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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 3)
Under the Securities Exchange Act of 1934*
Paxson Communications Corporation
---------------------------------
(Name of Issuer)
Class A Common Stock, par value $.001 per share
-----------------------------------------------
(Title of Class of Securities)
704231 10 9
--------------
(CUSIP Number)
Ed Grinacoff
Sandler Mezzanine General Partnership
767 Fifth Avenue, 45th Floor
New York, New York 10153
(212) 754-8100
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 2, 1996
-------------------------------------------------------
(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 this statement [ ].
(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 less than five percent 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 should 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).
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CUSIP No. 704231 10 9
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Sandler Mezzanine General Partnership
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
Not Applicable (see Item 3)
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
New York
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 2,427,835 shares
Shares Bene- --------------------------------------------------------
ficially (8) Shared Voting Power 0 shares
Owned by --------------------------------------------------------
Each Report- (9) Sole Dispositive Power 2,427,835 shares
ing Person --------------------------------------------------------
With (10) Shared Dispositive Power 0 shares
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
- --------------------------------------------------------------------------------
2,427,835 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
5.9%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
PN
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Amendment No. 3
Statement Of
SANDLER MEZZANINE GENERAL PARTNERSHIP
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
PAXSON COMMUNICATIONS CORPORATION
Sandler Mezzanine General Partnership (the "Reporting Person") hereby
amends certain items of its Schedule 13D (the "Prior Schedule 13D"), with
respect to its beneficial ownership of shares of Class A Common Stock, par
value $.001 per share ("Class A Common Stock"), of Paxson Communications
Corporation, a Delaware corporation (the "Company").
Item 4. Purpose of Transaction
Item 4 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The Reporting Person is the general partner of each of Sandler
Mezzanine Partners, L.P., Sandler Mezzanine Foreign Partners, L.P. and Sandler
Mezzanine T-E Partners, L.P. (collectively, the "Partnerships"). The
Partnerships hold, for investment purposes, warrants (the "Warrants"), which
are exercisable for shares of Class A Common Stock and Class B Common Stock,
par value $.001 per share ("Class B Common Stock"), of the Company. See Item 5.
Pursuant to (i) a U.S. Underwriting Agreement, dated March 28, 1996
(the "U.S. Underwriting Agreement"), among Smith Barney Inc., Painewebber
Incorporated, CIBC Wood Gundy Securities Corp. and BT Securities Corporation,
as representatives of the several U.S. underwriters (the "U.S. Underwriters"),
the Company, the Partnerships and certain other selling security holders and
(ii) an International Underwriting Agreement, dated March 28, 1996 (the
"International Underwriting Agreement"), among Smith Barney Inc., Painewebber
International (U.K.) Ltd., CIBC Wood Gundy Securities Corp., Bankers Trust
International plc, as lead managers of the several managers (the "International
Underwriters"), the Company, the Partnerships and certain other selling
security holders, the Partnerships sold to the U.S. Underwriters and the
International Underwriters (collectively, the "Underwriters") an aggregate of
28.77853 Warrants. The Underwriters immediately exercised such Warrants for
Class A Common Stock and Class B Common Stock (which Class B Common Stock was
then immediately converted into Class A Common Stock), thereby acquiring
797,322 shares of Class A Common Stock. In connection with such sale of
Warrants, the Partnerships received an aggregate of $12,119,294.40. A copy of
each of the U.S. Underwriting Agreement and the International Underwriting
Agreement has been incorporated by reference as an exhibit to this Schedule 13D.
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Also pursuant to the U.S. Underwriting Agreement and the International
Underwriting Agreement, the Underwriters had the option, which option expired
unexercised at 9:00 p.m., New York City time on April 29, 1996, to purchase an
aggregate of 9.47468 Warrants.
Pursuant to the September 1996 Agreement (as defined in Item 6 hereof)
and in connection with the Preferred Stock Offering (as defined in Item 6
hereof), the parties thereto provided for the Company's redemption of Senior
Preferred Stock (as defined in Item 6 hereof) from the proceeds of such public
offering and, effective upon such redemption, the waiver of the parties' rights
of first refusal and registration rights with respect to the Preferred Stock
Offering. See Item 6 for a discussion of the September 1996 Agreement. If the
Senior Preferred Stock is redeemed by the Company pursuant to the September
1996 Agreement, both Michael J. Marocco and John A. Kornreich, who are
affiliates of the Reporting Person and directors of the Company, will resign as
directors of the Company. The consummation of the redemption depends on the
Company's consummation of the Preferred Stock Offering.
Except as otherwise disclosed in this Schedule 13D, the Reporting
Person has not made any decision concerning its course of action with respect
to the Company. The Reporting Person could decide, depending on market and
other factors, to dispose of the Warrants (or the Class A Common Stock or Class
B Common Stock issuable upon exercise of the Warrants) beneficially owned by
it, to acquire additional shares of Class A Common Stock, Class B Common Stock
or Warrants, or to take any other available course of action. In this regard,
the Reporting Person intends to continuously review its investment in the
Company and may in the future determine to change its present plans and
proposals relating to the Company. In reaching any conclusion as to its future
course of action, the Reporting Person will take into consideration various
factors, including without limitation the Company's business and financial
condition and prospects, other developments concerning the Company, other
business opportunities available to the Reporting Person, developments with
respect to the business of the Reporting Person, developments in the Company's
industry generally, general economic conditions and money and stock market
conditions.
Other than as described in this Schedule 13D, the Reporting Person does
not have any present plans or proposals which relate to or would result in: (a)
the acquisition by any person of additional securities of the Company, or the
disposition of the securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material
amount of assets of the Company or of any of its subsidiaries; (d) any change
in the present board of directors or management of the issuer, including any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board; (e) any material change in the present
capitalization or dividend policy of the Company; (f) any other material change
in the Company's business or corporate structure; (g) changes in the Company's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Company by any person; (h) causing a
class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to
any of those enumerated above.
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Notwithstanding anything contained herein, the Reporting Person
reserves the right, depending on other relevant factors, to purchase additional
shares of Class A Common Stock, Class B Common Stock, Warrants or other
securities of the Company, dispose of all or a portion of its holdings of
securities of the Company, or change its intention with respect to any and all
of the matters referred to in this Item.
See Item 6 for a discussion of certain arrangements between the
Reporting Person and the Company.
Item 5. Interest in Securities of the Issuer
Item 5 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
(a) The Reporting Person is the general partner of each of
the Partnerships. The Reporting Person beneficially owns through the
Partnerships the Warrants, which are presently exercisable for shares
of Class A Common Stock and shares of Class B Common Stock. As of the
date hereof, the Partnerships hold an aggregate of 85.80614 Warrants,
which are exercisable for an aggregate of approximately 1,820,876
shares of Class A Common Stock and an aggregate of approximately
606,959 shares of Class B Common Stock. Each share of Class B Common
Stock is convertible into one share of Class A Common Stock. As a
result, the Reporting Person beneficially owns approximately 2,427,835
shares of Class A Common Stock. The Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1996, reports that, as of July
31, 1996, 38,670,309 shares of Class A Common Stock were outstanding.
