptcy Court
for professionals to file final fee applications (provided, however, if such
-------- -------
fees and expenses are incurred after the Consummation Date, such applications
must be submitted within sixty (60) days after the objection to such fees and
expenses), and the reasonableness of such fees and expenses shall be determined
by the Bankruptcy Court after notice and hearing applying the standards for
reasonableness contained in the applicable Indenture. To the extent that the
Bankruptcy Court finds specific fees and expenses of an Indenture Trustee to be
unreasonable (as determined in accordance with the applicable Indenture), such
specific fees and expenses shall not be paid by Reorganized Telemundo or
otherwise. In the event the Indenture Trustees' fees and expenses are not fully
paid on the Consummation Date, Telemundo shall reserve and remit to the
respective Indenture Trustee cash in the amount of (i) such Indenture Trustee's
previously requested and unpaid fees and expenses plus (ii) $20,000 (or such
lesser amount as may be agreed to by the Indenture Trustee). The respective
Indenture Trustees shall have a perfected first priority lien on such cash to
secure payment of their fees and expenses. In the event any such fees and
expenses are timely objected to and disallowed by the Bankruptcy court, the cash
reserved for such disallowed fees and expenses and which is in excess of any
outstanding and not disallowed fees and expenses, shall be delivered to
Reorganized Telemundo and the Indenture Trustee shall have no further claim to
such cash or for reimbursement of such disallowed fees and expenses. The
treatment of the Indenture Trustees' fees and expenses as provided in this
Section 17.01 shall be in lieu of, and in consideration for, the respective
Indenture Trustee's statutory or contractual lien rights under the applicable
Indenture.
The fees and expenses of Chemical Bank, as predecessor indenture
trustee to Bankers Trust, incurred prior to and after July 30, 1993 shall be
treated in accordance with the preceding paragraph.
To the extent any fees and expenses of Moses & Singer as special
counsel to the Creditors' Committee are not Allowed under sections 330 and 331
of the Bankruptcy
44
<PAGE>
Code, Bankers Trust may thereafter request payment under this Section 17.01 of
such fees and expenses as part of its reasonable expenses as Indenture Trustee,
in addition to any fees and expenses previously requested by Bankers Trust.
The satisfactions, releases and discharges set forth in this Section
17.01 shall also act as an injunction against any Entity commencing or
continuing any action, employment of process or act to collect, offset, affect
or recover any Claim or Cause of Action satisfied, released or discharged
hereunder.
By reason of and in consideration for the undertakings by Reorganized
Telemundo and the Administrator under Section 17.04 of this Plan, Section 17.04
of this Plan shall also act as (a) an injunction against (i) the Administrator
from asserting claims against Reorganized Telemundo in connection with any claim
arising from or related to the provisions contained in Section 17.04 of this
Plan or in connection with his acts and omissions as Administrator; provided,
--------
however, that the Administrator may assert claims against Reorganized Telemundo
- -------
in connection with that certain lien granted in his favor and in connection with
certain out-of-pocket expenses pursuant to Section 17.04 of this Plan; (ii)
Reorganized Telemundo from asserting claims against the Administrator in
connection with his acts and omissions in his official capacity as
Administrator; and (iii) any Indemnitee from asserting any claims against
Telemundo or Reorganized Telemundo in connection with any claim arising from or
related to the provisions contained in Section 17.04 of this Plan or in
connection with acts or omissions of the Administrator in his official capacity;
provided, however, that such Indemnitee may assert a claim for a Covered Expense
- -------- -------
in connection with a Covered Claim as provided in Section 17.04 of this Plan and
(b) a waiver of all claims enjoined pursuant to clauses (a)(i) through (a)(iii)
of this paragraph.
17.02. Guaranties and Claims of Subordination.
--------------------------------------
(a) Guaranties. The classification and the manner of satisfying
----------
all Claims under this Plan takes into consideration the possible existence of
any alleged guaranties by the Debtor of obligations of any Entity or Entities,
and that the Debtor may be a joint obligor with another Entity or Entities with
respect to the same obligation. All Claims against the Debtor based upon any
such guaranties shall be satisfied, discharged and released in the manner
provided in this Plan and the holders of Claims shall be entitled to only one
distribution with respect to any given obligation of the Debtor.
45
<PAGE>
(b) Claims of Subordination. All Claims against and Interests in the
-----------------------
Debtor, and all rights and claims between or among Creditors or holders of
Interests relating in any manner whatsoever to Claims against or Interests in
the Debtor, based on any contractual, legal or equitable subordination rights,
shall be terminated upon confirmation of this Plan by the Bankruptcy Court
(subject only to the occurrence of the Consummation Date) and discharged in the
manner provided in this Plan, and all such Claims, Interests and rights so based
and all such contractual, legal and equitable subordination rights to which any
Entity may be entitled shall be irrevocably waived upon confirmation of this
Plan by the Bankruptcy Court (subject only to the occurrence of the Consummation
Date). Except as otherwise provided in this Plan and to the fullest extent
permitted by applicable law, the rights afforded and the distributions that are
made in respect of any Claims hereunder shall not be subject to levy,
garnishment, attachment or like legal process by any Creditor or holder of an
Interest by reason of any contractual, legal or equitable subordination rights,
so that, notwithstanding any such contractual, legal or equitable subordination,
each Creditor shall have and receive the benefit of the rights and distributions
set forth in this Plan.
Pursuant to Bankruptcy Rule 9019 and any applicable state law and as
consideration for the distributions and other benefits provided under this Plan,
the provisions of this Section 17.02(b) shall constitute a good faith compromise
and settlement of any Causes of Action relating to the matters described in this
Section 17.02(b) which could be brought by any holder of a Claim or Interest
against or involving another holder of a Claim or Interest, which compromise and
settlement is in the best interests of Creditors and holders of Interests and is
fair, equitable and reasonable. This settlement shall be approved by the
Bankruptcy Court as a settlement of all such Causes of Action. The Bankruptcy
Court's approval of this settlement pursuant to Bankruptcy Rule 9019 and its
finding that this is a good faith settlement pursuant to any applicable state
law, including, without limitation, the laws of the States of New York and
Delaware, given and made after due notice and opportunity for hearing, shall bar
any such Cause of Action by any holder of a Claim or Interest against or
involving another holder of a Claim or Interest.
17.03. Survival of Indemnification Obligations. Except as otherwise
---------------------------------------
set forth in this Section 17.03 or in Section 17.04 of this Plan, all claims
against Telemundo by any past or present director, officer, employee or agent of
Telemundo, or person who may have served at the request of Telemundo as a
director, officer, employee or agent of
46
<PAGE>
another corporation, partnership, joint venture, trust or other enterprise (each
such person an "indemnified party" and, collectively, the "indemnified parties")
for indemnification and contribution made under or pursuant to Telemundo's
Certificate of Incorporation, By-Laws, any indemnification agreement to which
Telemundo is a party or Delaware law, shall be discharged. With the exceptions
of the claims asserted in the Gandal Litigation and the Profit Sharing
Litigation, the Debtor is unaware of any claims that can be asserted against any
of the indemnified parties. Notwithstanding the preceding sentences of this
Section 17.03, the obligations of the Debtor and Reorganized Telemundo pursuant
to Reorganized Telemundo's Restated Certificate of Incorporation, Restated By-
Laws, any agreement to which Telemundo is a party or any applicable laws to
indemnify (a) any directors of the Debtor who continue to serve in such capacity
with Reorganized Telemundo after the Consummation Date, (b) any present officers
of the Debtor who have entered into employment or completion contracts with the
Debtor which are in full force and effect on the Consummation Date, and (c) any
present officers of the Debtor not included in clause (b) of this sentence who
continue to be employed by Reorganized Telemundo for a period of ninety (90)
consecutive days following the Consummation Date, in each case from and against
any expenses, judgments, fines and amounts paid in settlement in connection with
any threatened, pending or completed action, suit or proceeding against any of
such indemnified parties in respect of all past, present and future actions,
suits and proceedings based upon any acts and omissions related to, arising from
and in connection with service to, for or on behalf of Telemundo shall not be
discharged or impaired by confirmation or consummation of this Plan, but shall
survive unaffected by the reorganization contemplated by this Plan and shall be
performed and honored to the fullest extent permitted by Reorganized Telemundo's
Restated Certificate of Incorporation, Restated By-Laws, or applicable law and,
to the extent applicable, such obligations to indemnify shall be deemed to be
and shall be treated as though they are, executory contracts that are assumed
under this Plan.
17.04. Survival of Indemnification Obligations to Indemnitees.
------------------------------------------------------
(a) Designation. From and after the Consummation Date,
-----------
Reorganized Telemundo shall pay all Covered Expenses incurred by Indemnitees
arising out of or incurred in connection with Covered Claims; provided, that the
--------
total of all of Reorganized Telemundo's obligations under this Section 17.04(a)
shall be limited to the Cap. Subject to the terms and conditions of this Section
17.04,
47
<PAGE>
the obligation of Reorganized Telemundo under this Section 17.04 shall
constitute an unconditional obligation to pay amounts up to the Cap and such
obligation shall not be conditioned upon the Indemnitees being entitled to
receive indemnification or contribution from Reorganized Telemundo in accordance
with the requirements or standards contained in section 145 of the General
Corporation Law of the State of Delaware or otherwise. Reorganized Telemundo
shall have no further liability to Indemnitees hereunder, including, without
limitation, any liabilities for any further Covered Expenses (i) at such time as
Reorganized Telemundo has paid an amount in respect of Covered Expenses equal to
the Cap, or (ii) for Covered Expenses that arise out of Covered Claims which are
not pending until on or after the date that is six (6) years after the
Consummation Date.
(b) Administration and Payment. Howard E. Steinberg shall be the
--------------------------
initial Administrator of Reorganized Telemundo's obligations under this Section
17.04; provided, however, that in the event Howard E. Steinberg is unable to
-------- -------
serve as Administrator, Andrew B. Donnellan, Jr. shall be the Administrator;
further, provided, however, that if a majority of Indemnitees designate a person
- ------- -------- -------
other than Howard E. Steinberg or Andrew B. Donnellan, Jr., as the case may be,
to serve as Administrator, then upon such designation that person, and not
Howard E. Steinberg, or Andrew B. Donnellan, Jr., as the case may be, shall
serve as Administrator hereunder. The Administrator shall have a lien prior to
that of the Indemnitees on all funds authorized to be expended by Reorganized
Telemundo hereunder for the sole purpose of reimbursing the Administrator for
any out-of-pocket expenses incurred by the Administrator in his official
capacity; provided, however, that the Administrator shall not be entitled to
-------- -------
payment for any fees other than out-of-pocket expenses incurred in connection
with his obligations under this Section 17.04. The Indemnitee who is a
defendant in a Covered Claim in respect of which claims may be asserted against
Reorganized Telemundo hereunder shall control all aspects of that Covered Claim
including, but not limited to, the selection of counsel. If more than one
defendant in any Covered Claim is a Indemnitee, the litigation shall be
controlled by the Indemnitees' Committee. The Administrator shall administer
payments to Indemnitees as follows: (i) reasonable fees and costs shall be
approved upon submission; and (ii) proposed settlements, and the fair and
equitable allocation of fees and costs as between any defendants to the same
action, shall be subject to the approval of the Administrator, which shall not
be unreasonably withheld. Reorganized Telemundo shall reimburse Indemnitees for
Covered Expenses in full, in cash, promptly, but in no event later than fifteen
(15) days following a submission by the Administrator certifying that the
reimbursement requested is a Covered Expense incurred in connection with a
Covered Claim. In addition to its
48
<PAGE>
obligations as set forth elsewhere in this Section 17.04, Telemundo and
Reorganized Telemundo shall be responsible for all costs and expenses incurred
in connection with the estimation and/or allowance of claims against Telemundo
related to the Gandal Litigation and/or the Profit Sharing Litigation, including
the prosecution or defense of any appeals in connection with the allowance or
estimation of such claims by the Bankruptcy Court, and, in the event that such
claims are not estimated or fixed by the Bankruptcy Court, the prosecution or
defense costs and expenses of any appeals related thereto. The Debtor shall
object to the Claims related to such litigations consistent with Section 15.01
of this Plan. Subject to the second preceding sentence, with respect to any
direct liability for litigation costs, attorneys' fees and settlements of the
individual defendants to the Gandal Litigation and/or the Profit Sharing
Litigation, and any costs that are independent of Telemundo's liability and
incremental thereto that are not covered by insurance are Covered Expenses
pursuant to paragraph (a) above.
(c) Proofs of Claim; Withdrawal. In consideration of the provisions
---------------------------
of this Section 17.04, on the Consummation Date, all proofs of Claim filed
against Telemundo by a Reliance Entity shall be expunged, dismissed and
withdrawn with prejudice; provided, however, that proofs of Claim numbered 56,
-------- -------
58, 59 and 60, filed by Reliance Capital Group, L.P., Reliance Capital Group,
Inc., Reliance Group Holdings, Inc. and Reliance Insurance Company,
respectively, shall be expunged, dismissed and withdrawn with prejudice only to
the extent that such proofs of Claim assert Claims for indemnification or
contribution.
ARTICLE EIGHTEEN
MISCELLANEOUS PROVISIONS
18.01. Bankruptcy Court to Retain Jurisdiction. The business and
---------------------------------------
assets of the Debtor shall remain subject to the jurisdiction of the Bankruptcy
Court until the Consummation Date. From and after the Consummation Date, except
as otherwise provided by law, the Bankruptcy Court shall retain and have
exclusive jurisdiction over Reorganized Telemundo and the Chapter 11 Case for
the purposes of determining all disputes and other issues presented by or
arising under this Plan including, without limitation, exclusive jurisdiction to
(a) determine any and all disputes relating to Claims and Interests and the
allowance and amount thereof, (b) determine any and all disputes among Creditors
with respect to their Claims, (c) consider and allow any and all applications
for
49
<PAGE>
compensation for professional services rendered and disbursements incurred in
connection therewith, (d) determine any and all applications, motions, adversary
proceedings and contested or litigated matters pending on the Consummation Date
and arising in or related to the Chapter 11 Case or this Plan, (e) modify this
Plan as provided for in Section 18.10 hereof or to remedy any defect or omission
or reconcile any inconsistency in the Confirmation Order, (f) enforce the
provisions of this Plan relating to the distributions to be made hereunder, (g)
if necessary, determine the contractual rights of subordination between or among
holders of Claims and Interests with respect to distributions under this Plan,
(h) issue such orders, consistent with section 1142 of the Bankruptcy Code, as
may be necessary to effectuate the consummation and full and complete
implementation of this Plan, (i) enforce and interpret any provisions of this
Plan, (j) determine such other matters as may be set forth in the Confirmation
Order or that may arise in connection with the implementation of this Plan, (k)
determine the final amounts allowable as compensation or reimbursement of
expenses pursuant to section 503(b) of the Bankruptcy Code and (l) determine all
matters relating to the interpretation and enforcement of the Blair Settlement
Agreement.
18.02. Binding Effect of this Plan. The provisions of this Plan
---------------------------
shall be binding upon and inure to the benefit of Reorganized Telemundo, any
holder of a Claim, any holder of an Interest and their respective predecessors,
successors, assigns, agents, officers and directors.
18.03. Nonvoting Equity Securities. In accordance with section
---------------------------
1123(a)(6) of the Bankruptcy Code, any and all authorized shares of Telemundo
Preferred Stock shall be canceled and become null and void as of the
Consummation Date, and the Restated Certificate of Incorporation of Reorganized
Telemundo shall contain a provision prohibiting the issuance of nonvoting equity
securities by Reorganized Telemundo.
18.04. Authorization of Corporate Action. The entry of the
---------------------------------
Confirmation Order shall constitute a direction and authorization to and of the
Debtor and Reorganized Telemundo to take or cause to be taken any corporate
action necessary or appropriate to consummate the provisions of this Plan
(including, without limitation, the filing of or amending or restating the
Certificate of Incorporation of Reorganized Telemundo), and all such actions
taken or caused to be taken shall be deemed to have been authorized and approved
by the Bankruptcy Court.
18.05. Withdrawal of this Plan. Subject to its obligations under the
-----------------------
Blair Settlement Agreement, if any, the Debtor reserves the right, at any time
prior to the
50
<PAGE>
entry of the Confirmation Order, to revoke or withdraw this Plan with the
written consent of the Creditors' Committee; provided, however, that if the
-------- -------
Creditors' Committee takes any action to terminate or object to the continuation
of exclusivity or any action inconsistent with the confirmation of this Plan,
the Debtor shall have no obligation to receive the consent of the Creditors'
Committee to withdraw this Plan. If the Debtor revokes or withdraws this Plan
or if the Confirmation Date does not occur, then this Plan will be deemed null
and void.
18.06. Captions. Article and Section captions used in this Plan are
--------
for convenience only and will not affect the construction of this Plan.
