AGREEMENT
BETWEEN
ML MEDIA PARTNERS, L.P.
AND
SMITHTOWN BAY, LLC,
A LIMITED PARTNER
WHEREAS, Smithtown Bay, LLC is a limited partner (the "Limited Partner") of
ML Media Partners, L.P. (the "Partnership"); and
WHEREAS, Limited Partner seeks to own or acquire or has acquired through
purchase, assignment or transfer, 1% or more of the Interests in the
Partnership; and
WHEREAS, Section 7.3(A) of the Partnership Agreement provides, among other
things, that no purported sale, assignment or transfer of an Interest to any
person who would own 1% or more of the Interests in the Partnership shall be
permitted, recognized, or effective for any purpose; provided that the General
Partner may permit, in its sole discretion, such sale, assignment or transfer if
such person provides satisfactory assurances to the General Partner that any
interests of such person in media properties would not be attributable to the
Partnership; and
WHEREAS, the Partnership has been advised by the Staff of the Federal
Communications Commission ("AFCC") that limited partners seeking to acquire 1%
or more of the Interests in the Partnership shall be considered to hold
attributable interests in the Partnership unless such limited partners satisfy
the FCC's criteria for insulating limited partners from any direct or indirect
involvement in the management or operation of the media-related activities of
the Partnership.
NOW THEREFORE, the General Partner has determined to permit, recognize or
give effect to certain proposed transfers which would result in the Limited
Partner owning 1% or more of the Interests in the Partnership in consideration,
among other things, of the Limited Partner's agreement to and compliance with
the following terms, condition and assurances concerning such Limited Partner's
interests in media properties and the Limited Partner hereby agrees to and
agrees to comply with each of the following:
1. Limited Partner shall not act as an employee of the Partnership.
2. Limited Partner shall not serve as an independent agent or contractor of
agent with respect to any of the Partnership's media enterprises.
3. Limited Partner shall not communicate with any FCC licensees in which
the Partnership holds an interest or the General Partner on matters
pertaining to the day-to-day operations of any such licensee's business.
4. Limited Partner agrees that General Partner may veto any admissions of
additional general partners proposed by the Limited Partner.
5. Limited Partner shall not be permitted to vote on the removal of the
General Partner, provided, however, that the Limited Partner may vote on
the removal of the General Partner in situations where the General
Partner is subject to bankruptcy proceedings as described in Section
17-402(a)(4)-(5) of the Delaware Revised Uniform Limited Partnership Act
or is adjudicated incompetent by a court of competent jurisdiction.
6. Limited Partner shall not perform any services on behalf of the
Partnership relating to its media activities, with the exception of
making loans, to, or acting as a surety with respect to such business.
7. Limited Partner is expressly prohibited from becoming actively involved
in the management or operation of the media business of the Partnership.
8. Limited Partner agrees that it will at no time own more than 5% of the
Interests in the Partnership.
9. Limited Partner agrees to provide such additional information and
assurances as the General Partner or the Partnership may request from
time to time and acknowledges that the General Partner shall be entitled
to take any actions provided in Section 7.3, and to redeem such Interests
pursuant to Section 7.4, of the Partnership Agreement, on the basis of
any determination by the General Partner that Limited Partner is or has
become an Ineligible Person as described in Section 7.3 of the
Partnership Agreement or has breached any of the terms of this agreement.
Smithtown Bay, LLC
By: Global Capital Management
its Manager
By: /s/ XXXXXXX X. XXXX Date: May 23, 1997
-----------------------------
LIMITED PARTNER
Media Management Partners
By: /s/ XXXXXX X. XXXXXXXXXX Date: May 28, 1997
-----------------------------
EXECUTIVE VICE PRESIDENT
ML Media Management Inc.
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Print Name
-----------------------------
Title
[LETTERHEAD]
BY FACSIMILE AND U.S. MAIL
November 24, 1998
Xx. Xxxxxx X. Xxxxxxx
Smithtown Bay, LLC
C/O EBF & Associates
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Re: ML MEDIA PARTNERS, L.P. (THE "PARTNERSHIP")--SMITHTOWN BAY, LLC
Dear Xx. Xxxxxxx:
This letter is in response to your letter dated November 20, 1998 regarding the
intention of Smithtown Bay, LLC ("Smithtown") to initiate a registered tender
offer for up to 5% of the outstanding units of limited partnership interest (the
"Units") in the Partnership. In the context of such proposed registered tender
offer you have requested a waiver of certain ownership restrictions contained in
a certain agreement previously entered into between Smithtown and the
Partnership (i.e., letter agreement dated May 23, 1997 (the "Prior Agreement"),
which among other things, limits Smithtown's ownership of Units of the
Partnership to not more than 5% of the outstanding Partnership Units. As we
discussed, based on Smithtown's representation that it currently owns less than
5% of the outstanding Units and that it intends to initiate a registered tender
offer (i.e., in accordance with the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder (the "Securities Laws")) for not more than
an additional 5% of the Partnership's Units, and subject to the terms of this
letter and the conditions set forth below, the Partnership will not enforce the
5% ownership limitation (described in paragraph 8 of such Prior Agreement) in
connection with the proposed registered tender offer. The foregoing waiver is
conditioned upon the following: (i) Smithtown's commencement of a registered
tender offer as provided in the Securities Laws within 5 business days of the
date of this letter, with a purchase price per Unit in Smithtown's offer being
an amount in cash in excess of $750 per Unit as of the tender offer date, (ii)
Smithtown's compliance with the Securities Laws, (iii) the satisfaction of the
provisions of the Partnership's Second Amended and Restated Agreement of Limited
Partnership, as amended (the "Partnership Agreement"), including without
limitation, the provisions of Article Seven of the Partnership Agreement, as
determined by the Partnership's general partner in its sole discretion, and (iv)
the number of Units transferred pursuant to the proposed tender offer when taken
together with all other transfers of Units in the Partnership for any tax year
of the Partnership does not exceed the limitations established by the
Partnership to stay within the 5% safe harbor percentage limitation and such
other limitations set forth in the safe harbor provisions of Internal Revenue
Service Notice 88-75. Please be advised, however, that notwithstanding the
foregoing, the Partnership (i) does not waive any of the provisions of or its
rights pursuant to Sections 7.1, 7.3 or 7.4 of the Partnership Agreement, and
the Partnership reserves its right to limit transfers of Units (including Units
transferred pursuant to the proposed tender offer you describe
Xx. Xxxxxx X. Xxxxxxx
Page 2
November 24, 1998
and other Units) to less than 5% of outstanding Units in any tax year and (ii)
the agreements of Smithtown set forth in paragraphs 1 through 7 and 9 of the
Prior Agreement shall remain in full force and effect.
Please be further aware that this letter does not make any determination in
favor of Smithtown as to whether the transfer of any such Units will be
recognized by the Partnership when and if submitted to the Partnership for
transfer.
Very truly yours,
/s/ XXXX XXXXX XXXXXX
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Xxxx Xxxxx Xxxxxx
VICE PRESIDENT & SENIOR COUNSEL
