among
ION
Media Networks, Inc.,
NBC
Universal, Inc.,
NBC Palm
Beach Investment I, Inc.,
NBC Palm
Beach Investment II, Inc.,
and
Dated as
of May 3, 2007
TABLE
OF CONTENTS
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Page
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ARTICLE
I DEFINITIONS |
2
|
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SECTION
1.01 Definitions |
2
|
|
SECTION
1.02 Other Defined Terms |
14
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|
SECTION
1.03 Interpretation |
16
|
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ARTICLE
II THE PRELIMINARY TRANSACTIONS |
17
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SECTION
2.01 Confirmation from Senior Lenders, CIG and NBCU |
17
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|
SECTION
2.02 Call Right Assignment |
18
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SECTION
2.03 Delivery of the Documents |
18
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SECTION
2.04 Filing of New Preferred Stock |
19
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|
SECTION
2.05 Exchange of NBCU Series B Preferred and Transfer of Series F
Non-Convertible Preferred |
19
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|
SECTION
2.06 Additional Investment by CIG |
19
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|
SECTION
2.07 Selection of Investment Banks |
20
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ARTICLE
III THE TENDER OFFER |
20
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SECTION
3.01 The Tender Offer |
20
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SECTION
3.02 Company Action |
22
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ARTICLE
IV THE REVERSE STOCK SPLIT |
23
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SECTION
4.01 The Reverse Stock Split |
23
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SECTION
4.02 Company Stock Options |
24
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SECTION
4.03 Surrender of Shares |
25
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ARTICLE
V THE EXCHANGE OFFER |
26
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SECTION
5.01 The Exchange Offer |
26
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|
SECTION
5.02 Consent Solicitation |
29
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SECTION
5.03 Exchange by CIG |
29
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SECTION
5.04 Contingent Exchange |
29
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SECTION
5.05 Company Approval |
30
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ARTICLE
VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
30
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SECTION
6.01 Organization and Qualification |
31
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SECTION
6.02 Capitalization |
31
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SECTION
6.03 Authority Relative to the Transaction Agreements |
33
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|
SECTION
6.04 No Conflict; Required Filings and Consents |
34
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SECTION
6.05 Permits; Compliance |
35
|
i
|
SECTION
6.06 SEC Filings; Financial Statements |
37
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|
SECTION
6.07 Absence of Certain Changes or Events |
39
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|
SECTION
6.08 Absence of Litigation |
40
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SECTION
6.09 Compensation and Benefit Plans; ERISA |
40
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SECTION
6.10 Labor Matters |
42
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SECTION
6.11 Taxes |
43
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|
SECTION
6.12 Insurance |
43
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|
SECTION
6.13 Company Material Contracts |
44
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|
SECTION
6.14 Property |
44
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SECTION
6.15 Intellectual Property |
44
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SECTION
6.16 Brokers |
45
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ARTICLE
VII REPRESENTATIONS AND WARRANTIES OF CIG |
45
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|
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SECTION
7.01 Corporate Organization |
46
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SECTION
7.02 Authority Relative to Transaction Agreements |
46
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SECTION
7.03 No Conflict; Required Filings and Consents |
46
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|
SECTION
7.04 Ownership of Company Securities |
47
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|
SECTION
7.05 FCC Compliance |
47
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SECTION
7.06 Financing |
47
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SECTION
7.07 Brokers |
47
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ARTICLE
VIII REPRESENTATIONS AND WARRANTIES OF NBCU ENTITIES |
47
|
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SECTION
8.01 Corporate Organization |
48
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SECTION
8.02 Authority Relative to Transaction Agreements |
48
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SECTION
8.03 No Conflict; Required Filings and Consents |
48
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SECTION
8.04 Ownership of Company Securities |
49
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SECTION
8.05 Brokers |
49
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ARTICLE
IX CONDUCT OF BUSINESS PENDING THE CALL CLOSING |
49
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SECTION
9.01 Conduct of Business by the Company Pending the Call Closing
|
49
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ARTICLE
X ADDITIONAL AGREEMENTS |
53
|
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SECTION
10.01 Stockholders’ Meetings |
53
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SECTION
10.02 Proxy Statement |
54
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SECTION
10.03 Company Board Representation; Section 14(f) |
55
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|
SECTION
10.04 Access to Information; Confidentiality |
55
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SECTION
10.05 No Solicitation of Transactions |
56
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|
SECTION
10.06 Directors’ and Officers’ Indemnification and
Insurance |
57
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|
SECTION
10.07 Notification of Certain Matters |
58
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SECTION
10.08 Further Action; Reasonable Best Efforts |
58
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SECTION
10.09 Public Announcements |
59
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SECTION
10.10 Exchange of NBCU Series B Preferred |
59
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|
SECTION
10.11 Exchange of Series F Non-Convertible Preferred |
60
|
ii
|
SECTION
10.12 Transfer of Series B Convertible Subordinated Debt |
60
|
|
SECTION
10.13 Exchange of Series A-2 Preferred Stock or Series C Preferred Stock
Following the Call Closing |
60
|
|
SECTION
10.14 Exchange of Series A-2 Preferred Stock or Series C Preferred Stock in
Absence of Call Closing |
61
|
|
SECTION
10.15 Termination of Certain Existing Agreements |
61
|
|
SECTION
10.16 Delisting |
62
|
|
SECTION
10.17 Stockholder Litigation |
62
|
|
SECTION
10.18 CIG Option to Purchase NBCU Series B Preferred |
62
|
|
SECTION
10.19 Employment of Certain Company Employees |
63
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|
SECTION
10.20 Approval of Compensation Actions |
63
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|
SECTION
10.21 Indemnity for Prior Breach of Call Agreement, Escrow Agreement and
Noncompete Agreements |
63
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|
SECTION
10.22 Indemnity for Compensation Actions |
64
|
|
SECTION
10.23 Conduct of the Exchange Offer |
64
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|
SECTION
10.24 CUSIP Numbers |
64
|
|
SECTION
10.25 PMC
Agreement |
64
|
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|
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ARTICLE
XI CONDITIONS PRECEDENT |
64
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|
|
SECTION
11.01 Conditions to the Reverse Stock Split |
64
|
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SECTION
11.02 Frustration of Closing Conditions |
65
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ARTICLE
XII TERMINATION, AMENDMENT AND WAIVER |
65
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|
|
SECTION
12.01 Termination Prior to the Commencement Date |
65
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|
SECTION
12.02 Termination After the Commencement Date |
65
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|
SECTION
12.03 Effect of Termination |
65
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SECTION
12.04 Fees and Expenses |
66
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|
SECTION
12.05 Amendment |
66
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|
SECTION
12.06 Waiver |
66
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ARTICLE
XIII GENERAL PROVISIONS |
66
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SECTION
13.01 Notices |
66
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SECTION
13.02 Severability |
68
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SECTION
13.03 Entire Agreement; Assignment |
69
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SECTION
13.04 Parties in Interest |
69
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SECTION
13.05 Specific Performance |
69
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SECTION
13.06 Governing Law |
69
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|
SECTION
13.07 Counterparts |
69
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|
SECTION
13.08 Waiver of Jury Trial |
70
|
iii
| |
|
ANNEXES
|
| |
|
|
|
Annex
A |
|
Conditions
to the Tender Offer |
|
Annex
B |
|
Conditions
to the Exchange Offer |
| |
|
|
|
SCHEDULES
|
|
|
| |
|
|
|
Schedule
5.04 |
|
Contingent
Exchange Methodology |
|
Schedule
10.12 |
|
Transfer
of Series B Convertible Subordinated Debt |
| |
|
|
|
EXHIBITS
|
|
|
| |
|
|
|
Exhibit
A |
|
Series A
Convertible Subordinated Debt Indenture |
|
Exhibit
B |
|
Series B
Convertible Subordinated Debt Indenture |
|
Exhibit
C |
|
NBCU
Option I |
|
Exhibit
D |
|
NBCU
Option II |
|
Exhibit
E |
|
Registration
Rights Agreement for New Securities |
|
Exhibit
F |
|
Series
A-1 Convertible Preferred Certificate of Designation |
|
Exhibit
G |
|
Series
A-2 Preferred Stock Certificate of Designation |
|
Exhibit
H |
|
Series
A-3 Convertible Preferred Certificate of Designation |
|
Exhibit
I |
|
Series B
Convertible Preferred Certificate of Designation |
|
Exhibit
J-1 |
|
Series C
Convertible Preferred Certificate of Designation |
|
Exhibit
J-2 |
|
Series C
Convertible Preferred Certificate of Designation |
|
Exhibit
K |
|
Series C
Preferred Stock Certificate of Designation |
|
Exhibit
L |
|
Series D
Convertible Preferred Certificate of Designation |
|
Exhibit
M |
|
Series
E-1 Convertible Preferred Certificate of Designation |
|
Exhibit
N |
|
Series
E-2 Convertible Preferred Certificate of Designation |
|
Exhibit
O |
|
Series F
Non-Convertible Preferred Certificate of Designation |
|
Exhibit
P |
|
New
Stockholders’ Agreement |
|
Exhibit
Q |
|
Assignment
Agreement |
|
Exhibit
R |
|
Call
Right Exercise Notice |
|
Exhibit
S |
|
Restated
Certificate of Incorporation |
|
Exhibit
T |
|
Proposed
Amendments |
|
Exhibit
U |
|
Warrant
|
|
Exhibit
V |
|
Put/Call
Agreement |
|
Exhibit
W |
|
Certificate
Amendment |
|
Exhibit
X |
|
Registration
Rights Agreement for Series B Convertible Subordinated Debt |
iv
THIS
MASTER TRANSACTION AGREEMENT (this “Agreement”)
is made and entered into as of May 3, 2007, by and among ION Media Networks,
Inc., a Delaware corporation (the “Company”),
NBC Universal, Inc., a Delaware corporation (“NBCU”),
NBC Palm Beach Investment I, Inc., a California corporation (“NBC
Palm Beach I”),
NBC Palm Beach Investment II, Inc., a California corporation
(“NBC
Palm Beach II,”
and together with NBCU and NBC Palm Beach I, the “NBCU
Entities”),
and CIG Media LLC, a Delaware limited liability company (“CIG”).
WHEREAS,
on November 7, 2005, the NBCU Entities entered into a series of agreements (the
“2005
Agreements”)
with one or more of the following parties: Xx. Xxxxxx (as defined below),
Second Xxxxxxx Xxxxxxx Limited Partnership, a Nevada limited partnership,
Xxxxxx Enterprises, Inc., a Nevada corporation (collectively, the
“Xxxxxx
Stockholders”),
the Company and Xxxxxx Management Corporation, a Nevada corporation
(“PMC”),
to, among other things, restructure the original investment of the NBCU
Entities in the Company made on September 15, 1999 and to resolve certain
disputes arising therefrom;
WHEREAS,
the Company, CIG and the NBCU Entities have agreed to further restructure the
Company’s ownership and capital structure (the “Transaction”),
subject to the terms and conditions set forth in the Transaction Agreements (as
defined below);
WHEREAS,
in furtherance of the Transaction, NBC Palm Beach II wishes to assign to CIG
$210,000,000 aggregate stated liquidation preference of Series F
Non-Convertible Preferred (as defined below), and its rights and obligations
under the Call Agreement (as defined below), and any other consideration
contemplated herein, in each case subject to the terms and conditions of this
Agreement, and in consideration therefor CIG intends to exercise the Call Right
(as defined below) immediately following such assignment and assumption and
perform the obligations set forth more fully in Section 2.02 hereof, and grant
NBC Palm Beach II the NBCU Option I (as defined below);
WHEREAS,
PMC and the Xxxxxx Stockholders have filed or intend to file promptly following
the execution of this Agreement one or more applications with the FCC
requesting that the FCC consent to the acquisition of the Call Shares (as
defined below) by CIG from the Xxxxxx Stockholders pursuant to the Call
Agreement (the “FCC
Application”);
WHEREAS,
CIG has made, and the Company and Xx. Xxxxxx intend to make promptly following
the execution of this Agreement, all governmental filings required to be made
to consummate the Transaction under the HSR Act (as defined
below);
WHEREAS,
concurrently with the assignment and exercise of the Call Right, CIG shall make
a cash tender offer (the “Tender
Offer”)
to acquire any and all of the issued and outstanding shares of Class A Common
Stock, par value $0.001 per share, of the Company (“Class
A Common Stock”)
at the Offer Price (as defined below), net to the seller in cash, subject to
the terms and conditions of this Agreement and the Tender Offer, and shall
invest $100,000,000 in a new series of convertible subordinated debt of the
Company, and in consideration thereof, among other consideration, the Company
shall issue to CIG a warrant to purchase up to 100,000,000
1
shares
of Class A Common Stock at a price of $0.75 per share, in each case on the
terms and subject to the conditions set forth in this Agreement and the other
Transaction Agreement;
WHEREAS,
as soon as reasonably practicable following the commencement of the Tender
Offer, the Company intends to make an offer (the “Exchange
Offer”)
to exchange any and all outstanding shares of Senior Preferred Stock (as
defined below) for an aggregate principal amount of up to $465,304,353 of
Series A Convertible Subordinated Debt (as defined below) and an aggregate
stated liquidation preference of up to $73,627,470 of Series A-1 Convertible
Preferred (as defined below) or up to an aggregate principal amount of
$20,819,068 of Series B Convertible Preferred (as defined below), subject to
the terms and conditions of the Exchange Offer set forth in this Agreement;
WHEREAS,
the Board (as defined below) has approved the making of the Tender Offer by CIG
and the making of the Exchange Offer by the Company and resolved to recommend
that holders of shares of Class A Common Stock tender their shares pursuant to
the Tender Offer; and
WHEREAS,
also in furtherance of the Transaction, the Board, the manager of CIG, and the
boards of directors of the NBCU Entities have each approved the Transaction,
this Agreement and the other Transaction Agreements to which it is a party and
the Board has approved the Reverse Stock Split (as defined below) in accordance
with the DGCL and upon the terms and subject to the conditions set forth
herein.
NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01 Definitions (a) For
purposes of this Agreement:
“9¾%
Preferred”
means the 9¾% Series A Convertible Preferred Stock, par value $0.001 per
share, of the Company, with a liquidation preference of $10,000 per share, as
it may be modified or amended from time to time.
“14¼%
Preferred”
means the 13¼% Cumulative Junior Exchangeable Preferred Stock, par value
$0.001 per share (currently accruing dividends at the rate of 14¼%), of
the Company, with a liquidation preference of $10,000 per share, as it may be
modified or amended from time to time.
“Action”
means any claim, demand, action, suit, arbitration, proceeding or investigation
by or before any Governmental Authority.
“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. As used in this definition, “control” (including its
correlative meanings, “controlled by” and “under common control
with”)
2
means
the possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or
otherwise).
“Board”
means the Board of Directors of the Company as constituted from time to
time.
“Business
Day”
means any day, other than a Saturday, Sunday or a day on which commercial banks
in New York, New York are authorized or obligated by Law to close.
“Call
Agreement”
means the Call Agreement, dated as of November 7, 2005, between the Xxxxxx
Stockholders and NBC Palm Beach II, as such agreement may be amended from time
to time.
“Call
Closing”
has the meaning set forth in Section 2.3 of the Call Agreement.
“Call
Right”
has the meaning set forth in Section 2.1 of the Call Agreement.
“Call
Right Transfer Agreement”
means the Call Right Transfer Agreement, dated as of February 22, 2007, among
CIG, NBCU and NBC Palm Beach II, as such agreement may be amended from time to
time.
“Call
Shares”
means the 8,311,639 shares of Class B Common Stock and 15,455,062 shares of
Class A Common Stock owned by the Xxxxxx Stockholders, and any shares of common
stock of the Company or other securities that may be received by the Xxxxxx
Stockholders with respect to such Call Shares (x) as a result of a stock
dividend or distribution on, stock split or reverse stock split of, or similar
event with respect to Call Shares or (y) in a merger, consolidation,
combination, reclassification, recapitalization or similar transaction
involving the Company.
“Class
B Common Stock”
means the Class B Common Stock, par value $0.001 per share, of the
Company.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $0.001 per share, of the
Company.
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $0.001 per share, of the
Company.
“CLP”
means Citadel Limited Partnership, a Delaware limited partnership.
“Code”
means the United States Internal Revenue Code of 1986, as amended.
“Commencement
Date”
means May 4, 2007.
“Common
Stock”
means, collectively, Class A Common Stock, Class B Common Stock, Class C Common
Stock and Class D Common Stock.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984, the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996) and all rules and regulations of the FCC, in each case as from time to
time in effect.
“Company
Benefit Plan”
means each “employee benefit plan” within the meaning of Section 3(3)
of ERISA, other than Multiemployer Plans, and each other stock purchase, stock
option, restricted stock, severance, retention, employment, consulting,
change-of-control, collective bargaining, bonus, incentive, deferred
compensation, employee loan, fringe benefit and other benefit plan, agreement,
program, policy, commitment or other arrangement, whether or not subject to
ERISA (including any related funding mechanism now in effect or required in the
future), whether formal or informal, oral or written, in each case under which
any past or present director, officer, employee, consultant or independent
contractor of the Company or any of its Subsidiaries has any present or future
right to benefits.
“Company
Disclosure Letter”
means the disclosure letter delivered to CIG and the NBCU Entities by the
Company on the date hereof.
“Company
Intellectual Property”
means all Intellectual Property owned, used, or held for use by the
Company.
“Company
Material Contracts”
means Contracts that (A) would be required to be filed by the Company with the
SEC pursuant to Item 601(b) (1), (2), (4) or (10) of Regulation S-K or
described under Item 1.01 of Form 8-K under the Exchange Act, or filed with the
FCC pursuant to section 76.3613 of the rules and regulations of the FCC; (B)
provide for the rights of the partners under material partnerships or joint
ventures, or that provide for material acquisitions or dispositions; (C)
contain covenants of the Company or any of its Subsidiaries purporting to limit
any line of business, industry or geographical area in which the Company or its
Subsidiaries may operate or granting material exclusive rights to the
counterparty thereto; (D) individually or in the aggregate with other
Contracts, would or would reasonably be expected to prevent, materially delay
or materially impede the Company’s ability to timely consummate the
Transaction; or (E) are indentures, mortgages, loans, guarantees or credit
agreements of any kind under which the Company or any of its Subsidiaries has
outstanding indebtedness or an outstanding note, bond, indenture or other
evidence of indebtedness for borrowed money or otherwise or any guaranteed
indebtedness for money borrowed by others, in each case, for or guaranteeing an
amount in excess of $5,000,000, other than any such indebtedness between the
Company (whether as creditor or debtor) and any of its wholly-owned
Subsidiaries, or between any of the Company’s wholly-owned
Subsidiaries.
“Company
Stations”
means, collectively, each full power television station owned and operated by
the Company or any Subsidiary.
“Company
Stock Option”
means each outstanding option to purchase shares of Class A Common Stock
granted under the Company Stock Plans.
“Company
Stock Plan”
means the Company’s Stock Incentive Plan, 1996 Stock Incentive Plan, 1998
Stock Incentive Plan, 2006 Stock Incentive Plan and other stock-based
compensation plans approved by the Board, each as amended through the date
hereof.
