1
Exhibit 10.3
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
BY AND AMONG
SUNRISE TELEVISION CORP.
AND
HICKS, MUSE, XXXX & XXXXX EQUITY FUND III, L.P.,
HM3 COINVESTORS, L.P.
AND
CHASE EQUITY ASSOCIATES, L.P.
AS PURCHASERS
DATED AS OF DECEMBER 30, 1999
2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION.........................................................1
Section 1.01. Definitions...................................................................1
Section 1.02. Interpretation...............................................................14
Section 1.03. Business Day Adjustment......................................................15
ARTICLE II PURCHASE OF NOTES.....................................................................15
Section 2.01. Purchase of Notes and Warrants...............................................15
Section 2.02. Closing......................................................................16
Section 2.03. Mandatory Redemption.........................................................16
Section 2.04. Use of Proceeds..............................................................16
Section 2.05. Interest on the Notes........................................................16
Section 2.06. Receipt of Payments..........................................................17
Section 2.07. Application of Payments......................................................18
Section 2.08. Sharing of Payments..........................................................18
Section 2.09. Indemnity....................................................................18
Section 2.10. Access.......................................................................19
Section 2.11. Taxes........................................................................19
NOTES; RIGHTS OF HOLDERS OF NOTES.......................................................................20
Section 3.01. Issue of Notes...............................................................20
Section 3.02. Purchase and Issuance of the Notes...........................................20
Section 3.03. Subordination of Liabilities.................................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................22
Section 4.01. Representations, Warranties and Agreements of the Company....................22
Section 4.02. Representations and Warranties of the Purchasers.............................28
ARTICLE V CONDITIONS PRECEDENT TO CLOSING.......................................................29
Section 5.01. Conditions Precedent to the Closing..........................................29
Section 5.02. Conditions Precedent to Obligations of the Company...........................30
ARTICLE VI COVENANTS.............................................................................30
Section 6.01. Notices of Material Events...................................................31
Section 6.02. Compliance with Laws.........................................................31
Section 6.03. Use of Proceeds..............................................................31
i
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 6.04. Limitation on Restricted Payments............................................31
Section 6.05. Corporate Existence..........................................................31
Section 6.06. Payment of Taxes and Other Claims............................................32
Section 6.07. Maintenance of Properties and Insurance......................................32
Section 6.08. Compliance with Laws.........................................................32
Section 6.09. Reports......................................................................32
Section 6.10. Limitations on Transactions with Affiliates..................................33
Section 6.11. Limitation on Incurrence of Additional Indebtedness and Issuance
of Disqualified Capital Stock................................................33
Section 6.12. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.................................................................33
Section 6.13. Limitation on Asset Sales....................................................34
Section 6.14. Limitation on Asset Swaps....................................................35
Section 6.15. FCC Compliance...............................................................35
Section 6.16. Merger, Consolidation and Sale of Assets.....................................35
Section 6.17. Successor Corporation Substituted............................................36
ARTICLE VII EVENTS OF DEFAULTS....................................................................36
Section 7.01. Actions after Default........................................................36
Section 7.02. Events of Default............................................................36
Section 7.03. Notice of Events.............................................................37
ARTICLE VIII INDEMNITY.............................................................................37
Section 8.01. Indemnity....................................................................37
(a) Indemnification by the Company...............................................37
(b) Indemnification by the Purchasers............................................38
(c) Procedure....................................................................39
Section 8.02. Contribution.................................................................40
ARTICLE IX MISCELLANEOUS.........................................................................40
Section 9.01. Notices......................................................................40
Section 9.02. Expenses.....................................................................41
Section 9.03. Governing Law, Submission to Jurisdiction: Venue.............................41
ii
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 9.04. Judgment.....................................................................42
Section 9.05. Benefit of Agreement.........................................................43
Section 9.06. Assignments..................................................................43
Section 9.07. Amendment....................................................................43
Section 9.08. Counterparts; Integration....................................................43
Section 9.09. Remedies and Waivers.........................................................43
Section 9.10. Severability.................................................................43
Section 9.11. WAIVER OF JURY TRIAL.........................................................43
iii
5
SENIOR SUBORDINATED
NOTE PURCHASE AGREEMENT
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT dated as of
December 30, 1999, by and among SUNRISE TELEVISION CORP., a Delaware
corporation (the "Company"), HICKS, MUSE, XXXX & XXXXX EQUITY FUND III, L.P., a
Delaware limited partnership, HM3 COINVESTORS, L.P., a Delaware limited
partnership and CHASE EQUITY ASSOCIATES, L.P., a Delaware limited partnership
(collectively, the "Purchasers" and individually, each a "Purchaser").
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Wherever used in this Agreement,
unless the context otherwise requires, the following terms have the meanings
indicated (such meanings to be equally applicable to both the singular and the
plural form of the terms defined):
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a
Subsidiary of the Company or at the time it merges or consolidates
with the Company or any of its Subsidiaries or assumed in connection
with the acquisition of assets from such Person and not incurred by
such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Subsidiary of the Company or such
acquisition, merger or consolidation.
"Affiliate" means a Person who, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Company. The term "control" means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Transaction" has the meaning provided therefor in
Section 6.10.
"Asset Acquisition" means (i) an Investment by the Company or
any Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Subsidiary of the Company or shall be
consolidated or merged with the Company or any Subsidiary of the
Company or (ii) the acquisition by the Company or any Subsidiary of
the Company of assets of any Person comprising a division or line of
business of such Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into
in the ordinary course of business),
6
assignment or other transfer for value by the Company or any of its
Subsidiaries (excluding any Sale and Leaseback Transaction or any
pledge of assets or stock by the Company or any of its Subsidiaries)
to any Person other than the Company or a Wholly Owned Subsidiary of
the Company of (i) any Capital Stock of any Subsidiary of the Company
or (ii) any other property or assets of the Company or any Subsidiary
of the Company other than in the ordinary course of business;
provided, however, that for purposes of Section 6.13, Asset Sales
shall not include (a) a transaction or series of related transactions
in which the Company or its Subsidiaries receive aggregate
consideration of less than $500,000, (b) transactions permitted under
Section 6.14 or (c) transactions covered by Section 6.16.
"Asset Swap" means the execution of a definitive agreement,
subject only to FCC approval, if applicable, and other customary
closing conditions, that the Company in good faith believes will be
satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its
Subsidiaries and another Person or group of affiliated Persons;
provided that any amendment to or waiver of any closing condition that
individually or in the aggregate is material to the Asset Swap shall
be deemed to be a new Asset Swap.
"Board of Directors" means, with respect to any Person, the
Board of Directors (or any other equivalent governing body) of such
Person or any committee of the Board of Directors of such Person duly
authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Business Day" means a day when banks are open for business
in New York, New York.
"Capital Stock" means (i) with respect to any Person that is
a corporation, any and all shares, interests, participations or other
equivalents (however designated) of capital stock of such Person and
(ii) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease
to which such Person is a party that is required to be classified and
accounted for as a capital lease obligation under GAAP, and for
purposes of this definition, the amount of such obligation at any date
shall be the capitalized amount of such obligation at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within
one year from the date of acquisition thereof; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof
and, at the time of acquisition, having one of the two highest ratings
2
7
obtainable from either Standard & Poor's Ratings Services, a division
of the McGraw Hill Companies, Inc. or Xxxxx'x Investors Service, Inc.;
(iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of
at least A-I from Standard & Poor's Services, a division of the McGraw
Hill Companies, Inc. or at least P-I from Xxxxx'x Investors Service,
Inc.; (iv) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $200,000,000; (v)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in
clause (iv) above; and (vi) investments in money market funds that
invest substantially all their assets in securities of the types
described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of
the following events: (i) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company to any Person or group
of related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group") (whether or not otherwise in compliance with the
provisions of this Agreement), other than to Xxxxx Muse, any of its
Affiliates, officers and directors or Xxxxxx X. Xxxxx or any of his
Affiliates (the "Permitted Holders"); or (ii) a majority of the board
of directors of the Company shall consist of Persons who are not
Continuing Directors; or (iii) the acquisition by any Person or Group
(other than the Permitted Holders or any direct or indirect Subsidiary
of any Permitted Holder) of the power, directly or indirectly, to vote
or direct the voting of securities having more than 50% of the
ordinary voting power for the election of directors of the Company.
"Closing" has the meaning provided therefor in Section 2.02.
"Closing Date" has the meaning provided therefor in Section
2.02.
"Commission" means the Securities and Exchange Commission.
"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement entered
into by the Company or any of its Subsidiaries designed to protect the
Company or any of its Subsidiaries against fluctuations in the price
of commodities actually used in the ordinary course of business of the
Company and its Subsidiaries.
"Communications Act" has the meaning provided therefor in
Section 4.01(e).
"Company" has the meaning provided therefor in the
introductory paragraph.
"Consolidated Cash Flow" means, with respect to any Person,
for any period, the sum (without duplication) of (i) Consolidated Net
Income and (ii) to the extent
3
8
Consolidated Net Income has been reduced thereby, (A) all income taxes
of such Person and its Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to
extraordinary or non-recurring gains or losses), (B) Consolidated
Interest Expense and (C) Consolidated Non-Cash Charges, all as
determined on a consolidated basis for such Person and its
Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the
interest expense of such Person and its Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP,
including (a) any amortization of debt discount, (b) the net cost
under Interest Swap Obligations (including any amortization of
discounts), (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts and other fees and charges
owed with respect to letters of credit, bankers' acceptance financing
or similar facilities, and (e) all accrued interest and (ii) the
interest component of Capitalized Lease Obligations paid or accrued by
such Person and its Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any
period, the aggregate net income (or loss) of such Person and its
Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided, however, that there shall be excluded
therefrom, without duplication, (a) gains and losses from Asset Sales
(without regard to the $500,000 limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related
tax effects, (b) items classified as extraordinary or non-recurring
gains and losses, and the related tax effects according to GAAP, (c)
the net income (or loss) of any Person acquired in a pooling of
interests transaction accrued prior to the date it becomes a
Subsidiary of such first-referred-to Person or is merged or
consolidated with it or any of its Subsidiaries, (d) the net income of
any Subsidiary to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is restricted
by contract, operation of law or otherwise, and (e) the net income of
any Person, other than a Subsidiary, except to the extent of the
lesser of (x) dividends or distributions paid to such
first-referred-to Person or its Subsidiary by such Person and (y) the
net income of such Person (but in no event less than zero), and the
net loss of such Person shall be included only to the extent of the
aggregate Investment of the first-referred-to Person or a consolidated
Subsidiary of such Person and any non-cash expenses attributable to
grants or exercises of employee stock options.
"Consolidated Non-Cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and
other non-cash expenses of such Person and its Subsidiaries (excluding
any such charges constituting an extraordinary or non-recurring item)
reducing Consolidated Net Income of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of the
Company on the Closing Date, (ii) was
4
9
nominated for election or elected to the board of directors of the
Company with the affirmative vote of a majority of the Continuing
Directors who were members of such board of directors at the time of
such nomination or election or (iii) is a representative of a
Permitted Holder.
"Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of July 2, 1998, among STC, the Company, The Chase
Manhattan Bank, as administrative agent, NationsBank, N.A., as
documentation agent, Salomon Brothers Holding Company Inc., as
syndication agent, and any other financial institutions from time to
time party thereto, together with the related documents thereto
(including any guarantee agreements and security documents), in each
case as such agreements have been or may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified
from time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including by way of
adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether
by the same or any other agent, lender or group of lenders (or other
institutions).
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuations in currency values.
"Default" means an event or condition that would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both.