18.07. Method of Notice. All notices required to be given under this
----------------
Plan, if any, shall be in writing and shall be sent by first class mail, postage
prepaid, or by overnight courier:
If to the Debtor, to:
Telemundo Group, Inc.
1740 Broadway
New York, New York 10019
Attn: Chief Financial Officer
With copies to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn: Brad Eric Scheler, Esq.
If to the Creditors' Committee, to its Chairperson:
Apollo Advisors, L.P.
1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Attn: Arthur H. Bilger
With copies to:
Berlack, Israels & Liberman
120 W. 45th Street
New York, New York 10036
Attn: Edward S. Weisfelner, Esq.
51
<PAGE>
-and-
Moses & Singer
1301 Avenue of the Americas
New York, New York 10019
Attn: Alan Kolod, Esq.
Any of the above may, from time to time, change its address for future notices
and other communications hereunder by filing a notice of the change of address
with the Bankruptcy Court. Any and all notices given under this Plan shall be
effective when received.
18.08. Dissolution of Creditors' Committee. On the Consummation
-----------------------------------
Date, the Creditors' Committee shall dissolve and the members of, and
professionals engaged by, the Creditors' Committee shall thereupon be released
and discharged of and from all authority, duties, responsibilities, obligations
and liabilities, if any, related to and arising from and in connection with the
Chapter 11 Case. The provisions of this Section 18.08 shall in no way limit the
provisions of Section 17.01 of this Plan.
18.09. Section 1125(e) of the Bankruptcy Code. Each of the members
--------------------------------------
of the Creditors' Committee and each of the Reliance Entities (and each of their
respective affiliates) have, and upon confirmation of the Plan shall be deemed
to have, solicited acceptances of this Plan, in good faith and in compliance
with all applicable provisions of the Bankruptcy Code, and have participated in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code in the offer, issuance, sale and purchase of the securities offered and
sold under this Plan, and therefore are not, and on account of such offer,
issuance, sale, solicitation and/or purchase, will not be liable at any time for
violation of any applicable law, rule, or regulation governing the solicitation
of acceptance or rejection of this Plan or the offer, issuance, sale or purchase
of the securities hereunder.
18.10. Continued Confidentiality Obligations. Pursuant to the terms
-------------------------------------
thereof, members of and advisors to the Creditors' Committee, any other holder
of a Claim or Interest and their respective predecessors and successors shall
continue to be obligated and bound by the terms of any confidentiality
agreements executed by them with the Debtor (both before and after the Filing
Date) in connection with the negotiations regarding the restructuring of the
Debtor's outstanding indebtedness or the Chapter 11 Case.
18.11. Amendments and Modifications to Plan. Except as provided by the
------------------------------------
Blair Settlement Agreement, notwithstanding any other provisions of the
Bankruptcy Code,
52
<PAGE>
this Plan may only be altered, amended or modified by the Debtor with the
written consent of the Creditors' Committee before or after the Confirmation
Date. Such alterations, amendments and modifications shall otherwise be in
accordance with the provisions of section 1127 of the Bankruptcy Code; provided,
--------
however, that if the Creditors' Committee takes any action to terminate or
- -------
object to the continuation of exclusivity or any action inconsistent with the
confirmation of this Plan, the Debtor shall have no obligation to receive the
consent of the Creditors' Committee for any alteration, amendment or
modification of this Plan.
Dated: New York, New York
April 29, 1994
Respectfully submitted,
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman II
-----------------------
Peter J. Housman II
President-Business and
Corporate Affairs
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON
(A Partnership Including
Professional Corporations)
Attorneys for Telemundo Group, Inc.,
Debtor and Debtor-In-Possession
One New York Plaza
New York, New York 10004
(212) 820-8000
By: /s/ Brad Eric Scheler
---------------------
Brad Eric Scheler (BES-4862)
A Member of the Firm
(212) 820-8019
53
<PAGE>
Exhibit P-1
Blair Settlement Agreement
<PAGE>
Exhibit P-2
Creditor Warrant Agreement
<PAGE>
Exhibit P-3
New Senior Note Indenture
<PAGE>
Exhibit P-4
1994 Stock Option Plan
<PAGE>
Exhibit P-5
O & Y Letter Agreement
<PAGE>
Exhibit P-6
Reliance Warrant Agreement
<PAGE>
Exhibit P-7
Restated By-Laws
of Telemundo Group, Inc.
<PAGE>
Exhibit P-8
Restated Certificate of
Incorporation of Telemundo Group, Inc.
<PAGE>
Exhibit P-9
Rights Plan
<PAGE>
Exhibit P-10
Standby Purchase Agreement
<PAGE>
Exhibit P-11
Registration Rights Agreement
<PAGE>
EXHIBIT 10.1
SHAREHOLDERS AGREEMENT
----------------------
This SHAREHOLDERS AGREEMENT ("Agreement") is made and entered into as of the
20th day of December, 1994, by and between TLMD Partners II, L.L.C., a Delaware
limited liability company ("TLMD"), Bastion Capital Fund, L.P., a Delaware
limited partnership ("Bastion"), Leon Black ("Black"), Hernandez Partners, a
California general partnership ("HP"), GRS Partners II, L.P., an Illinois
limited partnership ("GRS"), and The Value Realization Fund, L.P., a Delaware
limited partnership ("Value" and, collectively with Bastion, Black, HP and GRS,
the "Other Shareholders").
R E C I T A L S
---------------
A. TLMD beneficially owns or will own, as a result of the Plan of
Reorganization (as defined below), approximately 1,550,000 shares (the "TLMD
----
Shares") of Series B Common Stock (as defined below).
- ------
B. Each of the other parties hereto beneficially owns or will own, as a
result of the Plan of Reorganization, approximately the number of shares of
Series A Common Stock (as defined below) and shares of Series B Common Stock set
forth below:
Black: 0 Series A Common Stock and 52,596 Series B Common Stock*
Bastion: 374,498 Series A Common Stock and 882,596 Series B Common Stock*
HP: 50,000 Series A Common Stock and 450,000 Series B Common Stock
GRS: 33,333 Series A Common Stock and 0 Series B Common Stock
Value: 66,667 Series A Common Stock and 0 Series B Common Stock.
C. TLMD and the Other Shareholders desire to promote their mutual interests
by imposing certain restrictions and obligations on themselves and the Common
Stock owned by them.
- ----------------------------------
* Subject to possible increase in the aggregate of approximately 147,404 shares
of Series B Common Stock.
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto mutually agree as follows:
1. Definitions. Unless otherwise expressly provided, the following terms,
-----------
when used in this Agreement, shall be defined as follows:
Apollo Permitted Transferee shall have the meaning ascribed to such term in
---------------------------
the Certificate.
Bastion Nominee shall mean Guillermo Bron or, if he is unable to serve as a
---------------
director of the Company as a result of death or medical disability or otherwise,
a successor nominee chosen by Bastion and reasonably acceptable to the Voting
Committee.
Permitted Transferee, with respect to any Other Shareholder, shall mean (i)
--------------------
any partner or Affiliate (as defined in the Certificate) of such Other
Shareholder and (ii) any investment fund, investment account or other entity
whose investment manager, investment advisor or general partner, or any
principal thereof, is such Other Shareholder or any Affiliate or principal of
such Other Shareholder.
Beneficial Ownership shall have the meaning ascribed to such term in Rule
--------------------
13d-3 under the Securities Exchange Act and the term "Beneficially Owned" shall
have a correlative meaning.
Certificate shall mean the Restated Certificate of Incorporation of the
-----------
Company, as in effect on the consummation of the reorganization contemplated by
the Plan of Reorganization.
Common Stock shall mean collectively the Series A Common Stock and the Series B
------------
Common Stock.
Company shall mean Telemundo Group, Inc., a Delaware corporation.
-------
HP Nominee shall mean Roland A. Hernandez or, if he is unable to serve as the
----------
HP Nominee, a successor nominee chosen by HP and reasonably acceptable to the
Voting Committee.
Independent Member shall initially be Alan Abramson. In the event of the
------------------
death, incapacity or resignation of Alan Abramson, then Norman Brownstein shall
be his successor as the Independent Member. In the event of the death,
incapacity or resignation of Norman Brownstein, then TLMD and Bastion shall
mutually agree upon subsequent successor(s) to the Independent Member.
-2-
<PAGE>
1% Retention Requirement shall have the meaning set forth in Section 3.
------------------------ ---------
Plan of Reorganization shall mean the Second Amended Chapter 11 Plan of
----------------------
Reorganization of the Company dated April 29, 1994 (Case No. 93-B-42967 (JLG) in
the United States Bankruptcy Court for the Southern District of New York).
Registration Rights Agreement shall mean that certain Registration Rights
-----------------------------
Agreement among the Company, Apollo Advisors, L.P. and Reliance Insurance
Company contemplated by the Plan of Reorganization.
Series A Common Stock shall mean the Series A Common Stock, par value $.01 per
---------------------
share, of the Company, and any stock into which such shares shall have been
changed or any stock resulting from any stock split, reverse stock split, stock
dividend, reclassification or similar transaction, including, without
limitation, the issuance of Series A Common Stock upon conversion of Series B
Common Stock.
Series B Common Stock shall mean the Series B Common Stock, par value $.01 per
---------------------
share, of the Company, and any stock into which such shares shall have been
changed or any stock resulting from any stock split, reverse stock split, stock
dividend, reclassification or similar transaction (other than a conversion into
Series A Common Stock as contemplated by Article 4 of the Certificate).
Voting Committee shall have the meaning set forth in Section 2.1.
---------------- -----------
2. Voting Committee.
----------------
2.1. Establishment. TLMD and the Other Shareholders hereby establish a
-------------
voting committee whose sole function shall be voting (and consenting or
dissenting to corporate action in writing with respect to) (i) the shares of
Common Stock Beneficially Owned by TLMD and (ii) the shares of Common Stock
Beneficially Owned by the Other Shareholders (the "Voting Committee"). The
----------------
Other Shareholders and TLMD hereby agree that such shares of Common Stock shall
be voted (and consents or dissents to corporate action in writing shall be given
with respect thereto) only as contemplated by this Section 2. TLMD agrees that
the provisions of its organizational documents will, during the term of this
Agreement, provide for the operation of the Voting Committee as set forth in
this Section 2.
2.2. Membership. The Voting Committee shall at all times consist of three
----------
members: John Hannan (appointed by TLMD), Guillermo Bron (appointed by Bastion)
and the Independent Member. In the event that John Hannan is unable
-3-
<PAGE>
to serve as a member of the Voting Committee as a result of death or medical
disability or otherwise, TLMD shall be entitled to appoint his successor(s).
TLMD will use reasonable best efforts to cause John Hannan to continue to serve
as its designee on the Voting Committee during the term of this Agreement. In
the event that Guillermo Bron is unable to serve as a member of the Voting
Committee as a result of death or medical disability or otherwise, Bastion shall
be entitled to appoint his successor(s). Bastion will use reasonable best
efforts to cause Guillermo Bron to continue to serve as its designee on the
Voting Committee during the term of this Agreement. All members of the Voting
Committee are, and will be, citizens of the United States.
2.3. Action by Voting Committee. The Voting Committee shall act by a
--------------------------
unanimous written consent signed by all the members of the Voting Committee or
by majority vote of at least two members of the Voting Committee at a meeting
called by any member of the Voting Committee upon two business days written
notice to the other members. Such majority vote by the Voting Committee at a
duly held meeting shall have the effect of constituting acceptance of such
decision by all of the members of the Voting Committee. Two members of the
Voting Committee shall constitute a quorum for the transaction of business at a
meeting thereof. The Voting Committee shall have the power to designate one or
more members of the Voting Committee to execute certificates and other documents
on behalf of all of them in furtherance of their collective decisions. The
Voting Committee may, from time to time, adopt and/or amend its own rules of
procedure and take such other actions related to the voting of the Common Stock
not inconsistent with the provisions hereof, and shall record and keep records
of all its proceedings at such place as may be designated by the Voting
Committee.
2.4. Liability of Voting Committee. The members of the Voting Committee
-----------------------------
shall not be liable to TLMD, the Other Shareholders or any other person for
errors of law or of any thing done or suffered or omitted in connection
therewith, except for their own individual willful misconduct, bad faith or
action taken or omitted to be taken in knowing violation of law. The members of
the Voting Committee shall act with due diligence and shall act in compliance
with applicable provisions of law. No member of the Voting Committee shall be
required to give any bond or other security for the discharge of his duties.
2.5. Election of Directors. So long as Bastion is the Beneficial Owner of
---------------------
at least 278,944 shares of Series B Common Stock (unless Bastion instructs the
Voting Committee in writing not to take the following actions), each of TLMD,
-4-
<PAGE>
the Other Shareholders and the Voting Committee shall (a) use its reasonable
best efforts to cause the Bastion Nominee to be nominated as a director of the
Company (and Bastion will in such case use its reasonable best efforts to cause
the Bastion Nominee to so serve) and, (b) to vote all shares of Common Stock
that TLMD or the Voting Committee has the right to vote for the election of the
Bastion Nominee as a director of the Company.
So long as Leon Black is the Beneficial Owner of at least 25,000
shares of Common Stock (unless Mr. Black instructs the Voting Committee in
writing not to take the following actions), each of TLMD and the Voting
Committee and the Other Shareholders shall (a) use its reasonable best efforts
to cause Mr. Black (or his designee) to be nominated as a director of the
Company and (b) to vote all shares of Common Stock that TLMD or the Voting
Committee has the right to vote for the election of Mr. Black (or his designee)
as a director of the Company.
So long as HP is the Beneficial Owner of at least 125,000 shares of
Series B Common Stock (unless HP instructs the Voting Committee in writing not
to take the following actions ) each of TLMD, the Other Shareholders and the
Voting Committee shall (a) use its reasonable best efforts to cause (and, if the
HP Nominee is not a director on or immediately after the consummation of the
Plan of Reorganization, subject to any necessary Federal Communications Act
approvals or consents, to cause as promptly as reasonably practicable and in any
event (to the extent practicable) within 90 days of the consummation of the Plan
of Reorganization) the HP nominee to be nominated as a director of the Company
and (b) vote all shares of Common Stock that TLMD or the Voting Committee has
the right to vote for the election of the HP nominee.
So long as TLMD is the Beneficial Owner of at least 278,944 shares of
Series B Common Stock (unless TLMD instructs the Voting Committee in writing not
to take the following actions), the Voting Committee and the Other Shareholders
shall (a) use its reasonable best efforts to cause two persons specified from
time to time by TLMD to be nominated as directors of the Company (and TLMD will
in such case use its reasonable best efforts cause such persons to so serve) and
(b) vote all shares of Common Stock that the Voting Committee has the right to
vote for the election of such persons as directors of the Company.
2.6. Proxy of TLMD and the Other Shareholders. In furtherance of the
----------------------------------------
voting agreement contemplated by this Section 2, each of TLMD and each Other
Shareholder hereby irrevocably appoints the Voting Committee as attorney-in-fact
and proxy, during the term of this Agreement, to vote
-5-
<PAGE>
all shares of Common Stock Beneficially Owned by it, whether now owned or
hereafter acquired, on all matters as to which it is entitled to vote at a
meeting of the stockholders of the Company or to which it is entitled to express
consent or dissent to corporate action in writing without a meeting. Each of
TLMD and each Other Shareholder agrees that the Voting Committee may, in TLMD's
and each Other Shareholder's name and stead, as the case may be, (i) attend any
annual or special meeting of the stockholders of the Company and vote all shares
of Common Stock Beneficially Owned by it at any such annual or special meeting,
and (ii) execute with respect to all shares of Common Stock Beneficially Owned
by it any written consent to, or dissent from, corporate action respecting any
matter to which stockholders of the Company are entitled to express such consent
or dissent without a meeting. Each of TLMD and each Other Shareholder agrees
that this grant of proxy is irrevocable during the term of this Agreement and is
coupled with an interest. Each of TLMD and each Other Shareholder further
agrees to execute (and, if TLMD or such Other Shareholder, as the case may be,
is not the record owner of shares Beneficially Owned by it, to use best
reasonable efforts to cause the record owner to execute) all additional
writings, consents and authorizations as may be reasonably requested by the
Voting Committee to evidence the powers granted to the Voting Committee or to
exercise those powers (including any subsequent proxies).
2.7. Termination of Proxy. The proxy granted by each Other Shareholder in
--------------------
Section 2.6 shall cease to apply to any shares of Common Stock which cease, as a
result of transactions permitted pursuant to Section 3, to be Beneficially Owned
by such Other Shareholder or any Other Shareholder's Permitted Transferees. The
proxy granted by TLMD in Section 2.6 shall cease to apply to any shares of
Common Stock which cease, as a result of transactions permitted pursuant to
Section 3, to be Beneficially Owned by TLMD or Apollo Permitted Transferees.