Accordingly, if the Warrants held by the Partnerships were fully
exercised and the shares of Class B Common Stock issuable to the
Partnerships upon such exercise were converted into Class A Common
Stock, the Reporting Person would beneficially own approximately 5.9%
of the Company's Class A Common Stock.
The Class B Common Stock and the Class A Common Stock vote as a
single class, with each share of Class B Common Stock entitled to 10
votes per share and each share of Class A Common Stock entitled to one
vote per share. Therefore, if the Warrants held by the Partnerships
are exercised and the shares of Class B Common Stock issuable upon the
exercise of the Warrants are not converted into shares of Class A
Common Stock, the Reporting Person would effectively have
approximately 6.1% voting power with respect to the Company's common
stock.
(b) The Reporting Person as general partner of the
Partnerships has sole power (i) to direct the voting of the 2,427,835
shares of Class A Common Stock issuable upon exercise of the Warrants
(and the conversion of Class B Common Stock issuable upon exercise of
the Warrants) and (ii) to direct the disposition of the Warrants and
any Class A Common Stock or Class B Common Stock issuable upon the
exercise of the Warrants. The Reporting Person does not share with
any person voting power or the power to dispose of the Warrants or any
Class A Common Stock or Class B Common Stock issuable upon exercise of
the Warrants.
(c) Except as described in Item 4 to this Schedule 13D, the
Reporting Person, for itself and as the general partner of each of the
Partnerships, has not effected any transactions during the past 60
days in respect of the Class A Common Stock.
(d) No person other than the Reporting Person, as the
general partner of each of the Partnerships, is known to have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of the Warrants or the shares of Class A
Common Stock (issuable upon exercise of the Warrants), which are held
by the Partnerships.
(e) Item 5(e) of Schedule 13D is not applicable.
3
<PAGE> 6
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer
Item 6 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The Reporting Person is an affiliate of each of Michael J. Marocco and
John A. Kornreich, who are both directors of the Company.
The Partnerships, the Company, Paxson Enterprises, Inc., Second Crystal
Diamond, L.P., and certain purchasers of the Company's preferred stock and
warrants entered into a Stockholders' Agreement, dated as of December 15, 1993
and as amended to date (as amended, the "Stockholders Agreement"), pursuant to
which (among other things) the Partnerships, under certain conditions, had a
limited right (which right was subsequently terminated as described below) to
require the Company to purchase any shares of the Class A Common Stock and
Class B Common Stock issuable upon exercise of the Warrants held by the
Partnerships. As described more fully below, the Stockholders Agreement also
provides that the Partnerships may make a registration demand request of the
Company for registration with the Securities and Exchange Commission
("Commission") of all or part of the shares of Class A Common Stock issued or
issuable pursuant to the exercise of the Warrants. A copy of the Stockholders
Agreement (including the registration rights provisions thereof) has been filed
as an exhibit to this Schedule 13D and the statements made herein are qualified
in their entirety by reference to the Stockholders Agreement which is hereby
incorporated by reference herein.
In connection with an amendment to the Stockholders Agreement and a
certain Exchange Agreement and Consent, dated as of December 22, 1994 (the
"Exchange Agreement"), among the Company, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., the Partnerships and certain other purchasers of the
Company's securities, certain call rights with respect to the Warrants held by
the Partnerships were terminated. A copy of the Exchange Agreement has been
incorporated by reference as an exhibit to this Schedule 13D and the statements
made herein are qualified in their entirety by reference to the Exchange
Agreement which is hereby incorporated by reference herein.
Under the terms of the Stockholders Agreement, the Partnerships have
redemption rights with respect to shares of the Company's 15% Cumulative
Compounding Redeemable Preferred Stock and Series B 15% Cumulative Compounding
Redeemable Preferred Stock (collectively, the "Senior Preferred Stock") that
can be triggered by a change in control of the Company, by certain
bankruptcy-related events or any failure to select Lowell W. Paxson as Chairman
and Chief Executive Officer of the Company in accordance with the succession
provisions contained in the Stockholders Agreement. In addition, subject to
certain limitations and only after December 15, 1999, the Partnerships have the
right to require any shares of Senior Preferred Stock to be purchased for cash
by the Company. If the Partnerships choose to exercise their put or similar
rights with respect to Senior Preferred Stock and the Company is unable to
purchase all of the shares on the applicable purchase date because of a
material contractual obligation that prohibits such a repurchase, the Company
is required to take reasonable actions to enable the Company to purchase the
securities subject to the put notice, and is required to engage a nationally
recognized investment banking firm in order to advise and assist the Company in
connection with such actions.
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The Stockholders Agreement also provides the Partnerships with the
right of first refusal to purchase, subject to certain conditions, their pro
rata share of any new securities the Company may issue.
Pursuant to registration rights granted in the Stockholders Agreement,
certain holders of Senior Preferred Stock, including the Partnerships, may
require the Company to register with the Commission under and in accordance
with the Securities Act of 1933, as amended ("Securities Act"), all or part of
their "Registrable Shares" (as defined in the Stockholders Agreement).
Registrable Shares are defined to include shares issued or issuable as "Warrant
Shares" (which is defined in the Stockholders Agreement and includes shares of
Class A Common Stock issuable upon exercise of the Warrants) (as adjusted for
certain stock splits, stock dividends, recapitalizations and similar events)
and any securities issued to the holders of Senior Preferred Stock pursuant to
their exercise of certain rights of first refusal. The Company is required to
effectuate a demand registration at the request of holders of Senior Preferred
Stock only if (i) it has been requested and consented to by the holders of a
majority of the Registrable Shares held by the holders of Senior Preferred
Stock, and (ii) the shares as to which registration is requested represent at
least 25% of the aggregate Registrable Shares held by holders of Senior
Preferred Stock participating in such registration. Generally, the holders of
Senior Preferred Stock as a group are entitled to three demand registrations.
If at any time the Company proposes to file on its own behalf or on
behalf of any holder or holders of any equity securities a registration
statement under the Securities Act (other than a registration statement on Form
S-4 or Form S-8 or any successor form for the registration of securities to be
offered pursuant to an employee benefit plan), then the Company must give
notice to the holders of Senior Preferred Stock and certain other stockholders
of their respective rights to include certain Registrable Shares held by such
persons in a piggy-back registration. The Company has the right to abandon any
such registration.
In the case of a demand or certain piggy-back registrations, the
Company will pay all registration expenses except underwriting discounts and
commissions and transfer taxes. In the case of a piggy-back registration, each
participating holder of Senior Preferred Stock and each of certain other
stockholders shall pay its pro rata share of the incremental registration
filing fees and shall pay all fees and disbursements of its counsel (other than
a single counsel for certain holders) incurred in connection therewith.