“Competing
Transaction”
means any of the following (other than the Transaction): (i) any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or other similar transaction involving the Company or
any Subsidiary; (ii) any sale, lease, exchange, transfer or other disposition
of all or a substantial part of the assets of the Company or any Subsidiary;
(iii) any sale, exchange, transfer or other disposition of 15% or more of any
class of equity securities of the Company or of any Subsidiary; (iv) any tender
offer or exchange offer that, if consummated, would result in any Person
beneficially owning (as defined in subsection 13(d)(3) of the Exchange Act) 15%
or more of any class of equity securities of the Company or of any Subsidiary;
(v) any solicitation in opposition to approval and adoption of the Transaction
Agreements to which the Company is a party and the transactions contemplated
thereby by the Company’s stockholders; or (vi) any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Transaction.
“Contract”
means, with respect to any Person, any agreement, undertaking, contract,
understanding, obligation, indenture, instrument, lease, arrangement or
commitment to which such Person is subject or by which any of its assets or
properties is bound that is legally binding.
“Convertible
Securities”
means, collectively, Series A-1 Convertible Preferred, Series A-3 Convertible
Preferred, Series B Convertible Preferred, Series C Convertible Preferred,
Series D Convertible Preferred, Series E Convertible Preferred and the
Convertible Subordinated Debt and, to the extent outstanding following the
Exchange Offer Closing or the closing of the Contingent Exchange, NBCU Series B
Preferred and 9¾% Preferred.
“Convertible
Subordinated Debt”
means, collectively, Series A Convertible Subordinated Debt and Series B
Convertible Subordinated Debt.
“DGCL”
means the General Corporation Law of the State of Delaware, as
amended.
“DMA”
means a designated market area as determined by Xxxxxxx Media Research or such
successor designation of television markets that may in the future be
recognized by the FCC for determining television markets.
“D&O
Insurance Policies”
means a policy or policies of officers’ and directors’ liability
insurance currently maintained by the Company for acts and omissions of the
Company’s present or prior directors or officers occurring prior to the
Call Closing.
“ERISA”
means the Employee Retirement Income Security Act of 1974 (and any sections of
the Code), as amended, and all rules and regulations promulgated and rulings
issued thereunder.
“Escrow
Agent”
means The Bank of New York.
“Escrow
Agreement”
means the Escrow Agreement, dated as of November 7, 2005, among the Xxxxxx
Stockholders, NBCU and the Escrow Agent, as such agreement may be amended from
time to time.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Exchange
Offer Closing”
means the closing of the Exchange Offer by the Company in accordance with
Section 5.01(b) whereby the Company accepts for exchange shares of Senior
Preferred Stock validly tendered pursuant to the Exchange Offer and not validly
withdrawn.
“Exchange
Offer Expiration”
means the termination of the Exchange Offer whereby no shares of Senior
Preferred Stock validly tendered pursuant to the Exchange Offer and not validly
withdrawn are accepted for exchange by the Company.
“Existing
Preferred Stock”
means, collectively, 14¼% Preferred, 9¾% Preferred and NBCU
Series B Preferred.
“FCC”
means the Federal Communications Commission or any successor governmental
authority performing functions similar to those performed by the Federal
Communications Commission on the date hereof.
“FCC
Approval”
means the grant of the FCC Application by the FCC in a Final Order approving
the acquisition of the Call Shares by CIG from the Xxxxxx Stockholders.
“FCC
Licenses”
means the principal licenses issued by the FCC for each of the Company
Stations.
“Final
Order”
means an action or actions by the FCC that have not been reversed, stayed,
enjoined, set aside, annulled, or suspended, and with respect to which no
requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
“GAAP”
means United States generally accepted accounting principles as in effect from
time to time.
“Xxxxxxx
Noncompete Agreement”
means the Xxxxxxx Noncompetition Agreement, dated November 7, 2005, between
NBCU and Xx. Xxxxxxx, as such agreement may be amended from time to
time.
“Governmental
Authority”
means any federal, national, supranational, state, provincial, local or other
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.
“Governmental
Order”
means any order, writ, judgment, injunction, decree, stipulation, determination
or award issued or entered by or with any Governmental Authority.
“HSR
Act”
means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
“Ineligible
Shares”
means, collectively, (i) shares of the Class A Common Stock owned by the Xxxxxx
Stockholders and (ii) shares of Class A Common Stock issued after November 7,
2005 upon the exercise, grant or vesting of any Stock-Based Compensation Awards
(as defined in the Stockholder Agreement) or upon conversion or exchange of
convertible or exchangeable securities of the Company, unless such shares are
issued pursuant to any contractual obligations of the Company as existing
immediately prior to November 7, 2005.
“Intellectual
Property”
means trademarks, service marks, trade dress, trade names, and domain names,
including all goodwill associated therewith; copyrights; trade secrets and
confidential business information; patents and patent applications, together
with all reissuances, continuations, continuations-in-part, divisions,
revisions, extensions and reexaminations thereof; computer software (including
data and related documentation); rights of privacy and publicity; and licenses,
sublicenses, agreements, or permissions related to any of the
foregoing.
“Investment
Agreement”
means the Amended and Restated Investment Agreement, dated as of November 7,
2005, between the Company and NBCU, as such agreement may be amended from time
to time.
“Knowledge
of the Company”
means the actual current knowledge of the Persons identified on Section 1.01 of
the Company Disclosure Letter.
“Law”
means any provision of any (i) federal, state, provincial, local, foreign or
similar statute, law, ordinance, regulation, rule, code, administrative
interpretation, regulation or other requirement of any Governmental Authority
or (ii) Governmental Order.
“Lien”
means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement or any financing lease having substantially the same effect as any of
the foregoing).
“Losses”
means any and all losses, damages, liabilities, obligations, costs, demands,
claims, actions, causes of action or expenses (including reasonable
attorneys’ fees and disbursements and whether or not arising out of a
third party claim).
“Material
Adverse Effect”
means any event, change, circumstance or effect that, individually or when
taken together with all other such events, changes, circumstances or effects,
is or is reasonably expected to be materially adverse to the business, assets,
liabilities, results of operations or financial condition of the Company and
its Subsidiaries, taken as a whole; provided,
however, that
none of the following shall be considered in determining whether there has been
a Material Adverse Effect: (i) any change in conditions in the United States,
foreign or global economy or capital or financial markets generally, or any
change resulting from acts of war, terrorism or natural disasters, except to
the extent the Company and its Subsidiaries, taken as a whole, are adversely
affected in a disproportionate manner as compared to other companies in the
television
broadcast industry, (ii) any event, change, circumstance or effect affecting
the television broadcasting industry generally, except to the extent the
Company and its Subsidiaries, taken as a whole, are adversely affected in a
substantially disproportionate manner as compared to other companies in the
television broadcast industry, (iii) the impact related to the announcement or
pendency of the Transaction contemplated by the Transaction Agreements,
including such matters as are set forth in Section 9.01 of the Company
Disclosure Schedule, (iv) the effect of any action taken by the Company as
required by the Transaction Agreements to which the Company is a party, (v) the
effect of changes in any applicable accounting regulations or principles or the
interpretations thereof, or (vi) the effect of any action taken or omitted to
be taken by the Company at the request or with the prior consent of CIG and the
NBCU Entities.
“Xx.
Xxxxxxx”
means Xxx Xxxxxxx Xxxxxxx.
“Xx.
Xxxxxx”
means Xxxxxx X. Xxxxxx.
“Xx.
Xxxxxxx”
means Xxxx X. Xxxxxxx.
“Multiemployer
Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA.
“National
Coverage”
means, with respect to any television network, the percentage of national
television households that receive such network’s broadcast as listed in
the Xxxxxxx Television Index or such successor measure of coverage equivalent
thereto generally adopted by the television industry.
“NBCU
Option I”
means the Call Agreement between CIG and NBC Palm Beach II, in the form
attached hereto as Exhibit C, pursuant to which CIG grants NBC Palm Beach II an
irrevocable right to purchase the Call Shares upon the terms and conditions set
forth therein.
“NBCU
Option II”
means the Call Agreement between the Company and NBC Palm Beach I, in the form
attached hereto as Exhibit D, pursuant to which the Company grants NBC Palm
Beach I an irrevocable right to purchase 26,688,361 shares of Class B Common
Stock upon the terms and conditions set forth therein.
“NBCU
Series B Preferred”
means the 11% Series B Convertible Exchangeable Preferred Stock, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, as it may be modified or amended from time to time.
“New
Preferred Stock”
means, collectively, Series A-1 Convertible Preferred, Series A-2 Preferred
Stock, Series A-3 Convertible Preferred, Series B Convertible Preferred, Series
C Preferred Stock, Series C Convertible Preferred, Series D Convertible
Preferred, Series E Convertible Preferred and Series F Non-Convertible
Preferred.
“New
Preferred Stock Certificates of Designation”
means, collectively, the Series A-1 Convertible Preferred Certificate of
Designation, the Series A-2 Preferred Stock Certificate of Designation, the
Series A-3 Convertible Preferred Certificate of Designation, the Series B
Convertible
Preferred Certificate of Designation, the Series C Preferred Stock Certificates
of Designation, the Series C Convertible Preferred Certificate of Designation,
the Series D Convertible Preferred Certificates of Designation, the Series E
Convertible Preferred Certificates of Designation and the Series F
Non-Convertible Preferred Certificate of Designation.
“New
Stockholders’ Agreement”
means the Stockholders’ Agreement, in the form attached hereto as Exhibit
P, among the Company, NBCU and CIG.
“Noncompete
Agreements”
means, collectively, the Xxxxxx Noncompete Agreement and the Xxxxxxx Noncompete
Agreement.
“Offer
Price”
means $1.46 per share of Class A Common Stock to be offered in the Tender
Offer, which is $1.25 per share of Class A Common Stock, increasing at a rate
per annum equal to 10% from October 1, 2005 through the date of the
commencement of the Tender Offer, as such price may be equitably adjusted to
reflect (i) any stock dividend or distribution on, stock split or reverse stock
split of, or similar event with respect to Common Stock, (ii) any merger,
consolidation, combination, reclassification, recapitalization or similar
transaction involving Common Stock and (iii) any issuance of Common Stock for
consideration less than fair market value on the date of issue (other than
shares issued pursuant to Stock-Based Compensation Awards (as defined in the
Stockholder Agreement) or upon conversion or exchange of convertible or
exchangeable securities the conversion or exchange price of which was not less
than the fair market value on the date of issue) or, except as set forth in the
2005 Agreements, any repurchase or redemption of Common Stock by the Company at
a price greater than fair market value on the date of repurchase or
redemption.
“Xxxxxx
Noncompete Agreement”
means the Xxxxxx Consulting and Noncompetition Agreement, dated November 7,
2005, among the Company, NBCU and Xx. Xxxxxx, as such agreement may be amended
from time to time.
“Permitted
Liens”
means (i) mechanics’, carriers’, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, (ii) Liens arising
under original purchase price conditioned sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent
with past practice, (iii) statutory Liens for Taxes not yet due and payable,
(iv) Liens securing the indebtedness included as “long-term debt” on
the financial statements of the Company or securing any indebtedness that
replaces or refinances any of such indebtedness and (v) other encumbrances or
restrictions or imperfections of title which do not materially impair the
continued use and operation of the assets to which they relate.
“Person”
means an individual, corporation, unincorporated association, partnership,
group (as defined in subsection 13(d)(3) of the Exchange Act), trust, joint
stock company, joint venture, business trust or unincorporated organization,
limited liability company, Governmental Authority or any other entity of
whatever nature.
“Put/Call
Agreement”
means the Put/Call Agreement between NBCU and CIG, in the form attached hereto
as Exhibit V.
“Registration
Rights Agreement”
means the Registration Rights Agreement, dated as of September 15, 1999,
between the Company and NBCU, as amended from time to time.
“Registration
Rights Agreement for New Securities”
means the Registration Rights Agreement among the Company, NBCU and CIG, in the
form attached hereto as Exhibit E, pursuant to which the registration rights of
holders of Series B Convertible Subordinated Debt, Series A-3 Convertible
Preferred, Series C Convertible Preferred, Series D Convertible Preferred and
Series E Convertible Preferred are set forth.
“Registration
Rights Agreement for Series B Convertible Subordinated Debt”
means the Registration Rights Agreement among the Company, NBCU and CIG, in the
form attached hereto as Exhibit X, pursuant to which certain registration
rights of holders of Series B Convertible Subordinated Debt are set
forth.
“Same
Market Station”
means any Company Station (i) in which any Person that holds not less than 10%
of the outstanding voting power of the Company, on a fully-diluted basis, would
be permitted to have an attributable interest under the ownership rules adopted
by the FCC, as such rules may be amended from time to time, and (ii) which,
even if such Person were deemed to have an attributable interest therein, would
not increase such Person’s national broadcast coverage as calculated under
the FCC’s national ownership rules because such Person has an attributable
interest in a television station in the same DMA.
“SEC”
means the Securities and Exchange Commission.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Debt”
means, collectively, the Company’s (i) $325,000,000 aggregate principal
amount of First Priority Term Loan due 2012, (ii) $400,000,000 aggregate
principal amount of Floating Rate First Priority Senior Secured Notes due 2012
and (iii) $405,000,000 aggregate principal amount of Floating Rate Second
Priority Senior Secured Notes due 2013.
“Senior
Preferred Stock”
means, collectively, 14¼% Preferred and 9¾%
Preferred.
“Series
A Convertible Subordinated Debt”
means 11% mandatorily convertible subordinated debt due 2013 to be issued by
the Company to holders of 14¼% Preferred and 9¾% Preferred in the
Exchange Offer under the Series A Convertible Subordinated Debt Indenture
pursuant to Section 5.01.
“Series
A Convertible Subordinated Debt Indenture”
means the indenture, in the form of Exhibit A attached hereto, among the
Company, a trustee selected by the Company and reasonably satisfactory to CIG
and the NBCU Entities, as trustee, and subsidiary guarantors party thereto
which govern Series A Convertible Subordinated Debt.
“Series
A-1 Convertible Preferred”
means 12% Series A Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation
preference
of $10,000 per share, to be issued by the Company under the Series A-1
Convertible Preferred Certificate of Designation pursuant to this
Agreement.
“Series
A-1 Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series A-1 Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit F attached hereto.
“Series
A-2 Preferred Stock”
means 8% Series A-2 Preferred Stock due 2013, par value $0.001 per share, of
the Company, with a liquidation preference of $10,000 per share, to be issued
by the Company under the Series A-2 Preferred Stock Certificate of Designation
pursuant to this Agreement.
“Series
A-2 Preferred Stock Certificate of Designation”
means the Certificate of Designation of Series A-2 Preferred Stock to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit G attached hereto.
“Series
A-3 Convertible Preferred”
means 12% Series A-3 Mandatorily Convertible Preferred Stock due 2013, par
value $0.001 per share, of the Company, with a liquidation preference of
$10,000 per share, to be issued by the Company under the Series A-3 Convertible
Preferred Certificate of Designation pursuant to this Agreement.
“Series
A-3 Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series A-3 Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit H attached hereto.
“Series
B Convertible Preferred”
means 12% Series B Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, to be issued by the Company under the Series B Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
B Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series B Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit I attached hereto.
“Series
B Convertible Subordinated Debt”
means 11% mandatorily convertible subordinated debt due 2013 to be issued by
the Company to (i) CIG and NBC Palm Beach I in the Contingent Exchange under
the Series B Convertible Subordinated Debt Indenture pursuant to Section 5.04
and (ii) to CIG pursuant to Section 2.06.
“Series
B Convertible Subordinated Debt Indenture”
means the indenture, in the form of Exhibit B attached hereto, among the
Company, The Bank of New York Trust Company, N.A., as trustee, and subsidiary
guarantors party thereto which govern Series B Convertible Subordinated
Debt.
“Series
C Convertible Preferred”
means 8% Series C Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, to be issued by the Company under the Series C Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
C Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series C Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date which shall have become effective and shall be in full force
and effect upon filing with the Secretary of State of the State of Delaware, in
the form of Exhibit J-1 attached hereto, in the event the Exchange Offer is
more than 50% successful, and in the form of Exhibit J-2 attached hereto, in
the event the Exchange Offer is 50% or less successful.
“Series
C Preferred Stock”
means 8% Series C Preferred Stock due 2013, par value $0.001 per share, of the
Company, with a liquidation preference of $10,000 per share, to be issued by
the Company under the Series C Preferred Stock Certificate of Designation
pursuant to this Agreement.
“Series
C Preferred Stock Certificate of Designation”
means the Certificate of Designation of Series C Preferred Stock to be executed
and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit K attached hereto.
“Series
D Convertible Preferred”
means 8% Series D Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, to be issued by the Company under the Series D Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
D Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series D Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit L attached hereto.
“Series
E Convertible Preferred”
means Series E-1 Convertible Preferred and Series E-2 Convertible Preferred.
“Series
E Convertible Preferred Certificates of Designation”
means the Series E-1 Convertible Preferred Certificate of Designation and the
Series E-2 Convertible Preferred Certificate of Designation.
“Series
E-1 Convertible Preferred”
means Series E-1 Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, to be issued by the Company under the Series E-1 Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
E-1 Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series E-1 Convertible Preferred to be
executed and filed with the Secretary of
State of
the State of Delaware on the Commencement Date, in the form of Exhibit M
attached hereto.
“Series
E-2 Convertible Preferred,”
means Series E-2 Mandatorily Convertible Preferred Stock due 2013, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, to be issued by the Company under the Series E-2 Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
E-2 Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series E-2 Convertible Preferred to be
executed and filed with the Secretary of State of the State of Delaware on the
Commencement Date, in the form of Exhibit N attached hereto.
“Series
F Non-Convertible Preferred”
means 8% Series F Non-Convertible Preferred Stock due 2013, par value $0.001
per share, of the Company, with a liquidation preference of $10,000 per share,
to be issued by the Company under the Series F Non-Convertible Preferred
Certificate of Designation pursuant to this Agreement.
“Series
F Non-Convertible Preferred Certificate of Designation”
means the Certificate of Designation of Series F Non-Convertible Preferred to
be executed and filed with the Secretary of State of the State of Delaware on
the Commencement Date, in the form of Exhibit O attached hereto.
“stated
liquidation preference”
means, with respect to any equity security, the stated liquidation preference
of such security on a per share basis without including any accrued and unpaid
dividends.
“Stockholder
Agreement”
means the Amended and Restated Stockholder Agreement, dated as of November 7,
2005, among the Company, the Xxxxxx Stockholders and NBCU, as such agreement
may be amended from time to time.
“Subsequent
Expiration Date”
means, in the event there is a Subsequent Period, the expiration date of such
Subsequent Period.
“Subsidiary”
means, with respect to the Company, a corporation, partnership, limited
liability company, joint venture or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, directly or indirectly, through one or more intermediaries (including,
without limitation, other Subsidiaries), or both, by the Company.
“Superior
Proposal”
means an unsolicited written bona fide offer made by a third party with respect
to a Competing Transaction (with all percentages contained in the definition of
“Competing Transaction” increased to 50% for purposes of this
definition), in each case on terms (including conditions to consummation of the
contemplated transaction) that the Board determines,
in its
good faith judgment (after consultation with its financial advisor), to be more
favorable to the Company than the Transaction; provided,
however, that
any such offer shall not be deemed to be a “Superior Proposal” if (i)
any financing required to consummate the transaction contemplated by such offer
is not committed and is not likely, in the good faith judgment of the Board
(after consultation with its financial advisor), to be obtained by such third
party on a basis the Board deems timely, (ii) the transaction contemplated by
such offer is not likely, in the good faith judgment of the Board (after
consultation with its financial and legal advisors), to be consummated in a
timely manner or (iii) such offer is received by the Board after the
Commencement Date and contains a condition precedent that the Call Right shall
not have been exercised.