"Disqualified Capital Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of
any event, matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof (except, in each
case, upon the occurrence of a Change of Control), in whole or in
part, on or prior to the final maturity date of the Notes.
"DOJ" has the meaning provided therefor in Section 4.01(e).
"Dollars" and the sign "$" means the lawful currency of the
United States of America.
"Event of Default" means any one of the events specified in
Section 7.02.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
5
10
"FCC" means the United States Federal Communications
Commission or any similar agency having jurisdiction over the
purchase, sale and operation of broadcast licenses and related assets.
"Financial Monitoring and Oversight Agreements" means,
collectively, the Monitoring and Oversight Agreement among the
Company, STC and Xxxxx Muse Partners, as in effect on the Closing
Date, and the Financial Advisory Agreement among the Company, STC and
Xxxxx Muse Partners, as in effect on the Closing Date.
"FTC" has the meaning set forth in Section 4.01(e).
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Closing Date.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Xxxxx Muse" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a
Delaware corporation.
"Xxxxx Muse Partners" means Xxxxx, Muse & Co. Partners, L.P.,
a Texas limited partnership.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii)
evidenced by bonds, debentures, notes or other similar instruments,
(iii) constituting Capitalized Lease Obligations, (iv) incurred or
assumed as the deferred purchase price of property, or pursuant to
conditional sale obligations and title retention agreements (but
excluding trade accounts payable arising in the ordinary course of
business), (v) for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (vi) for
Indebtedness of others guaranteed by such Person, (vii) for Interest
Swap Obligations, Commodity Agreements and Currency Agreements and
(viii) for Indebtedness of any other Person of the type referred to in
clauses (i) through (vii) which is secured by any Lien on any property
or asset of such first-referred-to Person, the amount of such
Indebtedness being deemed to be the lesser of the value of such
property or asset or the amount of the Indebtedness so secured. The
amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations
described above, as such amount would be reflected on a balance sheet
prepared in accordance with GAAP, and the maximum liability at such
date of such Person for any contingent obligations described above.
"Indenture" means the Indenture in respect of the STC Senior
Subordinated Notes, dated as of March 25, 1997, as in effect on the
date hereof, between STC, on the
6
11
one hand, and U.S. Trust Company of Texas, N.A., or its successor, as
trustee, on the other hand.
"Interest Payment Date" has the meaning provided therefor in
Section 2.05(a).
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement, interest rate futures contract, interest rate option
contract or other similar arrangement or agreement to which the
Company or any of its Subsidiaries is party, designed to protect the
Company and its Subsidiaries against fluctuations in interest rates.
"Interest Swap Obligations" means the obligations of any
Person under any Interest Rate Agreement.
"Investment" means (i) any transfer or delivery of cash,
stock or other property of value in exchange for Indebtedness, stock
or other security or ownership interest in any Person by way of loan,
advance, capital contribution, guarantee or otherwise and (ii) an
investment deemed to have been made by the Company at the time any
entity which was a Subsidiary of the Company ceases to be such a
Subsidiary in an amount equal to the value of the loans and advances
made to, and any remaining ownership interest in, such entity
immediately following such entity ceasing to be a Subsidiary of the
Company. The amount of any non-cash Investment shall be the fair
market value of such Investment, as determined conclusively in good
faith by management of the Company unless the fair market value of
such Investment exceeds $1,000,000, in which case the fair market
value shall be determined conclusively in good faith by the Board of
Directors of the Company at the time such Investment is made.
"Leverage Ratio" shall mean the ratio of (i) the aggregate
outstanding amount of Indebtedness of STC and its Subsidiaries as of
the date of calculation on a consolidated basis in accordance with
GAAP plus the aggregate liquidation preference of all outstanding
Disqualified Capital Stock of STC to (ii) the Consolidated Cash Flow
of the STCs for the four full fiscal quarters (the "Four Quarter
Period") ending on or prior to the date of determination.
For purposes of this definition, the aggregate outstanding
principal amount of Indebtedness of the Person and its Subsidiaries
for which such calculation is made shall be determined on a pro forma
basis as if the Indebtedness giving rise to the need to perform such
calculation had been incurred and the proceeds therefrom had been
applied, and all other transactions in respect of which such
Indebtedness is being incurred had occurred, on the last day of the
Four Quarter Period. In addition to the foregoing, for purposes of
this definition, "Consolidated Cash Flow" shall be calculated on a pro
forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries (and the application
of the proceeds therefrom) giving rise to the need to make such
calculation and any incurrence (and the application of the proceeds
therefrom) or repayment of other Indebtedness, other than the
incurrence or repayment of Indebtedness pursuant to working capital
facilities, at any time subsequent to the
7
12
beginning of the Four Quarter Period and on or prior to the date of
determination, as if such incurrence (and the application of the
proceeds thereof), or the repayment, as the case may be, occurred on
the first day of the Four Quarter Period, (ii) any Asset Sales or
Asset Acquisitions (including any Asset Acquisition giving rise to the
need to make such calculation as a result of such Person or one of its
Subsidiaries (including any Person that becomes a Subsidiary as a
result of such Asset Acquisition) incurring, assuming or otherwise
becoming liable for Indebtedness) at any time on or subsequent to the
first day of the Four Quarter Period and on or prior to the date of
determination, as if such Asset Sale or Asset Acquisition (including
the incurrence, assumption or liability for any such Indebtedness and
also including any Consolidated Cash Flow associated with such Asset
Acquisition) occurred on the first day of the Four Quarter Period and
(iii) cost savings resulting from employee terminations, facilities
consolidations and closings, standardization of employee benefits and
compensation practices, consolidation of property, casualty and other
insurance coverage and policies, standardization of sales
representation commissions and other contract rates, and reductions in
taxes other than income taxes (collectively, "Cost Savings Measures"),
which cost savings the Company reasonably believes in good faith could
have been achieved during the Four Quarter Period as a result of such
Asset Acquisition (regardless of whether such cost savings could then
be reflected in pro forma financial statements under GAAP, Regulation
S-X promulgated by the Commission or any other regulation or policy of
the Commission), less the amount of any additional expenses that the
Company reasonably estimates would result from anticipated
replacements of any items constituting Cost Savings Measures in
connection with such Asset Acquisition; provided, however, that both
(A) such cost savings and Cost Savings Measures were identified and
such cost savings were quantified in an officer's certificate
delivered to the Purchasers at the time of the consummation of the
Asset Acquisition and (B) with respect to each Asset Acquisition
completed prior to the 90th day preceding such date of determination,
actions were commenced or initiated by the Company within 90 days of
such Asset Acquisition to effect the Cost Savings Measures identified
in such officer's certificate (regardless, however, of whether the
corresponding cost savings have been achieved). Furthermore, in
calculating "Consolidated Interest Expense" for purposes of the
calculation of "Consolidated Cash Flow," (i) interest on Indebtedness
determined on a fluctuating basis as of the date of determination
(including Indebtedness actually incurred on the date of the
transaction giving rise to the need to calculate the Leverage Ratio)
and which will continue to be so determined thereafter shall be deemed
to have accrued at a fixed rate per annum, equal to the rate of
interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined
on a fluctuating basis, to the extent such interest is covered by
Interest Swap Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such
agreements.
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the
nature thereof and any agreement to give any security interest).
8
13
"License" has the meaning provided therefor in Section
4.01(j).
"Loan Documents" shall mean this Agreement, the Notes, the
Warrants and all other agreements, instruments, documents and
certificates, including pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of Company, and
delivered to the Purchasers, in their capacities as purchasers of the
Notes hereunder, in connection with this Agreement or the transactions
contemplated hereby.
"Market Effect" has the meaning provided therefor in Section
5.01(i).
"Material Adverse Change" has the meaning provided therefor
in Section 5.01(j).
"Material Adverse Effect" has the meaning provided therefor
in Section 4.01(a).
"Maximum Lawful Rate" has the meaning provided therefor in
Section 2.05(d).
"Net Cash Proceeds" means, with respect to any Asset Sale,
the proceeds in the form of cash or Cash Equivalents (including
payments in respect of deferred payment obligations when received in
the form of cash or Cash Equivalents) received by the Company or any
of its Subsidiaries from such Asset Sale net of (i) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including
legal, accounting and investment banking fees and sales commissions,
recording fees, title insurance premiums, appraiser's fees and costs
reasonably incurred in preparation of any asset or property for sale),
(ii) taxes paid or reasonably estimated to be payable (calculated
based on the combined state, federal and foreign statutory tax rates
applicable to the Company or the Subsidiary engaged in such Asset
Sale) and (iii) repayment of Indebtedness secured by assets subject to
such Asset Sale; provided, however, that if the instrument or
agreement governing such Asset Sale requires the transferor to
maintain a portion of the purchase price in escrow (whether as a
reserve for adjustment of the purchase price or otherwise) or to
indemnify the transferee for specified liabilities in a maximum
specified amount, the portion of the cash or Cash Equivalents that is
actually placed in escrow or segregated and set aside by the
transferor for such indemnification obligation shall not be deemed to
be Net Cash Proceeds until the escrow terminates or the transferor
ceases to segregate and set aside such funds, in whole or in part, and
then only to the extent of the proceeds released from escrow to the
transferor or that are no longer segregated and set aside by the
transferor.
"Notes" has the meaning provided therefor in Section 2.01.
"Obligations" shall mean all amounts owing by the Company to
the Purchasers and any of their assignees pursuant hereto or the
Notes, including all principal, interest, fees, expenses, attorney's
fees and any other sum chargeable to the Company under any of the Loan
Documents.
"Other Taxes" has the meaning provided therefore in Section
2.11(b).
9
14
"Permitted Holder" has the meaning provided therefor in the
definition of "Change of Control."
"Permitted Indebtedness" means, without duplication, (i)
Indebtedness outstanding on the Closing Date; (ii) Indebtedness of the
Company or a Subsidiary incurred under the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed (a)
the sum of the aggregate commitments pursuant to the Credit Agreement
as in effect on Closing Date and (b) any Incremental Term Loans (as
defined in the Credit Agreement) after the Closing Date; (iii)
Indebtedness evidenced by or arising under the STC Senior Subordinated
Notes and the Indenture; (iv) Interest Swap Obligations; provided,
however that such Interest Swap Obligations are entered into to
protect the Company and its Subsidiaries from fluctuations in interest
rates of its Indebtedness; (v) additional Indebtedness of the Company
or any of its Subsidiaries not to exceed $10,000,000 in principal
amount outstanding at any time (which amount may, but need not, be
incurred under the Credit Agreement); (vi) Refinancing Indebtedness;
(vii) Indebtedness owed by the Company to any Wholly Owned Subsidiary
of the Company or by any Subsidiary of the Company to the Company or
any Wholly Owned Subsidiary of the Company; (viii) guarantees by
Subsidiaries of any Indebtedness permitted to be incurred pursuant to
the Indenture; (ix) Indebtedness in respect of performance bonds,
bankers' acceptances and surety or appeal bonds provided by the
Company or any of its Subsidiaries to their customers in the ordinary
course of their business; (x) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of
its Subsidiaries pursuant to such agreements, in each case incurred in
connection with the disposition of any business assets or Subsidiaries
of the Company (other than guarantees of Indebtedness or other
obligations incurred by any Person acquiring all or any portion of
such business assets or Subsidiaries of the Company for the purpose of
financing such acquisition) in a principal amount not to exceed the
gross proceeds actually received by the Company or any of its
Subsidiaries in connection with such disposition; provided, however,
that the principal amount of any Indebtedness incurred pursuant to
this clause (x), when taken together with all Indebtedness incurred
pursuant to this clause (x) and then outstanding, shall not exceed
$7,500,000; and (xi) Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money obligations, in
each case incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property used
in a related business or incurred to refinance any such purchase price
or cost of construction or improvement, in each case incurred no later
than 365 days after the date of such acquisition or the date of
completion of such construction or improvement; provided, however,
that the principal amount of any Indebtedness incurred pursuant to
this clause (xi) shall not exceed $3,000,000 at any time outstanding.