The registration rights provisions of the Stockholders Agreement
allocate Registrable Shares among participating holders of Senior Preferred
Stock and certain other stockholders if fewer than all the requested shares are
to be included in a registration statement. The registration rights of such
holders generally have priority over those of other parties that may have
registration rights.
Pursuant to an Agreement, dated as of March 26, 1996 (the "Agreement"),
by and among the Company, Second Crystal Diamond, L.P., Paxson Enterprises,
Inc., the Partnerships, National Union Fire Insurance Company of Pittsburgh,
PA, BT Investment Partners, Paribas North America, Inc. and Union Venture
Corporation, the Partnerships agreed to (i) terminate their rights to put
shares of Class A Common Stock and Class B Common Stock to the Company, (ii)
eliminate certain rights to approve certain investments by the Company, (iii)
permitted the Company to redeem the Senior Preferred Stock on or after December
15, 1996 (a year earlier than previously permitted) at a price of 105% of the
liquidation price thereof, (iv) permitted the Company to issue 2,000,000
additional shares of stock (or options to purchase the same), (v) permitted the
Company to issue 125,000 shares of common stock (or options to purchase the
same) at an exercise price of $3.42 per share, (vi) deleted certain
restrictions on the Company's ability to acquire businesses in consideration
for stock of the Company and (vii) modified certain rights of the parties to
register common stock of the Company. A copy of the Agreement has been
incorporated by reference as an exhibit to this Schedule 13D and the statements
made herein are qualified in their entirety by reference to the Agreement which
is hereby incorporated by reference herein.
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Pursuant to an Agreement, dated as of September 26, 1996, and executed
on October 2, 1996, among the Company, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., the Partnerships, National Union Fire Insurance Company of
Pittsburgh, PA, BT Investment Partners, Paribas North America, Inc. and Union
Venture Corporation, and in connection with a proposed public offering (the
"Preferred Stock Offering") by the Company of exchangeable preferred stock, the
parties thereto provided for the Company's redemption of the Senior Preferred
Stock from the proceeds of such public offering and, effective upon such
redemption, the waiver of the parties' rights of first refusal and registration
rights with respect to the Preferred Stock Offering. In addition, the
September 1996 Agreement eliminates certain rights of the Partnerships and
National Union Fire Insurance Company of Pittsburgh, PA under the Stockholders
Agreement and provides for the termination of certain rights thereunder of the
holders of Senior Preferred Stock, effective upon the redemption of the Senior
Preferred Stock by the Company. The consummation of the redemption depends on
the Company's completion of the Preferred Stock Offering. A copy of the
September 1996 Agreement has been filed as an exhibit to this Schedule 13D and
the statements made herein are qualified in their entirety by reference to the
September 1996 Agreement which is hereby incorporated by reference herein. If
the Senior Preferred Stock is redeemed by the Company pursuant to the September
1996 Agreement, both Michael J. Marocco and John A. Kornreich, who are
affiliates of the Reporting Person and directors of the Company, will resign as
directors of the Company.
Item 7. Material to be Filed as Exhibits
Item 7 of the Prior Schedule 13D is hereby amended and restated in its
entirety to read as follows:
The following documents have been filed or incorporated by reference as
exhibits to this Schedule 13D (items marked with an * have been previously
filed):
*1. Stockholders' Agreement, dated as of December 15, 1993,
by and among Paxson Communications Corporation, Second Crystal
Diamond, L.P., Paxson Enterprises, Inc., and certain purchasers.
2. Exchange Agreement and Consent, dated as of December
22, 1994, among Paxson Communications Corporation, Second Crystal
Diamond, L.P., Paxson Enterprises, Inc., and certain purchasers of
securities of the Company (incorporated herein by reference to Exhibit
4.7 of Paxson Communications Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 (Commission File No.
1-13452)).
3. Amended and Restated Stockholders' Agreement, dated as
of December 22, 1994, among Paxson Communications Corporation, Second
Crystal Diamond, L.P., Paxson Enterprises, Inc. and certain investors,
including the Amended and Restated Registration Rights Provisions
attached as Exhibit A thereto (incorporated herein by reference to
Exhibit 4.3 of Paxson Communications Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (Commission File
No. 1-13452)).
4. Agreement, dated as of March 26, 1996, by and among
Paxson Communications Corporation, Second Crystal Diamond, L.P.,
Paxson Enterprises, Inc., Sandler Mezzanine Partners, L.P., Sandler
Mezzanine Foreign Partners, L.P., Sandler Mezzanine T-E Partners,
L.P., National Union Fire Insurance Company of Pittsburgh, PA, BT
Investment Partners, Inc., First Union Corporation of Virginia,
Paribas North America, Inc. and Union Venture Corporation
(incorporated herein by reference to Exhibit 9.1 of Paxson
Communications Corporation's Registration Statement on Form S-3 No.
333-473).
6
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5. U.S. Underwriting Agreement, dated March 28, 1996,
among Smith Barney, Inc., Painewebber Incorporated, CIBC Wood Gundy
Securities Corp., BT Securities Corporation, as representatives of the
several U.S. underwriters, Paxson Communications Corporation, Sandler
Mezzanine Partners, L.P., Sandler Mezzanine Foreign Partners, L.P.,
Sandler Mezzanine T-E Partners, L.P. and certain other selling
security holders (incorporated herein by reference to Exhibit 1.1 of
Paxson Communications Corporation's Registration Statement on Form S-3
No. 333-473).
6. International Underwriting Agreement, dated March 28,
1996, among Smith Barney Inc., Painewebber International (U.K.) Ltd.,
CIBC Wood Gundy Securities Corp., Bankers Trust International plc, as
lead managers of the several managers, Paxson Communications
Corporation, Sandler Mezzanine Partners, L.P., Sandler Mezzanine
Foreign Partners, L.P., Sandler Mezzanine T-E Partners, L.P. and
certain other selling security holders (incorporated herein by
reference to Exhibit 1.2 of Paxson Communications Corporation's
Registration Statement on Form S-3 No. 333-473).
99.7. Agreement, dated as of September 26, 1996, among Paxson
Communications Corporation, Second Crystal Diamond, L.P., Paxson
Enterprises, Inc., Sandler Mezzanine Partners, L.P., Sandler Mezzanine
Foreign Partners, L.P., Sandler Mezzanine T-E Partners, L.P., National
Union Fire Insurance Company of Pittsburgh, PA, BT Investment
Partners, Inc., First Union Corporation of Virginia, Paribas North
America, Inc. and Union Venture Corporation.
7
<PAGE> 10
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information in this statement is true,
complete and correct.