“Tax”
means, with respect to any Person, all taxes, assessments and other
governmental charges, duties, impositions and liabilities (including any tax on
or based upon net income, gross income, or income as specially defined, or
earnings, profits, or selected items of income, earnings or profits) and all
alternative or add-on minimum tax, profits or excess profits tax, franchise
tax, gross income, gross receipts tax, license, employment related tax, real or
personal property tax or ad valorem tax, sales, social service, goods and
services or use tax, customs, excise tax, stamp tax, land transfer tax, any
withholding or backup withholding tax, value added tax, customs duties, capital
stock, severance tax, prohibited transaction tax, premiums tax, environmental,
windfall profits, occupation tax, capital tax, together with any interest and
any penalty, additions to tax or additional amount imposed by any Governmental
Authority on such person and any obligations under any legally binding
agreements or arrangements with any other person with respect to such amounts
and including any liability for the aforementioned taxes of a predecessor
entity.
“Tax
Return”
means any federal, state, local, foreign and other return, declaration, report
or similar statement required to be filed with a Governmental Authority with
respect to any Taxes (and any attached schedules), including any information
return, claim for refund, declaration of estimated Tax, and any amendment to
any of the foregoing.
“Transaction
Agreements”
means, collectively, this Agreement, the Registration Rights Agreement for New
Securities, the Registration Rights Agreement for Series B Convertible
Subordinated Debt, the Series A Convertible Subordinated Debt Indenture, the
Series B Convertible Subordinated Debt Indenture, NBCU Option I, NBCU Option
II, the New Preferred Stock Certificates of Designation, the New
Stockholders’ Agreement, the Put/Call Agreement and the Warrant.
“Voting
Stock”
means shares of the capital stock and any other securities of the Company
having the ordinary power to vote in the election of directors of the
Company.
“Warrant”
means the Class A Common Stock Purchase Warrant, in the form attached hereto as
Exhibit U, to be issued by the Company to CIG providing for the purchase of up
to 100,000,000 shares of Class A Common Stock at an initial exercise price of
$0.75 per share.
SECTION
1.02 Other
Defined Terms. The
following terms have the meanings set forth in the Sections set forth
below:
|
Definition
|
|
Section
|
|
“2005
Agreements” |
|
Recitals
|
|
“2005
SEC Filings”
|
|
8.02
|
|
“2006
Balance Sheet”
|
|
6.06(c)
|
|
“Adjusted
Company Restricted Stock”
|
|
4.02(c)
|
|
“Adjusted
Company Stock Option”
|
|
4.02(b)
|
|
“Agreement”
|
|
Preamble
|
|
“Assignment
Agreement”
|
|
2.02(a)
|
|
“Blue
Sky Laws”
|
|
6.04(b)
|
|
“Certificate
Amendment”
|
|
6.02(e)
|
|
“Certificates”
|
|
4.01(b)
|
|
“CIG”
|
|
Preamble
|
|
“Class
A Common Stock”
|
|
Recitals
|
|
“Company”
|
|
Preamble
|
|
“Company
Joint Venture”
|
|
6.02(b)
|
|
“Company
Stock Awards”
|
|
6.02(a)
|
|
“Compensation
Actions”
|
|
6.07(b)
|
|
“Confidentiality
Agreements”
|
|
10.04(b)
|
|
“Contingent
Exchange”
|
|
5.04(b)
|
|
“Conversion
Shares”
|
|
6.02(e)
|
|
“DTV”
|
|
6.05(e)
|
|
“Effective
Time”
|
|
4.01(a)
|
|
“Equity
Commitment Letter”
|
|
7.06
|
|
“Exchange
Offer”
|
|
Recitals
|
|
“Exchange
Offer Conditions”
|
|
5.01(b)
|
|
“Exchange
Offer Documents”
|
|
5.01(d)
|
|
“Exchange
Offer Initial Expiration Date”
|
|
5.01(b)
|
|
“Exchange
Offer Schedule TO”
|
|
5.01(d)
|
|
“FCC
Application”
|
|
Recitals
|
|
“Indemnified
D&Os”
|
|
10.06(a)
|
|
“Initial
Stockholders’ Meeting”
|
|
10.01(a)
|
|
“IRS”
|
|
6.09(b)
|
|
“Minority
Exchange” |
|
5.01(a)
|
|
“NBC
Palm Beach I”
|
|
Preamble
|
|
“NBC
Palm Beach II”
|
|
Preamble
|
|
“NBCU”
|
|
Preamble
|
|
“NBCU
Entities”
|
|
Preamble
|
|
“Xxxxxx
Stockholders”
|
|
Recitals
|
|
“Paying
Agent”
|
|
4.03(a)
|
|
“Permits”
|
|
6.05(a)
|
|
“PBGC”
|
|
6.09(d)
|
|
“PMC”
|
|
Recitals
|
|
“Principal
Amount”
|
|
2.06(b)
|
|
“Proposed
Amendments”
|
|
5.02
|
|
Definition
|
|
Section
|
|
“Proxy
Statement”
|
|
10.02
|
|
“Restated
Certificate of Incorporation”
|
|
4.01(a)
|
|
“Reverse
Stock Split”
|
|
4.01(a)
|
|
“Reverse
Stock Split Ratio”
|
|
4.01(a)
|
|
“Schedule
14D-9”
|
|
3.01(b)
|
|
“SEC
Reports”
|
|
6.06(a)
|
|
“Stockholders’
Meeting”
|
|
10.01(b)
|
|
“Subsequent
Period”
|
|
3.01(a)
|
|
“Tender
Offer”
|
|
Recitals
|
|
“Tender
Offer Conditions”
|
|
3.01(a)
|
|
“Tender
Offer Documents”
|
|
3.01(b)
|
|
“Tender
Offer Expiration Date”
|
|
3.01(a)
|
|
“Tender
Offer Initial Expiration Date”
|
|
3.01(a)
|
|
“Tender
Offer Schedule TO”
|
|
3.01(b)
|
|
“Termination
Date”
|
|
12.02
|
|
“Transaction”
|
|
Recitals
|
|
“WARN”
|
|
6.10(b)
|
SECTION
1.03 Interpretation. In
each Transaction Agreement, unless otherwise specified or where the context
otherwise requires:
(a) the
Section and paragraph headings contained in such Transaction Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of such Transaction Agreement;
(b) a
reference to a Preamble is to the relevant Preamble to such Transaction
Agreement, to a Recital is to the relevant Recital to such Transaction
Agreement, to a Section is to the relevant Section of such Transaction
Agreement, to an Exhibit is to the relevant Exhibit to such Transaction
Agreement, a reference to a Schedule is to the relevant Schedule of such
Transaction Agreement and to an Annex is to the relevant Annex to such
Transaction Agreement;
(c) words
importing any gender shall include other genders;
(d) words
importing the singular only shall include the plural and vice
versa;
(e) the
words “include”, “includes” or “including” shall
be deemed to be followed by the words “without
limitation”;
(f) the
words “hereof”, “herein”, “hereunder” and
“herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to such Transaction Agreement as a whole and not
to any particular provision of such Transaction Agreement;
(g) references
to any Person shall include such Person’s successors and permitted
assigns;
(h) references
to currency, monetary values, dollars or “$” set forth herein shall
mean United States (U.S.) dollars; and
(i) unless
otherwise expressly provided therein, any Contract or Law defined or referred
to therein or in any Contract that is referred to therein means such Contract
or Law as from time to time amended, modified or supplemented, including (in
the case of a Contract) by waiver or consent and (in the case of a Law) by
succession of comparable successor Laws and any reference to a Contract shall
be deemed to include all attachments thereto and instruments incorporated
therein, and any reference in such Transaction Agreement to a Law shall be
deemed to include any rules and regulations promulgated
thereunder.
ARTICLE
II
THE
PRELIMINARY TRANSACTIONS
SECTION
2.01 Confirmation
from Senior Lenders, CIG and NBCU. (a)
If, within ten days after the Commencement Date, the Company has not entered
into arrangements reasonably satisfactory to CIG providing for a third party to
purchase any and all of the Company’s outstanding Senior Debt as to which
the holders thereof elect to exercise any right they may have to require the
Company to repurchase such Senior Debt as a result of the Transaction (it being
agreed and understood that the Company shall continue to use its reasonable
best efforts to enter into such arrangements notwithstanding the expiration of
such 10 day period), the Company shall use its reasonable best efforts to
obtain a waiver, in form and substance satisfactory to the parties hereto, from
the holders of at least a majority in aggregate principal amount of each class
of the Senior Debt outstanding at the time of waiver, of any such right. CIG
hereby irrevocably waives any right it or any controlled Affiliate might have
to require the Company to prepay all or any part of the Senior Debt it owns, as
set forth in Section 7.04, as a result of the Transaction.
(b) In the
event neither the third party purchase arrangements nor the waiver described in
Section 2.01(a) is obtained prior to the Exchange Offer Closing or the closing
of the Contingent Exchange, the parties hereto shall, prior to the Call
Closing, amend and restructure the Transaction such that the NBCU Entities
shall retain not less than $250,000,000 in aggregate liquidation preference of
NBCU Series B Preferred at all times until such waiver has been obtained by the
Company or is no longer required (it being agreed and understood that the
Company shall continue to use its reasonable best efforts to enter into the
arrangements described in Section 2.01(a) subsequent to the Exchange Offer
Closing or the closing of the Contingent Exchange), and the Company shall
cooperate fully with CIG and the NBCU Entities and use its reasonable best
efforts to effect any changes to the terms of securities of the Company to be
held and received by CIG and the NBCU Entities as a result of any such
amendments to the Transaction to the extent permitted by Law.
(c) Each of
the NBCU Entities and CIG (on its own behalf and on behalf of its controlled
Affiliates) hereby irrevocably waives any right it might have, as a result of
the
Transaction, to require the Company to purchase for cash all or any shares of
NBCU Series B Preferred or Senior Preferred Stock, as the case may be, it
owns.
SECTION
2.02 Call
Right Assignment. (a) On
the Commencement Date, (i) NBC Palm Beach II shall assign all of its rights and
obligations under the Call Agreement, and (ii) NBCU shall assign all of its
rights and obligations arising under the Escrow Agreement and the Noncompete
Agreements, in each case, to CIG by executing and delivering to CIG an
assignment and assumption agreement (the “Assignment
Agreement”)
in the form attached hereto as Exhibit Q.
(b) On the
Commencement Date, CIG shall assume and accept the assignment of (i) all of the
rights and obligations of NBC Palm Beach II under the Call Agreement, and (ii)
all of the rights and obligations of NBCU under the Escrow Agreement and the
Noncompete Agreements, in each case, by executing and delivering to NBC Palm
Beach II and NBCU the Assignment Agreement. CIG shall be bound by all of the
terms and conditions thereof in the same way as such terms obligate NBC Palm
Beach II and NBCU, as the case may be. CIG hereby agrees that, following the
Commencement Date, the NBCU Entities shall not have any obligations under the
Call Agreement, the Escrow Agreement and the Noncompete Agreements, other than
the indemnity obligations set forth in Section 10.21. In addition, CIG shall
grant to NBC Palm Beach II the NBCU Option I.
(c) On the
Commencement Date, concurrently with the assignment and assumption described in
Sections 2.02(a) and (b), CIG shall (i) exercise the Call Right by delivering a
notice in the form attached hereto as Exhibit R to the Xxxxxx Stockholders
pursuant to the terms and conditions of the Call Agreement and (ii) commence
the Tender Offer upon the terms and conditions set forth in Article III. Upon
exercise of the Call Right, CIG shall (x) together with the Xxxxxx
Stockholders, deliver a joint written notice to the Escrow Agent pursuant to
Section 4(a) of the Escrow Agreement authorizing the Escrow Agent to disburse
the amount of $3,863,765.50 to the Xxxxxx Stockholders or their designees in
the manner indicated in such joint notice and (y) pay Xx. Xxxxxxx $2,250,000 by
wire transfer of immediately available funds to such account or accounts
specified in writing by him prior to the Commencement Date.
(d) Effective
as of the date hereof, the Call Right Transfer Agreement is hereby terminated
and shall have no further force or effect.
SECTION
2.03 Delivery
of the Documents. On the
Commencement Date, each party hereto shall deliver to the other parties hereto,
the following duly executed Transaction Agreements to which it is a
party:
| |
(i) |
Series B
Convertible Subordinated Debt Indenture, |
| |
(iv) |
Registration
Rights Agreement for New Securities, |
| |
(v) |
New
Stockholders’ Agreement, |
| |
(vi) |
Assignment
Agreement, |
| |
(vii)
|
Put/Call
Agreement, |
| |
(ix)
|
Registration
Rights Agreement for Series B Convertible Subordinated Debt. |
SECTION
2.04 Filing
of New Preferred Stock. On or
prior to the Commencement Date, the Company shall file with the Secretary of
State of the State of Delaware the New Preferred Stock Certificates of
Designation (other than the Series C Convertible Preferred Certificate of
Designation which
will be filed prior to the Call Closing), which
shall become effective and be in full force and effect as of the Commencement
Date.
SECTION
2.05 Exchange
of NBCU Series B Preferred and Transfer of Series F Non-Convertible
Preferred.
(a) On the
Commencement Date, NBC Palm Beach I shall surrender and deliver to the Company
one or more certificates representing $210,000,000 aggregate stated liquidation
preference of NBCU Series B Preferred in exchange for $210,000,000 aggregate
stated liquidation preference of Series F Non-Convertible Preferred.
Immediately following receipt of the certificate or certificates representing
$210,000,000 aggregate stated liquidation preference of NBCU Series B Preferred
surrendered by NBC Palm Beach I, the Company shall cancel such certificate or
certificates and issue to NBC Palm Beach I a certificate representing
$210,000,000 aggregate stated liquidation preference of Series F
Non-Convertible Preferred.
(b) On the
Commencement Date, immediately following the receipt of the certificate
representing $210,000,000 aggregate stated liquidation preference of Series F
Non-Convertible Preferred as described in Section 2.05(a), NBC Palm Beach I
shall deliver to CIG such certificate duly endorsed in blank or accompanied by
a stock power duly executed in blank, with all required stock transfer tax
stamps affixed.
SECTION
2.06 Additional
Investment by CIG. (a) On
the Commencement Date, the Company shall issue and sell to CIG, and CIG shall
purchase from the Company, (subject to receipt by CIG of an opinion of counsel
to the Company in form and substance reasonably acceptable to the Company), a
note or notes representing an aggregate principal amount of $100,000,000 of the
Series B Convertible Subordinated Debt for an aggregate purchase price of
$100,000,000, which amount shall be paid by CIG to the Company in cash by wire
transfer of immediately available funds to an account or accounts specified in
writing by the Company.
(b) On the
date of the Exchange Offer Closing or the Exchange Offer Expiration, the
Company shall issue and sell to CIG, and CIG shall purchase from the Company,
(subject to receipt by CIG of an opinion of counsel to the Company in form and
substance reasonably acceptable to the Company), a note or notes representing
an aggregate principal amount of up to $15,000,000, or such lesser amount as
may be permitted under the Company’s
Senior
Debt of the Series B Convertible Subordinated Debt (the “Principal
Amount”)
for an aggregate purchase price equal to the Principal Amount which amount
shall be paid by CIG to the Company in cash by wire transfer of immediately
available funds to an account or accounts specified in writing by the Company;
provided, that
the Principal Amount shall not exceed the amount of expenses incurred by the
Company in connection with the Transaction as evidenced by invoices provided by
the Company to CIG.
SECTION
2.07 Selection
of Investment Banks. The
Company shall, within 10 days after the Commencement Date, provide CIG and NBCU
with a list of three internationally recognized investment banks, other than
the banks set forth in Sections 6.16 and 8.05.
ARTICLE
III
THE
TENDER OFFER
SECTION
3.01 The
Tender Offer.
(a) CIG
shall (i) commence (within the meaning of Rule 14d-2 under the Exchange Act)
the Tender Offer on the Commencement Date and (ii) cause the Tender Offer to
remain open until the twentieth Business Day after such commencement of the
Tender Offer or, as set forth in this Section 3.01(a), such other later date as
CIG, the NBCU Entities and the Company may agree (the “Tender
Offer Initial Expiration Date”
and together with any extension permitted hereunder, the “Tender
Offer Expiration Date”).
CIG shall be obligated to accept for payment and pay for shares of Class A
Common Stock validly tendered pursuant to the Tender Offer, subject only to the
satisfaction or waiver of each of the conditions set forth in Annex A (the
“Tender
Offer Conditions”).
CIG shall have the right to amend or make changes to the terms of the Tender
Offer; provided,
however, that, without the prior written consent of the Company, the NBCU
Entities and the Xxxxxx Stockholders, CIG shall not do any of the following:
(A) decrease the Offer Price or change the form of consideration to be paid in
the Tender Offer, (B) impose any conditions to the Tender Offer other than the
Tender Offer Conditions or (C) otherwise amend the Tender Offer in a manner
that would materially and adversely affect the holders of shares of Class A
Common Stock. Notwithstanding anything in this Agreement to the contrary, CIG
shall have the right to extend the Tender Offer beyond the Tender Offer Initial
Expiration Date for: (1) any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Tender Offer or (2) any period required by applicable Law, and upon the
Company’s request, CIG shall extend the Tender Offer beyond the Tender
Offer Initial Expiration Date for one period of up to 30 days for the purpose
of satisfying (x) the requirements under any rule, regulation, interpretation
or position of the SEC or the staff thereof applicable to the Tender Offer or
(y) the waiting period requirements applicable to the Tender Offer under the
HSR Act. CIG may extend the Tender Offer beyond the date on which shares of
Class A Common Stock are first accepted for payment as a “subsequent
offering period” (as such term is defined in Rule 14d-1(g)(8) under the
Exchange Act in accordance with Rule 14d-11 of the Exchange Act (a
“Subsequent
Period”);
provided, that
upon the request of the Company, CIG shall extend the Tender Offer for one such
Subsequent Period; provided,
further, that
no Subsequent Period shall be less than three Business Days nor more than 20
Business Days and that the total number of Subsequent Periods shall not exceed
one. To the extent CIG amends or makes changes to the terms and conditions of
the Tender Offer pursuant to this Section 3.01(a), the Company and the NBCU
Entities shall cooperate with CIG in making any filings or
amendments
required by the DGCL, the Exchange Act, the Securities Act or any other
applicable Law, or as otherwise may be necessary to effect such amendment or
change.
(b) As
promptly as reasonably practicable on the date the Tender Offer is commenced,
(A) CIG shall file with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments thereto, the “Tender
Offer Schedule TO”)
and (B) the Company shall file a Solicitation/Recommendation Statement on
Schedule 14D-9 (the “Schedule
14D-9”)
with respect to the Tender Offer, each of which will comply in all material
respects with the provisions of all applicable federal and state securities
laws, and will contain (including as an exhibit) or incorporate by reference an
offer to purchase relating to the Tender Offer and forms of the related letter
of transmittal (which documents, together with the Tender Offer Schedule TO and
any supplements or amendments thereto, are referred to collectively as the
“Tender
Offer Documents”).