Notwithstanding anything to the contrary contained in this definition,
any Indebtedness permitted hereunder shall be permitted to the extent
and only to the extent it is also permitted under the terms of the
Credit Agreement and the Indenture.
10
15
"Permitted Investments" means (i) Investments by the Company
or any Subsidiary of the Company to acquire the stock or assets of any
Person (or Acquired Indebtedness acquired in connection with a
transaction in which such Person becomes a Subsidiary of the Company)
engaged in the broadcast business or businesses reasonably related
thereto; provided, however, that if any such Investment or series of
related Investments involves an Investment by the Company in excess of
$5,000,000, the Company is able, at the time of such investment and
immediately after giving effect thereto, to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 6.11), (ii) Investments received by the
Company or its Subsidiaries as consideration for a sale of assets,
(iii) Investments by the Company or any Wholly Owned Subsidiary of the
Company in any Wholly Owned Subsidiary of the Company (whether
existing on the Closing Date or created thereafter) or any Person that
after such Investments, and as a result thereof, becomes a Wholly
Owned Subsidiary of the Company and Investments in the Company by any
Wholly Owned Subsidiary of the Company, (iv) Investments in cash and
Cash Equivalents, (v) Investments in securities of trade creditors,
wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement, (vi) loans or advances to
employees of the Company or any Subsidiary thereof for purposes of
purchasing the Company's Capital Stock and other loans and advances to
employees made in the ordinary course of business consistent with past
practices of the Company or such Subsidiary, and (vii) additional
Investments in an aggregate amount not to exceed $1,000,000 at any
time outstanding. Notwithstanding anything to the contrary contained
in this definition, any Investment permitted hereunder shall be
permitted to the extent and only to the extent it is also permitted
under the terms of the Credit Agreement and the Indenture.
"Person" means shall mean any individual, corporation,
company, limited liability company, voluntary association,
partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemptions or upon
liquidation.
"Preferred Stock Series A" means the 14% Redeemable Preferred
Stock of STC, par value $.01.
"Preferred Stock Series B" means the Preferred Stock, Series
B of STC, par value $.01.
"Productive Assets" means assets of a kind used or usable by
the Company and its Subsidiaries in broadcast businesses or businesses
reasonably related thereto, and specifically includes assets acquired
through Asset Acquisitions.
11
16
"pro forma" means, unless otherwise provided herein, with
respect to any calculation made or required to be made pursuant to the
terms of this Agreement, a calculation in accordance with Article II
of Regulation S-X promulgated under the Securities Act.
"Purchasers" has the meaning provided therefor in the
introductory paragraph.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Refinancing Indebtedness" means any refinancing by the
Company or its Subsidiaries of Indebtedness of the Company or any of
its Subsidiaries incurred in accordance with Section 6.11 (other than
pursuant to clause (iii) or (iv) of the definition of Permitted
Indebtedness) that does not (i) result in an increase in the aggregate
principal amount of Indebtedness (such principal amount to include,
for purposes of this definition, any premiums, penalties or accrued
interest paid with the proceeds of the Refinancing Indebtedness) of
such Person or (ii) create Indebtedness with (A) a Weighted Average
Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being refinanced or (B) a final maturity
earlier than the final maturity of the Indebtedness being refinanced.
"Representative" has the meaning provided therefor in Section
3.03(a)(i).
"Restricted Payment" means (i) the declaration or payment of
any dividend or the making of any other distribution (other than
dividends or distributions payable in Qualified Capital Stock or in
options, rights or warrants to acquire Qualified Capital Stock) on
shares of the Company's or STC's Capital Stock, (ii) the purchase,
redemption, retirement or other acquisition for value of any Capital
Stock of the Company or STC, or any warrants, rights or options to
acquire shares of Capital Stock of the Company or STC, other than
through the exchange of such Capital Stock or any warrants, rights or
options to acquire shares of any class of such Capital Stock for
Qualified Capital Stock or warrants, rights or options to acquire
Qualified Capital Stock, (iii) the making of any principal payment on,
or the purchase, defeasance, redemption, prepayment, decrease or other
acquisition or retirement for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, of,
any Indebtedness of the Company or its Subsidiaries that is
subordinated or junior in right of payment to the STC Senior
Subordinated Notes or (iv) the making of any Investment (other than a
Permitted Investment).
"SAC" means Xxxxx Acquisition Company, a Delaware
corporation.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a
Subsidiary transfers such property to a Person and the Company or a
Subsidiary leases it from such Person.
12
17
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
"Senior Indebtedness" means, with respect to any Person, (i)
all Indebtedness of such Person outstanding under the Credit Agreement
and all Interest Swap Obligations with respect thereto, (ii) any other
Indebtedness of such Person permitted to be issued under the terms of
this Agreement, provided, however, that Senior Indebtedness shall not
include any Indebtedness which by the terms of the instrument creating
or evidencing the same is on parity with or is subordinated or junior
in right of payment in any respect to any other Indebtedness such
Person or its Subsidiaries or Affiliates and (iii) all obligations
with respect to the foregoing. Notwithstanding anything to the
contrary contained herein, Senior Indebtedness will not include (i)
any liability for federal, state, local, foreign or other taxes, (ii)
any Indebtedness of any such Person to any of its Subsidiaries or
other Affiliates, (iii) any accounts payable or trade liabilities
arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities), (iv) any
Indebtedness that is incurred in violation of the terms of this
Agreement, (v) Indebtedness of the Person to any shareholder of such
Person, (vi) Indebtedness to, or guaranteed by the Person or any of
its Subsidiaries for the benefit of, any director, officer or employee
of the Person or any Subsidiary of the Person (including, without
limitation, amounts owed for compensation), (vii) Capital Stock of
such Person and Indebtedness represented by Disqualified Capital
Stock, (viii) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to such Person and (ix) any Indebtedness or
obligation which is subordinated in right of payment to any other
Indebtedness or obligation of such Person.
"Significant Subsidiary" means for any Person each Subsidiary
of such Person which (i) for the most recent fiscal year of such
Person accounted for more than 5% of the consolidated net income of
such Person or (ii) as at the end of such fiscal year, was the owner
of more than 5% of the consolidated assets of such Person.
"STC" means STC Broadcasting, Inc., a Delaware corporation.
"STC Senior Subordinated Notes" means STC's 11% Senior
Subordinated Notes due 2007.
"Subsidiary" with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a
majority of the votes entitled to be cast in the election of directors
under ordinary circumstances shall at the time be owned, directly or
indirectly, through one or more intermediaries, by such Person or (ii)
any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly,
through one or more intermediaries, owned by such Person; provided,
however, that notwithstanding the foregoing, SAC shall be deemed to be
a "Subsidiary" of the Company. Notwithstanding anything in this
Agreement to the contrary, all references to the Company and its
consolidated Subsidiaries or to financial information prepared on a
consolidated basis in accordance with GAAP shall be deemed
13
18
to include the Company and its Subsidiaries as to which financial
statements are prepared on a combined basis in accordance with GAAP
and to financial information prepared on such a combined basis.
Notwithstanding anything in this Agreement to the contrary, an
Unrestricted Subsidiary shall not be deemed to be a Subsidiary for
purposes of this Agreement.
"Taxes" has the meaning provided therefor in Section 2.11(a).
"Unrestricted Subsidiary" means a Subsidiary of the Company
created after the Closing Date and so designated by a resolution
adopted by the Board of Directors of the Company; provided, however,
that (a) neither the Company nor any of its other Subsidiaries (other
than Unrestricted Subsidiaries) (1) provides any credit support for
any Indebtedness of such Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness) or (2) is
directly or indirectly liable for any Indebtedness of such Subsidiary
and (b) at the time of designation of such Subsidiary, such Subsidiary
has no property or assets (other than de minimis assets resulting from
the initial capitalization of such Subsidiary). The Board of Directors
may designate any Unrestricted Subsidiary to be a Subsidiary;
provided, however, that immediately after giving effect to such
designation (x) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 6.11 hereof and (y) no Default or Event of Default shall have
occurred and be continuing.
"Weighted Average Life to Maturity" means, when applied to
any Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such
Indebtedness into (b) the total of the product obtained by multiplying
(i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by (ii) the number of
years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
of such Person of which all the outstanding voting securities (other
than directors' qualifying shares) which normally have the right to
vote in the election of directors are owned by such Person or any
Wholly Owned Subsidiary of such Person; provided, however, that
"Wholly Owned Subsidiary" shall also include any Subsidiary of which
in excess of 95% of the common equity securities are owned by the
Company or another Wholly Owned Subsidiary and which is organized for
the purpose of facilitating the acquisition of any broadcasting
business that, but for the formation of such Person, the Company and
its Restricted Subsidiaries could not acquire under applicable laws
related to the ownership of broadcast businesses.
Section 1.02. Interpretation. In this Agreement, unless the
context otherwise requires:
(a) headings and underlinings are for convenience only and do
not affect the interpretation of this Agreement;
14
19
(b) words importing the singular include the plural and vice
versa, and the word "including" shall mean "including, without
limitation" unless the context otherwise requires;
(c) an expression importing a natural Person includes any
company, partnership, trust, joint venture, association, corporation
or other body corporate and any Governmental Authority or agency;
(d) a reference to a Section, party, Exhibit, Annex or
Schedule is a reference to that Section of, or that party, Exhibit,
Annex or Schedule to, this Agreement;
(e) a reference to a document includes an amendment or
supplement to, or replacement or novation of, that document but
disregarding any amendment, supplement, replacement or novation made
in breach of this Agreement; and
(f) a reference to a party to any document includes that
party's successors and permitted assigns.
Section 1.03. Business Day Adjustment. Where the day on or by
which a payment is due to be made is not a Business Day, that payment shall be
done on or by the next succeeding Business Day.
ARTICLE II
PURCHASE OF NOTES
Section 2.01. Purchase of Notes and Warrants.
(a) The Company agrees to sell and, subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of the Company contained or incorporated herein, the
Purchasers agrees to purchase, the Notes and the Warrants for an
aggregate purchase price of $25,000,000 for the Notes and the
Warrants.
(b) On or before the Closing Date, the Company will have
authorized the issuance and sale to the Purchasers, in the respective
amounts set forth on Schedule 2.01, of $25,000,000 aggregate principal
amount of its Senior Notes due December 29, 2008 (the "Notes"), to be
substantially in the form attached hereto as Exhibit A.
(c) On or before the Closing Date, the Company will have
authorized the issuance and sale to the Purchasers, in the respective
amounts set forth on Schedule 2.01, of Stock Purchase Warrants of the
Company (the "Warrants"), to be substantially in the form attached
hereto as Exhibit B.
(d) The Notes and the Warrants shall include such notations,
legends or endorsements set forth thereon or required by law. The
Notes will be in the principal amount of $1,000,000 (except in the
case of any redemption following which the aggregate principal amount
remaining is less than $1,000,000) or integral multiples of
15
20
$1,000,000 in excess thereof. Each Note shall be dated the date of its
issuance. The aggregate principal amount of the Notes outstanding at
any one time may not exceed $25,000,000, except to the extent interest
is added to the principal of any Note in accordance with the
provisions thereof. The terms and provisions contained in the Notes
shall constitute, and are hereby expressly made, a part of this
Agreement and, to the extent applicable, the Company, by its execution
and delivery of this agreement, expressly agrees to such terms and
provisions and to be bound thereby.