Dated: October 2, 1996
SANDLER MEZZANINE GENERAL PARTNERSHIP
By: MJM Media Corp, its general partner
By: /s/ Michael J. Marocco
-------------------------------
Name: Michael J. Marocco
Title: President
8
<PAGE> 1
EXHIBIT 99.7
AGREEMENT
This agreement (the "Agreement") dated as of September 26, 1996 is made
and entered into by and among (i) the holders (the "Senior Holders") of all of
the issued and outstanding shares of Paxson Communications Corporation's (the
"Company") "Existing Senior Preferred Stock" and "New Senior Preferred Stock"
(both as defined in the "Stockholders Agreement" (as defined below)), (ii) the
holders (the "Junior Holders", and with the Senior Holders, collectively, the
"Holders") of all of the issued and outstanding shares of the Company's "Junior
Preferred Stock" (as defined in the Stockholders Agreement), (iii) the "Initial
Management Investors" (as defined in the Stockholders Agreement), and (iv) the
Company. Terms not otherwise defined herein shall have the meanings given in
that certain Amended and Restated Stockholders' Agreement dated as of December
22, 1994 by and among the parties hereto, including the amended and restated
registration rights provisions (the "Registration Rights Provisions") attached
as Exhibit A thereto (collectively, as heretofore amended, the "Stockholders
Agreement").
RECITALS
A. Effective December 15, 1993, the Company and the Senior Holders
entered into a stock purchase agreement pursuant to which the Company sold to
the Senior Holders 2,000 shares of Existing Senior Preferred Stock and certain
warrants (the "Existing Warrants") to purchase shares of common stock issued by
the Company subject to a warrant agreement dated December 15, 1993 among the
Company, the Senior Holders and a warrant agent named therein. In connection
with the foregoing, the Company, the Senior Holders and the Initial Management
Investors entered into a stockholders agreement dated as of December 15, 1993
(the "Initial Stockholders Agreement").
B. Effective November 4, 1994, the Company amended its certificate
of incorporation to provide for two classes of common stock, Class A common
stock, par value $0.001 per share with one vote per share ("Class A Common
Stock"), and Class B common stock, par value $0.001 per share with ten votes
per share ("Class B Common Stock"). In connection therewith, the Company
caused each of its outstanding shares of common stock to be split into a
certain number of shares of Class A Common Stock and a certain number of shares
of Class B Common Stock.
C. Effective December 22, 1994, the Company, the Senior Holders
and the Initial Management Investors entered into an exchange agreement and
c1onsent (the "Exchange Agreement"), pursuant to which each Senior Holder
exchanged certain shares of Class A Common Stock and Class B Common Stock
issued upon the exercise of certain of the Existing Warrants for all of the
shares of the New Senior Preferred Stock, and reached additional agreements and
modified certain then existing agreements.
D. Effective December 22, 1994, the Company amended its
certificate of incorporation to provide for an additional class of common
stock, Class C common stock, par value $0.001 per share with no votes per share
("Class C Common Stock"), and increased the number of authorized shares of
Class A Common Stock, Class B Common Stock and preferred stock.
<PAGE> 2
E. Effective December 22, 1994, the Company and the Junior Holders
entered into a security purchase agreement (the "New Purchase Agreement"),
pursuant to which the Junior Holders subscribed for and purchased pursuant
thereto from the Company 33,000 shares of Junior Preferred Stock and certain
warrants to purchase shares of Class C Common Stock. In connection therewith,
the Company, the Senior Holders, the Junior Holders and the Initial Management
Investors entered into the Stockholders Agreement. The Stockholders Agreement,
among other things, amended and restated the Initial Stockholders Agreement and
set forth certain rights of the parties thereto with respect to certain
interests in the Company.
F. Effective January 1, 1995, the Company effected a stock split
by the issuance of a dividend of one share of Class A Common Stock for each two
shares of Class A Common Stock outstanding on such date and one share of Class
B Common Stock for each two shares of Class B Common Stock outstanding on such
date.
G. Effective April 1, 1995, the Holders and Initial Management
Investors executed a consent relating to the issuance of certain shares of
Class A Common Stock by the Company to Plymouth County Retirement Association.
H. Effective June 29, 1995, the Company filed three certificates
of amendment to its certificate of incorporation: (a) amending in its entirety
the designations of the Existing Senior Preferred Stock, (b) amending in its
entirety the designations of the New Senior Preferred Stock, and (c) changing
its name from "Paxson Communications Corp." to "Paxson Communications
Corporation."
I. Effective September 20, 1995, the parties hereto executed a
consent relating to, among other things, the Company's issuance of certain
senior subordinated notes and certain modifications of certain agreements
amongst the parties hereto.
J. Effective December 22, 1995, the parties hereto executed a
consent relating to, among other things, the pledge of certain Class A Common
Stock by one of the Initial Management Investors.
K. In connection with a public offering of equity securities of
the Company by certain of the parties hereto (the "1996 Public Offering"),
effective as of March 26, 1996, the parties hereto entered into an agreement
relating to a public offering of Class A common stock of the Company that,
among other things, modified provisions of the Stockholders Agreement and other
agreements and instruments referenced therein.
L. The Company recently began negotiating with certain
underwriters a proposal to commence a public offering of a new class of
cumulative exchangeable preferred stock (the "Exchangeable Preferred Stock")
and exchange debentures due 2006 (the "Exchange Debentures"), each
substantially as described in the registration statement filed by the Company
on August 15, 1996 on Form S-3, as amended (the "Proposed Offering"). The
proceeds of the Proposed Offering will be used in part to redeem all of the
outstanding shares of the Existing Senior Preferred Stock and New Senior
Preferred Stock (the "Redemption of Preferred Stock").
M. In connection with the consummation of the Proposed Offering
and the redemption of the Existing Senior Preferred Stock and New Senior
Preferred Stock, the parties hereto have agreed to the matters set forth in
this Agreement.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, each party hereto agrees as follows:
1. Proposed Offering and the Redemption of Preferred Stock. In
connection with the Proposed Offering and the Redemption of Preferred Stock,
and subject to each of the applicable conditions set forth herein, each of the
Company, the Initial Management Investors and each of the Holders hereby
agrees, effective simultaneously with the consummation of the Proposed Offering
and the Company's redemption of the Existing Senior Preferred Stock and the New
Senior Preferred Stock in accordance with Section 1(a) below, as follows:
(a) Notwithstanding anything to the contrary contained in the terms of
the certificates of designations relating to the Existing Senior Preferred
Stock and the New Senior Preferred Stock or any other document or instrument,
the Company shall be entitled on or before December 15, 1996, without providing
any further required notice, other than delivering a notice at least two
business days in advance to the Senior Holders of the date, time and place for
the redemption to occur, to redeem all of the Existing Senior Preferred Stock
and the New Senior Preferred Stock at the price per share of Existing Senior
Preferred Stock set forth on Schedule I hereto on the date the requisite
redemption funds are paid to the holders of such preferred stock in accordance
herewith and the price per share of New Senior Preferred Stock set forth on
Schedule II hereto on the date the requisite redemption funds are paid to the
holders of such preferred stock in accordance herewith. On the date at the
place and time specified in the aforementioned notice, each of the Senior
Holders shall present and surrender the stock certificates evidencing the
number of shares of such preferred stock set forth opposite their name on
Schedule III hereto, duly endorsed, and the Company shall (i) pay to each such
Senior Holder the full redemption price for such preferred stock calculated as
provided above in this paragraph, by either (A) wire transfer of immediately
available funds to the account designated and in accordance with the
instructions given to the Company in writing by such Senior Holder a reasonable
time in advance of such time for the redemption; or (B) the Company at its
option making available to each Senior Holder a cashier's or certified check in
the amount of such full redemption price, in which case if such cashier's or
certified check is not made so available before 11:00 a.m. on such date, the
amount of such cashier's or certified check shall be in the amount that would
have been due if such funds were made available on the following date, at the
place designated for the redemption to occur; and (ii) make available to each
Senior Holder at the place designated for the redemption to occur a certificate
signed by the secretary or an assistant secretary of the Company and an
executive officer of the Company that is not the secretary or assistant
secretary of the Company that also signs such certificate, dated the day of
such redemption, certifying that the representations and warranties of the
Company contained in Section 4 of this Agreement are true as of the date of
such certificate.