The related letter of transmittal shall provide that, among other matters, in
order for shares of Class A Common Stock to be validly tendered, each holder of
shares of Class A Common Stock who tenders in the Tender Offer shall represent
and warrant to CIG that (x) such holder has full power and authority to tender,
sell, assign and transfer shares of Class A Common Stock in the Tender Offer,
(y) such holder is not prohibited or restricted from tendering shares of Class
A Common Stock in the Tender Offer by the terms of such shares or any Contract
and (z) when such shares are accepted for payment by CIG, CIG shall acquire
good, marketable and unencumbered title thereto, free and clear of all Liens.
(c) The
Schedule 14D-9 shall contain the recommendation of the Board described in
Section 3.02(a) which recommendation shall not be withdrawn or amended without
the prior written consent of CIG and NBCU; provided,
however, that
the Company’s recommendation may be withdrawn or modified by the Board
without the prior written consent of CIG and NBCU to the extent that the Board
determines in the good faith exercise of its reasonable business judgment,
after receiving the advice of outside counsel, that such recommendation would
no longer be consistent with its fiduciary duties to the Company’s
stockholders under applicable Law. On the date filed with the SEC and on the
date first disseminated to the Company’s stockholders, the Schedule 14D-9
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to written information supplied by CIG or the NBCU Entities
specifically for inclusion in the Schedule 14D-9. On the date filed with the
SEC and on the date first disseminated to the Company’s stockholders, the
Tender Offer Documents shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation shall be made by CIG with respect to written information
supplied by the Company or the NBCU Entities specifically for inclusion in the
Tender Offer Documents, and no representation shall be made by the Company with
respect to written information supplied by CIG or the NBCU Entities
specifically for inclusion in the Tender Offer Documents. CIG and the Company
shall take all steps necessary to cause the Tender Offer Documents to be filed
with the SEC and to be disseminated to the Company’s stockholders, in each
case as and to the extent required by applicable federal securities laws. Each
of CIG, the NBCU Entities and the Company shall
promptly
correct or supplement any information provided by it for use in the Tender
Offer Documents if and to the extent that it shall have become false and
misleading in any material respect, and CIG and the Company shall take all
steps necessary to cause the Tender Offer Documents as so corrected to be filed
with the SEC and to be disseminated to the Company’s stockholders, in each
case as and to the extent required by applicable federal securities laws. The
Company, the NBCU Entities and their respective counsel shall be given a
reasonable opportunity to review the initial Tender Offer Documents before they
are filed with the SEC. CIG, the NBCU Entities and their respective counsel
shall be given a reasonable opportunity to review the initial Schedule 14D-9
before it is filed with the SEC. In addition, CIG, on the one hand, and the
Company, on the other hand, agree to provide the other, the NBCU Entities and
their respective counsel with any comments or other communications that either
party or their counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 or the Tender Offer Documents promptly after
the receipt of such comments or other communications. The Company, the NBCU
Entities and their respective counsel shall be given a reasonable opportunity
to review and comment on any response of CIG to comments or other
communications from the SEC or any amended or revised Tender Offer Documents
before it is filed with the SEC. CIG, the NBCU Entities and their respective
counsel shall be given a reasonable opportunity to review any response of the
Company to comments or other communications from the SEC or any amended or
revised Schedule 14D-9 before it is filed with the SEC.
(d) Subject
to the terms of this Agreement, promptly after the expiration of the
“initial offering period” (as such term is defined in Rule
14d-1(g)(4) under the Exchange Act) and, if applicable, promptly in accordance
with Rule 14d-11 under the Exchange Act, during the Subsequent Period, CIG
shall accept for payment and pay for, in accordance with the terms of the
Tender Offer, all of the shares of Class A Common Stock validly tendered
pursuant to the Tender Offer and not validly withdrawn.
(e) If the
payment of the Offer Price is to be made to a Person other than the Person in
whose name the surrendered certificate formerly evidencing shares of Class A
Common Stock is registered on the stock transfer books of the Company, it shall
be a condition of payment that the certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the Person
requesting such payment shall have paid all transfer and other taxes required
by reason of the payment of the Offer Price to a Person other than the
registered holder of the certificate surrendered, or shall have established to
the satisfaction of CIG that such taxes either have been paid or are not
applicable.
SECTION
3.02 Company
Action.
(a) The
Company represents that the Board has (i) determined that the Tender Offer is
fair to, and in the best interests of, the holders of shares of Class A Common
Stock, (ii) authorized and approved this Agreement, the other Transaction
Agreements and the transactions contemplated hereby and thereby (such
authorization and approval having been made in accordance with the DGCL,
including, without limitation, Section 203 thereof) and (iii) resolved to
recommend, subject to Section 3.01(c), that the holders of shares of Class A
Common Stock accept the Tender Offer and tender their shares pursuant to the
Tender Offer. The Company hereby consents to the inclusion in the Tender Offer
Documents of the recommendation of the Board described in this Section 3.02(a),
and the Company shall not
withdraw
or modify such recommendation in any manner adverse to CIG, except as provided
in Section 3.01(c).
(b) In
connection with the Tender Offer, no later than three (3) Business Days prior
to the anticipated commencement of the Tender Offer, the Company shall furnish
CIG with (A) mailing labels, security position listings of shares of Class A
Common Stock held in stock depositories and any available listing or computer
file containing the names and addresses of the record holders of shares of
Class A Common Stock, each as of the most recent practicable date, and (B) such
additional information, including updated lists of stockholders, mailing labels
and lists of securities positions and such other information and assistance as
CIG or its agents may reasonably request in connection with communicating to
the record and beneficial holders of shares of Class A Common Stock with
respect to the Tender Offer. Subject to the requirements of applicable Law, and
except for such steps as are necessary to disseminate the Tender Offer
Documents and any other documents necessary to consummate the Tender Offer, CIG
shall, and shall cause its agents to, hold in confidence the information
contained in any such labels, listings and files, shall use such information
only in connection with the Tender Offer and, if the Tender Offer shall be
terminated, shall, upon request, promptly deliver to the Company all copies of
such information then in its possession or under its control.
ARTICLE
IV
THE
REVERSE STOCK SPLIT
SECTION
4.01 The
Reverse Stock Split.
(a) Subject
to the conditions set forth in Section 11.01, promptly following the Call
Closing, and subject to receipt of the requisite stockholder approval, the
Company shall combine its outstanding shares of Common Stock into a lesser
number of shares (the “Reverse
Stock Split”)
and shall file with the Secretary of State of the State of Delaware (the time
of such filing, the “Effective
Time”)
an amended and restated Certificate of Incorporation of the Company (the
“Restated
Certificate of Incorporation”),
in the form attached hereto as Exhibit S, whereby, without any further action
on the part of the Company, CIG or any stockholder of the Company:
(i) each
share of Class A Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and become such fraction (the
“Reverse
Stock Split Ratio”)
of a fully paid and nonassessable share of Class A Common Stock as shall be
determined by the Company, CIG and the NBCU Entities, such that all holders of
Class A Common Stock other than CIG would be eligible to receive, in respect of
all shares held by each such holder, less than a whole share of Class A Common
Stock upon effectuation of the Reverse Stock Split; provided, that
if CIG does not own the greatest number of shares of Class A Common Stock
immediately prior to the Reverse Stock Split, the Reverse Stock Split Ratio
shall be such that all holders of Class A Common Stock would be entitled to
receive, in respect of all shares held by each such holder, less than a whole
share of Class A Common Stock upon effectuation of the Reverse Stock Split;
(ii) each
share of Class A Common Stock held as treasury stock or held or owned by the
Company or any Subsidiary immediately prior to the Effective Time shall be
cancelled; and
(iii) each
share of Class B Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and become a fractional number of fully
paid and nonassessable shares of Class B Common Stock at the Reverse Stock
Split Ratio.
(b) No
fractional shares of Class A Common Stock shall be issued in connection with
the Reverse Stock Split, and no certificates or scrip for any such fractional
shares shall be issued. Any holder of record of Class A Common Stock who would
otherwise be entitled to receive less than a whole share of Class A Common
Stock (after aggregating all fractional shares of Class A Common Stock issuable
to such holder) shall, in lieu of such fraction of a share and upon surrender
of such holder’s certificate representing such fractional shares of Class
A Common Stock (the “Certificate”)
as set forth in Section 4.03, be paid in cash the dollar amount (rounded to the
nearest whole cent), without interest, determined by multiplying the number of
shares represented by such Certificate prior to the Reverse Stock Split by the
Offer Price. Immediately prior to the Reverse Stock Split, CIG shall make a
capital contribution to the Company in the amount necessary to make any
payments required to be made to security holders of the Company pursuant to
this Article IV.
(c) Fractional
shares of Class B Common Stock as a result of the Reverse Stock Split shall
remain outstanding, and certificates or scrip for such fractional shares of
Class B Common Stock shall be issued.
SECTION
4.02 Company
Stock Options.
(a)
Effective as of immediately following the Effective Time, the Company shall
take all necessary actions to adjust the Company Stock Awards outstanding as of
the Effective Time in accordance with the terms of the Company Stock Plans so
as to give effect to the Reverse Stock Split.
(b) In the
event that, following the adjustment to the Company Stock Options (each such
Company Stock Option, as so adjusted, an “Adjusted
Company Stock Option”)
made pursuant to Section 4.02(a), the number of shares of Common Stock subject
to any Adjusted Company Stock Option is less than one, then, except as
otherwise agreed by the Company and any holder of any Adjusted Company Stock
Option, the Company shall cause such Adjusted Company Stock Option to be
cancelled immediately following the Reverse Stock Split, and, in consideration
of such cancellation, the holder of such Adjusted Company Stock Option shall be
entitled to receive a cash payment (less applicable tax withholdings) equal to,
for each share of Common Stock subject to such Company Stock Option immediately
prior to the Reverse Stock Split, the Offer Price minus the per share exercise
price of such Company Stock Option immediately prior to the Reverse Stock
Split; provided, that
in the case of any Company Stock Options issued on or following November 7,
2005 to any person who is a full-time employee of the Company as of the date
hereof, any Adjusted Company Stock Options with respect to such Company Stock
Options shall remain outstanding and holders of such Adjusted Company Stock
Options shall not be entitled to receive any cash payments. The Company shall
take all steps necessary and appropriate to give effect to this Section
4.02(b), including using reasonable best efforts to obtain any necessary
consents to the cancellation of the Adjusted Company Stock
Options.
(c) In the
event that, following the adjustment to outstanding restricted stock or
restricted stock units (each, as so adjusted, an “Adjusted
Company Restricted Stock”)
made
24
pursuant
to Section 4.02(a), the number of shares of Common Stock subject to any
Adjusted Company Restricted Stock is less than one, then, except as otherwise
agreed by the Company and any holder of any Adjusted Company Restricted Stock,
the Company shall cause such Adjusted Company Restricted Stock to be cancelled
immediately following the Reverse Stock Split, and, in consideration of such
cancellation, the holder of such Adjusted Company Restricted Stock shall be
entitled to receive a cash payment (less applicable tax withholdings) equal to,
for each share of Common Stock subject to such restricted stock or restricted
stock units immediately prior to the Reverse Stock Split, the Offer Price less
any applicable exercise or purchase price; provided, that
in the case of any restricted stock or restricted stock units issued on or
following November 7, 2005 to any person who is a full-time employee of the
Company as of the date hereof, any Adjusted Company Restricted Stock with
respect to such restricted stock or restricted stock units shall remain
outstanding and holders of such Adjusted Company Restricted Stock shall not be
entitled to receive any cash payments. The Company shall take all steps
necessary and appropriate to give effect to this Section 4.02(c), including by
obtaining any necessary consents to the cancellation of the Adjusted Company
Restricted Stock.
SECTION
4.03 Surrender
of Shares.
(a) Prior
to the Effective Time, the Company shall designate a bank or trust company to
act as agent (the “Paying
Agent”)
for the holders of fractional shares of Class A Common Stock to receive funds
pursuant to Section 4.01(b). Such funds shall be invested by the Paying Agent
as directed by the Company.
(b) Promptly
after the Effective Time, the Company shall cause to be mailed to each Person
who following the Effective Time shall be entitled to receive funds pursuant to
Section 4.01(b) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
evidencing shares that were converted into fractional shares in the Reverse
Stock Split shall pass, only upon proper delivery of the Certificates to the
Paying Agent) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a Certificate, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor
the Offer Price for each share formerly evidenced by such Certificate, and such
Certificate shall then be canceled. No interest shall accrue or be paid on the
Offer Price payable upon the surrender of any Certificate for the benefit of
the holder of such Certificate. If the payment equal to the Offer Price is to
be made to a Person other than the Person in whose name the surrendered
Certificate formerly evidencing shares is registered on the stock transfer
books of the Company, it shall be a condition of payment that the Certificate
so surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the Person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Offer Price
to a Person other than the registered holder of the Certificate surrendered, or
shall have established to the satisfaction of the Company that such taxes
either have been paid or are not applicable. If any holder of shares of Class A
Common Stock that were converted into fractional shares in the Reverse Stock
Split is unable to surrender such holder’s Certificates because such
Certificates have been lost, mutilated or destroyed, such holder may deliver in
lieu thereof an affidavit and indemnity bond in form and substance and with
surety reasonably satisfactory to the Company. Each of the Company and the
Paying Agent shall
be
entitled to deduct and withhold from any amounts otherwise payable pursuant to
this Agreement in respect of fractional shares of Class A Common Stock such
amount as it is required to deduct and withhold with respect to the making of
such payment under any Law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for purposes of this Agreement as having been
paid to the holder of such fractional shares of Class A Common Stock in respect
of which such deduction and withholding was made.
(c) At any
time following the twelfth month after the Effective Time, the Company shall be
entitled to require the Paying Agent to deliver to it any funds which had been
made available to the Paying Agent and not disbursed to holders of fractional
shares of Class A Common Stock (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made
available to it), and, thereafter, such holders shall be entitled to look to
the Company (subject to abandoned property, escheat and other similar laws)
only as general creditors thereof with respect to any Offer Price that may be
payable upon due surrender of the Certificates held by them. Notwithstanding
the foregoing, neither the Company nor the Paying Agent shall be liable to any
holder of a fractional share of Class A Common Stock for any Offer Price
delivered in respect of such share to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) From and
after the Effective Time, holders of shares of Class A Common Stock that were
converted into fractional shares in the Reverse Stock Split shall cease to have
any rights with respect to such fractional shares except the right to receive
an amount equal to the Offer Price multiplied by the number of shares of Class
A Common Stock held by such holder prior to the Effective Time or as provided
by applicable Law.
ARTICLE
V
THE
EXCHANGE OFFER
SECTION
5.01 The
Exchange Offer.
(a) As soon
as reasonably practicable following the Commencement Date, the Company shall
commence (within the meaning of Rule 13e-4(a)(4) under the Exchange Act) the
Exchange Offer to exchange, out of funds legally available therefor, (i) for
each outstanding share of 14¼% Preferred validly tendered in the
Exchange Offer and not validly withdrawn (x) $7,000 principal amount of Series
A Convertible Subordinated Debt and (y) $1,000 initial liquidation preference
of Series A-1 Convertible Preferred, and (ii) for each outstanding share of
9¾% Preferred validly tendered in the Exchange Offer and not validly
withdrawn (A) $4,000 principal amount of Series A Convertible Subordinated Debt
and (B) $1,000 initial liquidation preference of Series A-1 Convertible
Preferred; provided, that
if, at the Exchange Offer Closing, the number of shares of 14¼%
Preferred or 9¾% Preferred validly tendered in the Exchange Offer and
not validly withdrawn represent 50% or less of the total outstanding shares of
such class (a “Minority
Exchange”),
the Company shall exchange, out of funds legally available therefor, (i) for
each outstanding share of 14¼% Preferred that has been accepted for
exchange (x) $7,500 principal amount of Series A Convertible Subordinated Debt
and (y) $500 initial liquidation preference of Series B Convertible Preferred,
and (ii) for each outstanding share of 9¾% Preferred that has been
accepted for exchange (A) $4,500 principal amount of Series A Convertible
Subordinated Debt and (B) $500 initial liquidation preference of Series B
Convertible Preferred. In order for shares of Senior
Preferred
Stock to be validly tendered, each holder of Senior Preferred Stock who tenders
in the Exchange Offer shall tender all but not less than all of the Senior
Preferred Stock such holder owns on the Commencement Date.
(b) The
Company shall cause the Exchange Offer to remain open until the twentieth
Business Day after such commencement of the Exchange Offer or, as set forth in
this Section 5.01(b), such other later date as CIG and NBCU may mutually agree
(the “Exchange
Offer Initial Expiration Date”).
The Company shall be obligated to accept for exchange shares of Senior
Preferred Stock validly tendered pursuant to the Exchange Offer, subject only
to the non-occurrence or waiver of each of the conditions set forth in Annex B
(the “Exchange
Offer Conditions”).
The Company shall not amend or make changes to the terms of the Exchange Offer,
including the Exchange Offer Conditions, without the prior written consent of
both CIG and NBCU. Notwithstanding anything in this Agreement to the contrary,
the Company shall have the right to extend the Exchange Offer Initial
Expiration Date for (i) any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Exchange Offer, (ii) any period required to obtain required stockholder
approval of the Proposed Amendments, or (iii) any period required by applicable
Law. On the Exchange Offer Initial Expiration Date, CIG and the Company shall,
in their reasonable judgment, jointly determine whether the Exchange Offer
Conditions exist and whether any such Exchange Offer Conditions shall be
waived. Notwithstanding the foregoing, (A) in the event the Company, in its
reasonable judgment, determines that one or more Exchange Offer Conditions
exist and the Company reasonably determines not to waive any such Exchange
Offer Condition and CIG, in its reasonable judgment, determines that each such
Exchange Offer Condition does not exist or reasonably determines to waive any
such Exchange Offer Condition, the Contingent Exchange pursuant to Section
5.04(b) shall occur, (B) in
the event CIG, in its reasonable judgment, determines that one or more Exchange
Offer Conditions exist and CIG reasonably determines not to waive any such
Exchange Offer Condition and the Company, in its reasonable judgment,
determines that each such Exchange Offer Condition does not exist or reasonably
determines to waive any such Exchange Offer Condition, the Exchange Offer shall
expire and no shares of Senior Preferred Stock shall be accepted for exchange
and the Contingent Exchange pursuant to Section 5.04(b) shall not
occur and (C)
in the event an
Exchange Offer Condition set forth in clauses (b) or (c) of Annex B exists that
cannot be waived and that prevents the Exchange Offer Closing from occurring,
the Exchange Offer shall expire and no shares of Senior Preferred Stock shall
be accepted for exchange and the Contingent Exchange pursuant to Section
5.04(b) shall not occur.
(c) To the
extent the Company amends or makes changes to the terms and conditions of the
Exchange Offer pursuant to Section 5.01(b), CIG and the NBCU Entities shall
cooperate with the Company in making any filings or amendments required by the
DGCL, the Exchange Act, the Securities Act or any other applicable Law, or as
otherwise may be necessary to effect such amendment or change.