2.8. Application of Section. The provisions of this Section 2 shall apply
----------------------
to all shares of Common Stock transferred by each Other Shareholder (or its
Permitted Transferees) to its Permitted Transferees and to all shares of Common
Stock transferred by TLMD (or Apollo Permitted Transferees) to Apollo Permitted
Transferees as contemplated by Section 3.
3. Restrictions on Resales. Subject to Section 4, TLMD may freely sell or
-----------------------
transfer (subject to compliance with applicable law) any and all shares of
Common Stock Beneficially Owned by it from time to time; provided, that if
transferred to an Apollo Permitted Transferee, such shares shall continue to be
subject to the provisions of
-6-
<PAGE>
this Agreement applicable to voting and transfer, and TLMD agrees to be
responsible for any breach by an Apollo Permitted Transferee of such provisions.
Each Other Shareholder may freely sell or transfer any and all shares of Common
Stock Beneficially Owned by it; provided, however, that each of Bastion and its
Permitted Transferees, as a group, and HP and its Permitted Transferees, as a
group, must retain Beneficial Ownership of at least 55,789 shares of Series B
Common Stock (the "1% Retention Requirement") until termination of this
------------------------
Agreement in accordance with the terms hereof, unless TLMD shall consent (in its
sole discretion) to such sale or transfer; provided, however, that the 1%
Retention Requirement shall not apply, and HP and Bastion shall be free to sell
any and all shares of Common Stock, during the 365 day period commencing on the
consummation date of the Plan of Reorganization. Notwithstanding the foregoing,
Bastion or HP (or their respective Permitted Transferees) may transfer any
number of shares of Series B Common Stock to a Permitted Transferee so long as
such Permitted Transferee agrees to be bound by the provisions of this Agreement
applicable to voting and transfer of Common Stock applicable to it. Each of
Bastion and HP hereby agrees to be responsible for any breach by its Permitted
Transferees of this Agreement. Without in any way terminating or modifying the
obligations set forth above, in the event of a conversion of Series B Common
Stock to Series A Common Stock, such that Bastion and its Permitted Transferees,
as a group, or HP and its Permitted Transferees, as a group, no longer
Beneficially Own sufficient Series B Common Stock to satisfy its 1% Retention
Requirement, the 1% Retention Requirement shall apply to such Series B Common
Stock as is still Beneficially Owned by such persons, plus an amount of Series A
Common Stock, which if it were assumed to be Series B Common Stock, would
satisfy the 1% Retention Requirement.
4. Tag Along Rights of Other Shareholders.
--------------------------------------
4.1. General. (a) Subject to Sections 4.2 and 4.3, TLMD hereby agrees
------- --------------------
that in the event that TLMD or any Apollo Permitted Transferee (which, for
purposes of this Section 4, does not include Black in respect of the shares of
Common Stock owned by him and subject to this Agreement (other than any such
shares of Common Stock acquired in a chain of transactions from TLMD)) proposes
to sell any shares of Common Stock of the Company then Beneficially Owned by it
in a single transaction or a series of related transactions to any person that
is not an Apollo Permitted Transferee (a "Subject Sale"), then TLMD will notify
------------
each Other Shareholder in writing at least ten business days in advance of such
proposed sale (specifying the number of shares to be sold, the sales price, the
proposed purchaser and other material terms of sale) and will permit each Other
-7-
<PAGE>
Shareholder and its Permitted Transferees (at its option) to participate in such
sale on substantially the same terms as generally offered to TLMD or the Apollo
Permitted Transferees and to sell the number of shares of Common Stock each
Other Shareholder and its Permitted Transferees desire to sell together with the
number of shares of Common Stock which TLMD and the Apollo Permitted Transferees
desire to sell (subject to the limitations set forth in the remainder of this
Section 4). No such sale by Bastion or HP (or their respective transferees), as
the case may be, shall be made if, as a result of and after consummating such
sale, the 1% Retention Requirement for Bastion or HP, as the case may be, would
not be satisfied.
(b) Each Other Shareholder, and its Permitted Transferees, in the
aggregate, shall be entitled to sell, from shares of Common Stock Beneficially
Owned by them immediately prior to such sale, an aggregate maximum number of
shares which, when divided by the lesser of (x) the number of shares of Common
Stock owned by such Other Shareholder as a result of the consummation of the
Plan of Reorganization (including for these purposes, but only with respect to
Bastion, an additional 195,000 shares of Common Stock) reduced by the number of
shares of Common Stock previously sold by such Other Shareholder and its
Permitted Transferees pursuant to the provisions of this Section 4 and (y) the
total number of shares of Common Stock Beneficially Owned by them immediately
prior to such sale, shall equal the "TLMD Selling Percentage".
The "TLMD Selling Percentage" equals (x) the number of shares of
-----------------------
Common Stock proposed to be sold by TLMD and the Apollo Permitted Transferees
divided by (y) the lesser of (A) the number of shares of Common Stock to be
owned by TLMD or Apollo Permitted Transferees as a result of consummation of the
Plan of Reorganization reduced by the number of shares of Common Stock
previously sold by TLMD and the Apollo Permitted Transferees pursuant to Subject
Sales and (B) the number of shares of Common Stock Beneficially Owned by TLMD
and the Apollo Permitted Transferees immediately prior to such sale.
In the event that the inclusion of the shares proposed to be sold by
the Other Shareholders and their Permitted Transferees results in a greater
number of shares than can be sold in such transaction or series of transactions,
TLMD and the Apollo Permitted Transferees and the Other Shareholder and their
Permitted Transferees will reduce the number of shares they propose to sell, as
needed, so that the number of shares to be sold conform to the determinations
set forth in clauses (a) and (b).
-8-
<PAGE>
(c) Within five business days after receipt of the notice from TLMD,
each Other Shareholder shall notify TLMD in writing of the number of shares of
Series B Common Stock which it and its Permitted Transferees desire to sell (if
any) and will provide TLMD with such other information, and will take such
actions, as TLMD shall reasonably request. In connection with each such sale,
each Other Shareholder and TLMD will take such actions as the other party
reasonably requests (provided, that TLMD shall have no obligation to cause the
terms of any proposed sale to be modified at the request of any Other
Shareholder), and neither TLMD nor any Apollo Permitted Transferee will
consummate any such sale if the proposed purchaser shall fail to purchase the
shares of each Other Shareholder or its Permitted Transferees which are required
to be purchased pursuant to the terms hereof.
4.2. Rule 144 Sales. Notwithstanding the provisions of Section 4.1, in
-------------- -----------
the event that TLMD or an Apollo Permitted Transferee proposes to sell any
shares of Common Stock pursuant to Rule 144 of the Securities Act of 1933, such
entity shall not be required to permit an Other Shareholder or its Permitted
Transferee to participate in such sale.
4.3. Registered Offerings. Notwithstanding the provisions of Section 4.1,
-------------------- -----------
in the event that the proposed sale by TLMD or an Apollo Permitted Transferee
involves registering Common Stock under the Securities Act of 1933 pursuant to
the terms of the Registration Rights Agreement, TLMD and any Apollo Permitted
Transferee shall not be required to permit any Other Shareholder or its
Permitted Transferees to participate in such sale; provided, however, that TLMD
shall use its reasonable best efforts to include, and to cause the Company to
include, such number of shares of Common Stock as any Other Shareholder or its
Permitted Transferees would be otherwise entitled to include pursuant to Section
-------
4.1, if requested by such Other Shareholder, and TLMD shall use its reasonable
- ---
best efforts to cause such participation to be made on substantially the same
terms as are applicable to TLMD and any Apollo Permitted Transferee. Any Other
Shareholder (or its Permitted Transferee) participating in such sale shall take
such actions as TLMD and the Company shall reasonably request with respect to
any such registration.
4.4. Termination of Tag Along Rights. The right of the Other Shareholders
-------------------------------
under this Section 4 to participate in any such sale of Common Stock shall
---------
terminate if TLMD and the Apollo Permitted Transferees, as a group, cease to own
of record at least 557,887 shares of Common Stock.
-9-
<PAGE>
5. Termination of Agreement. This Agreement, including the right of
------------------------
Guillermo Bron and his successor(s) to serve as a member of the Voting Committee
and the proxies granted hereunder, shall terminate on the earlier of (i) the
date when no shares of Series B Common Stock are outstanding and (ii) the date
when TLMD and the Apollo Permitted Transferees cease to own shares of Series B
Common Stock representing at least 245,003 shares of Series B Common Stock;
provided, that the provisions of Section 4 shall continue until the earlier of
(i) seven years from the Consummation Date and (ii) the date of termination
contemplated by Section 4.4. This Agreement (other than the provisions of
Section 4, which shall continue until terminated in accordance with Section 4.4
or the preceding sentence of this Section 5) may also be terminated as of the
date specified by TLMD in a written notice delivered to each of the Other
Shareholders (which notice may be withdrawn prior to the time of termination of
this Agreement specified in such notice); provided, that any requisite
regulatory approvals required to permit termination of the Agreement as
contemplated hereby shall have been received or such termination is conditioned
upon receipt of any such required approvals.
6. Legend on Certificates. Each certificate representing shares of Common
----------------------
Stock subject to this Agreement shall have conspicuously stamped, printed, or
typed on the back thereof the following legend:
THE VOTING AND TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A SHAREHOLDERS AGREEMENT. A COPY OF THE SHAREHOLDERS
AGREEMENT IS ON FILE AT THE OFFICES OF TLMD PARTNERS II, [ADDRESS].
Such certificate shall be endorsed on the front thereof as follows:
"See restrictions on reverse side of this Certificate."
7. Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing and shall be delivered in person, by receipted
overnight courier, or by facsimile transmission to the telecopy number below:
To: TLMD Partners II, L.L.C.
c/o The Corporation Trust Company
The Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Telecopy Number: (302) 658-2919
-10-
<PAGE>
With a copy to: Patrick J. Dooley, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
65 East 55th Street
33rd Floor
New York, New York 10022
Telecopy Number: (212) 872-1002
To: Bastion Capital Fund, L.P.
1999 Avenue of the Stars
Suite 2800
Los Angeles, CA 90067
Attention: Guillermo Bron
Telecopy Number: (310) 277-7582
With a copy to: Michael A. Woronoff, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, California 90071
Telecopier: (213) 687-5600
To: The remaining Other Shareholders:
to such address as they may specify from
time to time in writing.
8. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of all the parties hereto and their respective heirs, legatees, legal
representatives, successors and permitted assigns.
9. Representations. TLMD and each Other Shareholder represents, as to
---------------
itself, (i) that this Agreement has been duly and validly authorized, executed
and delivered by it and is valid and binding and enforceable against it in
accordance with its terms and (ii) assuming the delivery of Common Stock to each
Other Shareholder as contemplated by the purchase agreements between TLMD or its
Affiliates and such Other Shareholder, it is or will be (as a result of the
consummation of the Plan of Reorganization) the Beneficial Owner of the number
of shares of Common Stock set forth in the Recitals as being owned by it.
10. Counterparts. This Agreement may be executed in multiple counterparts,
------------
each of which shall be deemed to be an original, and all such counterparts
together shall constitute but one and the same instrument.
11. Governing Law. This Agreement and all of the rights and duties of the
-------------
parties arising from or relating in any way to the subject matter of this
Agreement shall be governed, enforced and construed in accordance with the laws
of the State of Delaware applicable to contracts entered into and performed
completely within the State of Delaware.
12. Severability. In the event any of the provisions, or portions thereof, of
------------
this Agreement are held to be unenforceable
-11-
<PAGE>
or invalid by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions, or portions thereof, shall not be
affected thereby. Any provisions so held unenforceable or invalid shall be
reformed by such court to reflect the construction most nearly approximating the
intent of such provision which shall be valid and enforceable, and the parties
hereto hereby agree to such provision as reformed.
13. Construction. All personal pronouns used in this Agreement, whether used
------------
in the masculine, feminine or neuter gender, shall include all other genders and
the singular shall include the plural and vice versa.
14. Entire Agreement. This Agreement constitutes the entire agreement between
----------------
the parties with respect to the subject matter hereof.
15. Amendment. This Agreement may be amended only by the written consent of
---------
all the parties to this Agreement.
16. Certain Adjustments. All references to a number of shares of Series B
-------------------
Common Stock set forth in this Agreement shall be adjusted proportionately to
reflect any stock split, reverse stock split, stock dividend or similar
transaction (which shall not include a conversion into Series A Common Stock as
contemplated by Article 4 of the Certificate) that increases or decreases the
total number of outstanding shares of Series B Common Stock.
17. Specific Performance. The parties hereto acknowledge that money damages
--------------------
may be an inadequate remedy for breach of this Agreement. Therefore, the
parties agree that either party may, in its sole discretion, apply to any court
of law or equity of competent jurisdiction, to obtain specific performance of
this Agreement and injunctive relief against any breach hereof, in either case
without the posting of any bond or other security.
[Signature page follows.]
-12-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P., its Manager
By: Apollo Advisors, L.P.,
its Managing General
Partner
By: Apollo Capital
Management, Inc.,
its General Partner
By:
________________________
Name:
Title:
BASTION CAPITAL FUND, L.P.
By: Bastion Partners
its general partner
By: Bron Corp.
its general partner
By:
________________________
Guillermo Bron
President
HERNANDEZ PARTNERS
By:
________________________________
Roland Hernandez
General Partner
___________________________________
Leon Black
<PAGE>
THE VALUE REALIZATION FUND, L.P.
By: Canpartners Investments III, L.P.,
its General Partner
By: Canyon Capital Management, L.P.,
its General Partner
By: Canpartners Incorporated,
its General Partner
By: ___________________________________
Title:
GRS PARTNERS II
By:_____________________________________
Paul Meister, Vice President of
Grosvenor Capital Management, Inc.
general partner of Grosvenor
Capital Management, L.P.,
Administrator of GRS Partners II
<PAGE>
EXHIBIT 10.2
December __, 1994
Reference is made to the Agreement to Purchase Securities and Claims, dated
the date hereof, between __________ and TLMD Partners II, L.L.C. (the
"Agreement"). Capitalized terms used and not defined herein shall have the
meanings ascribed to them in the Agreement.
The parties are entering into this letter agreement ("Letter Agreement") to
induce Purchaser to enter into and perform its obligations under the Agreement.
The obligations of Seller under this Letter Agreement are irrevocable and,
except as expressly provided in this Letter Agreement, absolutely unconditional.
If at any time and from time to time prior to 365 days from the
consummation date of the Plan (the "Protection Period"), Purchaser shall have
completed a sale (a "Subject Sale") of any of the Distribution Stock in a bona
fide arms-length cash sale to an unaffiliated third party at a per share price
of less than $10.00, (which per share price shall be appropriately adjusted for
subdivisions or stock splits of Distribution Stock into a greater number of
shares, for combinations and reverse stock splits of Distribution Stock into a
smaller number of shares, and shall be fairly and equitably adjusted in the case
of any reclassification of Distribution Stock into a different class or series
of Debtor capital stock or any distribution of Debtor capital stock on and in
respect of the Distribution Stock, but excluding a conversion of Debtor's Series
B Common Stock into Series A Common Stock), Seller agrees to pay to Purchaser
the amount by which the total sale proceeds for all shares of Distribution Stock
sold by Purchaser during the Protection Period (adjusted in accordance with Page
2, Paragraph 1, hereinbelow) is less than the product of (i) $10.00 (adjusted as
aforesaid) and (ii) the total number of shares of Distribution Stock sold by
Purchaser during the Protection Period ("Protection Amount"). After the earlier
of (i) the sale of all of the shares of Purchaser's Distribution Stock or (ii)
the expiration of the Protection Period, Seller shall remit as and subject to
the provisions of this Agreement to the
<PAGE>
Purchaser an amount equal to the Protection Amount. Distribution Stock shall
include securities, cash or other property, or any combination thereof received
in exchange for Distribution Stock in a merger, consolidation or similar
corporate transaction, with fair and equitable adjustment of the $10.00 price
referred to above.
Purchaser agrees that it will not purchase any securities that could be
considered Distribution Stock as contemplated by the preceding paragraph within
90 days after any Subject Sale.
Purchaser agrees that Seller's obligations pursuant to the above paragraph
are subject only to the following terms (in addition to compliance by Purchaser
with its obligations hereunder):
1. The purchase price received by Purchaser shall be reduced by
customary commissions and brokerage fees incurred by or on
behalf of Purchaser pursuant to any such sale transaction.
2. Seller shall not be obligated to pay any amount pursuant to
this letter agreement for shares of Common Stock sold by
Purchaser not constituting Distribution Stock, it being
agreed that if Distribution Stock is Series B Common Stock
and is converted into shares of Series A Common Stock, such
shares of Series A Common Stock shall be treated as
Distribution Stock for all purposes of this Agreement.
3. Purchaser shall segregate Distribution Stock from all other
securities of the Company (or any successor) held by it.