(e) On or before thirty (30) days after the Closing Date, the
Company and the Purchasers shall endeavor in good faith to allocate
valuations for the purchase price of the Notes and the Warrants in
accordance with the rules and regulations of the Internal Revenue
Service. The Company and the Purchasers hereby agree that all tax
returns filed by the Company and the Purchasers shall be consistent in
all material respects with such allocations, including for purposes of
Section 1271 et al. of the Internal Revenue Code of 1986, as amended.
Section 2.02. Closing. The closing of the purchase and sale
of the Notes (the "Closing") shall take place upon the satisfaction or waiver
of the conditions set forth in Article V hereof or such date and time as shall
be mutually agreed to by the parties hereto (the "Closing Date") at the offices
of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx,
or such other place as shall be mutually agreed to by the parties hereto. On
the Closing Date, the Company will deliver to the Purchasers the Notes payable
to the Purchaser against delivery by the Purchaser of the purchase price
therefor by wire transfer of funds to the account of the Company.
Section 2.03. Mandatory Redemption. Upon the occurrence of a
Change of Control, the Purchaser, by written notice to the Company within
thirty (30) days of the occurrence thereof, may require the Company to redeem
all or a portion of the Notes for a price equal to the outstanding principal
amount thereof, together with a payment of all accrued and unpaid interest on
the amount being prepaid through the date of prepayment. the Company shall give
the Purchaser written notice of the occurrence of a Change of Control within
ten (10) days after the occurrence thereof.
Section 2.04. Use of Proceeds. The Company shall use the
proceeds of the purchase price hereunder to purchase $25,000,000 aggregate
liquidation value of Preferred Stock Series B.
Section 2.05. Interest on the Notes.
(a) The Company shall pay interest to the Purchasers,
quarterly in arrears on the last day of each March, June, September
and December, commencing on March 31, 2000 (each, an "Interest Payment
Date"), at a rate equal to fourteen percent (14.00%) per annum, based
on a year of 360 days for the actual number of days elapsed, and based
on the amounts outstanding from time to time under the Notes;
provided, however, that on any Interest Payment Date prior to March
31, 2002, in lieu of the payment in whole of accrued and unpaid
interest in cash, such interest shall be accrued
16
21
(in which case, interest shall also be payable on any accrued interest
until paid) and added to the principal amount then outstanding on the
Notes.
(b) If any payment on the Notes becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable
rate during such extension.
(c) So long as any Event of Default shall have occurred and
be continuing, the interest rate applicable to the Notes shall be
increased by 2% per annum above the rate otherwise applicable.
(d) Notwithstanding anything to the contrary set forth in
this Section 2.05, if at any time until payment in full of the Notes,
the interest rate payable thereon exceeds the highest rate of interest
permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto (the "Maximum
Lawful Rate"), then in such event and so long as the Maximum Lawful
Rate would be so exceeded, the rate of interest payable on the Notes
shall be equal to the Maximum Lawful Rate; provided, however, that if
at any time thereafter the interest rate payable thereon is less than
the Maximum Lawful Rate, the Company shall continue to pay interest
thereunder at the Maximum Lawful Rate until such time as the total
interest received by the Purchaser is equal to the total interest
which it would have received had the interest rate on the Notes been
(but for the operation of this paragraph) the interest rate payable
since the Closing Date. Thereafter, the interest rate payable shall be
the stated interest rate unless and until such rate again exceeds the
Maximum Lawful Rate, in which event this paragraph shall again apply.
In no event shall the total interest received by the Purchaser
pursuant to the terms hereof exceed the amount which it could lawfully
have received had the interest due hereunder been calculated for the
full term hereof at the Maximum Lawful Rate. In the event the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is
made. In the event that a court of competent jurisdiction,
notwithstanding the provisions of this Section 2.05(d), shall make a
final determination that the Purchaser has received interest hereunder
or under any of the Loan Documents in excess of the Maximum Lawful
Rate, the Purchaser shall, to the extent permitted by applicable law,
promptly apply such excess first to any interest due and not yet paid
under the Notes, then to the outstanding principal of the Notes, then
to other unpaid Obligations and thereafter shall refund any excess to
the Company or as a court of competent jurisdiction may otherwise
order.
Section 2.06. Receipt of Payments. The Company shall make
each payment under the Notes not later than 2:00 P.M. (New York City time) on
the day when due in Dollars in immediately available funds to the applicable
Purchaser's depository bank in the United States as designated by such
Purchaser from time to time for deposit in such Purchaser's depositary account.
For purposes only of computing interest under the Notes, all payments shall be
applied
17
22
by the Purchaser to the Notes on the day payment is credited by the Purchaser's
depository bank to the Purchaser's account in immediately available funds.
Section 2.07. Application of Payments. The Company
irrevocably waives the right to direct the application of any and all payments
at any time or times hereafter received by the Purchaser from or on behalf of
the Company pursuant to the terms of this Agreement, and the Company
irrevocably agrees that the Purchaser shall have the continuing exclusive right
to apply any and all such payments against the then due and payable Obligations
of the Company and in repayment of the Notes as it may deem advisable. In the
absence of a specific determination by the Purchaser with respect thereto, the
same shall be applied in the following order: (i) then due and payable fees and
expenses; (ii) then due and payable interest payments on the Notes; and (iii)
then due and payable principal payments on the Notes.
Section 2.08. Sharing of Payments. If any holder of a Note or
a portion thereof shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Notes held by it in excess of its ratable share of payments on account of the
Notes held by all holders thereof, such holder shall forthwith purchase from
each other holder such participations in the Notes held by it as shall be
necessary to cause such purchasing holder to share the excess payment ratably
with each other holder; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing holder, such
purchase shall be rescinded and such holder shall repay to the purchasing
holder the purchase price to the extent of such recovery together with an
amount equal to such holder's ratable share (according to the proportion of (i)
the amount of such holder's required repayment to (ii) the total amount so
recovered from the purchasing holder) of any interest or other amount paid or
payable by the purchasing holder in respect of the total amount so recovered.
The Company agrees that any holder so purchasing a participation from another
holder pursuant to this Section 2.08 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such holder were the direct
creditor of the Company in the amount of such participation. The Company
further agrees to make all payments on the Notes to all holders thereof on a
pro rata basis, based on the principal amount of the Notes held by each.
Section 2.09. Indemnity.
(a) The Company shall indemnify and hold each Purchaser and
each of its officers, directors and Affiliates harmless from and
against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by such Purchaser or
such other indemnified person as the result of such Purchaser having
entered into this Agreement or any of the other Loan Documents or
purchased the Notes hereunder or relating to or arising out of any
untrue representation, breach of warranty or failure to perform any
covenants or agreement by the Company contained herein or in any Loan
Document or otherwise relating to or arising out of the transactions
contemplated hereby; provided, however, that the Company shall not be
liable for such indemnification to such indemnified Person to the
extent that any such suit, action, proceeding, claim, damage,
18
23
loss, liability or expense results from such indemnified Person's
gross negligence or willful misconduct.
(b) Each Purchaser shall indemnify and hold the Company and
each of its officers, directors and Affiliates harmless from and
against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by the Company or such
other indemnified person as the result of the Company having entered
into this Agreement or any of the other Loan Documents or issued the
Notes hereunder or relating to or arising out of any untrue
representation, breach of warranty or failure to perform any covenants
or agreement by such Purchaser contained herein or in any Loan
Document or otherwise relating to or arising out of the transactions
contemplated hereby; provided, however, that no Purchaser shall be
liable for such indemnification to such indemnified Person to the
extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from such indemnified Person's gross
negligence or willful misconduct.
Section 2.10. Access. Each Purchaser and any of its officers,
employees and/or agents shall have the right, exercisable as frequently as it
determines to be appropriate, during normal business hours, to visit and
inspect the properties and facilities of the Company and its Subsidiaries and
to inspect, audit and make extracts from all of the Company's and its
Subsidiaries' records, files, corporate books and books of account and to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with the principal officers of the Company and its Subsidiaries, all at such
reasonable times, upon reasonable notice and as often as the Purchaser may
reasonably request. The Company shall deliver any document or instrument
reasonably necessary for such Purchaser, as it may request, to obtain records
from any service bureau maintaining records for the Company or its
Subsidiaries. The Company shall instruct its and its Subsidiaries' banking and
other financial institutions to make available to each Purchaser such
information and records as it may reasonably request.
Section 2.11. Taxes.
(a) Any and all payments by the Company hereunder or under
the Notes shall be made, in accordance with this Section 2.11, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or
measured by the net income of any Purchaser, by the jurisdiction under
the laws of which it is organized or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Company shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under the Notes to
any Purchaser, (i) the sum payable thereunder shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.11) each Purchaser receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company
shall make such
19
24
deductions, and (iii) the Company shall pay the full amount deducted
to the relevant taxing or other authority in accordance with
applicable law.
(b) In addition, the Company agrees to pay any present or
future stamp or documentary taxes or any other sales, transfer,
exercise, mortgage recording or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes
or from the execution, sale, transfer, delivery or registration of, or
otherwise with respect to, any of the Loan Documents ("Other Taxes").
(c) The Company shall indemnify each Purchaser for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section
2.11) paid by such Purchaser and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within thirty days from
the date the applicable Purchaser makes written demand therefor.
(d) Within thirty days after the date of any payment of
Taxes, the Company shall furnish to the applicable Purchaser the
original or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Company hereunder, the agreements and obligations of the
Company contained in this Section 2.11 shall survive the payment in
full of the Notes.
ARTICLE III
ISSUE OF NOTES; PURCHASE AND ISSUANCE OF
NOTES; RIGHTS OF HOLDERS OF NOTES
Section 3.01. Issue of Notes. The Company has authorized the
issuance of up to $25,000,000 in principal amount of the Notes. The Notes will
be offered and issued to the Purchasers without being registered under the
Securities Act.
Section 3.02. Purchase and Issuance of the Notes.
(a) Subject to the terms and conditions herein set forth, the
Company agrees that it will sell to each of the Purchasers, severally
and not jointly, and each of the Purchasers, severally and not
jointly, agrees that it will purchase from the Company at the Closing
the principal amount of the Notes set forth opposite the name of such
Purchaser on Schedule I hereto; provided, however, that all such
issuances of the Notes shall not result in issued Notes in a principal
amount of more than $25,000,000.
(b) Delivery of the Notes to be purchased by the Purchasers
pursuant to this Agreement shall be made at the Closing by the Company
delivering certificates representing the Notes to the Purchasers.
20
25
Section 3.03. Subordination of Liabilities. The Company, for
itself, its successors and assigns, covenants and agrees, and the Purchasers,
by their acceptance of the Notes likewise covenant and agree, that the payment
of the principal of, and interest on, and all other amounts owing in respect
of, the Notes are hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior payment in full of all Senior
Indebtedness.
(a) Nonpayment.
(i) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts
owing in respect thereof), whether at stated maturity, by
acceleration or otherwise, all principal thereof and premium,
if any, and interest thereon and fees and any other amounts
owing in respect thereof (including interest payable in
respect of any of the foregoing subsequent to the
commencement of any proceeding against or with respect to the
Company under the Bankruptcy Code, 11 U.S.C. ss. 101 et.
seq.), in each case to the extent due and owing, shall first
be paid in full, or such payment duly provided for in cash or
in a manner satisfactory to the holder or holders of such
Senior Indebtedness, before any further payment is made on
account of the principal of (including installments thereof),
or interest on, or any amount otherwise owing in respect of,
the Notes.