(d) As
promptly as reasonably practicable on the date the Exchange Offer is commenced,
the Company shall file with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments thereto, the “Exchange
Offer Schedule TO”)
with respect to the Exchange Offer, which will comply in all material respects
with the provisions of all applicable
27
federal
and state securities laws, and will contain (including as an exhibit) or
incorporate by reference an offer to exchange relating to the Exchange Offer,
the consent solicitation statement described in Section 5.02 and forms of the
related letter of transmittal (which documents, together with the Exchange
Offer Schedule TO and any supplements or amendments thereto, are referred to
collectively as the “Exchange
Offer Documents”).
The related letter of transmittal shall provide that, among other matters, in
order for shares of Senior Preferred Stock to be validly tendered, each holder
of Senior Preferred Stock who tenders in the Exchange Offer shall represent and
warrant to the Company that (x) such holder has full power and authority to
tender, sell, assign and transfer shares of Senior Preferred Stock in the
Exchange Offer, (y) such holder has tendered all but not less than all of the
shares of Senior Preferred Stock held by such holder on the Commencement Date
and (z) when such shares are accepted for exchange by the Company, the Company
shall acquire good, marketable and unencumbered title thereto, free and clear
of all Liens. The Exchange Offer Documents, on the date filed with the SEC and
on the date first disseminated to the holders of Senior Preferred Stock, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company shall take all steps necessary to cause the
Exchange Offer Documents to be filed with the SEC and to be disseminated to the
holders of Senior Preferred Stock, in each case as and to the extent required
by applicable federal securities laws. The Company shall promptly correct or
supplement any information in the Exchange Offer Documents if and to the extent
that it shall have become false and misleading in any material respect, and the
Company shall take all steps necessary to cause the Exchange Offer Documents as
so corrected to be filed with the SEC and to be disseminated to the holders of
Senior Preferred Stock, in each case as and to the extent required by
applicable federal securities laws. CIG, the NBCU Entities and their respective
counsel shall be given a reasonable opportunity to review and comment on the
initial Exchange Offer Documents before they are filed with the SEC. In
addition, the Company shall provide CIG, the NBCU Entities and their respective
counsel with any comments or other communications that it or its counsel may
receive from time to time from the SEC or its staff with respect to the
Exchange Offer Documents promptly after the receipt of such comments or other
communications. CIG, the NBCU Entities and their respective counsel shall be
given a reasonable opportunity to review and comment on any response of the
Company to comments or other communications from the SEC or any amended or
revised Exchange Offer Documents before it is filed with the SEC.
(e) Subject
to the terms of this Agreement, promptly after the expiration of the Exchange
Offer, the Company shall accept for exchange, in accordance with the terms of
the Exchange Offer, all of the shares of Senior Preferred Stock validly
tendered pursuant to the Exchange Offer and not validly withdrawn.
(f) If the
exchange is to be made to a Person other than the Person in whose name the
surrendered certificate formerly evidencing shares of Senior Preferred Stock is
registered on the stock transfer books of the Company, it shall be a condition
of exchange that the certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the Person requesting such
exchange shall have paid all transfer and other taxes required by reason of the
exchange to a Person other than the registered holder of the certificate
surrendered, or shall
have
established to the satisfaction of the Company that such taxes either have been
paid or are not applicable.
SECTION
5.02 Consent
Solicitation. The
Exchange Offer Documents shall provide that (A) holders of Senior Preferred
Stock who validly tender in the Exchange Offer shall also execute a written
consent to an amendment to the Company’s Certificate of Incorporation in
the form attached hereto as Exhibit T (the “Proposed
Amendments”)
and (B) the Proposed Amendments with respect to each series of Senior Preferred
Stock shall become effective upon the filing with the Secretary of State of the
State of Delaware of a certificate of amendment of the Company’s
Certificate of Incorporation which shall be filed promptly following (i)
acceptance by the Company for exchange of shares of Senior Preferred Stock
tendered pursuant to the Exchange Offer that represent a majority of the shares
of such series of Senior Preferred Stock outstanding on the Commencement Date
and (ii) receipt by the Company of the approval by the requisite vote of
holders of Common Stock of the Proposed Amendments.
SECTION
5.03 Exchange
by CIG. CIG
shall, and shall cause its controlled Affiliate to, (i) validly tender in the
Exchange Offer and not withdraw all of the shares of 14¼% Preferred and
9¾% Preferred it holds and (ii) consent to the Proposed Amendments in
the manner provided in the Exchange Offer Documents. Subject to Section
5.01(b), the Company shall accept for exchange all such shares of Senior
Preferred Stock tendered by CIG in the Exchange Offer.
SECTION
5.04 Contingent
Exchange. (a)
If, at the Exchange Offer Closing, (i) the Company has accepted for exchange
less than 90% of the outstanding shares of each series of Senior Preferred
Stock owned by holders other than CIG, (A) NBC Palm Beach I shall be entitled
to surrender and deliver to the Company, promptly following the Exchange Offer
Closing, one or more certificates representing up to $375,000,000 aggregate
stated liquidation preference of NBCU Series B Preferred in exchange for an
equal principal amount of Series B Convertible Subordinated Debt, and (ii) CIG
shall be entitled to surrender and deliver to the Company, promptly following
the Exchange Offer Closing, one or more certificates representing up to
$95,584,689 aggregate stated liquidation preference of Series C Preferred Stock
or Series A-2 Preferred Stock, as applicable, received pursuant to Section
10.11 in exchange for an equal principal amount of Series B Convertible
Subordinated Debt, with such amounts, in each case, determined in accordance
with the methodology described on Schedule 5.04.
(b) Notwithstanding
Section 5.04(a) but subject to Section 5.01(b), in the event the Exchange Offer
Expiration occurs, promptly following the Exchange Offer Expiration, (i) CIG
shall be entitled to surrender and deliver to the Company 9,386.46875 shares of
14¼% Preferred and 262.33603 shares of 9¾% Preferred in exchange
for $76,403,430 aggregate principal amount of Series B Convertible Subordinated
Debt, (ii) NBC Palm Beach I shall be entitled to surrender and deliver to the
Company one or more certificates representing $375,000,000 aggregate stated
liquidation preference of NBCU Series B Preferred in exchange for $375,000,000
aggregate principal amount of Series B Convertible Subordinated Debt and (iii)
CIG shall be entitled to surrender and deliver to the Company one or more
certificates representing $95,584,689 aggregate stated liquidation preference
of Series C Preferred Stock or Series A-2 Preferred Stock, as applicable,
received pursuant to Section 10.11 in exchange for an equal principal amount of
Series
B
Convertible Subordinated Debt (the actions as described in Section 5.04(a) and
this Section 5.04(b), as the case may be, the “Contingent
Exchange”).
(c) (i)
Immediately following receipt of the certificate or certificates, if any,
representing the aggregate stated liquidation preference of NBCU Series B
Preferred surrendered by NBC Palm Beach I in the Contingent Exchange, the
Company shall cancel such certificate and issue to NBC Palm Beach I, out of
funds legally available therefor, a note or notes representing an aggregate
principal amount of Series B Convertible Subordinated Debt determined in
accordance with Sections 5.04(a) or (b), as applicable, (ii) if applicable,
immediately following receipt of the certificate or certificates representing
the aggregate stated liquidation preference of Series C Preferred Stock or
Series A-2 Preferred Stock as applicable, surrendered by CIG in the Contingent
Exchange pursuant to Section 5.04(a), the Company shall cancel such certificate
and issue to CIG, out of funds legally available therefor, a note or notes
representing an aggregate principal amount of Series B Convertible Subordinated
Debt determined in accordance with Section 5.04(a), and (iii) if applicable,
immediately following receipt of the certificate or certificates representing
9,386.46875 shares of 14¼% Preferred, 262.33603 shares of 9¾%
Preferred and $95,584,689 in aggregate stated liquidation preference of Series
C Preferred Stock or Series A-2 Preferred Stock, as applicable, surrendered by
CIG in the Contingent Exchange pursuant to Section 5.04(b), the Company shall
cancel such certificate and issue to CIG, out of funds legally available
therefor, a note or notes representing $171,988,119 aggregate principal amount
of Series B Convertible Subordinated Debt in accordance with Section
5.04(b).
SECTION
5.05 Company
Approval. The
Company hereby represents that the Board has determined that it is in the best
interests of the Company to authorize and approve the Exchange Offer, the
Contingent Exchange and the Proposed Amendments.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
As an
inducement to CIG and the NBCU Entities to enter into this Agreement, except as
set forth in the Company Disclosure Letter or as disclosed in any report,
schedule, form, statement or other document filed with, or furnished to, the
SEC by the Company and publicly available prior to the date of this Agreement,
the Company hereby represents and warrants to CIG and the NBCU Entities as of
the date hereof that:
SECTION
6.01 Organization
and Qualification. (a)
Each of the Company and its Subsidiaries is duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its organization and
has all necessary power and authority to own, lease, use and operate its
properties and assets and to carry on its business as presently conducted and
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its assets or properties or conduct of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so
organized, licensed, qualified or in good standing, or to have such power or
authority, would not adversely affect the ability of the Company to carry out
its obligations under, and to consummate the transactions contemplated by, each
of the Transaction Agreements to which it is a party. The Company has made
available to CIG and NBCU complete and correct copies of the Company’s
and its
Subsidiaries’ certificates of incorporation and bylaws or comparable
governing documents, each as amended to the date hereof, and each as so made
available is in effect on the date hereof.
SECTION
6.02 Capitalization.
(a) The
authorized capital stock of the Company consists of (A)(1) 505,000,000 shares
of Class A Common Stock, of which, as of May 1, 2007, 65,377,185 shares were
issued and outstanding, (2) 35,000,000 shares of Class B Common Stock, of which
8,311,639 shares are issued and outstanding and (3) 317,000,000 shares of Class
C Common Stock, of which no shares are issued and outstanding, and (B)
1,000,000 shares of preferred stock, of which (1) 72,000 shares have been
designated as 14¼% Preferred, of which 56,931.4905 shares are issued and
outstanding, (2) 17,500 shares have been designated as 9¾% Preferred, of
which 16,695.9798 shares are issued and outstanding and (3) 60,607 shares have
been designated as NBCU Series B Preferred, all of which are issued and
outstanding. As of May 1, 2007, no shares of capital stock were held in
treasury, and no shares of capital stock were reserved for issuance except for
(i) 27,237,042 shares
of Class A Common Stock reserved in respect of Company Stock Options and other
rights (including restricted stock and restricted stock units) (the
“Company
Stock Awards”)
outstanding as of such date granted pursuant to the Company Stock Plans, (ii)
10,434,988 shares of Class A Common Stock reserved in respect of the conversion
of 9¾% Preferred, (iii) 8,311,639 shares of Class A Common Stock
reserved in respect of the conversion of Class B Common Stock and (iv)
303,035,000 shares of Class A and Class C Common Stock reserved in respect of
the conversion of NBCU Series B Preferred. All of the issued and outstanding
shares of the Company’s capital stock have been duly and validly
authorized and issued and are fully paid and nonassessable and not subject to
preemptive or other outstanding rights. The Company has made available to CIG
and the NBCU Entities accurate and complete copies of all Company Stock Option
Plans pursuant to which the Company has granted the Company Stock Awards that
are currently outstanding and the form of all stock award agreements evidencing
such Company Stock Awards. Since January 1, 2007, the Company has not issued
any shares of capital stock of the Company or granted or entered into any
calls, options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the capital stock of
the Company or obligating the Company or any of its Subsidiaries to issue or
sell any capital stock of the Company, or any other interest in, the Company or
any of its Subsidiaries, other than pursuant to one or more of the Transaction
Agreements or pursuant to the exercise of options to acquire shares of Class A
Common Stock outstanding on January 1, 2007 in an amount not in excess of the
amount set forth in this Section 6.02(a).
(b) None of
the Subsidiaries of the Company owns any shares of Common Stock or Existing
Preferred Stock. Section 6.02(b) of the Company Disclosure Letter sets forth a
list, as of the date hereof, of the Subsidiaries and Persons (other than the
Subsidiaries) in which the Company or a Subsidiary owns a 5% or greater, but
less than 100%, equity interest (each, a “Company
Joint Venture”).
Each of the outstanding shares of capital stock or other equity securities of
each of the Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and, except for directors’ qualifying shares and where such
failure to have such ownership would not reasonably be expected to have a
Material Adverse Effect, owned by the Company or by a direct or indirect
wholly-owned Subsidiary, free and clear of any Lien, other than Permitted
Liens. The ownership interest in each Subsidiary and in each Company Joint
Venture is
owned by
the Company or by a direct or indirect wholly-owned Subsidiary, free and clear
of any Lien, other than any Permitted Liens. Neither the Company nor any of its
Subsidiaries has entered into any commitment, arrangement or agreement, or is
otherwise obligated, to contribute capital, loan money or otherwise provide
funds to or make additional investments in any other Person.
(c) Upon any
issuance of any shares of Common Stock in accordance with the terms of the
Company Benefit Plans, such shares will be duly authorized, validly issued,
fully paid and nonassessable. The Company does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.
(d) Except
for the Stockholder Agreement and the Registration Rights Agreement, there are
no shareholder agreements, voting trusts or other agreements or understandings
to which the Company or any of its Subsidiaries is a party or by which the
Company is bound relating to the voting or registration of any equity
securities of the Company or any of its Subsidiaries.
(e) The
Board, at a meeting duly called and held, and following the unanimous
recommendation of a special committee of the Board, has (A) with all directors
voting, adopted resolutions approving the Transaction as a strategic plan or
financing plan for purposes of Section 3.3(a) of the Stockholder Agreement,
approving and declaring advisable and recommending that the stockholders of the
Company approve the Proposed Amendments, the Restated Certificate of
Incorporation, and the Reverse Stock Split and approving, declaring the
advisability of and recommending that the stockholders of the Company approve
an amendment to the Certificate of Incorporation (the “Certificate
Amendment”),
in the form attached hereto as Exhibit W, to create Class D Common Stock and
provide for 1,000,000,000 authorized shares of Class D Common Stock, and (ii)
increase the number of authorized shares of Common Stock, Class A Common Stock
and Class C Common Stock to 3,035,000,000, 1,000,000,000 and 1,000,000,000,
respectively, of which the Board has determined to reserve for issuance,
subject to the approval of the Certificate Amendment by the stockholders of the
Company entitled to vote and the filing of the Certificate Amendment with the
Secretary of State of the State of Delaware, 600,000,000 shares of Class A
Common Stock, 600,000,000 shares Class C Common Stock and 700,000,000 shares
Class D Common Stock upon conversion of the Convertible Securities (the
“Conversion
Shares”),
and 100,000,000 shares of Class A Common Stock upon exercise of the Warrant,
and (B) received the opinion of its financial advisor to the effect that, as of
the date of such opinion, the Offer Price to be received by the holders of the
shares of Class A Common Stock in the Tender Offer is fair from a financial
point of view to such holders. When issued, all shares of the New Preferred
Stock, all Conversion Shares issued upon the conversion of the Convertible
Securities in accordance with the terms thereof, and all shares of Common Stock
issued in accordance with the terms of the NBCU Option II and the Warrant will
be duly and validly authorized and issued, fully paid and nonassessable and not
subject to preemptive rights, and the owner of such shares will have good title
thereto, free and clear of all Liens (other than any Lien created by or on
behalf of such owner).
(f) Other
than (A) the shares referred to in Section 6.02(a), (B) the requirement to
issue the Conversion Shares pursuant to the documents governing the terms of
the Convertible
Securities
and (C) the issuance of the New Preferred Stock, the Convertible Subordinated
Debt, the NBCU Option II and the Warrant as contemplated by the Transaction
Agreements, (1) no equity securities of the Company or any of its Subsidiaries
are or may become required to be issued by reason of any options, warrants,
rights to subscribe for, conversion rights, stock appreciation rights,
performance units, redemption rights, repurchase rights, calls, preemptive
rights, commitments or other rights of any character whatsoever, (2) there are
outstanding no securities or rights convertible into or exchangeable for shares
of any capital stock of the Company or any of its Subsidiaries and (3) there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or will be bound to issue or sell
additional shares of its capital stock or any securities or rights convertible
into or exchangeable or exercisable for shares of its capital stock or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock. Except as required by the terms of the Existing Preferred Stock and the
2005 Agreements, the Company is not subject to any obligation (contingent or
otherwise) to repurchase, redeem or otherwise acquire or retire any of its
capital stock.
(g) The
consummation of the transactions contemplated by the Transaction Agreements
will not trigger the anti-dilution provisions or other price adjustment
mechanisms of any outstanding subscriptions, options, warrants, calls,
contracts, preemptive rights, demands, commitments, conversion rights or other
agreements or arrangements of any character or nature whatsoever under which
the Company is or may be obligated to issue or acquire its capital stock.
(h) None of
the Senior Preferred Stock or the NBCU Series B Preferred are required to be
registered pursuant to Section 12 of the Securities Act.
SECTION
6.03 Authority
Relative to the Transaction Agreements. (a)
The Company has all necessary corporate power and authority to execute and
deliver each of the Transaction Agreements to which it is a party, to perform
its obligations thereunder and to consummate the transactions contemplated
thereby. Except as set forth on Section 6.03(a) of the Company Disclosure
Letter, the execution and delivery by the Company of each of the Transaction
Agreements to which it is a party, the performance by the Company of its
obligations thereunder and the consummation by the Company of the transactions
contemplated thereby have been duly authorized by all requisite action on the
part of the Company and approved by the Board, and other than required
stockholder approval, no other corporate proceedings on the part of the Company
are necessary to authorize any of the Transaction Agreements to which it is a
party or to consummate the transactions contemplated thereby. Each of the
Transaction Agreements to which the Company is a party has been or, upon
execution, shall have been duly executed and delivered by it, and (assuming due
authorization, execution and delivery by the other parties) each of the
Transaction Agreements to which it is a party constitutes or, upon execution,
shall constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms. The Board has
approved each of the Transaction Agreements to which the Company is a party and
the transactions contemplated thereby and such approvals are sufficient so that
the restrictions on business combinations set forth in Section 203(b) of the
DGCL shall not apply to the Reverse Stock Split or the Tender Offer. To the
Knowledge of the Company, no other state takeover Law is applicable to any of
the transactions contemplated by any of the Transaction
Agreements.
(b) Pursuant
to the DGCL and the Company’s Certificate of Incorporation, the approval
of the Certificate Amendment, the Restated Certificate of Incorporation and the
Reverse Stock Split requires the affirmative votes of the holders of a majority
of the then outstanding shares of Common Stock and to the extent shares of
9¾% Preferred are then entitled to vote, 9¾% Preferred (on an as
converted basis), voting together as a single class.
SECTION
6.04 No
Conflict; Required Filings and Consents.
(a) The
execution and delivery by the Company of each of the Transaction Agreements to
which it is a party, the performance by the Company of its obligations
thereunder and the consummation by the Company of the transactions contemplated
thereby do not and will not (i) assuming that the required stockholder approval
of any amendment to the Certificate of Incorporation of the Company as
contemplated by the Transaction, including the Certificate Amendment, has been
obtained, conflict with or violate the Certificate of Incorporation or By-laws
of the Company or the comparable governing documents of any of its
Subsidiaries, (ii) assuming that all consents, approvals and other
authorizations described in Section 6.04(b) have been obtained and that all
filings and other actions described in Section 6.04(b) have been made or taken,
conflict with or violate any Law applicable to the Company or any Subsidiary or
by which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) except as described in Section 2.01(a), result in any breach
of or constitute a default (or an event which, with notice or lapse of time or
both, would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any property or asset of the Company or any Subsidiary
pursuant to any Contract to which the Company or any Subsidiary is a party or
by which the Company or a Subsidiary or any property or asset of the Company or
any Subsidiary is bound or affected, except, (x) with respect to clause (iii),
as would not materially and adversely affect the ability of the Company to
carry out its obligations under, and to consummate the transactions
contemplated by, each of the Transaction Agreements to which the Company is a
party and would not, and (y) with respect to clauses (ii) and (iii),
individually or in the aggregate, have a Material Adverse Effect.