Purchaser shall provide Seller such information as it may
reasonably request relating to compliance by Purchaser with
the terms of this Agreement.
4. Purchaser shall represent and warrant to Seller that, with
respect to any Subject Sale, (1) only Distribution Stock has
been sold, (2) the amount to be paid is consistent with the
provisions of this Agreement and (3) the purchase price
-2-
<PAGE>
received by Purchaser is the only consideration or other
benefit received or to be received directly or indirectly by
Purchaser or its affiliates for or in respect of such sale.
It shall be presumed that such representation and warranty
is accurate, but such presumption may be rebutted by Seller
with specific information to the contrary.
5. Purchaser shall notify Seller in writing of all permitted
transfers of any rights hereunder within five days of the
date of such transfer (and in such notice will represent the
total Protection Amount previously claimed) or such transfer
shall be void and no further transfers permitted.
6. The aggregate amount payable by Seller (whether to Purchaser
or any permitted transferee) pursuant to this Agreement
shall not exceed $___________.
Seller agrees to remit any payment owed pursuant to this Letter Agreement
to Purchaser 5 business days after the earlier of (i) the sale of all shares of
Purchaser's Distribution Stock or (ii) the expiration of the Protection Period,
and upon receipt of evidence reasonably satisfactory to it with respect to the
satisfaction of the above conditions. The parties agree that a copy of the
broker confirmation slip issued for such Subject Sale together with a written
statement from Purchaser, containing the representation referred to in
subparagraph 4 of the preceding paragraph of this Letter Agreement, shall
constitute satisfaction in full of all conditions to Seller's obligations to
receive payment in respect of such Subject Sale (provided that Seller retains
its rights to claim such payment was not made in compliance with this
Agreement). All amounts, payable hereunder, if not paid within 30 days (and
otherwise due hereunder), shall bear interest from the date due at the Bank of
America, NT&SA prime or reference rate in effect from time to time plus 2% per
annum.
This Letter Agreement and the rights and obligations (which shall be
transferred together) of Purchaser hereunder are not transferable or assignable
(including by operation
-3-
<PAGE>
of law) by Purchaser without the express written consent of Seller; provided,
however, that (i) a transfer of rights under this Letter Agreement along with
shares by Hernandez Partners to their partners, Roland A. Hernandez and Enrique
Hernandez, Jr., and any transfer by will, intestate succession or to a revocable
trust of which either such individual and his spouse are trustees or a transfer
to a Permitted Transferee as defined in the Plan shall not require Seller's
consent, and (ii) there shall be no prohibition against the transfer of the
rights and obligations (which shall be transferred together) under this Letter
Agreement to any other person or firm that is a party to a similar agreement
entered into on the date hereof and the total monetary obligation of Seller
under this Letter Agreement and all such other similar agreements shall be $1
million.
Notices hereunder shall be given as contemplated by the Agreement.
Any payments hereunder by Seller shall be treated as an adjustment to the
purchase price of the Distribution Stock.
The Seller hereby represents and warrants to Purchaser as follows:
(a) This Letter Agreement has been duly authorized, executed and delivered
by Seller and constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms.
(b) Seller's execution, delivery, and performance of this Letter Agreement
will not require any governmental, regulatory or third party consent and will
not contravene or conflict with (i) any law, statute, rule or regulation,
judgment or order, writ, injunction or decree which is binding upon Seller or
any of its properties or assets, (ii) any provisions of the organizational
documents of Seller, or (iii) any agreement or undertaking to which Seller is a
party or by which it or its assets is otherwise bound except for consents,
contravention or conflicts which would not have a material adverse effect on the
ability of Seller to discharge its obligations hereunder.
In the event Purchaser or Seller is required to take any action to enforce
its rights under this Letter Agreement, including the assertion of rights in any
litigation between the parties, the parties agree that the party who prevails in
such action or litigation (determined
-4-
<PAGE>
by a court, if necessary) shall have all reasonable fees, costs and expenses
(including, without limitation, fees and expenses of attorneys, accountants and
experts) incurred by the prevailing party in enforcing such rights paid by the
other party hereto.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the choice of law principles) of the State of New York.
This Agreement may not be amended or waived other than by an agreement in
writing signed by the party against which such waiver or amendment is to be
enforced.
IN WITNESS WHEREOF, the parties hereto have executed this letter agreement
on the date first above written.
By: ______________________________
Title:
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P., its Manager
By: Apollo Advisors, L.P.,
its Managing General
Partner
By: Apollo Capital
Management,
Inc., its
General Partner
By:________________________
Name:
Title:
-5-
<PAGE>
The undersigned acting as principal obligor, agrees to pay, perform and
discharge all of Seller's obligations to make cash payments under this Letter
Agreement up to a maximum aggregate amount of $_________.
AIF II, L.P.
By: Apollo Advisors, L.P.
its Managing General Partner
By: Apollo Capital Management,
Inc.
By:_____________________________
Name:
Title:
The undersigned acting as principal obligor, agrees to pay, perform and
discharge all of Seller's obligations to make cash payments under this Letter
Agreement up to a maximum aggregate amount of $_________.
ARTEMIS AMERICA III, L.L.C.
By: Lion Advisors, L.P.,
as Attorney-in-Fact
By: Lion Capital
Management, Inc.,
its General Partner
By:________________________
Name:
Title:
-6-
<PAGE>
EXHIBIT 10.3
FORM OF PLEDGE AGREEMENT
------------------------
This PLEDGE AGREEMENT, dated as of December __, 1994, is made by and
between __________________, a ____________________ (the "Pledgor"), and TLMD
-------
Partners II, L.L.C., a Delaware limited liability company (the "Secured Party"),
-------------
in connection with the Purchase Agreement (as defined herein).
PRELIMINARY STATEMENTS
----------------------
A. Pursuant to the terms of that certain Agreement to Purchase Securities
and Claims dated as of the date hereof between the Pledgor and Secured Party
(the "Purchase Agreement"), the Pledgor has acquired the Sale Debentures and the
------------------
Sale Claims of Telemundo Group, Inc., a Delaware corporation (the "Issuer").
------
B. Pursuant to Section 1.03 of the Purchase Agreement, the Pledgor agreed
to grant Secured Party a security interest in the Sale Debentures and the Sale
Claims as security for the unpaid portion of the Purchase Price for the Sale
Debentures and Sale Claims.
C. It is a condition precedent to the obligation of the Secured Party to
sell the Sale Debentures and the Sale Claims to Pledgor that the Pledgor execute
and deliver this Pledge Agreement.
ACCORDINGLY, in consideration of the preceding preliminary statements and
the mutual covenants contained in this Agreement and the Purchase Agreement, the
parties hereto, intending to be legally bound, now agree as follows:
STATEMENT OF AGREEMENT
----------------------
ARTICLE 1 DEFINITIONS.
-----------
1.1 Certain Defined Terms. As used in this Agreement, the following terms
---------------------
have the following meanings:
"Additions" shall mean all additions and accessions to the Collateral and
----------
all substitutions, exchanges and replacements therefor.
"Agreement" shall mean this Pledge Agreement, as amended, supplemented,
---------
waived or modified from time to time.
"Collateral" shall mean the Sale Debentures, the Sale Claims and all
----------
income, benefits, rights and other property derived
<PAGE>
therefrom or related thereto, including, without limitation, all proceeds
thereof, now owned or hereafter acquired by the Pledgor or hereafter arising in
favor of the Pledgor, including, but not limited to:
(i) all redemption proceeds and other distributions (including,
without limitation, Distributions) arising from, payable on, or
distributable in respect of, Collateral, whether in cash, property,
securities or otherwise, and whether now or hereafter paid or made;
(ii) all interest, premium and principal payments paid on, derived
from or otherwise related to Collateral;
(iii) all other rights derived from or related to Collateral
including, without limitation, all contract and court sanctioned claims and
rights attached to, or flowing from, Collateral; and
(iv) all Additions to, and Proceeds of, the foregoing; provided,
however, that none of the foregoing shall constitute Collateral from and
after the termination of this Agreement as provided in Section 2.3.
"Event of Default" shall mean the failure of the Pledgor to pay the
----------------
Purchase Price for the Sale Debentures and Sale Claims in accordance with the
terms of Section 1.02 of the Purchase Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law.
"Obligations" shall mean:
-----------
(i) the obligation of the Pledgor to the Secured Party to pay the
unpaid portion of the Purchase Price for the Sale Debentures and the Sale
Claims to the Secured Party pursuant to the Purchase Agreement, and to
perform its obligations to deliver the Distributions; and
(ii) all costs and expenses incurred by the Secured Party to obtain,
preserve, and enforce this Agreement and the Purchase Agreement, collect
the Obligations, and maintain, preserve and protect, and enforce the
Secured Party's rights against, any Collateral securing the Obligations,
including without limitation, all taxes (excluding income taxes),
-2-
<PAGE>
assessments, reasonable attorneys' fees and legal expenses and expenses of
sale.
"Proceeds" shall mean all "proceeds" and "products" (as such terms are
--------
defined in Article 9 of the UCC) of Collateral, and, to the extent not otherwise
included herein:
(i) the Distributions made with respect to the Sale Claims and the
Sale Debentures;
(ii) any and all proceeds of any insurance, causes and rights of
action, settlements thereof, judicial and arbitration judgments and awards,
indemnity, warranty or guaranty payable to the Pledgor from time to time
with respect to any of the Collateral;
(iii) any and all payments (in any form whatsoever) made or due and
payable to the Pledgor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental authority;
(iv) all claims of the Pledgor for losses or damages arising out of
or related to or for any breach of any agreements, covenants,
representations or warranties or any default under any of the Collateral
(without limiting any direct or independent rights of the Secured Party
with respect to the Collateral); and
(v) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Restriction" shall mean any voting agreement, voting trust, proxy, power
-----------
of attorney, or other document, instrument or agreement, whether revocable or
irrevocable, limiting or affecting the rights of the holder of any of the
Collateral to vote, transfer, receive distributions on, or otherwise enjoy any
of the benefits of, the Collateral.
"Security Interest" shall mean the continuing general first priority Lien
-----------------
on, and first priority security interest in, and the grant, bargain, sale,
transfer, pledge and assignment of, the Collateral in favor of and to the
Secured Party as security for the payment and performance of the Obligations.
"UCC" shall mean the Uniform Commercial Code, as in effect in the State of
---
New York.
1.2 Other Definitions. Unless the context indicates otherwise, (i)
-----------------
definitions in the UCC apply to words and phrases in this Agreement, and, to the
extent that UCC definitions conflict, Article 9 definitions apply and (ii)
unless otherwise defined
-3-
<PAGE>
herein, capitalized terms shall have the meanings set forth in the Purchase
Agreement.
ARTICLE 2 GRANT AND TERMS OF PLEDGE.
-------------------------
2.1 Grant. Subject to the terms and provisions of this Agreement, the
-----
Pledgor hereby grants, conveys and pledges to the Secured Party the Security
Interest in the Collateral in order to secure the payment and performance of the
Obligations by the Pledgor.
2.2 Delivery of Collateral. The Sale Debentures and all other tangible
----------------------
evidences of the Collateral, including, but not limited to, documents,
certificates, instruments and cash, shall immediately, or, if hereafter
acquired, immediately after such acquisition, be delivered to and held by the
Secured Party or its nominee or the DTC (as defined below) pursuant hereto and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment, all in form and substance
satisfactory to the Secured Party. Any such items received by the Pledgor shall
be held in trust by the Pledgor for the Secured Party until delivered to the
Secured Party. Any such items received by the Pledgor shall be held in trust by
the Pledgor for the Secured Party until delivered to the Secured Party.
The Collateral shall be held in a custody or like account by the Secured
Party or its nominee or on deposit for the account of the Pledgor, subject at
all times to the Security Interest granted to the Secured Party, with the
Depository Trust Company ("DTC"), which term shall include any successor or
other comparable clearing organization or financial intermediary between the
Secured Party and the DTC, which Security Interest shall be noted on the books
and records of the DTC, or such financial intermediary.
In the event Collateral is deposited with the DTC, the Pledgor shall upon
the request of the Secured Party take or ensure the taking of all steps
necessary to ensure that the Security Interest of the Secured Party in such
Collateral is fully perfected in compliance with Section 8-320 of the UCC, other
applicable law, if any, and the applicable rules, regulations, agreements and
procedures of the DTC (including, without limitation, the execution and delivery
by the Pledgor to the Secured Party of such copies, in blank, as the Secured
Party may request of DTC forms (including, without limitation, DTC Pledge of
Collateral Form 22-5035A)). The Pledgor hereby authorizes the Secured Party to
deliver such forms to the DTC, appropriately filled in by the Secured Party,
whenever the Secured Party in its discretion, elects to do so.
All Proceeds of Collateral received by a nominee or the DTC shall be heldin
trust for the Secured Party after the receipt by such nominee or the DTC thereof
either (i) in a segregated deposit account containing only cash Proceeds, free
and clear of all liens
-4-
<PAGE>
and claims, including without limitation banker's liens and rights of setoff or
recoupment (other than the Secured Party's Security Interest therein) or (ii) in
a deposit account at the Secured Party.
The Pledgor hereby authorizes the United States Trust Company New York to
execute a letter confirmation substantially in the form of Exhibit A attached
hereto.
2.3 Termination. All security interests in the Collateral shall terminate
-----------
and all obligations of the Pledgor and rights of the Secured Party hereunder
shall terminate upon the first to occur of (i) payment of the Purchase Price and
delivery of the Distributions as provided in Section 1.01 of the Purchase
Agreement, or (ii) termination of the Purchase Agreement in accordance with
Section 5 of the Purchase Agreement and Purchaser's delivery to Secured Party of
the instruments and documents referred to in such Section 5.
ARTICLE 3 PLEDGOR'S REPRESENTATIONS AND WARRANTIES. The Pledgor
----------------------------------------
represents and warrants as follows:
3.1 Ownership of Collateral. Except for the Security Interest, the
-----------------------
Pledgor is (or in the case of Collateral acquired after the date hereof, will
be) the sole owner of each item of the Collateral, having good and marketable
title thereto, free and clear of any and all Liens (except for Liens in favor of
United States Trust Company of New York, as custodian for the Collateral), and
has the legal right and authority to pledge and grant a Lien and the Security
Interest on the Collateral. No financing statements covering the Collateral is
on file in any public office except financing statements, if any, relating to
the Security Interest.
3.2 First Lien on the Collateral. The Security Interest constitutes and
----------------------------
creates a valid and continuing first priority Lien on the Collateral in favor of
the Secured Party. All action necessary or desirable to protect the Security
Interest in each item of the Collateral has been duly taken by the Pledgor.
Upon delivery of the certificates representing the Sale Debentures and bond
powers duly executed in blank to the Secured Party or its nominee, or if Sale
Debentures are deposited with the DTC, upon compliance with Section 8-320 of the
UCC, other applicable law, if any, and the applicable rules, regulations,
agreements and procedures of DTC, the Security Interest will be perfected in the
Sale Debentures. Likewise, the filing of UCC-1 financing statements on the
interests of the Pledgor in the remaining Collateral with the Secretary of State
of the State of California and the clerk for Los Angeles County, California, the
location of the Pledgor's chief executive office (as defined in the UCC), will
perfect the Security Interest in such other Collateral.
-5-
<PAGE>
3.3 Voting and Transfer Restrictions. Except as contemplated by the
--------------------------------
Purchase Agreement, no Restriction is in effect with respect to the Collateral
by virtue of any action taken by the Pledgor, and no Restriction will be in
effect with respect to any Collateral hereafter acquired by the Pledgor or
delivered to the Secured Party. The execution, delivery and performance of this
Agreement and the Purchase Agreement (including the exercise of any and all
remedies provided for herein and therein) will not result in or permit the
imposition of any Restriction upon any present or future Collateral.
ARTICLE 4 PLEDGOR'S COVENANTS.
-------------------
4.1 Ownership of Collateral. The Pledgor shall defend the Collateral
-----------------------
against all claims and demands of all Persons at any time claiming the
Collateral or any interest therein adverse to the Secured Party, except for
claims and demands arising out of the Secured Party's acts or omissions.
4.2 Sale of Collateral. Except for the obligations of Pledgor to transfer
------------------
the Collateral to the Secured Party pursuant to the Purchase Agreement, the
Pledgor will not, without the prior written consent of the Secured Party, sell,
encumber, or otherwise dispose of or hypothecate the Collateral or any portion
thereof.
4.3 Maintenance. Except for the Security Interest, the Pledgor shall keep
-----------
the Collateral free from all Liens and Restrictions, and shall not cause, permit
or suffer to exist the imposition of any Lien or Restriction upon any
Collateral, whether now owned or hereafter acquired. The Pledgor will not
execute and shall not suffer to exist on file in any public office any financing
statement or similar filing with respect to the Collateral.