(b) Each such party hereby waives any provision of the Stockholders
Agreement or any other agreement or instrument referred to therein to which
such party hereto is a party or which otherwise governs the terms of or such
party's rights or obligations with respect to securities of the Company held by
such party that, absent such waiver, would prevent the Proposed Offering. The
Company, Initial Management Investors and Junior Holders acknowledge that the
issuance of Exchange Debentures in exchange for Exchangeable Preferred Stock as
contemplated by the terms of the Proposed Offering would constitute a purchase,
redemption or other acquisition for value of the Exchangeable Preferred Stock
and, therefore, cannot be effected at any time when any Junior Preferred Stock
is outstanding unless the Company has obtained the prior written consent of the
Required Holders (as that term is defined in the New Purchase Agreement) and
has complied with any other applicable terms of the Junior Certificate of
Designations, the New Purchase Agreement and the Stockholders Agreement. In
addition, the parties acknowledge that any such issuance would constitute an
incurrence of Indebtedness by the Company. This Section 1(b) shall not
constitute a waiver of the provisions of the Junior Certificate of
Designations, the New Purchase Agreement or the Stockholders Agreement with
respect to any such issuance of Exchange Debentures, or of the consequences of
any Leverage Default Event that may occur as a result of any such issuance.
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(c) Each Initial Management Investor and each Holder agrees that
neither the Registration Rights Provisions nor the "right of first refusal"
provisions of Section 6 of the Stockholders Agreement shall apply to the
Proposed Offering, nor shall they apply to the issuance of any shares of
Exchangeable Preferred Stock that may be issued from time-to-time with respect
to the Exchangeable Preferred Stock in lieu of cash dividends thereon.
(d) Notwithstanding any limitation or anything to the contrary
contained in any of the documents or instruments referenced herein, including,
but not limited to, the Junior Certificate of Designations, the Company may pay
cash, of an aggregate amount of not more than $100,000.00 during any
twelve-month period, dividends on the Exchangeable Preferred Stock and interest
payments on the Exchange Debentures if such dividends and interest payments are
being made in lieu of fractional shares of Exchangeable Preferred Stock or
fractional Exchange Debentures that would otherwise be issued in lieu of cash
dividends or interest payments on the Exchangeable Preferred Stock or Exchange
Debentures.
2. Modifications of Certain Provisions of the Stockholders
Agreement, the New Purchase Agreement and the Junior Certificate of
Designations. Subject to the satisfaction of each of the conditions set forth
in Section 3 hereof and effective against the parties hereto as provided in
Section 7.8 hereof, the Stockholders Agreement, the New Purchase Agreement and
the Junior Certificate of Designations shall be amended as follows:
(a) The following definitions contained in the Stockholders
Agreement are deleted in their entirety: "Bankruptcy Code," "Bankruptcy Event,"
"Certificate of Designations," "Consolidated Indebtedness," "Consolidated
Operating Cash Flow," "Debt Instrument," "Exercise Period," "Existing Credit
Agreement," "Existing Senior Liquidation Price," "Existing Senior Redemption
Agent," "Indebtedness," "Junior Redemption Agent," "Junior Redemption Price,"
"Leverage Default Event," "New Senior Certificate of Designations," "New Senior
Liquidation Price," "New Senior Redemption Agent," "Put Notice," "Senior
Liquidation Price," "Senior Redemption Agent," "Senior Trigger Event,"
"Subordinated Obligations," "Succession Event," "Superior Obligations," and
"Twelve Month Senior Dividend Nonpayment." Clause (i) of the definition of the
term "Appropriate Parties" set forth in the Stockholders Agreement is deleted
in its entirety. The definition of "Change of Control" contained in the
Stockholders Agreement is deleted in its entirety and replaced with the
following:
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"Change of Control" shall have the meaning set forth in that
certain indenture dated as of September 28, 1995 by and among the
Company, direct and indirect subsidiaries of the Company and the Bank
of New York, as trustee, governing the Company's 11 5/8% notes.
(b) Section 2 of the Stockholders Agreement is deleted in its
entirety.
(c) Section 3 of the Stockholders Agreement is deleted in its
entirety.
(d) Sections 4.1 and 4.3 of the Stockholders Agreement, other than
the definitions of terms contained therein, are deleted in their entirety.
(e) The second sentence of Section 4.2(b) of the Stockholders
Agreement is deleted in its entirety. Section 4.2(a) of the Stockholders
Agreement is hereby amended and restated to read in its entirety as follows:
4.2 Take-Along Right.
(a) General. In connection with any Proposed Disposition
(other than a Permitted Transfer) of Shares of any Class by any
Selling Stockholder, each Investor holding any Common Share Equivalent
shall have the right (the "take-along right") to require the
Prospective Buyer to purchase from such Investor (each, a "Take-Along
Investor") at the same price per share and, except as otherwise
provided in the second sentence of this subsection 4.2(a), upon the
same terms and conditions as such Proposed Disposition (including, but
not limited to, any option granted to the Selling Stockholder as to
the amount or form of consideration to be received from the
Prospective Buyer), any or all Common Share Equivalents held by such
Take-Along Investor, as such Take-Along Investor may elect. The price
per share to be received by the Take-Along Investors who elect to
participate in such Proposed Disposition (the "Electing Stockholders")
for shares of each Class to be sold by them upon exercise of the
take-along right shall not be less than (1) if such shares are of the
same Class as any Offered Shares proposed to be Disposed of by any of
the Selling Stockholders in such Proposed Disposition, or previously
Disposed of by such Selling Stockholder (or any other Management
Investor) in any other transaction (whether or not related) at any
time within the previous twelve-month period or in any other
transaction (whether or not related and regardless of when it was
consummated) with the same Prospective Buyer or any of its Affiliates
or Related Parties, the weighted average price per share of such Class
of (x) the price per share proposed to be paid to such Selling
Stockholder in such Proposed Disposition and (y) each price per share
paid to such Selling Stockholder or such other Management Investor in
any such other transaction (provided, however, that this clause (y)
shall not apply if such weighted average price per share would result
in a lower price per share than the price per share proposed to be
paid to such Selling Stockholder in such Proposed Disposition) and (2)
if such shares are of any other Class, the Fair Market Value of such
shares. The other terms and conditions on which the Electing
Stockholders shall be entitled to Dispose of their shares pursuant to
this Section 4.2 shall be, as nearly as reasonably practicable, the
same as those applicable to the Proposed Disposition by the Selling
Stockholder; provided, however, that each Electing Stockholder shall
be required only (a) to make representations or warranties to, or
enter into indemnification or contribution arrangements with, the
Prospective Buyer relating to the Proposed Disposition that are
reasonable in the context of the Proposed Disposition including,
without limitation, a representation and warranty with respect to the
Shares being Disposed of by such Electing Stockholder that the
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transferee of such Shares is receiving good and marketable title to
such Shares, free and clear of all pledges, security interests or
other Liens, other than any created by this Agreement or (b) if the
Proposed Disposition by the Selling Stockholder is a Public Sale, the
representations, warranties and indemnification and contribution
agreements, if any, that would be required by the terms of Exhibit A
hereto to be given or made by an Investor participating in a Piggyback
Registration (as defined in Exhibit A hereto); and no Electing
Stockholder shall be required to comply with terms or conditions that
can reasonably be met only by the Selling Stockholder. For purposes
of this Section 4.2, all Common Stock shall be treated as a single
"Class."
(f) Section 6 of the Stockholders Agreement is deleted in its
entirety.
(g) Section 7.1(a) of the Stockholders Agreement is amended and
restated to read in its entirety as follows:
Limitations on Transactions with Affiliates. The Company will not, and
will not cause or permit any of its Subsidiaries to, directly or indirectly,
enter into or suffer to exist any transaction or series or related transactions
(including, without limitation, the sale, purchase, exchange or lease of
assets, property or services) with any Affiliate of the Company or any of its
Subsidiaries (including entities in which the Company or any of its
Subsidiaries owns a minority interest) or any direct or indirect holder or
beneficial owner of 10% or more of the Company's Common Stock, by quantity or
by voting power (each an "Affiliate Transaction"), or extend, renew, waive or
otherwise modify the terms of any Affiliate Transaction previously entered
into, unless (i) such Affiliate Transaction is between or among the Company and
its Subsidiaries; or (ii) the terms of such Affiliate Transaction are fair and
reasonable to the Company or such Subsidiary, as the case may be, and the terms
of such Affiliate Transaction are at least as favorable as the terms that could
be obtained by the Company or such Subsidiary, as the case may be, in a
comparable transaction made on an arm's-length basis between unaffiliated
parties. Prior to the consummation of any Affiliate Transaction involving an
amount or having a value in excess of $1 million that is not permitted under
clause (i) above, the Company's Board of Directors must determine that such
Affiliate Transaction complies with clause (ii) above. Prior to the
consummation of any Affiliate Transaction involving an amount or having a value
in excess of $5 million that is not permitted under clause (i) above, the
Company must obtain a written opinion as to the fairness of such a transaction
from an independent investment banking firm.
The foregoing provisions will not apply to any transaction approved by
the Board of Directors of the Company with an officer or director of the
Company or of any Subsidiary in his or her capacity as officer or director
entered into in the ordinary course of business, including compensation and
employee benefit arrangements with any officer or director of the Company or of
any Subsidiary, that are customary for public companies in the broadcasting
industry.
(h) Section 7.2 of the Stockholders Agreement is deleted in its
entirety.
(i) Sections 8, 9 and 13.21 of the Stockholders Agreement are
deleted in their entirety.
(j) Sections 6, 7 and 8 of the New Purchase Agreement are deleted
in their entirety.
(k) Each holder of Junior Preferred Stock agrees that clause (i) in
the definition of "Redemption Factor" set forth in the Certificate of
Designations governing the terms of the Junior Preferred Stock is amended by
replacing the number "1.03" therein with "1.00."
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3. Conditions to Effectiveness of Provisions of Section 2. The
provisions of Section 2 shall automatically become effective against the
parties hereto as follows:
(a) The provisions of Section 2 shall be effective and enforceable
by and among the Senior Holders, the Company and the Initial Management
Investors upon the Company redeeming all of the outstanding shares of the
Existing Senior Preferred Stock and the New Senior Preferred Stock in
accordance with Section 1(a) hereof and delivering to the Senior Holders the
certificate required by Section 1(a) hereof; provided, however, that such
redemption and delivery shall occur on or before December 15, 1996.
(b) The provisions of Sections 2(e) and 2(k) shall be effective and
enforceable by and among the Senior Holders, the Junior Holders, the Company
and the Initial Management Investors upon the Company redeeming all of the
outstanding shares of the Existing Senior Preferred Stock and the New Senior
Preferred Stock in accordance with Section 1(a) hereof and consummating the
Proposed Offering; provided that such redemption shall occur on or before
December 15, 1996.
(c) The provisions of Section 2 (other than Sections 2(e) and 2(k))
shall be effective and enforceable by and among the Junior Holders, the Company
and the Initial Management Investors upon the Company redeeming all of the
outstanding shares of the Existing Senior Preferred Stock and the New Senior
Preferred Stock in accordance with Section 1(a) hereof, the Company
consummating the Proposed Offering and the Company redeeming all of the
outstanding shares of the Junior Preferred Stock; provided that such redemption
of the Existing Senior Preferred Stock and New Senior Preferred Stock shall
occur on or before December 15, 1996.
(d) In addition, no Junior Holder shall, for any reason whatsoever,
seek to invalidate or contest the effectiveness or enforceability of the
provisions of Section 2 against any party to this Agreement other than the
Junior Holders
If the Proposed Offering shall have not been consummated, or any of the
other conditions set forth in clause (a) above shall not have been satisfied,
on or before December 15, 1996, then a Majority-in-Interest of the Senior
Holders, Holders of at least 25% of the outstanding Junior Preferred Stock or a
Majority-in-Interest of the Initial Management Investors, in any of their sole
discretion, may at any time thereafter, but prior to the consummation of both
the Proposed Offering and the Redemption of Preferred Stock, elect to terminate
this Agreement by not fewer than five days' advance written notice to the
Company to such effect. If the Proposed Offering shall have been consummated
and such other conditions shall have been satisfied on or prior to such date or
the expiration of any such five-day period, then (subject to Section 3(c)
above) the provisions of Section 2 hereof shall take effect as of the date of
satisfaction of the last of such other conditions to be satisfied. If the
Proposed Offering shall have not been consummated or such conditions have not
been satisfied on or prior to the expiration of any such five-day period, the
provisions of Section 2 hereof shall automatically without further obligation
or liability of any party hereto terminate and none of the amendments,
modifications or interpretations of any of the documents referenced in this
Agreement shall become effective.