(b) The
execution and delivery by the Company of each of the Transaction Agreements to
which it is a party, the performance by the Company of its obligations
thereunder and the consummation by the Company of the transactions contemplated
thereby do not and will not require any consent, approval, authorization or
other order of, action by, filing with, registration or notification to, any
Governmental Authority, except for (i) applicable requirements, if any, of the
Exchange Act, Securities Act, or state securities or “blue sky” laws
(“Blue
Sky Laws”),
(ii) the pre-merger notification and waiting period requirements of the HSR
Act, (iii) the FCC Application, (iv) the FCC Approval, (v) the filing and
recordation of the Proposed Amendments, any amendment to the Certificate of
Incorporation of the Company as contemplated by the Transaction, including the
Certificate Amendment, and each of the New Preferred Stock Certificates of
Designation with the Secretary of State of the State of Delaware pursuant to
the DGCL, (vi) where failure to obtain such consent, approval, authorization or
action, or to make such filing or notification, would not prevent or materially
delay the consummation by the Company of the transactions contemplated by each
of the Transaction Agreements to which it is a party and (vii) as may be
necessary as a result of any facts or circumstances relating solely to CIG or
the NBCU Entities or any of their respective Affiliates.
SECTION
6.05 Permits;
Compliance.
(a) Each of
the Company and the Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Authority, in each case
applicable to the Company and its Subsidiaries, including all authorizations
under the Communications Act, necessary for each of the Company or the
Subsidiaries to own, lease and operate its properties, including the Company
Stations, or to carry on its business as it is now being conducted (the
“Permits”),
except where the failure to have, or the suspension or cancellation of, any of
the Permits would not, individually or in the aggregate, prevent or materially
delay consummation of any of the transactions contemplated by the Transaction
Agreements or otherwise prevent or materially delay the Company from performing
its obligations under the Transaction Agreements to which it is a party and
would not, individually or in the aggregate, have a Material Adverse Effect. To
the Knowledge of the Company, no suspension or cancellation of any of the
Permits is pending or threatened that would reasonably be expected to have a
Material Adverse Effect.
(b) Each of
the Company and the Subsidiaries is in compliance with (i) any Law applicable
to the Company or any Subsidiary or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (ii) any Contract or Permit
to which the Company or any Subsidiary is a party or by which the Company or
any Subsidiary or any property or asset of the Company or any Subsidiary is
bound, except for any such conflicts, defaults, breaches or violations that
would not, individually or in the aggregate, prevent or materially delay
consummation of any of the transactions contemplated by the Transaction
Agreements or otherwise prevent or materially delay the Company from performing
its obligations under the Transaction Agreements to which it is a party and
would not, individually or in the aggregate, have a Material Adverse Effect.
(c) Except
as would not, individually or in the aggregate, have a Material Adverse Effect,
(i) each Company Station, including physical facilities, electrical and
mechanical systems, and transmitting and studio equipment, is operated in
compliance with the Communications Act and the specifications of the FCC
Licenses; (ii) the antenna structures owned or used by each Company Station are
in compliance with the Communications Act and the requirements of the Federal
Aviation Administration; (iii) the location and staffing of each Company
Station’s main studio comply with the Communications Act; (iv) all reports
and other filings required by the FCC with respect to the FCC Licenses and each
Company Station (including, without limitation, all required children’s
television and equal employment opportunity reports) have been filed in
material compliance with the FCC rules and regulations; and (v) all FCC
regulatory fees have been timely paid.
(d) Section
6.05(d) of the Company Disclosure Letter sets forth a complete and accurate
list of the FCC Licenses and the authorized holder and the expiration date of
the term (including any renewals, extensions or modifications thereof) of each
of the FCC Licenses. The FCC Licenses are, except as described in Section
6.05(d) of the Company Disclosure Letter, in full force and effect and have not
been revoked, suspended, canceled, rescinded or terminated and their respective
terms are not subject to any conditions other than those applicable to
broadcast licenses generally or as otherwise disclosed on the face of the FCC
Licenses. Except as described in
35
Section
6.05(d) of the Company Disclosure Letter, there is no Action pending or, to the
Knowledge of the Company, threatened against the Company or any Subsidiary or
affecting the FCC Licenses or requesting revocation, suspension, cancellation
or non-renewal of any of the FCC Licenses by or before the FCC, except for the
FCC rulemaking proceedings generally affecting the television broadcast
industry. Except as set forth in Section 6.05(d) of the Company Disclosure
Letter, there are no unsatisfied, outstanding or pending, or to the Knowledge
of the Company, threatened, by or before the FCC, orders to show cause, notices
of violation, notices of apparent liability, notices of forfeiture or
complaints issued against the Company or any of the Company Stations. To the
Knowledge of the Company, there is no reason to believe that the FCC Licenses
will not be renewed in the ordinary course. The FCC Licenses listed on Section
6.05(d) of the Company Disclosure Letter include all of the principal station
licenses issued by the FCC that are used in or required for the operation of
the Company Stations under the Communications Act. Except for pending
applications for renewal of licenses for certain of the Company Stations, as of
the date of this Agreement there are no proceedings, complaints, notices of
forfeiture, claims or investigations pending, or to the Knowledge of the
Company, threatened, that would materially impair the ability of Xx. Xxxxxx or
PMC to transfer control of the Call Shares to CIG or which would materially
impede Xx. Xxxxxx’x or PMC’s ability to prosecute the FCC
Application.
(e) The
Company Stations have been assigned channels by the FCC for the provision of
digital television (“DTV”)
service. The channel assignments have not been vacated, reversed, stayed, set
aside, annulled or suspended, nor are they subject to any pending appeal,
request for stay, or petition for rehearing, reconsideration or review by any
person or by the FCC on its own motion, and the time for filing any such
appeal, request, petition or similar document for the reconsideration or review
by the FCC on its own motion has expired. To the Knowledge of the Company,
there are no pending or anticipated petitions for rulemaking or notices of
proposed rulemaking to reallocate the DTV allotment of any of the Company
Stations, or to reallocate the DTV allotment of any other station in a manner
that could affect the DTV operations of any of the Company Stations, nor were
any requests to such effect filed with the FCC in its consideration of a final
DTV table of allotments. All of the Company Stations are operating DTV
facilities at full licensed power, or as set forth on Section 6.05 of the
Company Disclosure Letter, have been authorized by the FCC, or have applied for
authorization from the FCC, to defer full power DTV operation.
SECTION
6.06 SEC
Filings; Financial Statements. (a) The
Company has filed or furnished, as the case may be, on a timely basis, all
forms, reports and documents required to be filed by it with the SEC since
January 1, 2005, including (i) its Annual Reports on Form 10-K for the fiscal
years ended December 31, 2005 and 2006, respectively, (ii) all proxy statements
relating to the Company’s meetings of stockholders (whether annual or
special) held since January 1, 2005 and (iii) all other forms, certifications,
reports and registration statements filed by the Company with the SEC since
January 1, 2005 (the forms, certifications, reports, statements and other
documents referred to in clauses (i), (ii) and (iii) above, and those filed
with the SEC subsequent to the date of this Agreement, and as amended, being,
collectively, the “SEC
Reports”).
The SEC Reports, including any financial statements or schedules included
therein, (i) were prepared in accordance with the requirements of either the
Securities Act or the Exchange Act, as the case may be, and (ii) did not, at
the time they were filed, or, if amended, as of the date of such amendment,
contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary is required to file any form, report or other
document with the SEC.
(b) Each of
the consolidated financial statements (including, in each case, any notes and
schedules thereto) contained in or incorporated by reference into the SEC
Reports was prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto) and each fairly presents, in all material respects, or, in the case of
the SEC Reports filed after the date of this Agreement, will fairly present in
all material respects the consolidated financial position, results of
operations and cash flows of the Company and its consolidated Subsidiaries as
at the respective dates thereof and for the respective periods indicated
therein (subject, in the case of unaudited statements, to notes and normal
year-end adjustments that will not be material in amount or effect), except as
otherwise noted therein.
(c) Except
as and to the extent set forth on the consolidated balance sheet of the Company
and the consolidated Subsidiaries as of December 31, 2006, including the notes
thereto (the “2006
Balance Sheet”),
neither the Company nor any Subsidiary has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since January 1, 2007, liabilities or obligations
incurred in connection with the Transaction and described in Section 6.06(c) of
the Company Disclosure Letter, or liabilities or obligations which would not,
individually or in the aggregate, prevent or materially delay consummation of
any of the transactions contemplated by the Transaction Agreements or otherwise
prevent or materially delay the Company from performing its obligations under
the Transaction Agreements to which it is a party and would not, individually
or in the aggregate, have a Material Adverse Effect.
(d) The
Company has heretofore furnished to CIG and the NBCU Entities complete and
correct copies of all amendments and modifications that have not been filed by
the Company with the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC and are currently in
effect.
(e) The
Company has made available to CIG and the NBCU Entities all comment letters
received by the Company from the SEC or the staff thereof since January 1, 2005
and all responses to such comment letters filed by or on behalf of the Company.
As of the date of this Agreement, there are no outstanding or unresolved
comments received from the SEC staff with respect to the SEC
Reports.
(f) To the
Company’s knowledge, except as disclosed in the SEC Reports, each director
and executive officer of the Company has filed with the SEC on a timely basis
all statements required by Section 16(a) of the Exchange Act and the rules and
regulations thereunder since January 1, 2005.
(g) The
Company maintains disclosure controls and procedures as required by Rule 13a-15
or Rule 15d-15 under the Exchange Act and such controls and procedures are
effective
to ensure that all material information concerning the Company and the
Subsidiaries is made known on a timely basis to the individuals responsible for
the preparation of the Company’s SEC filings and other public disclosure
documents. The Company has made available to CIG and the NBCU Entities complete
and correct copies of, all written descriptions of, and all policies, manuals
and other documents promulgating, such disclosure controls and procedures. As
used in this Section 6.06, the term “file” shall be broadly construed
to include any manner in which a document or information is furnished, supplied
or otherwise made available to the SEC. Documents filed with the SEC by the
Company and publicly available via the SEC’s XXXXX system shall be
considered to have been made available by the Company to CIG and the NBCU
Entities. The Company has disclosed, based on its most recent evaluation prior
to the date of this Agreement, to the Company’s outside auditors and the
audit committee of the Board (i) any significant deficiencies and material
weaknesses in the design or operation of internal controls over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are
reasonably likely to adversely affect the Company’s ability to record,
process, summarize and report financial information and (ii) any fraud, known
to the Company, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls
over financial reporting.
(h) The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP. The Company and 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 GAAP 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. The Company has made available
to CIG and the NBCU Entities complete and correct copies of, all written
descriptions of, and all policies, manuals and other documents promulgating,
such internal accounting controls.
(i) Since
January 1, 2005, neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any director, officer, employee, auditor, accountant
or representative of the Company or any Subsidiary, has received or otherwise
had or obtained knowledge of any complaint, allegation, assertion or claim,
whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any Subsidiary or their
respective internal accounting controls, including any such complaint,
allegation, assertion or claim that the Company or any Subsidiary has engaged
in questionable accounting or auditing practices. Since January 1, 2005, there
have been no internal investigations regarding internal accounting controls,
accounting or revenue recognition discussed with, reviewed by or initiated at
the direction of the chief executive officer, chief financial officer, general
counsel, the Board or any committee thereof.
(j) To the
Knowledge of the Company, no employee of the Company or any Subsidiary has
provided or is providing information to any law enforcement agency regarding
the commission or possible commission of any crime or the violation or possible
violation of any
applicable
Law. Neither the Company nor any Subsidiary nor to the Knowledge of the
Company, any officer, employee, contractor, subcontractor or agent of the
Company or any such Subsidiary has discharged, demoted, suspended, threatened,
harassed or in any other manner discriminated against an employee of the
Company or any Subsidiary in the terms and conditions of employment because of
any act of such employee described in 18 U.S.C. §1514A(a).
(k) The
Company is in compliance in all material respects with the applicable listing
and corporate governance rules and regulations of the American Stock
Exchange.
SECTION
6.07 Absence
of Certain Changes or Events.
(a) Since
December 31, 2006, except as expressly contemplated by the Transaction
Agreements to which the Company is a party, (i) the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary
course and in a manner consistent with past practice, (ii) there has not been
any change in the business, assets, liabilities, results of operations or
financial condition of the Company and its Subsidiaries that, individually or
in the aggregate, has had or would be reasonably expected to have a Material
Adverse Effect, and (iii) none of the Company or any Subsidiary has taken any
action not in the ordinary course of business that, if taken after the date
hereof, would constitute a breach of any of the covenants set forth in Section
9.01.
(b) Since
January 1, 2006 the Company has not taken any of the following actions with
respect to any of its present or former directors or officers, except as has
been approved by the compensation committee of the Board as an employment
compensation, severance or other employee benefit arrangement in accordance
with the safe harbor contained in Rule 14d-10 of the Exchange Act: (i) an
increase in compensation or benefits in any form, (ii) any grant of the right
to receive any severance or termination compensation or benefit, (iii) any
entry into an employment, consulting, indemnification, termination, change of
control, non-competition or severance agreement or (iv) an amendment to or
adoption of a Company Stock Plan (the matters described in foregoing clauses
(i), (ii), (iii) and (iv), collectively, “Compensation
Actions”).
To the extent that any Compensation Action was approved after the date of the
first discussion of a potential tender offer between the Company or the Board,
on the one hand, and CIG, CLP or the NBCU Entities, on the other hand, the
compensation committee of the Board was, at the time of each such approval,
aware of such potential tender offer.
SECTION
6.08 Absence
of Litigation. There
is no Action pending or, to the Knowledge of the Company, threatened against
the Company or any Subsidiary before any Governmental Authority that (a)
individually or in the aggregate, has had or reasonably would be expected to
have a Material Adverse Effect or (b) seeks to materially delay or prevent the
consummation of the transactions contemplated by the Transaction Agreements to
which the Company is a party or otherwise prevent or materially delay the
Company from performing its obligations thereunder. Neither the Company nor any
Subsidiary nor any property or asset of the Company or any Subsidiary is
subject to any continuing order of, consent decree, settlement agreement or
similar written agreement with, or, to the Knowledge of the Company, continuing
investigation by, any Governmental Authority, or any Governmental Order that,
individually or in the aggregate, has had or reasonably would be expected to
have a Material Adverse Effect or to prevent or materially delay consummation
of any of the transactions contemplated by the
Transaction
Agreements to which the Company is a party or otherwise prevent or materially
delay the Company from performing its obligations thereunder.
SECTION
6.09 Compensation
and Benefit Plans; ERISA.
(a) The
Company has made available to CIG and NBCU correct and complete copies of each
Company Benefit Plan and amendments thereto. No entity is treated as a single
employer with the Company under Sections 414(b), (c), (m) or (o) of the Code,
other than the Company and its Subsidiaries.
(b) With
respect to each Company Benefit Plan, if applicable, the Company has made
available to CIG and NBCU correct and complete copies of (i) all plan texts and
agreements and related trust agreements (or other funding vehicles); (ii) the
most recent summary plan descriptions and material employee communications
concerning the extent of the benefits provided under a Company Benefit Plan;
(iii) the most recent annual report (including all schedules); (iv) the most
recent annual audited financial statements and opinions; (v) if the plan is
intended to qualify under Section 401(a) of the Code, the most recent
determination letter received from the Internal Revenue Service (the
“IRS”);
and (vi) all material communications with any domestic Governmental Authority
given or received since January 1, 2005. There is no present intention that any
Company Benefit Plan be materially amended, suspended or terminated at any time
within the twelve months immediately following the date of this
Agreement.
(c) [Intentionally
omitted].
(d) With
respect to each Company Benefit Plan that is subject to Title IV or Section 302
of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any
accumulated funding deficiency within the meaning of Section 412 of the Code or
Section 302 of ERISA, whether or not waived; (ii) no reportable event within
the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement
has not been waived has occurred, and the consummation of the transactions
contemplated by this Agreement will not result in the occurrence of any such
reportable event; (iii) no liability (other than for premiums to the Pension
Benefit Guaranty Corporation (the “PBGC”))
under Title IV of ERISA has been or is expected to be incurred by the Company
or any of its Subsidiaries; and (iv) the PBGC has not instituted proceedings to
terminate any such plan or made any inquiry which would reasonably be expected
to lead to termination of any such plan, and, to the Knowledge of the Company,
no condition exists that presents a material risk that such proceedings will be
instituted or which would constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any such
plan. Neither the Company nor any of its Subsidiaries has, at any time during
the last six years, contributed to or been obligated to contribute to any
Multiemployer Plan other than a plan listed on Section 6.09(a) of the Company
Disclosure Letter. Neither the Company nor any of its Subsidiaries would be
reasonably expected to have any liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan (as those
terms are defined in Part I of Subtitle E of Title IV of ERISA) that has not
been satisfied in full.
(e) Each
Company Benefit Plan which is intended to qualify under Section 401(a) of the
Code has been issued a favorable determination letter by the IRS with respect
to such qualification, its related trust has been determined to be exempt from
taxation under Section 501(a) of the Code and no event has occurred since the
date of such qualification or exemption that would
reasonably
be expected to result in the loss of such qualification or exemption. Each
Company Benefit Plan has been established and administered in material
compliance with its terms and with the applicable provisions of ERISA, the Code
and other applicable Laws. With respect to the Company Benefit Plans, no event
has occurred and no condition exists that would subject the Company by reason
of its being treated as a single employer with any entity under Sections
414(b), (c), (m) or (o) of the Code to any material (i) Tax, penalty, fine,
(ii) Lien (other than a Permitted Lien) or (iii) other liability imposed by
ERISA, the Code or other applicable Laws.
(f) There
are no Company Benefit Plans under which welfare benefits are provided to past
or present employees of the Company and its Subsidiaries beyond their
retirement or other termination of service, other than coverage mandated by the
Consolidated Omnibus Budget Reconciliation Act of 1985, Section 4980B of the
Code, Title I of ERISA or any similar state group health plan continuation
Laws.
(g) Except
as contemplated by the 2005 Agreements, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (either alone or in combination with another event) (i) result in any
payment becoming due, or increase the amount of any compensation or benefits
due, from the Company or any Subsidiary to any current or former employee of
the Company and its Subsidiaries or with respect to any Company Benefit Plan;
(ii) increase any benefits otherwise payable under any Company Benefit Plan;
(iii) result in the acceleration of the time of payment or vesting of any such
compensation or benefits; (iv) result in a non-exempt “prohibited
transaction” within the meaning of Section 406 of ERISA or section 4975 of
the Code; (v) limit or restrict the right of the Company to merge, amend or
terminate any of the Company Benefit Plans; or (vi) result in the payment by
the Company or any Subsidiary of any amount that would, individually or in
combination with any other such payment, reasonably be expected to constitute
an “excess parachute payment,” as defined in Section 280G(b)(1) of
the Code in excess of $5,000,000.
