Exhibit 10.5
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (this "Agreement") is entered into as
of July 8, 1998 among RADIO UNICA OF SAN FRANCISCO, RADIO UNICA OF MIAMI, INC.,
RADIO UNICA OF LOS ANGELES, INC., ORO SPANISH BROADCASTING, INC., RADIO UNICA OF
MIAMI LICENSE CORP., RADIO UNICA OF LOS ANGELES LICENSE CORP., RADIO UNICA OF
SAN FRANCISCO LICENSE CORP., RADIO UNICA OF SAN ANTONIO, INC., RADIO UNICA
NETWORK, INC. AND RADIO UNICA SALES CORP., each a Delaware corporation, (each a
"Subsidiary" and, collectively, the "Subsidiaries").
W I T N E S S E T H :
WHEREAS, Radio Unica Corp., a Delaware corporation (the
"Borrower") has entered into the Credit Agreement dated as of July 8, 1998
between the Borrower, the several banks and other financial instituions from
time to time party thereto (the "Lenders") and Canadian Imperial Bank of
Commerce, as agent for the Lenders (the "Agent") (as further amended,
supplemented, waived or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as defined therein); and
WHEREAS, in connection therewith, each Subsidiary has entered
into a Guarantee dated as of the date hereof in favor of the Agent for the
benefit of the Lenders, pursuant to which such Subsidiary has guaranteed all the
Obligations of the Borrower (such Guarantees, as the same may be amended,
supplemented or modified from time to time, are collectively referred to as the
"Subsidiary Guarantees"); and
WHEREAS, the Borrower owns, directly or indirectly, all the
Capital Stock of each of the Subsidiaries and each of the Subsidiaries derives
substantial direct and indirect benefit from the Borrower entering into the
Credit Agreement and obtaining Loans thereunder;
NOW, THEREFORE, in consideration of the premises and the
covenants hereafter contained, and to induce each of the Subsidiaries to enter
into its respective Subsidiary Guarantee, it is agreed as follows:
The parties agree as among themselves that, to the extent any
payment of the Obligations of the Borrower is required to be made under a
Subsidiary Guarantee, each Subsidiary shall be responsible for a portion of such
payment equal to the product of (a) a fraction, the numerator of which is the
net worth (determined in accordance with GAAP) of such Subsidiary on the date of
such payment and the denominator of which is the aggregate net worth (computed
as aforesaid) of the Subsidiaries (such fraction is referred to in the case of
any Subsidiary as its "Net Worth Fraction"), multiplied by (b) the amount of
such payment (such product being such Subsidiary's "Contribution Amount"). To
the extent that any Subsidiary (the
"Paying Subsidiary") shall make a payment in respect of the Obligations of the
Borrower under its Subsidiary Guarantee in excess of its Contribution Amount,
each of the other Subsidiaries shall reimburse the Paying Subsidiary in an
amount equal to the excess of such other Subsidiary's Contribution Amount over
the amount actually paid by such other Subsidiary (if any); provided, that in no
event will such other Subsidiary pay an aggregate amount in excess of its
Contribution Amount.
This Agreement is only intended to define the relative rights
of the Subsidiaries, and nothing set forth in this Agreement is intended to or
shall impair the obligations of the Subsidiaries, jointly and severally, to pay
to the Lender the Obligations as and when the same shall become due and payable
in accordance with the terms of their respective Subsidiary Guarantees.
The parties hereto acknowledge that the right to contribution
hereunder shall constitute an asset of the Subsidiaries to which such
contribution is owing.
The parties hereto acknowledge and agree that the Agent and
the Lenders are intended third-party beneficiaries of this Agreement and that
this Agreement may not be terminated, amended or modified in a manner that would
adversely affect the Lenders without the prior written consent of the Lenders.
The parties hereto acknowledge and agree that this Agreement
has been entered into to support the arrangement set forth in the Credit
Agreement, which is governed by the laws of the State of New York. The parties
hereto desire that this Agreement be interpreted in a manner consistent with the
interpretation of the Credit Agreement and to that end have agreed that this
Agreement will be governed by and construed in accordance with the laws of the
State of New York and in such selection have relied, among other items, upon
Section 5-1401 of the General Obligations Law of the State of New York.
2
IN WITNESS WHEREOF, each of the Subsidiaries has executed and
delivered this Agreement as of the date first above written.
RADIO UNICA OF SAN FRANCISCO
RADIO UNICA OF MIAMI, INC.
RADIO UNICA OF LOS ANGELES, INC.
ORO SPANISH BROADCASTING, INC.
RADIO UNICA OF MIAMI LICENSE CORP.
RADIO UNICA OF LOS ANGELES LICENSE CORP.
RADIO UNICA OF SAN FRANCISCO LICENSE CORP.
RADIO UNICA OF SAN ANTONIO, INC.
RADIO UNICA NETWORK, INC.
RADIO UNICA SALES CORP.
By:/s/
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