(ii) In the event that notwithstanding the
provisions of the preceding clause (i), the Company shall
make any payment on account of the principal of, or interest
on, or amounts otherwise owing in respect of, the Notes, any
amounts received in cash in respect thereof shall not be
applied by the holder thereof to such Note but shall be held
by such holder in trust for the benefit of, and shall be paid
forthwith over and delivered to, the holders of Senior
Indebtedness or their agent, representative or the trustee
under the indenture or other agreement pursuant to which any
instruments evidencing any Senior Indebtedness may have been
issued (each, a "Representative"), as their respective
interests may appear, for application pro rata to the payment
of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in
accordance with the terms of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or
for the benefit of the holders of Senior Indebtedness;
provided that, any such payment of the Company shall be
applied solely to Senior Indebtedness of the Company.
(b) Dissolution, Liquidation or Reorganization. Upon any
payment or distribution of assets of the Company (other than payments
consisting of shares of Preferred Stock or nonvoting Capital Stock or
other securities issued by the Company) upon any dissolution, winding
up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(i) the holders of all Senior Indebtedness shall
first be entitled to receive payment in full (or have such
payment duly provided for in cash or in a manner satisfactory
to the holder or holders of such Senior Indebtedness) of the
21
26
principal thereof, premium, if any, and interest (including
post-petition interest) due thereon and fees and any other
amounts owing in respect thereof before the Purchasers are
entitled to receive any payment in cash on account of the
principal of, or interest on, or any other amount owing in
respect of, the Notes;
(ii) any payment or distribution of assets of the
Company of any kind or character, whether in cash, property
or securities to which the Purchasers would be entitled
except for the provisions of this Section 3.03 (other than
payments consisting of shares of Preferred Stock or nonvoting
Capital Stock or other securities issued by the Company),
shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution, whether a trustee
in bankruptcy, a receiver or liquidating trustee or other
trustee or agent, directly to the holders of Senior
Indebtedness, or their Representative, to the extent
necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior
Indebtedness; and
(iii) in the event that, notwithstanding the
foregoing provisions of this Section 3.03, any payment or
distribution of assets of the Company, of any kind or
character, whether in cash, property or securities, shall be
received by a Purchaser on account of principal or interest
on the Notes (other than payments consisting of shares of
Preferred Stock or nonvoting Capital Stock or other
securities issued by the Company) before all Senior
Indebtedness is paid in full, or provision made for its
payment in full satisfactory to the holder or holders of such
Senior Indebtedness, such payment or distribution shall be
received and held in trust for and shall be paid over to the
holders of the Senior Indebtedness, as the case may be,
remaining unpaid or unprovided for or their Representatives,
for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
(c) Obligation Unconditional. Nothing contained in this
Section 3.03 or in the Notes is intended to or shall impair, as
between the Purchasers and the Company, the obligation of the Company,
which is absolute and unconditional, to pay to the Purchasers the
principal of, and interest on, the Notes as and when the same shall
become due and payable in accordance with their terms. In the event
that by virtue of this Section 3.03, any amounts paid or payable to
the Purchasers in respect of the Notes shall instead be paid to the
holders of the Senior Indebtedness, the Purchasers shall be subrogated
to the rights of the holders of such Senior Indebtedness.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations, Warranties and Agreements of
the Company. The Company represents and warrants to, and agrees with, the
several Purchasers that:
22
27
(a) The Company and each of its Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing, as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to
so qualify or have such power or authority would not, singularly or in
the aggregate, have a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects
of the Company and its Subsidiaries taken as a whole (a "Material
Adverse Effect").
(b) The authorized capital stock of the Company consists of
1,000,000 shares of common stock, $0.01 par value per share, of which
891,589.16 shares are issued and outstanding; all of the outstanding
shares of capital stock of the Company are duly and validly authorized
and issued and fully paid and nonassessable. All of the outstanding
shares of capital stock of each Subsidiary of the Company (and, in the
case of SAC, 100% of the nonvoting stock) have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of any Lien,
charge, encumbrance, security interest, restriction upon voting
(except for SAC) or transfer or any other claim of any third party
(other than Liens and security interests created pursuant to the
Credit Agreement, the Indenture or applicable law) and restrictions on
transfer imposed by the FCC requirements.
(c) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and the other Loan
Documents and to perform its obligations hereunder and thereunder.
(d) The Loan Documents have been duly authorized, executed
and delivered by the Company and constitute valid and legally binding
agreements of the Company, enforceable against the Company in
accordance with their respective terms, except (i) to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law)
and (ii) to the extent that the enforceability of rights to
indemnification and contribution thereunder may be limited by federal
or state securities laws or regulations or the public policy
underlying such laws or regulations.
(e) The execution, delivery and performance by the Company of
each of the Loan Documents, the issuance, sale and delivery of the
Notes by the Company and compliance by the Company with the terms
thereof and the consummation by the Company and its Subsidiaries of
the transactions contemplated by the Loan Documents do not and will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in
the creation or imposition of any Lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant
to, any material indenture, mortgage, deed of trust, loan agreement
23
28
or other material agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject, except for any such
conflict, breach, violation, default, Lien, charge or encumbrance that
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; nor will such actions result in any
violation of the provisions of the charter or bylaws of the Company or
any of its Subsidiaries; or any statute or any order, rule or
regulation (including the Communications Act of 1934, as amended (the
"Communications Act"), and the rules and regulations of the FCC
thereunder) of any court or arbitrator or governmental agency or body
(including the FCC) having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets, except for any such
conflict, breach, violation, default, Lien, charge or encumbrance that
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator
or governmental agency or body (including the FCC, the Federal Trade
Commission (the "FTC") and the Department of Justice (the "DOJ")) is
required for the execution, delivery and performance by the Company of
each of the Loan Documents, the issuance, sale and delivery of the
Notes and compliance by the Company with the terms thereof and the
consummation of the transactions contemplated by the Loan Documents,
except for such consents, approvals, authorizations, filings,
registrations or qualifications (i) that have been obtained or made
prior to the Closing Date, and (ii) that from time to time, the
Company or its Subsidiaries may be required to obtain from or make
with the FCC in the ordinary course of business.
(f) The audited financial statements (including the related
notes) for the year ended December 31, 1998 previously delivered to
the Purchasers have been prepared in conformity with generally
accepted accounting principles consistently applied throughout the
periods covered thereby and fairly present in all material respects
the financial condition and the results of operations and cash flows
of the entities purported to be covered thereby for the respective
periods indicated except as otherwise disclosed therein. The unaudited
financial statements for the eleven months ended November 30, 1999
previously delivered to the Purchasers fairly present in all material
respects the financial condition and the results of operations and
cash flows of the entities purported to be covered thereby for the
respective periods indicated except as otherwise disclosed therein.
(g) Except as described on Schedule 4.01(g) hereto, there are
no legal or governmental proceedings (including before or by the FCC,
the FTC or the DOJ) pending to which the Company or any of its
Subsidiaries is a party or of which any property or assets of the
Company or any of its Subsidiaries or affiliates is the subject which,
singularly or in the aggregate, if determined adversely to the Company
or any of its Subsidiaries or affiliates, could reasonably be expected
to have a Material Adverse Effect; and to the best knowledge of the
Company, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
24
29
(h) No injunction, restraining order or order of any nature
by any federal or state court of competent jurisdiction has been
issued with respect to the Company or any of its Subsidiaries which
would prevent or suspend the issuance or sale of the Notes; no action,
suit or proceeding is pending against or, to the best knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries before any court or arbitrator or any governmental
agency, body or official, domestic or foreign, which could reasonably
be expected to interfere with or adversely affect the issuance of the
Notes or in any manner draw into question the validity or
enforceability of any of the Loan Documents or any action taken or to
be taken pursuant thereto.
(i) Neither the Company nor any of its Subsidiaries is (i) in
violation of its charter or bylaws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject or (iii)
in violation in any material respect of any applicable law, ordinance,
court decree, governmental rule or regulation (including the
Communications Act and the rules and regulations of the FCC
thereunder) to which it or its property or assets may be subject.
(j) The Company and each of its Subsidiaries possess all
material licenses, orders, certificates, authorizations, approvals and
permits issued by, and have made all declarations and filings with,
the appropriate federal, state or foreign regulatory agencies or
bodies (including the FCC and the DOJ) that are necessary for the
ownership of their respective properties or the conduct of their
respective businesses, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its Subsidiaries
has received notification of any revocation or modification of any
such license, certificate, authorization or permit that is generally
renewable in the ordinary course or has any reason to believe that any
such license, certificate, authorization or permit will not be renewed
in the ordinary course. The licenses issued with respect to the
Company's and its Subsidiaries' television broadcast stations by the
FCC (the "Licenses") are validly issued and in full force and effect
with no restrictions or qualifications -------- (other than standard
restrictions or qualifications usually on similar licenses) that
would, singly or in the aggregate, have a Material Adverse Effect. No
event has occurred that permits, or with notice or lapse of time or
both would permit, and no legal governmental proceeding has been
instituted or threatened that could cause, the revocation or
termination of any of the Licenses or that might result in any other
impairment or modification of the rights of the Company or any
Subsidiary thereof that in any such case would, singly or in the
aggregate, have a Material Adverse Effect. The Company has no reason
to believe that any License issued by the FCC will not be renewed in
the ordinary course.
25
30
(k) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.
(l) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(m) The Company and each of its Subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, which insurance is in amounts and insures against such
losses and risks as are in the Company's opinion adequate to protect
the Company and its Subsidiaries and their respective businesses.
Neither the Company nor any of its Subsidiaries has received notice
from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to
continue such insurance.
(n) The Company and each of its Subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
conduct of their respective businesses does not conflict in any
material respect with, and the Company and its Subsidiaries have not
received any notice of any claim of conflict with, any such rights of
others.
(o) The Company and each of its Subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property which are
material to the business of the Company and its Subsidiaries, taken as
a whole, in each case free and clear of all Liens, encumbrances and
defects other than (i) Liens and encumbrances granted pursuant to the
Credit Agreement and (ii) Liens, encumbrances and defects that do not
materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries or could not reasonably
be expected to have a Material Adverse Effect.
(p) No labor disturbance by or dispute with the employees of
the Company or any of its Subsidiaries exists or, to the best
knowledge of the Company, is imminent, which could reasonably be
expected to have a Material Adverse Effect.
(q) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release or
threatened release of any kind of toxic or
26
31
other wastes or other hazardous substances by, due to or caused by the
Company or any of its Subsidiaries (or, to the best knowledge of the
Company, any other entity (including any predecessor) for whose acts
or omissions the Company or any of its Subsidiaries is or could
reasonably be expected to be liable) upon any property now or
previously owned or leased by the Company or any of its Subsidiaries,
or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or
which would, under any statute or any ordinance, rule (including rule
of common law), regulation, order, judgment, decree or permit, give
rise to any liability except for any violation or liability which
would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; and there has
been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property
of any toxic or other wastes or other hazardous substances with
respect to which the Company has knowledge, except for any such
disposal, discharge, emission or other release of any kind which would
not have, singularly or in the aggregate with all such disposal,
discharge, emission and other release, a Material Adverse Effect.