(h) With
respect to any Company Benefit Plan or any current or former employee of any of
the Company or any of its Subsidiaries, (i) no Actions (including any
administrative investigation, audit or other proceeding by the Department of
Labor or the IRS but other than routine claims for benefits in the ordinary
course) are pending or, to the Knowledge of the Company, threatened, and (ii)
to the Knowledge of the Company, no events or conditions have occurred or exist
that would reasonably be expected to give rise to any such
Actions.
(i) Except
as would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, all Company Benefit Plans subject to the Laws of any
jurisdiction outside of the United States (i) have been maintained in
accordance with all applicable requirements, (ii) if they are intended to
qualify for special Tax treatment, meet all requirements for such treatment,
and (iii) if they are intended to be funded and/or book-reserved, are fully
funded and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions. Each Company Benefit Plan that requires registration with a
Governmental Authority has been properly registered, except where any failure
to register, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(j) Each
Company Benefit Plan that is a “nonqualified deferred compensation
plan” (as defined in Section 409A(d)(1) of the Code) of the Company
(including Company Benefit Plans pursuant to which “stock rights” (as
defined in Treas. Reg. §1409A-1(e)) have been granted) has been operated
since January 1, 2005 either pursuant to a grandfathering exemption from
Section 409A of the Code or in good faith compliance with Section 409A of the
Code, the proposed regulations, the final regulations and other guidance issued
thereunder.
SECTION
6.10 Labor
Matters. (a) (i) As
of the date of this Agreement, except as set forth in Section 6.10 of the
Company Disclosure Letter, and (ii) as of any date subsequent to the date of
this Agreement except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect: (x) none of the
employees of the Company or its Subsidiaries is represented by a union and, to
the knowledge of the Company, no union organizing efforts have been conducted
or threatened since January 1, 2005 or are being conducted or threatened, (y)
neither the Company nor any of its Subsidiaries is a party to or is negotiating
any collective bargaining agreement or other labor Contract, and (z) there is
no pending and, to the Knowledge of the Company, there is no threatened
material strike, picket, work stoppage, work slowdown or other organized labor
dispute affecting the Company or any of its Subsidiaries.
(b) The
Company and each of its Subsidiaries are in compliance in all material respects
with all applicable Laws relating to the employment of labor, including all
applicable Laws relating to wages, hours, collective bargaining, employment
discrimination, civil rights, safety and health, workers’ compensation,
pay equity, classification of employees, and the collection and payment of
withholding or social security Taxes. No material unfair labor practice charge
or complaint is pending or, to the Knowledge of the Company, threatened.
Neither the Company nor any of its Subsidiaries has incurred any material
liability or material obligation under the Worker Adjustment and Retraining
Notification Act (“WARN”)
or any similar state or local Law which remains unsatisfied, and neither the
Company nor any of its Subsidiaries has planned or announced any “plant
closing” or “mass layoff” as contemplated by WARN affecting any
site of employment or facility of the Company or any of its
Subsidiaries.
SECTION
6.11 Taxes.
(a) All Tax
Returns that are filed or required to be filed by or with respect to the
Company have been duly and timely filed and all such Tax Returns are complete
and correct in all material respects. All Taxes of the Company that are due and
payable have been paid in full, whether or not shown to be due on a Tax Return.
The Company has withheld and paid all Taxes required to have been withheld and
paid in connection with any amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party.
(b) There is
no litigation outstanding concerning any Tax liability of the Company pending
or threatened in writing with respect to any Taxes due from or with respect to
the Company. There are no Liens on any of the assets of the Company that arose
in connection with any failure (or alleged failure) to pay Taxes other than any
Liens for Taxes that are not yet due and payable. There are no currently
outstanding or pending waivers or agreed or pending extensions of any statute
of limitations in respect of Taxes of the Company. No claim has ever been made
in writing by any Governmental Authority in a jurisdiction where the Company
does not file Tax Returns that the Company is or may be subject to taxation by
that jurisdiction.
(c) The
Company does not have any liability for the Taxes of any Person under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
non-U.S. national law) as a transferee or successor, by contract or otherwise.
The Company is not a party to or bound by any Tax allocation, sharing or
similar agreement. The Company has never been a member of an affiliated group
of corporations within the meaning of Section 1504 of the Code (or any similar
provision of state, local, or non-U.S. national law which provides for
consolidation, group relief, or other surrender of Tax items between affiliated
entities in the preparation and filing of their respective Tax Returns).
(d) The
Company is not nor has it been subject to (i) a disclosure obligation with
respect to any Person under Section 6111 of the Code and the regulations
promulgated thereunder, (ii) a list maintenance obligation with respect to any
Person under Section 6112 of the Code and the Treasury Regulations promulgated
thereunder, or (iii) a disclosure obligation as a “reportable
transaction” under Section 6011 of the Code and the Treasury Regulations
promulgated thereunder.
SECTION
6.12 Insurance. The
Company and its Subsidiaries have made available to CIG and NBCU correct and
complete copies of their respective D&O Insurance Policies. Such D&O
Insurance Policies are in full force and effect and, to the Knowledge of the
Company, neither the Company nor any Subsidiary is in material default with
respect to any of its obligations under any such D&O Insurance Policy.
Neither the Company nor any of its Subsidiaries has received any notice of
cancellation or termination with respect to any such D&O Insurance
Policy.
SECTION
6.13 Company
Material Contracts. The
Company has filed or furnished to the SEC, or provided to CIG and NBCU prior to
the date hereof, true and complete copies of all Company Material Contracts.
All Company Material Contracts are valid and in full force and effect and
enforceable in accordance with their respective terms, with respect to the
Company or its Subsidiaries, as applicable, and, to the knowledge of the
Company, with respect to the other parties thereto, except to the extent that
(i) they have previously expired or otherwise terminated in accordance with
their terms or (ii) the failure to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any
counterparty to any Company Material Contract, has violated any provision of,
or committed or failed to perform any act which, with or without notice, lapse
of time or both, would constitute a default under the provisions of any Company
Material Contract, except in each case for those violations or defaults which
are not continuing or, individually or in the aggregate, would not have a
Material Adverse Effect. No Company Material Contract has been amended or
modified prior to the date of this Agreement (other than immaterial amendments
or modifications), except for amendments or modifications which have been filed
or furnished as an exhibit to a subsequently filed or furnished SEC Report, or
provided to CIG and NBCU prior to the date hereof. The consummation of the
Transaction will not result in any Company Material Contract failing to
continue in full force and effect or result in any material penalty or other
material adverse consequence under a Company Material Contract.
SECTION
6.14 Property. All
properties and assets of the Company and its Subsidiaries, real and personal,
that are material to the conduct of their businesses, taken as a
whole,
as of the date of this Agreement are, except for changes in the ordinary course
of business since the date of the most recent consolidated balance sheet
included in the SEC Reports as filed with the SEC prior to the date hereof,
reflected, in all material respects in accordance with GAAP, and to the extent
required thereby, on the most recent consolidated balance sheet of the Company
included in the SEC Reports as filed with the SEC. Each of the Company and its
Subsidiaries has legal title to, or a leasehold interest, license or easement
in, its real and personal property reflected on such balance sheet or acquired
by it since the date of such balance sheet, free and clear of all Liens, other
than Permitted Liens or Liens which have not had and would not, individually or
in the aggregate, have a Material Adverse Effect.
SECTION
6.15 Intellectual
Property. (a) Section
6.15(a) of the Company Disclosure Letter sets forth (i) a list of all
copyrights and trademarks owned by the Company which have been registered, or
for which applications for registration have been filed and are pending
anywhere in the world; and (ii) each material programming license under which
the Company licenses program rights from any third party.
(b) Section
6.15(b) of the Company Disclosure Letter contains a true and complete list of
material licenses or other agreements with third parties pursuant to which the
Company has obtained rights to use computer software, except for licenses or
other agreements with respect to commercially available, off the shelf
software. All such Company Intellectual Property is used by the Company in all
material respects in accordance with the terms of such licenses or other
agreements, and the Company is not in breach of or default under any such
agreement in any material respect and, to the knowledge of the Company, no
other party to such agreement is in breach of or default under such agreement
in any material respect.
(c) The
Company owns all right, title, and interest in and to, the Company Intellectual
Property that is owned by the Company, free and clear of all Liens (other than
Permitted Liens), and is the owner of record of any registered or applied for
Company Intellectual Property that is owned by the Company.
(d) The
Company owns or has a valid right to use all material Company Intellectual
Property used in the business as presently conducted and as presently
contemplated to be conducted.
(e) The
operation of the business as presently conducted, and as presently contemplated
to be conducted, does not infringe, misappropriate, or otherwise violate or
conflict with the intellectual property of any third party in any material
respect, and the Company has not received notice of any claims or threatened
claims alleging any of the foregoing, including any offer to license or any
claim that Company must license or refrain from using Company Intellectual
Property of a third party, and is not aware of any facts that would support
such a claim.
(f) To the
Knowledge of the Company, no third party has infringed, misappropriated or
otherwise violated or come into conflict with the Company’s rights in any
Company Intellectual Property owned by the Company. No action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand has been
made, is pending, or, to the
Knowledge
of Company, is threatened which challenges the legality, validity,
enforceability, use or ownership of any Company Intellectual Property owned by
Company.
(g) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby shall impair or alter any of the
Company’s rights in any Company Intellectual Property in any material
respect.
SECTION
6.16 Brokers. No
broker, finder or investment banker (other than UBS Investment Bank and Lazard)
is entitled to any brokerage, finder’s or other fee or commission in
connection with the Transaction based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished to CIG and the NBCU Entity a
complete and correct copy of all agreements between the Company and UBS
Investment Bank and Lazard pursuant to which such firm would be entitled to any
payment relating to the Transaction.
ARTICLE
VII
REPRESENTATIONS
AND WARRANTIES OF CIG
As an
inducement to the Company and the NBCU Entities to enter into this Agreement,
CIG hereby represents and warrants to the Company and the NBCU Entities as of
the date hereof that:
SECTION
7.01 Corporate
Organization. CIG is
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization and has all necessary power and authority to
own, lease, use and operate its properties and assets and to carry on its
business as presently conducted and is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its assets or properties or conduct
of its business makes such licensing or qualification necessary, except to the
extent that the failure to be so organized, licensed, qualified or in good
standing, or to have such power or authority, would not adversely affect the
ability of CIG to carry out its obligations under, and to consummate the
transactions contemplated by, each of the Transaction Agreements to which it is
a party.
SECTION
7.02 Authority
Relative to Transaction Agreements. CIG
has all necessary limited liability company power and authority to execute and
deliver each of the Transaction Agreements to which it is a party, to perform
its obligations thereunder and to consummate the transactions contemplated
thereby. The execution and delivery by CIG of each of the Transaction
Agreements to which it is a party, the performance by CIG of its obligations
thereunder and the consummation by CIG of the transactions contemplated thereby
have been duly authorized by all requisite action on the part of CIG and its
members. Each of the Transaction Agreements to which it is a party has been or,
upon execution, shall have been duly executed and delivered by CIG, and
(assuming due authorization, execution and delivery by the other parties)
constitutes or, upon execution, shall constitute legal, valid and binding
obligations of CIG, enforceable against CIG in accordance with its terms.
SECTION
7.03 No
Conflict; Required Filings and Consents.
(a) The
execution and delivery by CIG of each of the Transaction Agreements to which it
is a party, the performance
by CIG
of its obligations thereunder and the consummation by CIG of the transactions
contemplated thereby do not and will not (i) conflict with or violate the
organizational documents of CIG, (ii) assuming that all consents, approvals and
other authorizations described in Section 7.03(b) have been obtained and that
all filings and other actions described in Section 7.03(b) have been made or
taken, conflict with or violate any Law applicable to CIG or by which any
property or asset of CIG is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which, with notice or lapse of time or
both, would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any property or asset of CIG pursuant to, any Contract to
which CIG is a party or by which CIG or any property or asset of CIG is bound
or affected, except, with respect to clause (iii), as would not materially and
adversely affect the ability of CIG to carry out its obligations under, and to
consummate the transactions contemplated by, each of the Transaction Agreements
to which CIG is a party.
(b) The
execution and delivery by CIG of each of the Transaction Agreements to which it
is a party, the performance by CIG of its obligations thereunder and the
consummation by CIG of the transactions contemplated thereby do not and will
not require any consent, approval, authorization or permit of, or filing with,
registration or notification to, any Governmental Authority, except for (i)
applicable requirements, if any, of the Exchange Act, Securities Act or Blue
Sky Laws, (ii) the pre-merger notification and waiting period requirements of
the HSR Act, (iii) the FCC Application, (iv) the FCC Approval, (v) where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent or materially delay the
consummation by CIG of the transactions contemplated by each of the Transaction
Agreements to which it is a party and (vi) as may be necessary as a result of
any facts or circumstances relating solely to the Company or the NBCU Entities
or any of their respective Affiliates.
SECTION
7.04 Ownership
of Company Securities. As of
the date hereof, (a) CIG and its controlled Affiliates own (i) 2,724,207 shares
of Class A Common Stock, (ii) 9,386.46875 shares of 14¼% Preferred,
(iii) 262.33603 shares of 9¾% Preferred and (iv) $6,000,000 in principal
amount of Floating Rate Second Priority Senior Secured Notes due 2013 and (b)
CIG has long economic exposure to 3,398,337 shares of Class A Common Stock
through derivative contracts entered into with unaffiliated financial
institutions. Except as set forth in this Section 7.04 or as contemplated by
the Transaction Agreements, neither CIG nor any of its controlled Affiliates
owns any securities of the Company or has any Contract or relationships (legal
or otherwise) with any Person with respect to any securities of the Company.
SECTION
7.05 FCC
Compliance. CIG is
legally and financially qualified as a transferee of control of the FCC
Licenses under the Communications Act and the published policies and orders of
the FCC. There are no facts or circumstances pertaining to CIG which, under the
Communications Act, would reasonably be expected to (x) result in the
FCC’s refusal to grant the FCC Approval, or (y) materially delay obtaining
the FCC Approval. No waiver of, or exemption from, any provision of the
Communications Act with respect to CIG would reasonably be expected to be
necessary to obtain the FCC Approval (other than waivers for continued
satellite status of any Company Station).
SECTION
7.06 Financing. CIG has
provided the Company and the NBCU Entities with a copy of a commitment letter
(the “Equity
Commitment Letter”)
which evidences that CIG shall have, subject to the satisfaction of the
conditions contained therein, funds sufficient to consummate all the
transactions contemplated to be performed by CIG by the Transaction Agreements
to which CIG is a party. The Equity Commitment Letter is in full force and
effect and has not been amended and shall remain in full force and effect and
shall not be amended prior to the later of the Termination Date or the
Effective Time without the prior written consent of the Company and NBCU.
SECTION
7.07 Brokers. No
broker, finder or investment banker is entitled to any brokerage, finder’s
or other fee or commission in connection with the Transaction based upon
arrangements made by or on behalf of CLP or CIG.
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES OF NBCU ENTITIES
As an
inducement to the Company and CIG to enter into this Agreement, each of the
NBCU Entities, jointly and severally, hereby represents and warrants to the
Company and CIG as of the date hereof that:
SECTION
8.01 Corporate
Organization. Each
of the NBCU Entities is a legal entity duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its organization and has
all necessary power and authority to own, lease, use and operate its properties
and assets and to carry on its business as presently conducted and is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its assets or properties or conduct of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so
organized, licensed, qualified or in good standing, or to have such power or
authority, would not adversely affect the ability of any of the NBCU Entities
to carry out its obligations under, and to consummate the transactions
contemplated by, each of the Transaction Agreements to which it is a
party.
SECTION
8.02 Authority
Relative to Transaction Agreements. Each
of the NBCU Entities has all necessary corporate power and authority to execute
and deliver each of the Transaction Agreements to which it is a party, to
perform its obligations thereunder and to consummate the transactions
contemplated thereby. The execution and delivery by each of the NBCU Entities
of each of the Transaction Agreements to which it is a party, the performance
by each of the NBCU Entities of its obligations thereunder and the consummation
by each of the NBCU Entities of the transactions contemplated thereby have been
duly authorized by all requisite action on the part of each of the NBCU
Entities and its stockholders. Each of the Transaction Agreements to which it
is a party has been or, upon execution, shall have been duly executed and
delivered by each of the NBCU Entities, and (assuming due authorization,
execution and delivery by the other parties) constitutes or, upon execution,
shall constitute legal, valid and binding obligations of each of the NBCU
Entities, enforceable against each of the NBCU Entities in accordance with its
terms. Each of the Call Agreement, the Escrow Agreement and the Noncompete
Agreements is in full force and effect and constitutes the legally valid and
binding obligation of the NBCU Entity that is a party to such agreement and, to
the knowledge of the
NBCU
Entities, each of the other parties thereto. Except as disclosed in (i) the
Current Report on Form 8-K filed by the Company with the SEC on November 7,
2005 or (ii) Amendment No. 2 to the Schedule 13D/A filed by NBCU with the SEC
on November 9, 2005 (together, the “2005
SEC Filings”),
there are no Contracts which relate to any of the Call Agreement, the Escrow
Agreement or the Noncompete Agreements. True copies of each of the Call
Agreement, the Escrow Agreement and the Noncompete Agreements, as amended to
date, have been filed with the SEC in the 2005 SEC Filings or provided to CIG
by NBCU.
SECTION
8.03 No
Conflict; Required Filings and Consents.
(a) The
execution and delivery by each of the NBCU Entities of each of the Transaction
Agreements to which it is a party, the performance by each of the NBCU Entities
of its obligations thereunder and the consummation by each of the NBCU Entities
of the transactions contemplated thereby do not and will not (i) conflict with
or violate the certificate of incorporation or bylaws of such NBCU Entity, (ii)
assuming that all consents, approvals and other authorizations described in
Section 8.03(b) have been obtained and that all filings and other actions
described in Section 8.03(b) have been made or taken, conflict with or violate
any Law applicable to such NBCU Entity or by which any property or asset of
such NBCU Entity is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any property or asset of such NBCU Entity pursuant to, any Contract to which
such NBCU Entity is a party or by which such NBCU Entity or any property or
asset of such NBCU Entity is bound or affected, except, with respect to clause
(iii), as would not materially and adversely affect the ability of such NBCU
Entity to carry out its obligations under, and to consummate the transactions
contemplated by, each of the Transaction Agreements to which such NBCU Entity
is a party. The assignment of each of the Call Agreement, the Escrow Agreement
and the Noncompete Agreements by the NBCU Entities to CIG as set forth in
Section 2.02(a) does not require the consent of any Person.
(b) The
execution and delivery by each of the NBCU Entities of each of the Transaction
Agreements to which it is a party, the performance by such NBCU Entity of its
obligations thereunder and the consummation by such NBCU Entity of the
transactions contemplated thereby do not and will not require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, except for (i) applicable requirements, if any, of the
Exchange Act, Securities Act or Blue Sky Laws, (ii) where failure to obtain
such consent, approval, authorization or action, or to make such filing or
notification, would not prevent or materially delay the consummation by such
NBCU Entity of the transactions contemplated by each of the Transaction
Agreements to which it is a party, (iii) the FCC Application, (iv) the FCC
Approval, and (v) as may be necessary as a result of any facts or circumstances
relating solely to the Company or CIG or any of their respective
Affiliates.