4.4 Additional Documents. At any time and from time to time, upon the
--------------------
request of the Secured Party, and at the sole expense of the Pledgor, the
Pledgor will promptly do all such acts and things and execute and deliver any
and all such further instruments and documents and will take such further action
as may be deemed necessary or desirable in the judgment of the Secured Party to
(i) obtain, maintain, preserve and perfect the Security Interest, including,
without limitation, the filing of any financing statements and continuation
statements and the giving of all notices of the Security Interest hereunder to
the DTC under the UCC or other applicable law in effect in any jurisdiction with
respect to the Security Interest and (ii) enforce the Secured Party's rights,
power and remedies with respect to the Collateral.
4.5 Notice of Change. The Pledgor will notify the Secured Party of any
----------------
material adverse change occurring in or to the Collateral of which it becomes
aware.
-6-
<PAGE>
4.6 Notice of Security Interest to Indenture Trustees. The Pledgor shall
-------------------------------------------------
provide written notice of its granting of the Security Interest to the Secured
Party in respect of the Sale Debentures and all of the other Collateral pursuant
to this Agreement to: (i) Continental Bank, N.A., as trustee under a certain
Indenture dated as of August 15, 1987 (as supplemented, amended or modified from
time to time) between Telemundo Group, Inc. and Continental Bank, N.A., as
trustee for, among others, the holders of the 1992 Zero Coupon Notes and (ii)
Bankers Trust Company, as successor indenture trustee under a certain Indenture
dated as of December 15, 1982 (as supplemented, amended or modified from time to
time) between Telemundo Group, Inc. (as successor in interest to John Blair &
Company) and Bankers Trust Company, as successor indenture trustee for the
holders of the 13 5/8% Debentures.
ARTICLE 5 RIGHTS AND DUTIES OF SECURED PARTY.
----------------------------------
5.1 Attorney-in-Fact. The Pledgor hereby appoints the Secured Party as
----------------
the Pledgor's attorney-in-fact with full power in the Pledgor's name and on the
Pledgor's behalf to do every act that the Pledgor is or may be obligated or
required to do hereunder and to take any action and to execute any instrument
that the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement (but the Secured Party shall not be obligated to take
any such action), including, without limitation:
(a) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
that the Secured Party may deem necessary or desirable for the protection
or collection of any of the Collateral or otherwise to protect or enforce
the rights of the Pledgor with respect to any of the Collateral.
5.2 Certain Rights. The Secured Party may, in its discretion, at any time
--------------
before or after the occurrence of an Event of Default, take any or all of the
following actions (but the Secured Party is under no duty to take any such
action):
(a) take control of Proceeds and use cash Proceeds to reduce any part
of the Obligations;
(b) release Collateral in its possession to the Pledgor, temporarily
or otherwise; and
-7-
<PAGE>
(c) in its own name or in the name of the Pledgor, as the Secured
Party may determine, take any of the actions described in Section 5.1.
5.3 Registration. After the occurrence and during the continuance of an
------------
Event of Default, the Secured Party shall have the right, at any time in its
discretion and without notice to the Pledgor, to transfer to or to register in
the name of the Secured Party or any of its nominees any or all of the
Collateral. In this regard, the Pledgor hereby authorizes and irrevocably
appoints the Secured Party as the Pledgor's attorney-in-fact to transfer the
Collateral on the books of the Issuer, in whole or in part, to the name of the
Secured Party or such other Person(s) as the Secured Party may designate. The
Pledgor hereby agrees to use its best efforts to cause the Issuer to comply with
and only with instructions of transfer received from the Secured Party.
5.4 Right to Vote. The Secured Party may, without notice to the Pledgor,
-------------
directly or through a nominee, exercise all voting and other rights related to
the Collateral at any meeting of the holders of securities of the Issuer and
exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to such Collateral as if it were the
absolute owner thereof.
5.5 Sales of Collateral.
-------------------
(a) After the occurrence and during the continuance of an Event of
Default, the Secured Party may, without notice to the Pledgor, without demand of
performance or other demand, advertisement or notice of any kind (except notices
the right to which may not be waived under applicable law) to or upon the
Pledgor or any other Person (all and each of which demands, advertisements and
notices are, to the extent permitted by law, hereby expressly waived), may
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, assign, give an option or options to
purchase, contract to sell or otherwise dispose of and deliver the Collateral,
or any part thereof, in one or more parcels at public or private sale or sales,
at any exchange, broker's board or any of the Secured Party's offices or
elsewhere at such prices and on such terms (including, without limitation, a
requirement that any purchaser of all or any part of the Collateral shall be
required to purchase securities constituting Collateral for investment and
without any intention to make a distribution thereof) as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk,
with the right to the Secured Party or any purchaser upon any such sale or
sales, whether public or private, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby expressly waived and released.
-8-
<PAGE>
(b) The Pledgor shall be entitled to any surplus and shall be liable
to the Secured Party for any deficiency arising from accounts, contract rights
or chattel paper included in the Collateral through sale thereof to the Secured
Party. If the Secured Party disposes of the Collateral, or any portion thereof,
following the occurrence of an Event of Default, the Proceeds of such
disposition available to satisfy the Obligations shall be applied by the Secured
Party to the Obligations in such order and in such manner as the Secured Party
shall elect at its discretion. In the event that the proceeds of any collection,
recovery, receipt, appropriation, realization, or sale as aforesaid are
insufficient to pay all amounts to which the Secured Party is legally entitled,
the Pledgor will be liable for the deficiency, together with interest thereon,
at the rate of 10% per annum, and the fees of any attorneys employed by the
Secured Party to collect such deficiency. Expenses of holding, preparing for
sale, selling, or the like shall include the Secured Party's attorneys' fees and
legal expenses.
5.6 Private Sales. The Pledgor recognizes that it may not be desirable
-------------
for the Secured Party to effect a public sale of all or a part of the
Collateral, and that the Secured Party may wish to resort to one or more private
sales to a restricted group of purchasers who will be obligated to agree, among
other things, to acquire Collateral consisting of securities for their own
account, for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges that any such private sales may be at places
and on terms less favorable to the seller than if sold at public sales and
agrees that such private sales shall be deemed to have been made in a
commercially reasonable manner, and that the Secured Party has no obligation to
delay sale of any such Collateral consisting of securities for the period of
time necessary to permit the issuer of such Collateral consisting of securities
to register such Collateral consisting of securities for public sale under the
Securities Act.
5.7 Remedies Cumulative. The foregoing rights and powers of the Secured
-------------------
Party shall be in addition to, and not a limitation upon, any rights and powers
of the Secured Party given by law, equity, custom, elsewhere by this Agreement
or otherwise. The Secured Party may, but shall not have any duty to, exercise
any of the rights, privileges or options listed in or contemplated by this
section and shall not be responsible for any failure to exercise any such
rights, privileges or options or for any delay in any such exercise.
5.8 Care. Beyond the exercise of reasonable care to assure the safe
----
custody of the Collateral while held hereunder, the Secured Party shall have no
duty or liability to preserve rights pertaining thereto, and shall be relieved
of all responsibility for the Collateral upon surrendering it to the Pledgor.
-9-
<PAGE>
ARTICLE 6 GENERAL.
-------
6.1 Assignment of the Obligations by the Secured Party. The Secured Party
--------------------------------------------------
may assign to any transferee of any of the Obligations any or all of the rights
of the Secured Party in the Collateral, and thereafter the Secured Party shall
be fully discharged from all responsibility with respect to the Collateral so
assigned, transferred or delivered. Such transferee shall be vested with all
the powers and rights of the Secured Party hereunder with respect to such
Collateral, but the Secured Party shall retain all rights and powers hereby
given with respect to any of the Collateral not so assigned or transferred.
6.2 Waiver. No failure or delay on the part of the Secured Party in
------
exercising any right, power or privilege hereunder and no course of dealing
between the Pledgor and the Secured Party shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. No notice to or demand on the Pledgor
in any case shall entitle the Pledgor to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Secured Party to any other or further action in any circumstances without notice
or demand.
6.3 Parties Bound. The rights of the Secured Party hereunder shall inure
-------------
to the benefit of its successors, transferees and assigns. This Agreement shall
be binding upon the Pledgor and its successors and assigns.
6.4 Notice. Section 6.01 of the Purchase Agreement shall govern the
------
manner and effectiveness of all notices, requests and other communications in
connection with this Agreement. Notice mailed in accordance with the terms
hereof at least five days prior to the related action shall be deemed
commercially reasonable and fair.
6.5 INTEGRATION AND MODIFICATIONS. NO PROVISION HEREOF SHALL BE MODIFIED
-----------------------------
OR LIMITED EXCEPT BY A WRITTEN AGREEMENT EXPRESSLY REFERRING HERETO. THIS
AGREEMENT SHALL NOT BE MODIFIED BY COURSE OF CONDUCT, USAGE OF TRADE OR THE LAW
MERCHANT. THIS AGREEMENT AND THE PURCHASE AGREEMENT REPRESENT THE FINAL
AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
6.6 Financing Statements. The Secured Party is authorized on behalf of
--------------------
the Pledgor, as the Pledgor's agent and attorney in fact for such purpose, to
complete and sign one or more financing statements, continuation statements,
notices of pledge or similar instruments with respect to any Collateral covered
by this
-10-
<PAGE>
Agreement and to file the same in any appropriate office or place.
6.7 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW RULES THEREOF.
6.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument notwithstanding that all
parties are not signatories to each individual counterpart.
6.9 Reformation and Severability. If any provision of this Agreement is
----------------------------
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof (i) in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable,
and (ii) the legality, validity and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.
6.10 Pledgor's Obligations. Anything herein to the contrary
---------------------
notwithstanding (i) the Pledgor shall remain liable under the documents,
instruments and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Secured Party of any of the rights hereunder shall not release the Pledgor from
any of its duties or obligations under the documents, instruments and agreements
included in the Collateral, and (iii) the Secured Party shall not have any
obligation or liability under the documents, instruments and agreements included
in the Collateral by reason of this Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of the Pledgor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
6.11 Submission to Jurisdiction. The Pledgor hereby irrevocably consents
--------------------------
that any legal action or proceeding against it or any of its property arising
out of or relating to the Obligations, the Collateral or this Agreement may be
brought in any court of the State of New York or any federal court of the United
States of America located in the County of New York, the State of New York,
United States of America, as the Secured Party may elect, and, by execution and
delivery of this Agreement, the Pledgor hereby submits to and accepts with
regard to any such action or proceeding, for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Pledgor hereby irrevocably designates, appoints and empowers The
-11-
<PAGE>
Corporation Trust Company located at 1633 Broadway, New York, New York 10019, as
its agent to receive for and on its behalf service of process in New York in any
legal action or proceeding with respect to this Agreement. The Pledgor further
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, return receipt requested, to its address for notices pursuant to
Section 6.4. hereof. The foregoing, however, shall not limit the right of the
Secured Party to serve process in any other manner permitted by applicable law
or to bring any legal action or proceeding or to obtain execution of judgment in
any jurisdiction.
The Pledgor hereby waives any right it may have under the law of any
jurisdiction to commence any legal action or proceeding with respect to this
Agreement with notice by publication.
The Pledgor hereby irrevocably waives any objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement in the State of New York and hereby
further irrevocably waives any claim that the State of New York is not a
convenient forum for any such suit, action or proceeding. The Pledgor further
agrees that any final judgment obtained against it in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction
within or outside the United States of America by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and of the amount of its indebtedness.
-12-
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed and delivered as of the date specified at the beginning hereof.
By:
-----------------------------------
Title:
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P. its Manager
By: Apollo Advisors, L.P.,
its Managing General Partner
By: Apollo Capital Management,
Inc., its General Partner
By:
------------------------------
Name:
Title:
<PAGE>
UNITED STATES TRUST COMPANY OF NEW YORK
December __, 1994
TLMD Partners II, L.L.C.
c/o Apollo Advisors, L.P.
1301 Avenue of the Americas
36th Floor
New York, NY 10019
Attention: Michael D. Weiner
Ladies and Gentlemen:
Confirmation of "Purchase" of
Securities and Identification
of Security Interests
-------------------------------
Reference is made to the Pledge Agreement, dated as of December __, 1994
between ________________________________ (the "Pledgor"), and TLMD Partners II,
L.L.C. (the "Pledgee") (as such Pledge may be modified, supplemented or amended
from time to time, the "Pledge Agreement").
1. The undersigned, United States Trust Company of New York ("U.S. Trust")
hereby represents, warrants and agrees as follows:
(a) it is a "financial intermediary", and not a "clearing corporation"
within the meaning of Section 8-313 of the Uniform Commercial Code as in effect
in the State of New York (the "New York UCC");
(b) it confirms that it has, by book entry or otherwise, identified the
number of the securities listed on Schedule I hereto which constitute or are
part of a fungible bulk of securities shown on its account on the books of
another financial intermediary (the "Securities") as belonging to
________________________________ and that, in the case of certificated
securities, such securities are held in New York;
(c) it confirms that the Securities are subject to a first priority pledge
and security interest in favor of the Pledgee pursuant to the Pledge Agreement
and that it has identified, by book entry or otherwise, that such securities are
subject to a first priority pledge and security interest in favor of the Pledgee
and, following the receipt of a written direction by Pledgee, it shall pay all
cash distributions in respect of the Securities, and all proceeds of any sale of
the Securities, directly to the Pledgee at such address as the Pledgee shall
have separately instructed U.S. Trust;
<PAGE>
(d) it confirms that it has received no notice of a lien on the Securities
and will not confirm such a lien without the prior written consent of the
Pledgee;
(e) it will, from time to time upon written request of the Pledgee, deliver
to the Pledgee a list of Securities; and
(f) without the prior written consent of the Pledgee, it will not sell,
assign or transfer any of the Securities.
2. All such notices and communications hereunder shall be sent or
delivered by mail, telegraph, telex, telecopy, cable or overnight courier
service and all such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier and when mailed shall be effective
three Business Days following deposit in the mail with proper postage. All
notices and other communications shall be in writing and addressed as follows:
if to the Pledgee, at:
TLMD Partners II, L.L.C.
c/o Apollo Advisors, L.P.
1301 Avenue of the Americas
38th Floor
New York, NY 10019
Attention: Michael D. Weiner
Telephone: (212) 261-4000
Telecopier: (212) 261-4060
With a copy to:
c/o Apollo Advisors, L.P.
1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Attention: Michael D. Weiner
Telephone: (310) 201-4122
Telecopier: (310) 201-4166
if to the Pledgor, at:
if to the Custodian, at:
United States Trust Company of New York
770 Broadway
New York, New York 10003
Attention: P. Lawrence Seidel, Jr.
Telephone: (212) 598-2973
Telecopier: (212) 598-2993
<PAGE>
This letter shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
Very truly yours,
UNITED STATES TRUST COMPANY OF
NEW YORK
By:_____________________________________
Title:
<PAGE>
Schedule 1
----------
Description of Securities
-------------------------
Security Principal Amount
- -------- ----------------
<PAGE>
EXHIBIT 10.4
AGREEMENT TO PURCHASE SECURITIES AND CLAIMS
THIS AGREEMENT TO PURCHASE SECURITIES AND CLAIMS (this "Agreement"),
---------
dated as of December 21, 1994, is by and between Hernandez Partners, a
California general partnership ("Purchaser"), and TLMD Partners II, L.L.C., a
---------
Delaware limited liability company ("Seller"). Capitalized terms used and not
------
defined herein shall have the meanings ascribed to them in the Second Amended
Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code of
Telemundo Group, Inc. dated April 29, 1994.
RECITALS:
--------
A. On or about June 8, 1993 (the "Petition Date"), Telemundo Group,
-------------
Inc. (the "Debtor") filed a petition for relief under Chapter 11 of Title 11 of
------
the United States Code, as amended (the "Bankruptcy Code"), with the United
---------------
States Bankruptcy Court for the Southern District of New York, commencing
Chapter 11 case No. 93-B-42967(JLG) (the "Case").
----
B. Seller is the owner of at least $901,218 principal amount of
13 5/8% Debentures and $15,384,633 principal amount of 1992 Zero Coupon Notes.
C. Proofs of claim in the Case have been filed with respect to the
13 5/8% Debentures, the 1993 Zero Coupon Notes and the 1992 Zero Coupon Notes
owned by Seller.
D. Seller desires to sell, transfer, and assign to Purchaser, and
Purchaser desires to purchase from Seller, all of Seller's right, title and
interest in and to (i) $901,218 principal amount of 13 5/8% Debentures and
$15,384,633 principal amount of 1992 Zero Coupon Notes (collectively, the "Sale
----
Debentures") and (ii) the related 13 5/8% Debenture Claims, 1993 Zero Coupon
- ----------
Notes Claims and 1992 Zero Coupon Notes Claims (collectively, the "Sale
----
Claims"), upon the terms and conditions set forth herein.
- ------
NOW, THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. Purchase and Sale of Sale Debentures and Sale Claims.