(r) On the Closing Date the Company and its Subsidiaries,
taken as a whole (after giving effect to the issuance of the Notes),
will be Solvent. As used in this paragraph, the term "Solvent" means,
with respect to a particular date, that on such date (i) the aggregate
fair value (or present fair saleable value) of the assets of the
Company and its Subsidiaries, taken as a whole, is not less than their
total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured in the normal course
of business and (ii) the Company and its Subsidiaries, taken as a
whole, do not have an unreasonably small amount of capital with which
to conduct their businesses. In computing the amount of such
contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(s) Except as described on Schedule 4.01(s) hereto, there are
no outstanding subscriptions, rights, warrants, calls or options to
acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership
interest in the Company.
(t) None of the proceeds of the issuance of the Notes will be
used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of
the Notes to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(u) Since November 30, 1999, (i) there has been no material
adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, management or business
27
32
prospects of the Company nor any of its Subsidiaries, whether or not
arising in the ordinary course of business, (ii) neither the Company
nor any of its Subsidiaries has incurred any liability or obligation,
direct or contingent, other than in the ordinary course of business,
which would, singly or in the aggregate, have a Material Adverse
Effect, (iii) neither the Company nor any of its Subsidiaries has
entered into any material transaction other than in the ordinary
course of business and (iv) there has not been any change in the
capital stock or long-term debt of the Company or any of its
Subsidiaries, or any dividend or distribution of any kind declared,
paid or made by the Company or any of its Subsidiaries on any class of
its capital stock (other than dividends declared in respect of
Preferred Stock, Series A).
Section 4.02. Representations and Warranties of the
Purchasers. Each Purchaser makes the following representations and warranties
to the Company, each and all of which shall survive the execution and delivery
of this Agreement and the Closing hereunder:
(a) Each Purchaser is purchasing the Notes for its own
account, for investment purposes and not with a view to the
distribution thereof. No Purchaser will, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any Note (or solicit any offers to buy, purchase, or
otherwise acquire any Note), except in compliance with the Securities
Act.
(b) Each Purchaser is an "accredited investor" (as that term
is defined in Rule 501 of Regulation D under the Securities Act) and
by reason of its business and financial experience, it has such
knowledge, sophistication and experience in business and financial
matters as to be capable of evaluating the merits and risks of the
prospective investment, is able to bear the economic risk of such
investment and is able to afford a complete loss of such investment.
(c) Each Purchaser is duly organized, validly existing and in
good standing under the laws of the state of its organization.
(d) The execution, delivery and performance by each Purchaser
of this Agreement and the other Loan Documents to be executed by it:
(i) are within such Purchaser's legal power; (ii) have been duly
authorized by all necessary legal action; (iii) are not in
contravention of any provision of such Purchaser's organizational
documents; and (iv) will not violate any law or regulation, or any
order or decree of any court or governmental instrumentality binding
on such Purchaser. This Agreement and the other Loan Documents to
which such Purchaser is a party have each been duly executed and
delivered by such Purchaser and constitute the legal, valid and
binding obligations of such Purchaser, enforceable against it in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
28
33
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.01. Conditions Precedent to the Closing. The
obligation of the Purchasers to purchase the Notes to be purchased by them
hereunder on the Closing Date is subject to the satisfaction of the following
conditions:
(a) The representations and warranties made by the Company
herein shall be true and correct in all material respects on and as of
the Closing Date and the Company shall have complied in all material
respects with all agreements as set forth in or contemplated hereunder
and in the other Loan Documents, required to be performed by it at or
prior to the Closing.
(b) As of the Closing Date, and after giving effect to the
consummation of the transactions contemplated by this Agreement, there
shall exist no Default or Event of Default.
(c) As to the Purchasers, the purchase of and payment for the
Notes by the Purchasers hereunder (i) shall not be prohibited or
enjoined (temporarily or permanently) by any applicable law or
governmental regulation (including Regulation T, U or X of the Board
of Governors of the Federal Reserve System), (ii) shall not subject
the Purchasers to any penalty or other onerous condition under or
pursuant to any applicable law or governmental regulation (provided,
however, that such regulation, law or onerous condition was not in
effect at the date of this Agreement), and (iii) shall be permitted by
the laws and regulations of the jurisdictions to which they are
subject.
(d) At the Closing, the Purchasers shall have received a
certificate, dated the Closing Date, from the Company stating that the
conditions specified in Sections 5.01(a), through (c) have been
satisfied or duly waived as of the Closing Date.
(e) Each of the Loan Documents, except for this Agreement
shall be substantially in the form attached hereto and the Loan
Documents shall have been executed and delivered by all the respective
parties thereto and shall be in full force and effect.
(f) All proceedings taken in connection with the issuance of
the Notes and the transactions contemplated by this Agreement, the
other Loan Documents and all documents and papers relating thereto
shall be reasonably satisfactory to the Purchasers and their counsel.
The Purchasers and their counsel shall have received copies of such
papers and documents as they may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to them.
(g) All reasonable costs and fees due and owing and expenses
(including reasonable legal fees and expenses) required to be paid to
or on behalf of the Purchasers on or prior to the Closing Date
pursuant to this Agreement and all fees and expenses
29
34
payable to the Purchasers' counsel (in each case upon presentation of
reasonable documentation therefor) shall have been paid.
(h) On or before the Closing Date, the Purchasers and their
counsel shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the
business, corporate, legal and financial affairs of the Company and
its Subsidiaries as they may reasonably request.
(i) There shall not have occurred and be continuing (i) any
general suspension of, or limitation on times or prices for, trading
in securities on the New York Stock Exchange or American Stock
Exchange or in the over-the-counter market in the United States or the
establishment of minimum or maximum prices on any such exchange; (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of the banks in the United States or the State of New York; or
(iii) either (A) an outbreak or escalation of hostilities between the
United States and any foreign power, (B) an outbreak or escalation of
any insurrection or other armed conflict involving the United States
or any other national or international calamity or emergency, or (C)
any material disruption of or material adverse change in financial,
banking or capital market (including high-yield market) conditions
(collectively, a "Market Effect").
(j) There shall not have occurred a material adverse change
or any development involving a prospective material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs, management or business prospects of the Company and its
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business (collectively, a "Material Adverse Change").
(k) The Credit Agreement shall have been amended to permit
the issuance of the Notes, which such amendment shall be in form and
substance satisfactory to the Purchasers.
Section 5.02. Conditions Precedent to Obligations of the
Company. The obligations of the Company to issue the Notes pursuant to this
Agreement are subject, at the Closing to the satisfaction of the following
conditions:
(a) The representations and warranties made by the Purchasers
herein shall be true and correct in all material respects on and as of
the Closing Date.
(b) The issuance of the Notes by the Company shall not be
enjoined under the laws of any jurisdiction to which the Company is
subject (temporarily or permanently).
ARTICLE VI
COVENANTS
The Company covenants and agrees with the Purchasers that:
30
35
Section 6.01. Notices of Material Events. The Company will
furnish to the Purchasers prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Company or STC that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
and
(c) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Section 6.02. Compliance with Laws. The Company will, and
will cause its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or them, or to its or
their property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 6.03. Use of Proceeds. The proceeds of the issuance
of the Notes will be used only for the purposes contemplated in Section 2.04.
No part of the proceeds of the issuance of the Notes will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board of Governors of the Federal Reserve System of the
United States, including Regulations T, U and X.
Section 6.04. Limitation on Restricted Payments. The Company
shall not and shall not permit any Subsidiary of the Company to make any
Restricted Payments if at the time of such Restricted Payment and immediately
after giving effect thereto:
(a) a Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment; or
(b) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 6.11 hereof.
Section 6.05. Corporate Existence. The Company shall do or
cause to be done all things reasonably necessary to preserve and keep in full
force and effect its corporate or other existence and the corporate or other
existence of each of its Significant Subsidiaries in accordance with the
respective organizational documents of each such Significant Subsidiary and the
material rights (charter and statutory) and franchises of the Company and each
such Significant Subsidiary; provided, however, that the Company shall not be
required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Significant Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company or such
Significant Subsidiary, as the case may be, shall determine that the
preservation thereof is no longer reasonably necessary or desirable in the
conduct of the business of the Company or any such Significant Subsidiary.
31
36
Section 6.06. Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon it or any of its Subsidiaries or properties of it
or any of its Subsidiaries and (ii) all material lawful claims for labor,
materials, supplies and services that, if unpaid, might by law become a Lien
upon the property of it or any of its Subsidiaries; provided, however, that
there shall not be required to be paid or discharged any such tax, assessment
or charge, the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate provision has been
made or where the failure to effect such payment or discharge is not adverse in
any material respect to the holders of Notes.
Section 6.07. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its
Subsidiaries to, maintain its material properties in normal condition
(subject to ordinary wear and tear) and make all reasonably necessary
repairs, renewals or replacements thereto as in the judgment of the
Company may be reasonably necessary to the conduct of the business of
the Company and its Subsidiaries; provided, however, that nothing in
this Section 6.07 shall prevent the Company or any of its Subsidiaries
from discontinuing the operation and maintenance of any of its
properties, if such properties are, in the reasonable and good faith
judgment of the Board of Directors of the Company or the Subsidiary,
as the case may be, no longer reasonably necessary in the conduct of
their respective businesses.
(b) The Company shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Company, are reasonably adequate
and appropriate for the conduct of the business of the Company and
such Subsidiaries.
Section 6.08. Compliance with Laws. The Company shall comply,
and shall cause each of its Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries taken as a whole.
Section 6.09. Reports. So long as any of the Notes are
outstanding, the Company will provide to the holders of Notes copies of the
annual reports and of the information, documents and other reports that the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act.
32
37
Section 6.10. Limitations on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries will, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with or for
the benefit of any of its Affiliates (other than transactions between the
Company and a Wholly Owned Subsidiary of the Company or among Wholly Owned
Subsidiaries of the Company) (an "Affiliate Transaction"), other than Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $1,000,000 or
more, such determination will be made in good faith by a majority of members of
the Board of Directors of the Company and by a majority of the disinterested
members of the Board of Directors of the Company, if any; provided, further,
that for a transaction or series of related transactions involving value of
$5,000,000 or more, the Board of Directors of the Company has received an
opinion from a nationally recognized investment banking firm that such
Affiliate Transaction is fair, from a financial point of view, to the Company
or such Subsidiary. The foregoing restrictions will not apply to (1) reasonable
and customary directors' fees, indemnification and similar arrangements and
payments thereunder, (2) any obligations of the Company or its Subsidiaries
under the Financial Monitoring and Oversight Agreements or any employment
agreement, noncompetition or confidentiality agreement with any officer of the
Company or its Subsidiaries (provided that each amendment of any of the
foregoing agreements shall be subject to the limitations of this covenant), (3)
reasonable and customary investment banking, financial advisory, commercial
banking and similar fees and expenses paid to any of the Purchasers and their
Affiliates, (4) any Restricted Payment permitted to be made pursuant to the
covenant described under Section 6.04, (5) any issuance of securities or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
finding of, employment arrangements, stock options and stock ownership plans
approved by the board of directors of the Company or its Subsidiaries, (6)
loans or advances to employees in the ordinary course of business of the
Company or any of its Subsidiaries consistent with past practices, and (7) the
issuance of Capital Stock of the Company or its Subsidiaries (other than
Disqualified Stock).
Section 6.11. Limitation on Incurrence of Additional
Indebtedness and Issuance of Disqualified Capital Stock. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur"), any
Indebtedness (other than Permitted Indebtedness) and the Company will not issue
any Disqualified Capital Stock, and its Subsidiaries will not issue any
Preferred Stock (other than the Preferred Stock Series B being issued on the
Closing Date); provided, however, that the Company and its Subsidiaries may
incur Indebtedness or issue shares of such Capital Stock if, in either case,
the Leverage Ratio at the time of incurrence of such Indebtedness or the
issuance of such Capital Stock, as the case may be, after giving pro forma
effect to such incurrence or issuance as of such date and to the use of
proceeds therefrom is less than 7.0 to 1.