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4. Representations and Warranties of the Company To Each of the
Holders and Initial Management Investors. The Company represents and
warrants to each of the Holders and Initial Management Investors as follows:
(i) the Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby, (ii) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
(including all stockholder approvals and other action), (iii) this Agreement
has been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies), (iv) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby and compliance with the provisions hereof do not and will
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to the loss of a
material benefit under, or result in the creation of any lien, claim or
encumbrance upon any of the properties or assets of the Company or any
subsidiary of the Company under, (I) the certificate of incorporation or bylaws
of the Company or the comparable organization documents of any Subsidiary of
the Company, (II) any contract to which the Company or any Subsidiary of the
Company is a party or by which any of them or their respective properties or
assets are bound, or (III) subject to the governmental filings and other
matters referred to in clause (v) hereof, any law or court order (including,
without limitation, Section 160 of the Delaware General Corporation Law)
applicable to the Company or any Subsidiary of the Company or its respective
properties or assets, (v) no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person is required by or with respect to the Company or any Subsidiary of the
Company in connection with the execution, delivery or performance of this
Agreement (excluding Section 1 hereof, the Proposed Offering and the
transactions contemplated thereby and by the underwriting documents related to
the Proposed Offering) by the Company or the consummation of any of the
transactions contemplated hereby, except for such consents, approval, orders,
authorizations, registrations, declarations and filings that, if not obtained
or made, would not be, individually or in the aggregate, material; (vi) the
Company's capital is not, and the consummation of the transactions contemplated
hereby (including, without limitation, the redemptions contemplated by Section
1(a) hereof) will not cause the Company's capital to be, impaired within the
meaning and intent of the Delaware General Corporation Law; (vii) the Company
is not insolvent and will not be rendered insolvent by the consummation of the
transactions contemplated hereby (including, without limitation, the
redemptions contemplated by Section 1(a) hereof); and (viii) as originally
issued by the Company, the securities to be issued by the Company in the
Proposed Offering shall not by their original terms be convertible into common
stock of the Company.
5. Representations and Warranties of Each Holder and Initial
Management Investor. Each Holder and Initial Management Investor (as
applicable), severally and not jointly, and with respect to itself only and not
with respect to any other Holder or Initial Management Investor, represents and
warrants to the Company and each other Holder and Initial Management Investor
that (i) this Agreement has been duly executed and delivered by such Holder or
Initial Management Investor (as applicable); (ii) the execution, delivery and
performance by such Holder or Initial Management Investor (as applicable) of,
and the consummation by such Holder or Initial Management Investor (as
applicable) of the transactions contemplated by, this Agreement have been duly
and validly authorized by all necessary partnership action on the part of such
Holder or Initial Management Investor (as applicable), if such Holder or
Initial Management Investor (as applicable) is a partnership, or by all
necessary corporate action on the part of such Holder or Initial Management
Investor (as applicable), if such Holder or Initial Management Investor (as
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<PAGE> 9
applicable) is a corporation; (iii) this Agreement constitutes a legal, valid
and binding obligation of such Holder or Initial Management Investor (as
applicable) enforceable in accordance with its terms, except that (A) such
enforceability may be subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (B) such enforceability may be subject to
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); (iv) in the case of each Holder, such
Holder owns all of the Preferred Stock and warrants it acquired from the
Company, except that each Senior Holder no longer owns the warrants such Senior
Holder exercised pursuant to the Exchange Agreement and each Holder no longer
owns the Warrants such Holder sold pursuant to the 1996 Public Offering, and
the number of Shares of Preferred Stock owned by such Holder is set forth in
Schedule I hereto; (v) no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person is required by or with respect to such Holder or Initial Management
Investor (as the case may be) in connection with the execution and delivery or
performance of this Agreement by such Holder or Initial Management Investor (as
the case may be), except for such consents, approvals, orders, authorizations,
registrations, declarations and filings that, if not obtained or made, would
not be, individually or in the aggregate, material. The Initial Management
Investors further represent and warrant to the Holders and the Company that the
Initial Management Investors named on the signature page(s) to this Agreement
are the only Management Investors.
6. No Joint Obligations of Holders, Initial Management Investors,
and Company. Each Holder, each Initial Management Investor and the Company
shall be (i) obligated hereunder only with respect to those covenants and
agreements that by their terms are applicable to such party, and no such party
shall have any liability with respect to any other party's obligations
hereunder and (ii) separately and independently entitled to rely on the
representations and warranties of each other party made to each party in this
Agreement, and to the benefit of all agreements, covenants, obligations and
commitments of each other party made with or to such party herein. Without
limiting the generality of the preceding sentence,(i) no provision of this
Agreement shall be construed as creating any concept of "group" liability, and
(ii) the rights, remedies, agreements and obligations of the Holders under or
with respect to Section 1 and each other provision of this Agreement are
several, not joint, and no Holder shall have any obligation or liability with
respect to any other Holder's obligations hereunder.
7. Miscellaneous.
7.1 Survival of Provisions. The representations and warranties of
the parties made in or pursuant to this Agreement shall survive the
consummation of any of the transactions contemplated hereby, in each case
regardless of any investigation that may have been or may be made by or on
behalf of any other party.
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7.2 Communications. All notices and other communications required
or permitted by this Agreement shall be in writing, and, (i) if to any Holder
or any Initial Management Investor, addressed to such Holder or Initial
Management Investor at such Holder's or Initial Management Investor's address
specified in the Stockholders Agreement or at such other address as such Holder
or Initial Management Investor may designate in a written notice to the Company
and (ii) if to the Company, to Paxson Communications Corporation, 601
Clearwater Park Road, West Palm Beach, FL 33401 (facsimile number (561)
655-9424), Attention: General Counsel, or to such other address as the Company
may designate in a written notice to each Holder or Initial Management
Investor. All notices and other communications required or permitted by this
Agreement shall be deemed to have been duly given if personally delivered to
the intended recipient at the proper address determined pursuant to this
Section 7.2 or sent to such recipient at such address by registered or
certified mail, return receipt requested, Express Mail, Federal Express or
similar overnight delivery service for next business day delivery or by
telegram, telex or facsimile transmission and will be deemed given, unless
earlier received: (1) if sent by certified or registered mail, return receipt
requested, five calendar days after being deposited in the United States mail,
postage prepaid; (2) if sent by Express Mail, Federal Express or similar
overnight delivery service for next business day delivery, the next business
day after being entrusted to such service, with delivery charges prepaid or
charged to the sender's account; (3) if sent by telegram or telex or facsimile
transmission, on the date sent, and (4) if delivered by hand, on the date of
delivery.