----------------------------------------------------
Subject to the terms and conditions of this Agreement, effective upon execution
of this Agreement by the parties, Seller hereby sells, transfers and assigns to
Purchaser, and, effective upon execution of this Agreement by the parties,
Purchaser hereby purchases and acquires from Seller, all of Seller's rights,
title and interest in and to the Sale Debentures and Sale Claims, in
<PAGE>
consideration of payment to Seller of the Purchase Price (as defined below).
Section 1.01 (a) Purchase Price. The purchase price (the " Purchase
-------------- --------
Price") payable by Purchaser for the Distribution Stock (in respect of the Sale
- -----
Debentures and Sale Claims) shall be an amount equal to (x) $10.00 per share
multiplied by (y) the number of shares of Common Stock to be issued and
delivered to or for the account of Purchaser (as used herein, this means its
account at U.S. Trust Company) in respect of the Sale Debentures and the Sale
Claims (the "Distribution Stock") (the "Cash Amount").
(b) Undertaking. Purchaser shall deliver to Seller in the manner
-----------
set forth below such cash, Warrants and other consideration (other than
Distribution Stock) as are to be received by Purchaser pursuant to the Plan with
respect to the Sale Debentures and Sale Claims (the "Distributions"), which
shall be considered to have been received by Purchaser on behalf of Seller.
Section 1.02 Payment of Purchase Price and Delivery of Distributions.
-------------------------------------------------------
(a) Upon delivery of certificates to or for the account of Purchaser evidencing
all of the Distribution Stock, free and clear of all Liens (as hereinafter
defined) (such delivery date, the "Stock Delivery Date"), Purchaser shall pay to
Seller in cash by wire transfer in immediately available funds, to such account
as Seller has specified, an amount equal to the Cash Amount.
(b) Purchaser shall deliver to Seller the Distributions promptly,
and in any event within three business days, after receipt thereof by Purchaser.
The Distributions shall be delivered to Seller in the same form as received by
Purchaser, together with any appropriate documents of transfer, if any, as
Seller shall reasonably require and shall be free and clear of all Liens created
by or as a result of actions or omissions of the Purchaser other than the Lien
created by this Section 1.03 in favor of Seller. Seller and Purchaser agree to
use their best efforts, promptly after the date of consummation of the Plan, to
cause certificates evidencing all of the Distribution Stock to be delivered to
or for the account of Purchaser in accordance with the terms of this Agreement
and to cause to be delivered to or for the account of Seller all of the
Distributions in accordance with the terms of this Agreement.
(c) Upon execution of this Agreement by the parties, Seller shall
deliver to or for the account of Purchaser, the Sale Debentures and Sale Claims,
for re-delivery to Seller in accordance with Section 1.03 (which re-delivery
shall be deemed to occur contemporaneously with such delivery to Purchaser).
2
<PAGE>
Section 1.03 Security Interest. In order to secure Purchaser's
-----------------
obligation to deliver the Cash Amount and Distributions when due, Purchaser
hereby grants a security interest in the Sale Claims and Sale Debentures (and
proceeds thereon) to Seller in accordance with, and is executing
contemporaneously herewith, a Pledge Agreement substantially in the form of
Exhibit A, and upon delivery by Seller to or for the account of Purchaser agrees
- ---------
to deliver certificates representing the Sale Debentures, with bond powers
executed in blank (or, if certificates for the Sale Debentures are not delivered
to Purchaser, such other documentation and agreements, as Seller shall
reasonably request in order to allow it to perfect the security interest
contemplated by the Pledge Agreement), and such other documents as Seller shall
reasonably request, to Seller. In order to more fully effect the delivery of
the Distributions to Seller, Purchaser shall instruct U.S. Trust Company, and,
if requested by Seller, the Indenture Trustees for the Sale Debentures (the
"Trustees"), or cause the Trustees to be instructed, in such form as Seller
--------
shall reasonably request, that upon consummation of the Plan, the Distributions
shall be delivered directly to, and in the name of, the Seller or such person as
the Seller shall designate, and shall take such other actions as Seller shall
reasonably request. The parties agree that Purchaser is not, by virtue of this
Agreement or the transactions contemplated hereby, guaranteeing the payment of
any principal or interest to be paid on the Distributions in accordance with the
constituent documents pursuant to which the Distributions were created.
Section 1.04 Shareholders Agreement. On the date hereof and
----------------------
contemporaneously with the transfer of the Sale Debentures and Sale Claims,
Purchaser, Seller and other persons are entering into a Shareholders Agreement
substantially in the form of Exhibit B.
---------
Section 2. Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Purchaser, its successors and assigns, as of the date
hereof and as of the Stock Delivery Date, that:
Section 2.01 Due Organization; Authority. Seller is a limited
---------------------------
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
Section 2.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Seller and constitutes the legal, valid
and binding agreement of Seller, enforceable in accordance with its terms.
3
<PAGE>
Section 2.03 Title. On the date hereof Seller is the owner of and
-----
has good and marketable title to all of the Sale Debentures and the Sale Claims,
free and clear of all liens, charges, adverse claims and pledges, except for
such liens, charges, adverse claims and pledges arising from the status or
actions of Purchaser or as contemplated by this Agreement ("Liens"), and as a
-----
result of the sale of the Sale Debentures and Sale Claims hereby, Purchaser is
obtaining good title to the Sale Debentures and Sale Claims free and clear of
all Liens. When the certificates evidencing the Distribution Stock are
delivered to or for the account of Purchaser on the Stock Delivery Date,
Purchaser will acquire good and marketable title to the Distribution Stock free
and clear of all Liens.
Section 2.04 No Conflict. Seller's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Seller or any of its Affiliates
or its properties or assets, (ii) any provisions of the organizational documents
of Sellers, or (iii) any agreement or undertaking to which Seller is a party or
by which it or its assets is otherwise bound except for consents, contraventions
or conflicts which would not have a material adverse effect on the ability of
Seller to deliver the Sale Debentures and Sale Claims as contemplated herein or
the ability of Purchaser to receive or Debtor to issue and deliver the
Distribution Stock and the Distributions as contemplated hereby under the Plan
in accordance with its terms; provided, however, that no representation is
deemed made as to consents which may be required by the FCC or any contravention
or conflict arising under the Federal Communications Act of 1934, as amended
(the "Communications Act").
Section 2.05 Amount of Series B Common Stock. Assuming consummation
-------------------------------
of the Plan in accordance with its terms, as a result of the ownership of the
1993 Zero Coupon Notes and the 1992 Zero Coupon Notes, collectively Seller,
Purchaser and Leon Black (the "Entities") will own at least 2,000,000 shares of
Common Stock. To the knowledge of Seller, upon consummation of the Plan, Debtor
will have outstanding approximately 10 million shares of Common Stock,
approximately 5,611,606 of which will be Series B Common Stock. To the
knowledge of Seller and assuming that the Purchaser receives Series B Common
Stock in respect of the Zero Coupon Notes, the Distribution Stock will consist
of approximately 450,000 shares of Series B Common Stock and approximately
50,000 shares of Series A Common Stock.
Section 2.06 Other Representations. The Plan was confirmed in July,
---------------------
1994. To the knowledge of Seller, there have been no amendments or
modifications to the Plan as confirmed
4
<PAGE>
which would have a material adverse effect on the sale of the securities
contemplated by this Agreement, there have been no appeals from the order
confirming the Plan and there has been no motion, filed to seek revocation of,
nor has an order been entered revoking, the Plan.
Section 3. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
hereby represents and warrants to Seller that:
Section 3.01 Due Organization; Authority. Purchaser is a general
---------------------------
partnership duly organized, validly existing and in good standing under the laws
of California, and has all requisite partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.
Section 3.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Purchaser and constitutes the legal, valid
and binding agreement of Purchaser, enforceable in accordance with its terms.
Section 3.03 No Conflict. Purchaser's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Purchaser or any of its
properties or assets, (ii) any provisions of the organizational documents of
Purchaser or (iii) any agreement or undertaking to which Purchaser is a party or
by which it or its assets are otherwise bound except for consents,
contraventions or conflicts which would not have a material adverse effect on
the ability of Purchaser to deliver the Purchase Price as contemplated herein;
provided, however, that no representation is deemed made as to consents which
may be required by the FCC or any contravention or conflict arising under the
Communications Act.
Section 3.04 Investment Representations. (a) Purchaser hereby
--------------------------
acknowledges that Purchaser is aware that Seller or its affiliates by reason of
their relationship to Debtor may have had access to certain information (the
"Information") which may be material regarding Debtor, its financial condition,
- ------------
results of operations, management, projections and businesses. Purchaser
further agrees that Purchaser has conducted its own investigation, to the extent
that Purchaser has determined necessary or desirable regarding Debtor, and that
Purchaser has determined to enter into and complete this transaction based on,
among other things, such investigation.
(b) Purchaser understands and represents that it is purchasing the
Sale Debentures and Sale Claims for its own
5
<PAGE>
account and not with a view to or for sale or distribution that would be in
violation of the Securities Act of 1933, as amended.
(c) Purchaser is an "accredited investor" as such term is defined
in Rule 501 of Regulation D under the Act, and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the acquisition of the Sale Debentures and Sale Claims, and having
had access to, or having been furnished with, all such information as he has
considered necessary, has concluded that he is able to bear those risks.
(d) Purchaser represents that the Sale Debentures and Sale Claims
were not offered or sold to Purchaser by any form of general solicitation or
general advertising.
(e) Purchaser represents that all beneficial interests in capital
stock or other voting or equity interests in Purchaser are owned by U.S.
citizens or by entities formed under the laws of the U.S. in which all
beneficial interests, directly or indirectly, in capital stock or other voting
or equity interests is owned by U.S. citizens and Purchaser agrees to take such
actions, if any, as may be required by the Federal Communications Commission to
bring its ownership interests into compliance with applicable law (including, if
no other remedy exists, reducing its ownership interest in Telemundo Group,
Inc.).
Section 4. Certain Covenants.
-----------------
(a) Reasonable Best Efforts. Subject to the terms of this
-----------------------
Agreement, each of Seller and Purchaser shall use its reasonable best efforts to
take, or cause to be taken, all actions reasonably necessary, proper or
advisable under applicable law, including such additional actions as may be
reasonably requested by the other party hereto, to more fully effectuate the
transactions contemplated by this Agreement. In the event at any time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto shall use their reasonable best efforts to take
such action.
(b) Costs and Expenses. Each of Seller and Purchaser shall be
------------------
solely responsible for all costs and expenses (including legal expenses)
incurred by it with respect to the negotiation and preparation of this Agreement
and the transactions contemplated hereby, provided, that Seller shall indemnify
Purchaser in respect of and promptly pay all reasonable actual legal fees and
expenses of Purchasers' legal counsel in representing Purchaser and in
negotiating and documenting this transaction through and including the date this
agreement is filed.
6
<PAGE>
(c) Certain Rights. The parties agree that nothing contained
--------------
herein shall in any way restrict the rights or abilities of Seller or its
affiliates and agents, from taking any action any of them deems necessary or
appropriate with respect to the Plan or the Case, including voting (or causing
the Trustee to vote, if applicable), the Sale Debentures and Sale Claims as it
may determine, provided, that nothing herein shall negate any of Sellers'
express obligations under this Agreement.
(d) Certain Notices. If requested by Seller, Purchaser will
---------------
promptly execute, deliver and/or fill such notices, stipulations and any related
documents as and when Seller believes reasonably necessary in order to permit
Purchaser to be treated as the record holder of the Sale Debentures and Sale
Claims or as of any record date for distributions in the Reorganization.
(e) Voting Sale Debentures. In the event that any vote or consent
----------------------
of the Sale Debentures and Sale Claims is sought in respect of the Plan (or any
substitute or amended plan) or any other matter, Purchaser agrees to vote the
Sale Debentures and Sale Claims in such manner as Seller shall request.
Section 5. Termination. In the event that the Consummation Date
-----------
shall not have occurred by December 31, 1994, then either Seller or Purchaser,
by written notice given to the other party, may terminate this Agreement. In
the event that certificates representing the Distribution Stock are not
delivered to Purchaser or for Purchaser's account by January 31, 1995, or in the
event that the Distributions have not been delivered to Seller by January 31,
1995, then in either such case, Seller or Purchaser, by written notice given to
the other party, may terminate this Agreement. In the event of termination of
this Agreement in accordance with its terms, Purchaser shall immediately
transfer the Sale Debentures and Sale Claims (and any proceeds thereon) to
Seller, together with any evidence of transfer that Seller shall reasonably
request and Seller shall return any of the Cash Amount that has been delivered
to it. Neither Seller nor Purchaser shall have any further obligation to the
other after these deliveries have been made except for a willful breach by a
party of its obligations hereunder.
Section 6. Miscellaneous.
-------------
Section 6.01 Notices. All notices or other communications required
-------
or permitted hereunder shall be sufficiently given (i) if delivered personally,
(ii) when transmitted via telecopy to the telecopier number as the parties may
from time to time provide (with hard copy following), or (iii) the day following
the day on which the same has been delivered prepaid to a national overnight air
courier service addressed to the address as the parties may from time to time
provide.
7
<PAGE>
Section 6.02 Governing Law. This Agreement and all rights conferred
-------------
and obligations imposed hereunder shall be interpreted and construed in
accordance with the laws and internal judicial decisions of the State of New
York, without giving effect to the conflicts of laws rules thereof.
Section 6.03 Entire Agreement; Counterparts. This Agreement (i)
------------------------------
embodies the entire agreement between the parties relating to the subject matter
hereof, supersedes all prior agreements and understandings between such parties,
if any, relating to the subject matter hereof, and may be amended only by an
instrument in writing executed jointly by each party hereto, and (ii) may be
executed in a number of identical counterparts, each of which shall be deemed an
original for all purposes and all of which constitute, collectively, one
agreement; but in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.
Section 6.04 Assignment; Survival. The terms of this Agreement
--------------------
shall be binding upon, and shall inure to the benefit of, Seller, Purchaser, and
their respective successors and assigns. All representations, warranties,
covenants and agreements made herein shall survive the execution and delivery of
this Agreement and the purchase and sale of the Sale Debentures and Sale Claims.
Section 6.05 Certain Limitation. Neither party shall be liable for
------------------
damages to the other party or any third person as a result of a breach or
termination of this Agreement, except that if a party willfully and in bad faith
breaches any provision of this Agreement, the other party shall be entitled to
seek damages resulting from such willful, bad faith breach, but in no event
shall a party be liable for consequential or punitive damages.
Section 6.06 Headings. The captions and headings in this Agreement
--------
are for convenience only and shall not affect the interpretation or construction
of this Agreement.
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, each by its duly authorized officer or representative, all on the day
and year first above written.
HERNANDEZ PARTNERS
By: ,
----------------------------
a General Partner
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P. its Manager
By: Apollo Advisors, L.P.,
its Managing General Partner
By: Apollo Capital
Management, Inc.,
its General Partner
By:
-------------------------
Name:
Title:
<PAGE>
December 29, 1994
Reference is made to the Agreement to Purchase Securities and Claims, dated
as of December 21, 1994, by and between Hernandez Partners ("Purchaser") and
TLMD Partners II, L.L.C. ("Seller") (the "Agreement"). Capitalized terms used
and not defined herein shall have the meaning ascribed to them in the Agreement.
The Purchaser and Seller agree that the amount of Distribution Stock
received by Purchaser pursuant to the consummation of the Plan is intended to be
less than 5% of the Debtor's outstanding shares of Common Stock and that
Purchaser shall not be deemed to have acquired any shares of Common Stock equal
to or greater than such 5%. Therefore, notwithstanding anything else contained
in the Agreement to the contrary, if required pursuant to the terms herein.
Purchaser shall transfer to Seller immediately upon receipt by Purchaser, an
amount of Series A Common Stock received by Purchaser as Distribution Stock so
that as a result of such transfer Purchaser will own in the aggregate one share
less than 5% of the Debtor's outstanding shares of Common Stock immediately
after consummation of the Plan.
Seller and Purchaser shall adjust the Cash Amount of the Purchase Price to
be paid by Purchaser as a result of the above transfer.
This letter agreement may be executed in counterparts, each of which
constitute, collectively, one agreement.
<PAGE>
HERNANDEZ PARTNERS
By: ___________________
A general partner
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P. its Manager
By: Apollo Advisors, L.P.
its Managing General
Partner
By:___________________
Name
Title:
<PAGE>
EXHIBIT 10.5
AGREEMENT TO PURCHASE SECURITIES AND CLAIMS
THIS AGREEMENT TO PURCHASE SECURITIES AND CLAIMS (this "Agreement"),
---------
dated as of December 21, 1994, is by and between GRS Partners II, an Illinois
general partnership ("Purchaser"), and TLMD Partners II, L.L.C., a Delaware
---------
limited liability company ("Seller"). Capitalized terms used and not defined
------
herein shall have the meanings ascribed to them in the Second Amended Disclosure
Statement Pursuant to Section 1125 of the Bankruptcy Code of Telemundo Group,
Inc. dated April 29, 1994.