Section 6.12. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries. Neither the Company nor any of its
Subsidiaries will, directly or indirectly, create or otherwise cause to permit
to exist or become effective, by operation of the charter of such
33
38
Subsidiary or by reason of any agreement, instrument, judgment, decree, rule,
order, statute or governmental regulation, any encumbrance or restriction on
the ability of any Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock; (b) make loans or advances or pay any
Indebtedness or other obligation owed to the Company or any of its
Subsidiaries; or (c) transfer any of its property or assets to the Company,
except for such encumbrances or restrictions existing under or by reason of:
(1) applicable law; (2) the Indenture; (3) customary non-assignment provisions
of any lease governing a leasehold interest of the Company or any Subsidiary;
(4) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired; (5) agreements existing on the Closing Date (including the Credit
Agreement) as such agreements are from time to time in effect; provided,
however, that any amendments or modifications of such agreements that affect
the encumbrances or restrictions of the types subject to this covenant shall
not result in such encumbrances or restrictions being less favorable to the
Company in any material respect, as determined in good faith by the Board of
Directors of the Company, than the provisions as in effect before giving effect
to the respective amendment or modification; (6) any restriction with respect
to such a Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets of such
Subsidiary pending the closing of such sale or disposition; (7) an agreement
effecting a refinancing, replacement or substitution of Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clause (2), (4) or
(5) above or any other agreement evidencing Indebtedness permitted under the
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are no less favorable to the Company in
any material respect as determined in good faith by the Board of Directors of
the Company than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4) or (5); (8)
restrictions on the transfer of the assets subject to any Lien imposed by the
holder of such Lien; or (9) a licensing agreement to the extent such
restrictions or encumbrances limit the transfer of property subject to such
licensing agreement.
Section 6.13. Limitation on Asset Sales. Neither the Company
nor any of its Subsidiaries will consummate an Asset Sale unless (i) the
Company or the applicable Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by management of the Company or, if such Asset Sale involves consideration in
excess of $2,500,000, by the Board of Directors of the Company, as evidenced by
a duly adopted resolution of such Board of Directors), (ii) at least 75% of the
consideration received by the Company or such Subsidiary, as the case may be,
from such Asset Sale is in the form of cash or Cash Equivalents (other than to
the extent that the Company is exchanging all or substantially all the assets
of one or more broadcast businesses operated by the Company (including by way
of the transfer of capital stock) for all or substantially all the assets
(including by way of the transfer of capital stock) constituting one or more
broadcast businesses operated by another Person, in which event, to such
extent, the foregoing requirement with respect to the receipt of cash or Cash
Equivalents shall not apply) and is received at the time of such disposition
and (iii) upon the consummation of an Asset Sale, the Company applies, or
causes such Subsidiary to apply, such
34
39
Net Cash Proceeds within 180 days of receipt thereof either (A) to repay any
Indebtedness of the Company or any Indebtedness of a Subsidiary of the Company
(and, to the extent such Indebtedness relates to principal under a revolving
credit or similar facility, to obtain a corresponding reduction in the
commitments thereunder), (B) to reinvest, or to be contractually committed to
reinvest pursuant to a binding agreement, in Productive Assets and, in the
latter case, to have so reinvested within 360 days of the date of receipt of
such Net Cash Proceeds, (C) to redeem the Notes, (D) to redeem the Preferred
Stock, Series B or (E) to redeem the Preferred Stock, Series A.
Section 6.14. Limitation on Asset Swaps. The Company will
not, and will not permit any Subsidiary to, engage in any Asset Swaps, unless:
(i) at the time of entering into such Asset Swap, and immediately after giving
effect to such Asset Swap, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof, (ii) in the event
such Asset Swap involves an aggregate amount in excess of $1,000,000, the terms
of such Asset Swap have been approved by a majority of the members of the Board
of Directors of the Company; and (iii) in the event such Asset Swap involves an
aggregate amount in excess of $5,000,000, the Company has received a written
opinion from an independent investment banking firm of nationally recognized
standing that such Asset Swap is fair to the Company or such Subsidiary, as the
case may be, from a financial point of view.
Section 6.15. FCC Compliance. Notwithstanding anything in
this Agreement to the contrary, the Company shall not be required to take any
action hereunder that (i) constitutes or would represent a transfer of control
to the Company or SAC or any Subsidiary of SAC without first obtaining the
consent of the FCC to such transfer of control or (ii) constitutes a violation
of the Communications Act or the rules or regulations promulgated thereunder.
Section 6.16. Merger, Consolidation and Sale of Assets.
(a) The Company may not, in a single transaction or a series
of related transactions, consolidate with or merge with or into, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or adopt a plan of
liquidation unless:
(1) either (A) the Company is the surviving or
continuing Person or (B) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged or the
Person that acquires by conveyance, transfer or lease the properties
and assets of the Company substantially as an entirety or in the case
of a plan of liquidation, the Person to which assets of the Company
have been transferred shall be a corporation, partnership or trust
organized and existing under the laws of the United States or any
State thereof or the District of Columbia;
(2) such surviving Person shall assume all of the
obligations of the Company under this Agreement pursuant to an
assignment and acceptance in a form reasonably satisfactory to the
Purchasers;
35
40
(3) immediately after giving effect to such
transaction and the use of the proceeds therefrom (on a pro forma
basis, including giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with such transaction), the
Company (in the case of clause (A) of the foregoing clause (1)) or
such Person (in the case of clause (B) of the foregoing clause (1))
shall be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 6.11; and
(4) immediately after giving effect to such
transactions, no Default or Event of Default shall have occurred and
be continuing.
(b) For purposes of this Section 6.16, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or
series of related transactions) of all or substantially all of the
properties and assets of one or more Subsidiaries, the Capital Stock
of which constitutes all or substantially all of the properties or
assets of the Company, will be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
(c) Notwithstanding the foregoing clauses (a)(2) and (3),
subject to applicable FCC requirements, if any, (i) any Subsidiary of
the Company may consolidate with, merge into or transfer all or part
of its properties and assets to the Company and (ii) the Company may
merge with a corporate Affiliate thereof incorporated solely for the
purpose of reincorporating the Company in another jurisdiction in the
U.S. to realize tax or other benefits.
Section 6.17. Successor Corporation Substituted. Upon any
consolidation or merger, or any transfer of assets in accordance with Section
6.16, the successor Person formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Agreement with the same effect as if such successor Person had been named
as the Company herein. When a successor corporation assumes all of the
obligations of the Company hereunder and agrees to be bound hereby, the
predecessor shall be released from such obligations.
ARTICLE VII
EVENTS OF DEFAULTS
Section 7.01. Actions after Default. If any Event of Default
occurs and is continuing (whether it is voluntary or involuntary, or results
from operation of law or otherwise), the Purchasers may exercise any of their
rights by operation of law or otherwise including their rights under the Notes.
Section 7.02. Events of Default. It is an Event of Default
if:
(a) an Event of Default shall have occurred and be continuing
under the Indenture; or
36
41
(b) an Event of Default shall have occurred and be continuing
under the Credit Agreement; or
(c) any representation or warranty made or deemed made by or
on behalf of the Company or STC in this Agreement, any report,
certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement shall prove to have been
incorrect in any material respect when made or deemed made; or
(d) the Company or STC shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement and such
breach continues unremedied for 30 days thereafter; or
(e) a Change of Control shall have occurred.
Section 7.03. Notice of Events. If any Event of Default
happens, the Company shall promptly notify the Purchasers by facsimile
specifying the nature of such Event of Default and any steps the Company is
taking to remedy it.
ARTICLE VIII
INDEMNITY
Section 8.01. Indemnity.
(a) Indemnification by the Company. The Company agrees and
covenants to hold harmless and indemnify the Purchasers and each
Person, if any, who controls any of the Purchasers within the meaning
of Section 20 of the Exchange Act from and against any losses, claims,
damages, liabilities and expenses (including expenses of
investigation) to which the Purchasers or such controlling Person may
become subject (i) arising out of or based upon any untrue statement
or alleged untrue statement of any material fact contained in this
Agreement or (ii) arising out of, based upon or in any way related or
attributed to claims, actions or proceedings relating to this
Agreement or the subject matter of this Agreement or (iii) arising in
any manner out of or in connection with such Person being a Purchaser
of the Notes and relating to any action taken or omitted to be taken
by the Company; provided, however, that the Company shall not be
liable under this paragraph (a) for any amounts paid in settlement of
claims without their written consent, which consent shall not be
unreasonably withheld, or to the extent that it is finally judicially
determined that such losses, claims, damages or liabilities arose
primarily out of the gross negligence, willful misconduct or bad faith
of the Purchasers. The Company further agrees to reimburse the
Purchasers for any reasonable legal and other expenses as they are
incurred by it in connection with investigating, preparing to defend
or defending any lawsuits, claims or other proceedings or
investigations arising in any manner out of or in connection with such
Person being a Purchaser; provided that if the Company reimburses the
Purchasers hereunder for any expenses incurred in connection with a
lawsuit, claim or other proceeding for which indemnification is
sought, the Purchasers hereby agree to refund such reimbursement of
expenses to the extent it is finally judicially determined that the
losses, claims, damages or liabilities arising out of
37
42
or in connection with such lawsuit, claim or other proceedings arose
primarily out of the gross negligence, willful misconduct or bad faith
of the Purchasers or from a violation by any Purchaser of legal
requirements applicable to such Purchaser solely because of their
character as a particular type of regulated institution. The Company
further agrees that the indemnification, contribution and
reimbursement commitments set forth in this Article VIII shall apply
whether or not the Purchasers are a formal party to any such lawsuits,
claims or other proceedings. Notwithstanding the foregoing, the
Company shall not be liable to a party seeking indemnification under
the foregoing provisions of this paragraph (a) to the extent that any
such losses, claims, damages, liabilities or expenses arise out of or
are based upon an untrue statement or omission made in any of the
documents referred to in this paragraph (a) in reliance upon and in
conformity with the information relating to the party seeking
indemnification furnished in writing by such party for inclusion
therein. The indemnity, contribution and expense reimbursement
obligations of the Company under this Article VIII shall be in
addition to any liability the Company may otherwise have.