7.3 Binding Effect; Successors and Assigns. Except as expressly
provided in this Agreement, nothing in this Agreement, express or implied, is
intended or shall be construed to confer upon or give any Person (including
creditors, stockholders, Affiliates of the Company or any underwriter or
prospective underwriter with respect to the Proposed Offering) other than the
parties hereto any remedy or claim under or by reason of this Agreement or any
term, covenant or condition hereof, all of which shall be for the sole and
exclusive benefit of the parties. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors, heirs, executors, legal representatives and permitted
assigns; provided, however, that, except as otherwise specifically permitted or
contemplated by this Agreement, neither this Agreement nor any of the rights,
interests or obligations of the Company hereunder shall be assigned or
delegated by the Company without the prior written consent of the Holders,
other than any provision herein that modifies another agreement referenced
herein, that shall be assignable or delegatable by the Company as permitted in
such other document.
7.4 Entire Agreement. This Agreement sets forth the entire
agreement and understanding among the parties hereto as to the specific subject
matter hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them with respect to such subject
matter. Except as specifically waived and modified hereby, the Stockholders
Agreement and all agreements and other documents heretofore executed and
delivered among the Company and/or any or all of the Holders will remain in
full force and effect and are hereby ratified and confirmed, and the execution
and delivery of this Agreement will not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Holder under the
Stockholders Agreement or any such other agreement or document. Without
limiting the foregoing, the agreements and modifications set forth in this
Agreement will be limited precisely as set forth herein, and nothing in this
Agreement will be deemed (i) to constitute a waiver of compliance by any party
hereto with respect to, or modification of, any other provision or condition of
the Stockholders Agreement or any such other agreement or document; or (ii) to
prejudice any right or remedy that any party hereto may now have or may have in
the future under or in connection with the Stockholders Agreement or any such
other agreement or document.
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7.5 Governing Law. This Agreement will be governed by, and will be
construed in accordance with, the laws of the state of New York, without regard
to conflict or choice of law principles of the state of New York that might
otherwise cause the internal laws of any other jurisdiction to be applied.
7.6 Interpretation. The headings of the sections contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation of
this Agreement.
7.7 No Implied Waivers. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, agreements,
covenants, obligations or commitments contained herein or made pursuant hereto.
The waiver by any party of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any preceding or succeeding breach
and no failure by any party to exercise any right, privilege or remedy
hereunder shall be deemed a waiver of such party's rights, privileges or
remedies hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
7.8 Counterparts; Effectiveness . This instrument may be executed
in two or more counterparts, each of which shall be deemed an original, and all
of which together shall constitute one instrument. Except as otherwise
provided herein, this Agreement will become effective when executed by either
(a) all of the parties hereto, or (b) each of (i) the Company, (ii) each
Initial Management Investor, (iii) a Majority-in-Interest of holders of Senior
Preferred Stock and (iv) a Majority-in-Interest of holders of the Junior
Preferred Stock.
7.9 Fees and Expenses. Whether or not the Proposed Offering is
consummated or the provisions of Section 2 ever become effective, the Company
covenants and agrees to pay promptly the Holders' reasonable costs and expenses
in connection with the negotiation, preparation, review, execution, delivery
and performance of this Agreement and any and all other agreements,
instruments, certificates and other documents furnished pursuant hereto or in
connection herewith including the fees and disbursements of the Holders'
respective legal counsel.
7.10 Further Assurances. Each party shall cooperate and take such
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
7.11 Continuing Validity of Amended or Supplemented Documents.
Each of the Existing Senior Stock Purchase Agreement, the New Purchase
Agreement, the Junior Certificate of Designations, the Warrant Agreements, the
Stockholders Agreement and the Registration Rights Provisions, as previously
amended or supplemented in accordance with their respective terms and, in the
case of the Stockholders Agreement, the New Purchase Agreement and the Junior
Certificate of Designations, if the amendments expressly provided for in
Sections 1 and 2 hereof become effective as provided herein, as amended from
and after the effective date of such amendments, is and shall continue in full
force and effect and is hereby in all respects ratified and confirmed. This
Agreement shall not in any event be interpreted to eliminate, impair, reduce or
otherwise affect any rights or remedies which arise under the Registration
Rights Provisions (other than as provided in Section 1 hereof), the Warrants or
the Warrant Agreements.
11
<PAGE> 12
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective as provided herein.
COMPANY
PAXSON COMMUNICATIONS
CORPORATION
By:___________________________
Name:_________________________
Title:________________________
INITIAL MANAGEMENT INVESTORS
SECOND CRYSTAL DIAMOND, L.P. PAXSON ENTERPRISES, INC.
By: Paxson Enterprises, Inc. By:_________________________
Its: General Partner Name:_______________________
Title:______________________
By:___________________________
Name:_________________________
Title:________________________
12
<PAGE> 13
SENIOR HOLDERS
SANDLER MEZZANINE SANDLER MEZZANINE FOREIGN
PARTNERS, L.P. PARTNERS, L.P.
By: Sandler Mezzanine By: Sandler Mezzanine
General Partnership General Partnership
Its: General Partner Its: General Partner
By: MJM Media Corp. By: MJM Media Corp.
Its: General Partner Its: General Partner
By:_____________________ By:__________________________
Name:___________________ Name:________________________
Title:__________________ Title: _____________________
SANDLER MEZZANINE T-E NATIONAL UNION FIRE INSURANCE
PARTNERS, L.P. COMPANY OF PITTSBURGH, PA
By: Sandler Mezzanine General By: ______________________________
Partnership Name:_____________________________
Its: General Partner Title:____________________________
By: MJM Media Corp.
Its: General Partner
By:_____________________
Name:___________________
Title:__________________
13
<PAGE> 14
JUNIOR HOLDERS
BT INVESTMENT PARTNERS, INC. FIRST UNION CORPORATION OF
VIRGINIA
By:_______________________ By:________________________
Name:_____________________ Name:______________________
Title:____________________ Title:_____________________
PARIBAS NORTH AMERICA, INC. UNION VENTURE CORPORATION
By:_______________________ By:________________________
Name:_____________________ Name:______________________
Title:____________________ Title:_____________________
<PAGE> 15
Schedule III
Preferred Stock Held by Holders
Senior Holder Type and Shares of Preferred Stock
- ------------- ----------------------------------
Existing Senior New Senior
Preferred Stock Preferred Stock
--------------- ---------------
Sandler Mezzanine Partners, L.P. 1,073.286 shares 383.317 shares
Sandler Mezzanine Foreign 231.142 shares 82.550 shares
Partners, L.P.
Sandler Mezzanine T-E 481.286 shares 171.889 shares
Partners, L.P.
National Union Fire Insurance 214.286 shares 76.530 shares
Company of Pittsburgh, PA
Junior Holder Type and Shares of Preferred Stock
- ------------ ----------------------------------
Junior Preferred Stock
----------------------
BT Investment Partners, Inc. 15,000 shares
Paribas North America, Inc. 2,000 shares
First Union Corporation of Virginia 15,000 shares
Union Venture Corporation 1,000 shares