RECITALS:
--------
A. On or about June 8, 1993 (the "Petition Date"), Telemundo Group,
-------------
Inc. (the "Debtor") filed a petition for relief under Chapter 11 of Title 11 of
------
the United States Code, as amended (the "Bankruptcy Code"), with the United
---------------
States Bankruptcy Court for the Southern District of New York, commencing
Chapter 11 case No. 93-B-42967(JLG) (the "Case").
----
B. Seller is the owner of at least $600,813 principal amount of
13 5/8% Debentures.
C. Proofs of claim in the Case have been filed with respect to the
13 5/8% Debentures.
D. Seller desires to sell, transfer, and assign to Purchaser, and
Purchaser desires to purchase from Seller, all of Seller's right, title and
interest in and to $600,813 principal amount of 13 5/8% Debentures (the "Sale
----
Debentures") and the related 13 5/8% Debenture Claims (the "Sale Claims"), upon
- ---------- -----------
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. Purchase and Sale of Sale Debentures and Sale Claims.
----------------------------------------------------
Subject to the terms and conditions of this Agreement, effective upon execution
of this Agreement by the parties, Seller hereby sells, transfers and assigns to
Purchaser, and, effective upon execution of this Agreement by the parties,
Purchaser hereby purchases and acquires from Seller, all of Seller's rights,
title and interest in and to the Sale Debentures and Sale Claims, in
consideration of payment to Seller of the Purchase Price (as defined below).
Section 1.01 (a) Purchase Price. The purchase price (the "Purchase
-------------- --------
Price") payable by Purchaser for the Distribution Stock (in respect of the Sale
- -----
Debentures and Sale Claims) shall
<PAGE>
be an amount equal to (x) $10.00 per share multiplied by (y) the number of
shares of Common Stock to be issued and delivered to or for the account of
Purchaser (as used herein, this means its account at U.S. Trust Company) in
respect of the Sale Debentures and the Sale Claims (the "Distribution Stock")
(the "Cash Amount").
(b) Undertaking. Purchaser shall deliver to Seller in the manner
-----------
set forth below such cash, Warrants and other consideration (other than
Distribution Stock) as are to be received by Purchaser pursuant to the Plan with
respect to the Sale Debentures and Sale Claims (the "Distributions"), which
shall be considered to have been received by Purchaser on behalf of Seller.
Section 1.02 Payment of Purchase Price and Delivery of Distributions.
-------------------------------------------------------
(a) Upon delivery of certificates to or for the account of Purchaser evidencing
all of the Distribution Stock, free and clear of all Liens (as hereinafter
defined) (such delivery date, the "Stock Delivery Date"), Purchaser shall pay to
Seller in cash by wire transfer in immediately available funds, to such account
as Seller has specified, an amount equal to the Cash Amount.
(b) Purchaser shall deliver to Seller the Distributions promptly,
and in any event within three business days, after receipt thereof by Purchaser.
The Distributions shall be delivered to Seller in the same form as received by
Purchaser, together with any appropriate documents of transfer, if any, as
Seller shall reasonably require and shall be free and clear of all Liens created
by or as a result of actions or omissions of the Purchaser other than the Lien
created by this Section 1.03 in favor of Seller. Seller and Purchaser agree to
use their best efforts, promptly after the date of consummation of the Plan, to
cause certificates evidencing all of the Distribution Stock to be delivered to
or for the account of Purchaser in accordance with the terms of this Agreement
and to cause to be delivered to or for the account of Seller all of the
Distributions in accordance with the terms of this Agreement.
(c) Upon execution of this Agreement by the parties, Seller shall
deliver to or for the account of Purchaser, the Sale Debentures and Sale Claims,
for re-delivery to Seller in accordance with Section 1.03 (which re-delivery
shall be deemed to occur contemporaneously with such delivery to Purchaser).
Section 1.03 Security Interest. In order to secure Purchaser's
-----------------
obligation to deliver the Cash Amount and Distributions when due, Purchaser
hereby grants a security interest in the Sale Claims and Sale Debentures (and
proceeds thereon) to Seller in accordance with, and is executing
contemporaneously herewith, a Pledge Agreement substantially in
2
<PAGE>
the form of Exhibit A, and upon delivery by Seller to or for the account of
---------
Purchaser agrees to deliver certificates representing the Sale Debentures, with
bond powers executed in blank (or, if certificates for the Sale Debentures are
not delivered to Purchaser, such other documentation and agreements, as Seller
shall reasonably request in order to allow it to perfect the security interest
contemplated by the Pledge Agreement), and such other documents as Seller shall
reasonably request, to Seller. In order to more fully effect the delivery of
the Distributions to Seller, Purchaser shall instruct U.S. Trust Company, and,
if requested by Seller, the Indenture Trustees for the Sale Debentures (the
"Trustees"), or cause the Trustees to be instructed, in such form as Seller
--------
shall reasonably request, that upon consummation of the Plan, the Distributions
shall be delivered directly to, and in the name of, the Seller or such person as
the Seller shall designate, and shall take such other actions as Seller shall
reasonably request. The parties agree that Purchaser is not, by virtue of this
Agreement or the transactions contemplated hereby, guaranteeing the payment of
any principal or interest to be paid on the Distributions in accordance with the
constituent documents pursuant to which the Distributions were created.
Section 1.04 Shareholders Agreement. On the date hereof and
----------------------
contemporaneously with the transfer of the Sale Debentures and Sale Claims,
Purchaser, Seller and other persons are entering into a Shareholders Agreement
substantially in the form of Exhibit B.
---------
Section 2. Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Purchaser, its successors and assigns, as of the date
hereof and as of the Stock Delivery Date, that:
Section 2.01 Due Organization; Authority. Seller is a limited
---------------------------
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
Section 2.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Seller and constitutes the legal, valid
and binding agreement of Seller, enforceable in accordance with its terms.
Section 2.03 Title. On the date hereof Seller is the owner of and
-----
has good and marketable title to all of the Sale Debentures and the Sale Claims,
free and clear of all liens, charges, adverse claims and pledges, except for
such liens, charges, adverse claims and pledges arising from the status or
actions of Purchaser or as contemplated by this Agreement
3
<PAGE>
("Liens"), and as a result of the sale of the Sale Debentures and Sale
-----
Claims hereby, Purchaser is obtaining good title to the Sale Debentures and Sale
Claims free and clear of all Liens. When the certificates evidencing the
Distribution Stock are delivered to or for the account of Purchaser on the Stock
Delivery Date, Purchaser will acquire good and marketable title to the
Distribution Stock free and clear of all Liens.
Section 2.04 No Conflict. Seller's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Seller or any of its Affiliates
or its properties or assets, (ii) any provisions of the organizational documents
of Sellers, or (iii) any agreement or undertaking to which Seller is a party or
by which it or its assets is otherwise bound except for consents, contraventions
or conflicts which would not have a material adverse effect on the ability of
Seller to deliver the Sale Debentures and Sale Claims as contemplated herein or
the ability of Purchaser to receive or Debtor to issue and deliver the
Distribution Stock and the Distributions as contemplated hereby under the Plan
in accordance with its terms; provided, however, that no representation is
deemed made as to consents which may be required by the FCC or any contravention
or conflict arising under the Federal Communications Act of 1934, as amended
(the "Communications Act").
Section 2.05 Amount of Series B Common Stock. Assuming consummation
-------------------------------
of the Plan in accordance with its terms, as a result of the ownership of the
1993 Zero Coupon Notes and the 1992 Zero Coupon Notes, collectively Seller,
Hernandez Partners and Leon Black (the "Entities") will own at least 2,000,000
shares of Common Stock. To the knowledge of Seller, upon consummation of the
Plan, Debtor will have outstanding approximately 10 million shares of Common
Stock, approximately 5,611,606 of which will be Series B Common Stock. To the
knowledge of Seller, the Distribution Stock will consist of approximately 33,333
shares of Series A Common Stock.
Section 2.06 Other Representations. The Plan was confirmed in July,
---------------------
1994. To the knowledge of Seller, there have been no amendments or
modifications to the Plan as confirmed which would have a material adverse
effect on the sale of the securities contemplated by this Agreement, there have
been no appeals from the order confirming the Plan and there has been no motion,
filed to seek revocation of, nor has an order been entered revoking, the Plan.
Section 3. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
hereby represents and warrants to Seller that:
4
<PAGE>
Section 3.01 Due Organization; Authority. Purchaser is a general
---------------------------
partnership duly organized, validly existing and in good standing under the laws
of Illinois, and has all requisite partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.
Section 3.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Purchaser and constitutes the legal, valid
and binding agreement of Purchaser, enforceable in accordance with its terms.
Section 3.03 No Conflict. Purchaser's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Purchaser or any of its
properties or assets, (ii) any provisions of the organizational documents of
Purchaser or (iii) any agreement or undertaking to which Purchaser is a party or
by which it or its assets are otherwise bound except for consents,
contraventions or conflicts which would not have a material adverse effect on
the ability of Purchaser to deliver the Purchase Price as contemplated herein;
provided, however, that no representation is deemed made as to consents which
may be required by the FCC or any contravention or conflict arising under the
Communications Act.
Section 3.04 Investment Representations. (a) Purchaser hereby
--------------------------
acknowledges that Purchaser is aware that Seller or its affiliates by reason of
their relationship to Debtor may have had access to certain information (the
"Information") which may be material regarding Debtor, its financial condition,
-----------
results of operations, management, projections and businesses. Purchaser
further agrees that Purchaser has conducted its own investigation, to the extent
that Purchaser has determined necessary or desirable regarding Debtor, and that
Purchaser has determined to enter into and complete this transaction based on,
among other things, such investigation.
(b) Purchaser understands and represents that it is purchasing the
Sale Debentures and Sale Claims for its own account and not with a view to or
for sale or distribution that would be in violation of the Securities Act of
1933, as amended.
(c) Purchaser is an "accredited investor" as such term is defined in
Rule 501 of Regulation D under the Act, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the acquisition of the Sale Debentures and Sale Claims, and having had
access to, or having been furnished with, all such
5
<PAGE>
information as he has considered necessary, has concluded that he is able to
bear those risks.
(d) Purchaser represents that the Sale Debentures and Sale Claims
were not offered or sold to Purchaser by any form of general solicitation or
general advertising.
(e) Purchaser represents that all beneficial interests in capital
stock or other voting or equity interests in Purchaser are owned by U.S.
citizens or by entities formed under the laws of the U.S. in which all
beneficial interests, directly or indirectly, in capital stock or other voting
or equity interests is owned by U.S. citizens and Purchaser agrees to take such
actions, if any, as may be required by the Federal Communications Commission to
bring its ownership interests into compliance with applicable law (including, if
no other remedy exists, reducing its ownership interest in Telemundo Group,
Inc.).
Section 4. Certain Covenants.
-----------------
(a) Reasonable Best Efforts. Subject to the terms of this Agreement,
-----------------------
each of Seller and Purchaser shall use its reasonable best efforts to take, or
cause to be taken, all actions reasonably necessary, proper or advisable under
applicable law, including such additional actions as may be reasonably requested
by the other party hereto, to more fully effectuate the transactions
contemplated by this Agreement. In the event at any time any further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
hereto shall use their reasonable best efforts to take such action.
(b) Costs and Expenses. Each of Seller and Purchaser shall be
------------------
solely responsible for all costs and expenses (including legal expenses)
incurred by it with respect to the negotiation and preparation of this Agreement
and the transactions contemplated hereby, provided, that Seller shall indemnify
Purchaser in respect of and promptly pay all reasonable actual legal fees and
expenses of Purchasers' legal counsel in representing Purchaser and in
negotiating and documenting this transaction through and including the date this
agreement is filed.
(c) Certain Rights. The parties agree that nothing contained
--------------
herein shall in any way restrict the rights or abilities of Seller or its
affiliates and agents, from taking any action any of them deems necessary or
appropriate with respect to the Plan or the Case, including voting (or causing
the Trustee to vote, if applicable), the Sale Debentures and Sale Claims as it
may determine, provided, that nothing herein shall negate any of Sellers'
express obligations under this Agreement.
6
<PAGE>
(d) Certain Notices. If requested by Seller, Purchaser will
---------------
promptly execute, deliver and/or fill such notices, stipulations and any related
documents as and when Seller believes reasonably necessary in order to permit
Purchaser to be treated as the record holder of the Sale Debentures and Sale
Claims or as of any record date for distributions in the Reorganization.
(e) Voting Sale Debentures. In the event that any vote or consent
----------------------
of the Sale Debentures and Sale Claims is sought in respect of the Plan (or any
substitute or amended plan) or any other matter, Purchaser agrees to vote the
Sale Debentures and Sale Claims in such manner as Seller shall request.
Section 5. Termination. In the event that the Consummation Date
-----------
shall not have occurred by December 31, 1994, then either Seller or Purchaser,
by written notice given to the other party, may terminate this Agreement. In
the event that certificates representing the Distribution Stock are not
delivered to Purchaser or for Purchaser's account by January 31, 1995, or in the
event that the Distributions have not been delivered to Seller by January 31,
1995, then in either such case, Seller or Purchaser, by written notice given to
the other party, may terminate this Agreement. In the event of termination of
this Agreement in accordance with its terms, Purchaser shall immediately
transfer the Sale Debentures and Sale Claims (and any proceeds thereon) to
Seller, together with any evidence of transfer that Seller shall reasonably
request and Seller shall return any of the Cash Amount that has been delivered
to it. Neither Seller nor Purchaser shall have any further obligation to the
other after these deliveries have been made except for a willful breach by a
party of its obligations hereunder.
Section 6. Miscellaneous.
-------------
Section 6.01 Notices. All notices or other communications required
-------
or permitted hereunder shall be sufficiently given (i) if delivered personally,
(ii) when transmitted via telecopy to the telecopier number as the parties may
from time to time provide (with hard copy following), or (iii) the day following
the day on which the same has been delivered prepaid to a national overnight air
courier service addressed to the address as the parties may from time to time
provide.
Section 6.02 Governing Law. This Agreement and all rights conferred
-------------
and obligations imposed hereunder shall be interpreted and construed in
accordance with the laws and internal judicial decisions of the State of New
York, without giving effect to the conflicts of laws rules thereof.
Section 6.03 Entire Agreement; Counterparts. This Agreement (i)
------------------------------
embodies the entire agreement between the parties relating to the subject matter
hereof, supersedes all prior agreements and understandings between such parties,
if any, relating to the subject matter hereof, and may be amended only by
7
<PAGE>
an instrument in writing executed jointly by each party hereto, and (ii) may be
executed in a number of identical counterparts, each of which shall be deemed an
original for all purposes and all of which constitute, collectively, one
agreement; but in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.
Section 6.04 Assignment; Survival. The terms of this Agreement
--------------------
shall be binding upon, and shall inure to the benefit of, Seller, Purchaser, and
their respective successors and assigns. All representations, warranties,
covenants and agreements made herein shall survive the execution and delivery of
this Agreement and the purchase and sale of the Sale Debentures and Sale Claims.
Section 6.05 Certain Limitation. Neither party shall be liable for
------------------
damages to the other party or any third person as a result of a breach or
termination of this Agreement, except that if a party willfully and in bad faith
breaches any provision of this Agreement, the other party shall be entitled to
seek damages resulting from such willful, bad faith breach, but in no event
shall a party be liable for consequential or punitive damages.
Section 6.06 Headings. The captions and headings in this Agreement
--------
are for convenience only and shall not affect the interpretation or construction
of this Agreement.
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, each by its duly authorized officer or representative, all on the day
and year first above written.
GRS PARTNERS II
By:
-------------------------------------
Paul Meister, Vice President of
Grosvenor Capital Management, Inc.
general partner of Grosvenor
Capital Management, L.P.,
Adminstrator of GRS Partners II
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P. its Manager
By: Apollo Advisors,
L.P., its Managing
General Partner
By: Apollo Capital
Management,
Inc., its
General Partner
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT 10.6
AGREEMENT TO PURCHASE SECURITIES AND CLAIMS
THIS AGREEMENT TO PURCHASE SECURITIES AND CLAIMS (this "Agreement"),
---------
dated as of December 21, 1994, is by and between The Value Realization Fund,
L.P., a Delaware limited partnership ("Purchaser"), and TLMD Partners II,
---------
L.L.C., a Delaware limited liability company ("Seller"). Capitalized terms used
------
and not defined herein shall have the meanings ascribed to them in the Second
Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code of
Telemundo Group, Inc. dated April 29, 1994.
RECITALS:
--------
A. On or about June 8, 1993 (the "Petition Date"), Telemundo Group,
-------------
Inc. (the "Debtor") filed a petition for relief under Chapter 11 of Title 11 of
------
the United States Code, as amended (the "Bankruptcy Code"), with the United
---------------
States Bankruptcy Court for the Southern District of New York, commencing
Chapter 11 case No. 93-B-42967(JLG) (the "Case").