(b) Indemnification by the Purchasers. Each Purchaser agrees
and covenants to hold harmless and indemnify the Company and each
Person, if any, who controls the Company within the meaning of Section
20 of the Exchange Act from and against any losses, claims, damages,
liabilities and expenses (including expenses of investigation) to
which the Company or such controlling Person may become subject (i)
arising out of or based upon any untrue statement or alleged untrue
statement of any material fact contained in this Agreement or (ii)
arising out of, based upon or in any way related or attributed to
claims, actions or proceedings relating to this Agreement or the
subject matter of this Agreement or (iii) relating to any action taken
or omitted to be taken by such Purchaser; provided, however, that no
Purchaser shall be liable under this paragraph (a) for any amounts
paid in settlement of claims without their written consent, which
consent shall not be unreasonably withheld, or to the extent that it
is finally judicially determined that such losses, claims, damages or
liabilities arose primarily out of the gross negligence, willful
misconduct or bad faith of the Company. Each Purchaser further agrees
to reimburse the Company for any reasonable legal and other expenses
as they are incurred by it in connection with investigating, preparing
to defend or defending any lawsuits, claims or other proceedings or
investigations arising in any manner out of or in connection with the
issuance of the Notes to such Purchaser; provided that if such
Purchaser reimburses the Company hereunder for any expenses incurred
in connection with a lawsuit, claim or other proceeding for which
indemnification is sought, the Company hereby agrees to refund such
reimbursement of expenses to the extent it is finally judicially
determined that the losses, claims, damages or liabilities arising out
of or in connection with such lawsuit, claim or other proceedings
arose primarily out of the gross negligence, willful misconduct or bad
faith of the Company or from a violation by the Company of legal
requirements applicable to the Company solely because of its character
as a particular type of regulated institution. Each Purchaser further
agrees that the indemnification, contribution and reimbursement
commitments set forth in this Article VIII shall apply whether or not
the Company is a formal party to any such lawsuits, claims or other
proceedings. Notwithstanding the foregoing, no Purchaser shall
38
43
be liable to a party seeking indemnification under the foregoing
provisions of this paragraph (a) to the extent that any such losses,
claims, damages, liabilities or expenses arise out of or are based
upon an untrue statement or omission made in any of the documents
referred to in this paragraph (a) in reliance upon and in conformity
with the information relating to the party seeking indemnification
furnished in writing by such party for inclusion therein. The
indemnity, contribution and expense reimbursement obligations of the
Purchasers under this Article VIII shall be in addition to any
liability such Purchasers may otherwise have.
(c) Procedure. If any Person shall be entitled to indemnity
hereunder (the "Indemnified Parties"), such Indemnified Party shall
give prompt notice confirmed in writing to the party or parties from
which such indemnity is sought (the "Indemnifying Parties") of the
commencement of any proceeding (a "Proceeding") with respect to which
such Indemnified Party seeks indemnification or contribution pursuant
hereto; provided, however, that the failure so to notify the
Indemnifying Parties shall not relieve the Indemnifying Parties from
any obligation or liability except to the extent that the Indemnifying
Parties have been prejudiced materially by such failure. The
Indemnifying Parties shall have the right, exercisable by giving
written notice to an Indemnified Party promptly after the receipt of
written notice from such Indemnified Party of such Proceeding, to
assume, at the Indemnifying Parties' expense, the defense of any such
Proceeding, with counsel reasonably satisfactory to such Indemnified
Party; provided, however, that an Indemnified Party or parties (if
more than one such Indemnified Party is named in any Proceeding) shall
have the right to employ separate counsel in any such Proceeding and
to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party or
parties unless: (1) the Indemnifying Parties agree to pay such fees
and expenses; or (2) the Indemnifying Parties fail promptly to assume
the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (3) the named
parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party or Parties and the Indemnifying
Party or an Affiliate of the Indemnifying Party and such Indemnified
Parties, and the Indemnifying Parties shall have been advised in
writing by counsel that a conflict or potential conflict exists
between such Indemnified Party or Parties and the Indemnifying
Parties, in which case, if such Indemnified Party or Parties notify
the Indemnifying Parties in writing that they elect to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying
Parties shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Parties, it
being understood, however, that, unless there exists a conflict among
Indemnified Parties, the Indemnifying Parties shall not, in connection
with any one such Proceeding or separate but substantially similar or
related Proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with
appropriate local counsel, if any) at any time for such Indemnified
Party or Parties, or for fees and expenses that are not reasonable. No
Indemnified Party or Parties will settle any Proceedings without the
written consent of the Indemnifying Party or Parties (but such consent
will not be unreasonably withheld).
39
44
Section 8.02. Contribution. If for any reason the
indemnification provided for in Section 8.01 of this Agreement is unavailable
to an Indemnified Party, or insufficient to hold it harmless, in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnifying and Indemnified Parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying and Indemnified Parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying or
Indemnified Parties and each such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above shall be deemed to include any
reasonable legal or other fees or expenses incurred by such party in connection
with investigating or defending any such claim.
The Company and the Purchasers agree that it would not be
just and equitable if contribution pursuant to the immediately preceding
paragraph were determined by any method of allocation which does not take into
account the equitable considerations referred to in such paragraph. No Person
guilty of fraudulent misrepresentation shall be entitled to contribution from
any Person.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices. Any notice, request or other
communication to be given or made under this Agreement shall be in writing.
Subject to Section 7.03, the notice, request or other communication may be
delivered by hand or facsimile, to the party's address specified below or at
such other address as such party notifies to the other party from time to time
and will be effective upon receipt.
For the Company:
Sunrise Television Corp.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telefax: (000) 000-0000
40
45
with a copy to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
For the Purchasers:
Chase Equity Associates, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
and
Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P.
HM3 Coinvestors, L.P.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Section 9.02. Expenses. The Company agrees promptly to pay
(i) all the actual and reasonable costs and expenses of preparation of the Loan
Documents; (ii) the reasonable fees, expenses and disbursements of Weil,
Gotshal & Xxxxxx LLP in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the sale of the Notes hereunder,
and any amendments, modifications and waivers hereto or thereto and consents to
departures from the terms hereof and thereof, and (iii) after the occurrence
and during the continuance of an Event of Default, all reasonable costs and
expenses (including reasonable attorneys fees of one counsel to all the
Purchasers) in enforcing any obligations of or in collecting any payments due
from the Company hereunder or under the Notes by reason of such Event of
Default.
Section 9.03. Governing Law, Submission to Jurisdiction:
Venue.
(a) This Agreement is governed by, and shall be construed in
accordance with, the law of the State of New York.
(b) Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or of
the United States for the Southern
41
46
District of New York and, by execution and delivery of this Agreement,
the Company hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. the Company hereby irrevocably designates, appoints
and empowers Xxxxx Muse, with offices at 1325 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000, as its designee, appointee and agent
to receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action
or proceeding. If for any reason such designee, appointee and agent
shall lease to be available to act as such, the Company agrees to
designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the
Purchasers. The Company further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Company at its address set forth in
Section 9.01 above, such service to become effective ten days after
such mailing. Nothing herein shall affect the right of the Purchasers
to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Company in any
other jurisdiction.
(c) The Company hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Section 9.04. Judgment.
(a) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they
may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Purchasers
could purchase Dollars with such other currency in New York City at
11:00 A.M. (New York City time) on the Business Day preceding that on
which final judgment is given.
(b) The obligation of the Company in respect of any sum due
from it to the Purchasers hereunder held by the Purchasers shall,
notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following
receipt by the Purchasers of any sum adjudged to be so due in such
other currency, the Purchasers may in accordance with normal banking
procedures purchase Dollars with such other currency; if the Dollars
so purchased are less than such sum due to the Purchasers in Dollars,
the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Purchasers against such loss, and the
Dollars so purchased exceed such sum due to the Purchasers in Dollars,
the Purchasers agree to remit to the Company such excess.
42
47
Section 9.05. Benefit of Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto, all future holders of the Notes, and their respective successors and
assigns.
Section 9.06. Assignments. The Company may not assign or
delegate any of its interests or obligations under this Agreement. Each holder
of Notes may sell or transfer all or a portion of its Notes to any person who
is reasonably satisfactory to the Company; provided that such sale or transfer
complies with Section 4.02 and each transferee of such Notes executes and
delivers to each party hereto a joinder agreement in form and substance
reasonably satisfactory to the Purchasers and the Company. Notwithstanding the
foregoing, each holder of Notes may sell or transfer all or a portion of its
Notes, in each case, to any of its Affiliates, without the consent of the
Company; provided, however, that no party shall assign or otherwise transfer
any of its rights, duties or obligations hereunder if such assignment or
transfer (i) would violate any of the rules, regulations or policies of the FCC
or (ii) could reasonably be expected to cause adverse consequences for any of
the parties hereto under the ownership attribution rules of the FCC.
Section 9.07. Amendment. Neither this Agreement nor any terms
hereof may be changed, waived or discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the Company and a
majority of the holders of Notes.
Section 9.08. Counterparts; Integration. This Agreement may
be executed in several counterparts, each of which is an original, but all of
which together constitute one and the same agreement. This Agreement, together
with the other Loan Documents, constitutes the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, and as written, relating to the subject
matter hereof. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.09. Remedies and Waivers. No failure or delay by
the Purchasers in exercising any power, remedy, discretion, authority or other
rights under this Agreement shall waive or impair that or any other right of
the Purchasers. No single or partial exercise of such a right shall preclude
its additional or future exercise. No such waiver shall waive any other right
under this Agreement. All waivers or consents given under this Agreement shall
be in writing.
Section 9.10. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any Jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof, and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
Section 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER
43
48
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS
SECTION.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
44
49
IN WITNESS WHEREOF, the parties have caused this Senior Note
Purchase Agreement to be signed in their respective names as of the date above
first written.
SUNRISE TELEVISION CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President
SIGNATURE PAGE TO
SENIOR NOTE PURCHASE AGREEMENT
50
HICKS, MUSE, XXXX & XXXXX EQUITY FUND III, L.P.,
a Delaware limited partnership
By: HM3/GP Partners, L.P., a Texas limited
partnership, its general partner
By: Xxxxx, Muse GP Partners III, a Texas
limited partnership, L.P., its general
partner
By: Xxxxx, Muse Fund III Incorporated, a
Texas corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President, Secretary,
Treasurer
HM3 COINVESTORS, L.P., a Delaware limited
partnership
By: Xxxxx, Muse GP Partners III, a Texas
limited partnership, L.P., its general
partner
By: Xxxxx, Muse Fund III Incorporated, a
Texas corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President, Secretary,
Treasurer
SIGNATURE PAGE TO
SENIOR NOTE PURCHASE AGREEMENT
51
CHASE EQUITY ASSOCIATES, L.P.,
a Delaware limited partnership
By: Chase Capital Partners, a Delaware
general partnership, its general
partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
SIGNATURE PAGE TO
SENIOR NOTE PURCHASE AGREEMENT
52
Schedule 2.01 to
Senior Note Purchase Agreement
PURCHASER COMMITMENTS
Hicks, Muse, Xxxx & Xxxxx Equity Fund IV, L.P. $ 21,749,383.00
HM3 Coinvestors, L.P. $ 750,617.00
Chase Equity Associates, L.P. $ 2,500,000.00
53
Schedule 4.01(g) to
Senior Note Purchase Agreement
LEGAL OR GOVERNMENTAL PROCEEDINGS
In April, 1999, the Antitrust Division of the United States Department
of Justice (the "DOJ") issued various requests to STC Broadcasting Company
("STC") for additional information under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act (the "HSR Act") in connection with proposed transactions with
Xxxxxxxx Communications, Inc. ("Xxxxxxxx"). STC and Xxxxxxxx are in discussions
with the DOJ regarding the transaction, and the waiting period under the HSR
Act has been extended pending completion of these discussions.
54
Schedule 4.01(s) to
Senior Note Purchase Agreement
OUTSTANDING WARRANTS
------------------------------------------ ----------------- --------------------------------------
HOLDER CERT. # VESTED SHARES TO DATE
------------------------------------------ ----------------- --------------------------------------
Hicks, Muse, Xxxx & Xxxxx Equity Fund W-1
IV, L.P.
------------------------------------------ ----------------- --------------------------------------
Chase Equity Associates, L.P. W-2
------------------------------------------ ----------------- --------------------------------------
HM3 Coinvestors, L.P. W-3
------------------------------------------ ----------------- --------------------------------------
55
Exhibit A to
Senior Note Purchase Agreement
FORM OF SENIOR NOTES
56
Exhibit B to
Senior Note Purchase Agreement
FORM OF WARRANTS