----
B. Seller is the owner of at least $1,201,624 principal amount of
13 5/8% Debentures.
C. Proofs of claim in the Case have been filed with respect to the
13 5/8% Debentures.
D. Seller desires to sell, transfer, and assign to Purchaser, and
Purchaser desires to purchase from Seller, all of Seller's right, title and
interest in and to $1,201,624 principal amount of 13 5/8% Debentures (the "Sale
----
Debentures") and the related 13 5/8% Debenture Claims (the "Sale Claims"), upon
- ---------- -----------
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. Purchase and Sale of Sale Debentures and Sale Claims.
----------------------------------------------------
Subject to the terms and conditions of this Agreement, effective upon execution
of this Agreement by the parties, Seller hereby sells, transfers and assigns to
Purchaser, and, effective upon execution of this Agreement by the parties,
Purchaser hereby purchases and acquires from Seller, all of Seller's rights,
title and interest in and to the Sale Debentures and Sale Claims, in
consideration of payment to Seller of the Purchase Price (as defined below).
Section 1.01 (a) Purchase Price. The purchase price (the "Purchase
-------------- --------
Price") payable by Purchaser for the Distribution
<PAGE>
Stock (in respect of the Sale Debentures and Sale Claims) shall be an amount
- -----
equal to (x) $10.00 per share multiplied by (y) the number of shares of Common
Stock to be issued and delivered to or for the account of Purchaser (as used
herein, this means its account at U.S. Trust Company) in respect of the Sale
Debentures and the Sale Claims (the "Distribution Stock") (the "Cash Amount").
(b) Undertaking. Purchaser shall deliver to Seller in the manner set
-----------
forth below such cash, Warrants and other consideration (other than Distribution
Stock) as are to be received by Purchaser pursuant to the Plan with respect to
the Sale Debentures and Sale Claims (the "Distributions"), which shall be
considered to have been received by Purchaser on behalf of Seller.
Section 1.02 Payment of Purchase Price and Delivery of
-----------------------------------------
Distributions. (a) Upon delivery of certificates to or for the account of
- -------------
Purchaser evidencing all of the Distribution Stock, free and clear of all Liens
(as hereinafter defined) (such delivery date, the "Stock Delivery Date"),
Purchaser shall pay to Seller in cash by wire transfer in immediately available
funds, to such account as Seller has specified, an amount equal to the Cash
Amount.
(b) Purchaser shall deliver to Seller the Distributions promptly,
and in any event within three business days, after receipt thereof by Purchaser.
The Distributions shall be delivered to Seller in the same form as received by
Purchaser, together with any appropriate documents of transfer, if any, as
Seller shall reasonably require and shall be free and clear of all Liens created
by or as a result of actions or omissions of the Purchaser other than the Lien
created by this Section 1.03 in favor of Seller. Seller and Purchaser agree to
use their best efforts, promptly after the date of consummation of the Plan, to
cause certificates evidencing all of the Distribution Stock to be delivered to
or for the account of Purchaser in accordance with the terms of this Agreement
and to cause to be delivered to or for the account of Seller all of the
Distributions in accordance with the terms of this Agreement.
(c) Upon execution of this Agreement by the parties, Seller shall
deliver to or for the account of Purchaser, the Sale Debentures and Sale Claims,
for re-delivery to Seller in accordance with Section 1.03 (which re-delivery
shall be deemed to occur contemporaneously with such delivery to Purchaser).
Section 1.03 Security Interest. In order to secure Purchaser's
-----------------
obligation to deliver the Cash Amount and Distributions when due, Purchaser
hereby grants a security interest in the Sale Claims and Sale Debentures (and
proceeds thereon) to Seller in accordance with, and is executing
2
<PAGE>
contemporaneously herewith, a Pledge Agreement substantially in the form of
Exhibit A, and upon delivery by Seller to or for the account of Purchaser agrees
- ---------
to deliver certificates representing the Sale Debentures, with bond powers
executed in blank (or, if certificates for the Sale Debentures are not delivered
to Purchaser, such other documentation and agreements, as Seller shall
reasonably request in order to allow it to perfect the security interest
contemplated by the Pledge Agreement), and such other documents as Seller shall
reasonably request, to Seller. In order to more fully effect the delivery of
the Distributions to Seller, Purchaser shall instruct U.S. Trust Company, and,
if requested by Seller, the Indenture Trustees for the Sale Debentures (the
"Trustees"), or cause the Trustees to be instructed, in such form as Seller
--------
shall reasonably request, that upon consummation of the Plan, the Distributions
shall be delivered directly to, and in the name of, the Seller or such person as
the Seller shall designate, and shall take such other actions as Seller shall
reasonably request. The parties agree that Purchaser is not, by virtue of this
Agreement or the transactions contemplated hereby, guaranteeing the payment of
any principal or interest to be paid on the Distributions in accordance with the
constituent documents pursuant to which the Distributions were created.
Section 1.04 Shareholders Agreement. On the date hereof and
----------------------
contemporaneously with the transfer of the Sale Debentures and Sale Claims,
Purchaser, Seller and other persons are entering into a Shareholders Agreement
substantially in the form of Exhibit B.
---------
Section 2. Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Purchaser, its successors and assigns, as of the date
hereof and as of the Stock Delivery Date, that:
Section 2.01 Due Organization; Authority. Seller is a limited
---------------------------
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
Section 2.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Seller and constitutes the legal, valid
and binding agreement of Seller, enforceable in accordance with its terms.
Section 2.03 Title. On the date hereof Seller is the owner of and
-----
has good and marketable title to all of the Sale Debentures and the Sale Claims,
free and clear of all liens, charges, adverse claims and pledges, except for
such liens, charges, adverse claims and pledges arising from the status or
3
<PAGE>
actions of Purchaser or as contemplated by this Agreement ("Liens"), and as a
-----
result of the sale of the Sale Debentures and Sale Claims hereby, Purchaser is
obtaining good title to the Sale Debentures and Sale Claims free and clear of
all Liens. When the certificates evidencing the Distribution Stock are
delivered to or for the account of Purchaser on the Stock Delivery Date,
Purchaser will acquire good and marketable title to the Distribution Stock free
and clear of all Liens.
Section 2.04 No Conflict. Seller's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Seller or any of its Affiliates
or its properties or assets, (ii) any provisions of the organizational documents
of Sellers, or (iii) any agreement or undertaking to which Seller is a party or
by which it or its assets is otherwise bound except for consents, contraventions
or conflicts which would not have a material adverse effect on the ability of
Seller to deliver the Sale Debentures and Sale Claims as contemplated herein or
the ability of Purchaser to receive or Debtor to issue and deliver the
Distribution Stock and the Distributions as contemplated hereby under the Plan
in accordance with its terms; provided, however, that no representation is
deemed made as to consents which may be required by the FCC or any contravention
or conflict arising under the Federal Communications Act of 1934, as amended
(the "Communications Act").
Section 2.05 Amount of Series B Common Stock. Assuming consummation
-------------------------------
of the Plan in accordance with its terms, as a result of the ownership of the
1993 Zero Coupon Notes and the 1992 Zero Coupon Notes, collectively Seller,
Hernandez Partners and Leon Black (the "Entities") will own at least 2,000,000
shares of Common Stock. To the knowledge of Seller, upon consummation of the
Plan, Debtor will have outstanding approximately 10 million shares of Common
Stock, approximately 5,611,606 of which will be Series B Common Stock. To the
knowledge of Seller, the Distribution Stock will consist of approximately 66,667
shares of Series A Common Stock.
Section 2.06 Other Representations. The Plan was confirmed in July,
---------------------
1994. To the knowledge of Seller, there have been no amendments or
modifications to the Plan as confirmed which would have a material adverse
effect on the sale of the securities contemplated by this Agreement, there have
been no appeals from the order confirming the Plan and there has been no motion,
filed to seek revocation of, nor has an order been entered revoking, the Plan.
4
<PAGE>
Section 3. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
hereby represents and warrants to Seller that:
Section 3.01 Due Organization; Authority. Purchaser is a limited
---------------------------
partnership duly organized, validly existing and in good standing under the laws
of Delaware, and has all requisite partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.
Section 3.02 Enforceability. This Agreement has been duly
--------------
authorized, executed and delivered by Purchaser and constitutes the legal, valid
and binding agreement of Purchaser, enforceable in accordance with its terms.
Section 3.03 No Conflict. Purchaser's execution, delivery, and
-----------
performance of this Agreement will not require any governmental, regulatory or
third party consent (except as contemplated by the Plan) and will not contravene
or conflict with (i) any law, statute, rule or regulation, judgment or order,
writ, injunction or decree which is binding upon Purchaser or any of its
properties or assets, (ii) any provisions of the organizational documents of
Purchaser or (iii) any agreement or undertaking to which Purchaser is a party or
by which it or its assets are otherwise bound except for consents,
contraventions or conflicts which would not have a material adverse effect on
the ability of Purchaser to deliver the Purchase Price as contemplated herein;
provided, however, that no representation is deemed made as to consents which
may be required by the FCC or any contravention or conflict arising under the
Communications Act.
Section 3.04 Investment Representations. (a) Purchaser hereby
--------------------------
acknowledges that Purchaser is aware that Seller or its affiliates by reason of
their relationship to Debtor may have had access to certain information (the
"Information") which may be material regarding Debtor, its financial condition,
-----------
results of operations, management, projections and businesses. Purchaser
further agrees that Purchaser has conducted its own investigation, to the extent
that Purchaser has determined necessary or desirable regarding Debtor, and that
Purchaser has determined to enter into and complete this transaction based on,
among other things, such investigation.
(b) Purchaser understands and represents that it is purchasing the
Sale Debentures and Sale Claims for its own account and not with a view to or
for sale or distribution that would be in violation of the Securities Act of
1933, as amended.
(c) Purchaser is an "accredited investor" as such term is defined in
Rule 501 of Regulation D under the Act, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of
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the acquisition of the Sale Debentures and Sale Claims, and having had access
to, or having been furnished with, all such information as he has considered
necessary, has concluded that he is able to bear those risks.
(d) Purchaser represents that the Sale Debentures and Sale Claims
were not offered or sold to Purchaser by any form of general solicitation or
general advertising.
(e) Purchaser represents that all beneficial interests in capital
stock or other voting or equity interests in Purchaser are owned by U.S.
citizens or by entities formed under the laws of the U.S. in which all
beneficial interests, directly or indirectly, in capital stock or other voting
or equity interests is owned by U.S. citizens and Purchaser agrees to take such
actions, if any, as may be required by the Federal Communications Commission to
bring its ownership interests into compliance with applicable law (including, if
no other remedy exists, reducing its ownership interest in Telemundo Group,
Inc.).
Section 4. Certain Covenants.
-----------------
(a) Reasonable Best Efforts. Subject to the terms of this
-----------------------
Agreement, each of Seller and Purchaser shall use its reasonable best efforts to
take, or cause to be taken, all actions reasonably necessary, proper or
advisable under applicable law, including such additional actions as may be
reasonably requested by the other party hereto, to more fully effectuate the
transactions contemplated by this Agreement. In the event at any time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto shall use their reasonable best efforts to take
such action.
(b) Costs and Expenses. Each of Seller and Purchaser shall be
------------------
solely responsible for all costs and expenses (including legal expenses)
incurred by it with respect to the negotiation and preparation of this Agreement
and the transactions contemplated hereby, provided, that Seller shall indemnify
Purchaser in respect of and promptly pay all reasonable actual legal fees and
expenses of Purchasers' legal counsel in representing Purchaser and in
negotiating and documenting this transaction through and including the date this
agreement is filed.
(c) Certain Rights. The parties agree that nothing containe
--------------
herein shall in any way restrict the rights or abilities of Seller or its
affiliates and agents, from taking any action any of them deems necessary or
appropriate with respect to the Plan or the Case, including voting (or causing
the Trustee to vote, if applicable), the Sale Debentures and Sale Claims as it
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may determine, provided, that nothing herein shall negate any of Sellers'
express obligations under this Agreement.
(d) Certain Notices. If requested by Seller, Purchaser will
---------------
promptly execute, deliver and/or fill such notices, stipulations and any related
documents as and when Seller believes reasonably necessary in order to permit
Purchaser to be treated as the record holder of the Sale Debentures and Sale
Claims or as of any record date for distributions in the Reorganization.
(e) Voting Sale Debentures. In the event that any vote or consent
----------------------
of the Sale Debentures and Sale Claims is sought in respect of the Plan (or any
substitute or amended plan) or any other matter, Purchaser agrees to vote the
Sale Debentures and Sale Claims in such manner as Seller shall request.
Section 5. Termination. In the event that the Consummation Date
-----------
shall not have occurred by December 31, 1994, then either Seller or Purchaser,
by written notice given to the other party, may terminate this Agreement. In
the event that certificates representing the Distribution Stock are not
delivered to Purchaser or for Purchaser's account by January 31, 1995, or in the
event that the Distributions have not been delivered to Seller by January 31,
1995, then in either such case, Seller or Purchaser, by written notice given to
the other party, may terminate this Agreement. In the event of termination of
this Agreement in accordance with its terms, Purchaser shall immediately
transfer the Sale Debentures and Sale Claims (and any proceeds thereon) to
Seller, together with any evidence of transfer that Seller shall reasonably
request and Seller shall return any of the Cash Amount that has been delivered
to it. Neither Seller nor Purchaser shall have any further obligation to the
other after these deliveries have been made except for a willful breach by a
party of its obligations hereunder.
Section 6. Miscellaneous.
-------------
Section 6.01 Notices. All notices or other communications required
-------
or permitted hereunder shall be sufficiently given (i) if delivered personally,
(ii) when transmitted via telecopy to the telecopier number as the parties may
from time to time provide (with hard copy following), or (iii) the day following
the day on which the same has been delivered prepaid to a national overnight air
courier service addressed to the address as the parties may from time to time
provide.
Section 6.02 Governing Law. This Agreement and all rights conferred
-------------
and obligations imposed hereunder shall be interpreted and construed in
accordance with the laws and internal judicial decisions of the State of New
York, without giving effect to the conflicts of laws rules thereof.
Section 6.03 Entire Agreement; Counterparts. This Agreement (i)
------------------------------
embodies the entire agreement between the parties
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relating to the subject matter hereof, supersedes all prior agreements and
understandings between such parties, if any, relating to the subject matter
hereof, and may be amended only by an instrument in writing executed jointly by
each party hereto, and (ii) may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one agreement; but in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
Section 6.04 Assignment; Survival. The terms of this Agreement
--------------------
shall be binding upon, and shall inure to the benefit of, Seller, Purchaser, and
their respective successors and assigns. All representations, warranties,
covenants and agreements made herein shall survive the execution and delivery of
this Agreement and the purchase and sale of the Sale Debentures and Sale Claims.
Section 6.05 Certain Limitation. Neither party shall be liable for
------------------
damages to the other party or any third person as a result of a breach or
termination of this Agreement, except that if a party willfully and in bad faith
breaches any provision of this Agreement, the other party shall be entitled to
seek damages resulting from such willful, bad faith breach, but in no event
shall a party be liable for consequential or punitive damages.
Section 6.06 Headings. The captions and headings in this Agreement
--------
are for convenience only and shall not affect the interpretation or construction
of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, each by its duly authorized officer or representative, all on the day
and year first above written.
THE VALUE REALIZATION FUND, L.P.
By: Canpartners Investments III, L.P.,
its General Partner
By: Canyon Capital Management, L.P.,
its General Partner
By: Canpartners Incorporated,
its General Partner
By:
----------------------------------
Title:
TLMD PARTNERS II, L.L.C.
By: AIF II, L.P. its Manager
By: Apollo Advisors,
L.P., its Managing
General Partner
By: Apollo Capital Management,
Inc., its
General Partner
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT 99
JOINT FILING AGREEMENT
Each of the undersigned hereby acknowledges and agrees, in compliance with
the provisions of Rule 13d-1(f)(1) under the Securities Exchange Act of 1934,
that the Schedule 13D to which this Agreement is attached as an exhibit is being
filed with the Securities and Exchange Commission on behalf of each of them.
This Agreement may be signed by the undersigned in separate counterparts.
HERNANDEZ PARTNERS
By: /s/ Roland A. Hernandez
________________________
Roland A. Hernandez
General Partner
THE VALUE REALIZATION FUND, L.P.
By: Canpartners Investments III, L.P.
its General Partner
By: Canyon Capital Management, L.P.
its General Partner
By: Canpartners Incorporated,
its General Partner
By: /s/ Mitchell R. Julis
_______________________
Title: Vice President
____________________
GRS PARTNERS II, L.P.
By: /s/ Michael J. Sacks
_______________________
Title: Vice President
____________________