SECTION
8.04 Ownership
of Company Securities. As of
the date hereof, (a) NBC Palm Beach I owns 60,607 shares of NBCU Series B
Preferred, convertible into 303,035,000 shares of Class A Common Stock, and (b)
NBC Palm Beach II owns the Call Right to purchase the Call Shares. Except as
set forth in this Section 8.04 or contemplated by the Transaction Agreements or
the 2005 Agreements, none of the NBCU Entities owns any securities of the
48
Company
or has any Contract or relationships (legal or otherwise) with any Person with
respect to any securities of the Company.
SECTION
8.05 Brokers. No
broker, finder or investment banker (other than Xxxxxxx, Xxxxx & Co.) is
entitled to any brokerage, finder’s or other fee or commission in
connection with the Transaction based upon arrangements made by or on behalf of
the NBCU Entities.
ARTICLE
IX
CONDUCT
OF BUSINESS PENDING THE CALL
CLOSING
SECTION
9.01 Conduct
of Business by the Company Pending the Call Closing.
Between the date hereof and the Call Closing, the Company shall, and shall
cause each Subsidiary to, (i) conduct its business only in the ordinary course
and in a manner consistent with past practice, (ii) use its reasonable best
efforts to preserve substantially intact the business organization of the
Company and its Subsidiaries, to keep available the services of the current
officers, employees and consultants of the Company and its Subsidiaries and to
preserve the current relationships and goodwill of the Company and its
Subsidiaries with customers, suppliers, employees and other Persons with which
the Company or any Subsidiary has significant business relations and (iii)
refrain from taking any action that would reasonably be expected to delay or
impede FCC Approval, would reasonably be expected to result in any FCC action
affecting the FCC Licenses, or result in revocation, suspension, cancellation
or non-renewal of any of the FCC Licenses, or result in any forfeiture or other
financial obligation to the FCC, whether imposed by forfeiture order or
voluntary agreement; provided,
however, that
in the event that any such forfeiture or financial obligation is imposed prior
to the Call Closing, the Company shall undertake to pay any amounts due. By way
of amplification and not limitation, except (A) as contemplated by the
Transaction Agreements, or (B) as is required by applicable Law, the Company
shall not, and shall not permit any Subsidiary to, between the date hereof and
the Effective Time, directly or indirectly, do, or propose to do, any of the
following without the prior written consent of CIG and the NBCU Entities (which
consent shall not be unreasonably withheld or delayed and shall be deemed to
have been provided unless such party shall have delivered written notice to the
contrary within 15 days of receipt of a request for consent from the Company
pursuant to this Section 9.01):
(a) amend
its Certificate of Incorporation or By-laws or equivalent organizational
documents;
(b) issue,
sell, pledge, transfer, dispose of, grant or encumber, or authorize the
issuance, sale, pledge, transfer, disposition, grant or encumbrance of, (i) any
shares of any class of capital stock of the Company or any Subsidiary, or
securities convertible or exchangeable into or exercisable for any shares of
such capital stock, or any options, warrants or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or any
Subsidiary (except for the issuance of shares of Class A Common Stock issuable
(A) pursuant to the Company Stock Plans outstanding on the date hereof
(subject, however, to the limitations set forth in Section 9.01(b) of the
Company Disclosure Letter) or (B) upon conversion of the Existing Preferred
Stock or (ii) enter into any Contract with respect to the voting of its capital
stock;
(c) declare,
set aside, make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise, with respect to any of its capital stock, except
as may be payable pursuant to the terms of the Existing Preferred Stock;
(d) reclassify,
combine, split, subdivide or redeem, or purchase or otherwise acquire, directly
or indirectly, any of its capital stock or securities convertible or
exchangeable into or exercisable for any shares of its capital
stock;
(e) (i)
acquire (including by merger, consolidation, or acquisition of stock or other
equity interests or assets or any other business combination) any Person or any
assets other than in the ordinary course of business for a purchase price in
excess of $1,000,000; (ii) make any loans, advances or capital contributions or
investments (other than investments in marketable securities) in any Person
(other than any direct or indirect wholly owned Subsidiary); or (iii) except
with respect to capital expenditures provided for in the Company’s capital
expenditure plan, a copy of which has previously been provided to CIG and the
NBCU Entities, authorize or make any single capital expenditure which is in
excess of $1,000,000 or capital expenditures which are, in the aggregate, in
excess of $3,000,000 for the Company and the Subsidiaries taken as a whole; or
(iv) enter into or amend any Contract with respect to any matter set forth in
this Section 9.01(e);
(f) repurchase,
redeem, defease, cancel, prepay, forgive, issue, sell, incur or otherwise
acquire any indebtedness for borrowed money or any debt securities or rights to
acquire debt securities of the Company or any Subsidiary, or assume, guarantee
or otherwise become responsible for such indebtedness of another Person, except
for indebtedness for borrowed money incurred or repaid in the ordinary course
of business consistent with past practice under the Senior Debt;
(g) amend or
modify in any material respect the terms of, or refinance, any indebtedness for
borrowed money, guarantee of indebtedness for borrowed money or debt securities
of the Company or any Subsidiary;
(h) merge or
consolidate the Company or any Subsidiary with any Person;
(i) transfer,
lease, license, sell, place a Lien upon or otherwise dispose of any of its
properties or assets (including capital stock of any Subsidiary) with a fair
market value in excess of $2,000,000 individually, or $5,000,000 in the
aggregate, except for transfers, leases, licenses, sales, Liens (other than
Permitted Liens) or other dispositions (i) in the ordinary course of business
and consistent with past practice or (ii) required under any Contract to which
the Company or any of its Subsidiaries is a party as of the date of this
Agreement.
(j) adopt a
plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization of the Company or any material
Subsidiary;
(k) (i)
increase the compensation (including, without limitation, severance
compensation) or benefits payable or to become payable to, or make any payment
not otherwise due to, any of its past or present directors, officers, employees
or other service providers, except for increases in the ordinary course of
business and consistent with past practice in salaries, wages,
bonuses,
incentives or benefits of employees of the Company or any Subsidiary who are
not directors or officers of the Company, (ii) except pursuant to existing
contract obligations establish, adopt, enter into, amend or take any action to
accelerate rights under any Company Benefit Plans or any plan, agreement,
program, policy, trust, fund or other arrangement that would be a Company
Benefit Plan if it were in existence as of the date of this Agreement other
than agreements entered into in the ordinary course of business and consistent
with past practice with new hires who will not be officers of the Company,
(iii) contribute any funds to a “rabbi trust” or similar grantor
trust, (iv) change any actuarial assumptions currently being utilized with
respect to Company Benefit Plans, or (v) grant any equity or equity-based
awards to directors, officers or employees, except in each case to the extent
required by applicable Laws or by existing Company Benefit Plans set forth in
Section 6.09 of the Company Disclosure Letter;
(l) make any
changes other than as required by GAAP or applicable Law, with respect to
accounting methods, policies or procedures;
(m) pay,
discharge or satisfy any claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business and consistent
with past practice, of liabilities reflected or reserved against in the 2006
Balance Sheet or subsequently incurred in the ordinary course of business and
consistent with past practice;
(n) enter
into, renew, extend, amend, modify or terminate any Company Material Contract,
or renew, extend, amend, waive, modify or terminate any material rights of the
Company or any Subsidiary thereunder, other than in the ordinary course of
business and consistent with past practice;
(o) enter
into any Contract relating to the digital spectrum of all or any of the Company
Stations, except for any agreement which (i) has a term of not more than 14
months, (ii) is terminable on not more than 14 months notice without payment of
any material penalty or any other material adverse consequence suffered by the
Company or (C) is approved by a majority of the Board;
(p) enter
into any new joint sales, joint services, time brokerage, or local marketing
Contract (other than Contracts that may be terminated at no cost to the Company
or any Subsidiary upon six months’ notice) involving 15% or more of the
weekly time inventory or programming hours of a Company Station, but only if
after entering into such Contract, Company Stations representing 20% or more of
the Company’s National Coverage would be subject to such
Contracts;
(q) other
than with respect to any low power television stations that do not expand the
coverage and cable carriage of any Company Station, sell, lease, assign or
otherwise dispose of (x) more than 50% of the stock of any Subsidiary of the
Company that owns the primary operating assets of, or a FCC license of, a
Company Station or (y) the primary operating assets of, or any FCC license of,
a Company Station, in each case, if such Company Station is located in any of
the 50 largest DMAs as of the date of such disposition;
(r) commence,
waive, release or settle any pending or threatened Action (i) involving
payments by or to the Company or any of its Subsidiaries in excess of
$1,000,000 or (ii) entailing the incurrence of (A) any obligation or liability
of the Company in excess of such amount, including costs or revenue reductions,
(B) obligations that would impose any material restrictions on the business or
operations of the Company or its Subsidiaries, or (iii) that is brought by any
current, former or purported holder of any capital stock or debt securities of
the Company or any Subsidiary relating to the transactions contemplated by any
of the Transaction Agreements;
(s) fail to
make in a timely manner any filings with the SEC required under the Securities
Act or the Exchange Act; or
(t) announce
an intention, enter into any formal or informal agreement or otherwise make a
commitment, to do any of the foregoing.
ARTICLE
X
ADDITIONAL
AGREEMENTS
SECTION
10.01 Stockholders’
Meetings.
(a) The
Company, acting through the Board, shall, in accordance with applicable Law and
the Company’s Certificate of Incorporation and By-laws, duly call, give
notice of, convene and hold an annual or special meeting of its stockholders no
later than June 30, 2007 (the “Initial
Stockholders’ Meeting”)
to vote on, among other matters, (i) the Certificate Amendment, (ii) the
Proposed Amendments, (iii) the issuance of the Conversion Shares, if and to the
extent required to satisfy conditions to the listing thereof under applicable
rules of the American Stock Exchange, (iv) if and to the extent required under
applicable rules of the American Stock Exchange, (A) the issuance of 26,688,361
shares of Class B Common Stock pursuant to the terms and conditions of the NBCU
Option II, and (B) the issuance of 100,000,000 shares of Class A Common Stock
upon exercise of the Warrant by CIG, and (v) any other matters, if any,
required by applicable Law to approve and adopt the Transaction Agreements to
which the Company is a party and to consummate the transactions contemplated
thereby. CIG hereby irrevocably agrees that it shall vote (or cause to be
voted) all of the Voting Stock that it or its subsidiaries has the power to
vote on the record date for the Initial Stockholders’ Meeting, in favor of
each of the proposals described in this Section 10.01(a) at the Initial
Stockholders’ Meeting. The Company shall (A) include in the Proxy
Statement, and not subsequently withdraw or modify in any manner adverse to CIG
or the NBCU Entities, the declaration of the Board that the proposals described
in this Section 10.01(a) are advisable and (B) use its reasonable best efforts
to obtain the approval of such proposals; provided,
however, that
such declaration may be withdrawn or modified by the Board without the prior
written consent of CIG and the NBCU Entities to the extent that the Board
determines in the good faith exercise of its reasonable business judgment,
after receiving the advice of outside counsel, that such declaration would no
longer be consistent with its fiduciary duties to the Company’s
stockholders under applicable Law, in which event notwithstanding such
withdrawal or modification of such declaration, the Company’s obligation
to duly call, give notice of, convene and hold the Initial Stockholders’
Meeting pursuant to this Section 10.01(a) shall not be affected.
Notwithstanding the foregoing, if the Xxxxxx Stockholders sign one or more
consents in writing approving each of the matters set forth in clauses (i)
through (vi) of this Section 10.01(a), and duly deliver such written consent or
consents to the Company in the manner provided in the Certificate of
Incorporation of
the
Company prior to May 14, 2007, the Company shall no longer be obligated to duly
call, give notice of, convene or hold the Initial Stockholders’ Meeting.
(b) The
Company, acting through the Board, shall, in accordance with applicable Law and
the Company’s Certificate of Incorporation and By-laws, (i) duly call,
give notice of, convene and hold an annual or special meeting of its
stockholders as promptly as practicable following the Call Closing for the
purpose of considering and taking action on the Restated Certificate of
Incorporation necessary to effect the Reverse Stock Split (the
“Stockholders’
Meeting”)
and (ii) (A) include in the Proxy Statement, and not subsequently withdraw or
modify in any manner adverse to CIG, the declaration of the Board that the
Restated Certificate of Incorporation is advisable and (B) use its best efforts
to obtain approval of the Restated Certificate of Incorporation; provided,
however, that
such declaration may be withdrawn or modified by the Board without the prior
written consent of CIG and the NBCU Entities to the extent that the Board
determines in the good faith exercise of its reasonable business judgment,
after receiving the advice of outside counsel, that such declaration would no
longer be consistent with its fiduciary duties to the Company’s
stockholders under applicable Law, in which event notwithstanding such
withdrawal or modification of such declaration, the Company’s obligation
to duly call, give notice of, convene and hold the Stockholders’ Meeting
pursuant to this Section 10.01(b) shall not be affected. At the
Stockholders’ Meeting, CIG shall vote (or cause to be voted) all shares of
Class A Common Stock that it or its subsidiaries has the power to vote on the
record date for the Stockholders’ Meeting, in favor of the Restated
Certificate of Incorporation necessary to effect the Reverse Stock Split.
SECTION
10.02 Proxy
Statement. (i) In
the case of the Stockholders’ Meeting, promptly following the Call
Closing, and (ii) in the case of the Initial Stockholders’ Meeting, as
promptly as practicable following the Commencement Date, the Company shall file
a Proxy Statement with the SEC under the Exchange Act, and shall use its
reasonable best efforts to have such Proxy Statement cleared by the SEC as
promptly as practicable. CIG, the NBCU Entities and the Company shall cooperate
with each other in the preparation of each such Proxy Statement, and the
Company shall notify CIG and the NBCU Entities of the receipt of any comments
of the SEC with respect to each such Proxy Statement and of any requests by the
SEC for any amendment or supplement thereto or for additional information and
shall promptly provide to CIG and the NBCU Entities copies of all
correspondence between the Company or any representative of the Company and the
SEC with respect thereto. The Company shall give CIG, the NBCU Entities and
their respective counsel a reasonable opportunity to review and comment on each
Proxy Statement, including all amendments and supplements thereto, prior to
such documents being filed with the SEC or disseminated to the holders of
shares of Voting Stock, and shall give CIG, the NBCU Entities and their
respective counsel a reasonable opportunity to review and comment on all
responses to requests for additional information and replies to comments prior
to their being filed with, or sent to, the SEC. Each of the Company, CIG and
the NBCU Entities agrees to use its reasonable best efforts, after consultation
with each other, to respond promptly to all such comments of and requests by
the SEC and to cause each Proxy Statement and all required amendments and
supplements thereto to be mailed to the holders of shares of Voting Stock at
the earliest practicable time. The proxy statement to be sent to the
stockholders of the Company in connection with the Initial Stockholders’
Meeting and, if necessary, the Stockholders’ Meeting, or
the
information statement to be sent to such stockholders, as appropriate (such
proxy statement or information statement, as amended or supplemented, being
referred to herein as the “Proxy
Statement”),
shall not, on the date the Proxy Statement (or any amendment or supplement
thereto) is filed with the SEC, on the date first mailed to stockholders of the
Company, at the time of the Initial Stockholders’ Meeting and, if
necessary, at the time of the Stockholders’ Meeting, and at the Effective
Time, contain any statement which, at the time and in light of the
circumstances under which it was made, is false or misleading with respect to
any material fact, or which omits to state any material fact necessary in order
to make the statements therein not false or misleading or necessary to correct
any statement in any earlier communication with respect to the solicitation of
proxies for the Initial Stockholders’ Meeting or, if necessary, the
Stockholders’ Meeting which shall have become false or misleading.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied by CIG, the NBCU Entities or their
respective representatives for inclusion in such Proxy Statement. Such Proxy
Statement shall comply in all material respects as to form with the
requirements of the Exchange Act.
SECTION
10.03 Company
Board Representation; Section 14(f).
(u) From
and after the closing of the Tender Offer but prior to the Call Closing, CIG
shall have the right to designate two directors. In addition to the foregoing,
in the event any member of the Board other than any member appointed by the
holders of 14 ¼ Preferred or the 9 ¾ Preferred ceases for any
reason to serve as a director of the Company, CIG shall have the right to
designate a director to fill any such vacancy. Subject to any restrictions
imposed by applicable Law, the Company shall take all actions necessary to
cause CIG’s designees to be elected or appointed as directors of the
Company, including increasing the size of the Board or securing the
resignations of incumbent directors, or both.
(b) Promptly
following the Call Closing, and from time to time thereafter, the composition
of the Board and the election of members designated or nominated by CIG or the
NBCU Entities to the Board shall be governed by Section 3.1 of the New
Stockholders’ Agreement, as may be amended from time to time.
(c) The
Company shall promptly take all actions, if any, required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder to fulfill its
obligations under this Section 10.03, and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1 to fulfill such obligations. CIG
shall supply to the Company, and be solely responsible for, any information
with respect to it and its nominees, officers, directors and affiliates
required by such Section 14(f) and Rule 14f-1.
(d) Following
the election or appointment of designees of CIG pursuant to this Section 10.03,
prior to the Call Closing, (i) any amendment of the Transaction Agreements to
which the Company is a party or the Certificate of Incorporation or By-laws of
the Company, (ii) any termination by the Company of the Transaction Agreements
to which the Company is a party, (iii) any extension by the Company of the time
for the performance of any of the obligations or other acts of CIG or the NBCU
Entities, (iv) any recommendation to the Company’s stockholders or any
modification or withdrawal of any such recommendation in connection with the
Transaction or (v) any waiver of any of the Company’s rights under the
Transaction Agreements to
which
the Company is a party, shall require the concurrence of a majority of the
directors of the Company then in office who neither were designated by CIG nor
are employees of the Company or any Subsidiary.
SECTION
10.04 Access
to Information; Confidentiality.
(a) From
the date hereof until the Effective Time, the Company shall, and shall cause
the Subsidiaries and the officers, directors, employees, auditors and agents of
the Company and the Subsidiaries to, afford the officers, employees and agents
of CIG and the NBCU Entities access, during normal business hours and upon
reasonable notice by CIG or the NBCU Entities, to the officers, employees,
agents, properties, offices, plants and other facilities, books and records of
the Company and each Subsidiary, and shall furnish CIG and the NBCU Entities
with such financial, operating and other data and information as CIG or the
NBCU Entities, through its officers, employees or agents, may reasonably
request.
(b) All
information obtained by CIG and its Affiliates and the NBCU Entities pursuant
to this Section 10.04 shall be kept confidential in accordance with (i) the
Confidentiality Agreement, dated February 15, 2007, between CLP and the Company
and (ii) the Confidentiality Agreements, dated May 12, 1999 and June 30, 2004,
between NBCU and the Company (collectively, the “Confidentiality
Agreements”).
(c) No
investigation pursuant to this Section 10.04 shall affect any representation or
warranty in this Agreement of any party hereto, any condition to the
obligations of any parties hereto, or any condition to the Tender Offer and the
Exchange Offer set forth on Annex A and Annex B, respectively.
SECTION
10.05 No
Solicitation of Transactions.
(a) The
Company agrees that neither it nor any Subsidiary nor any of the directors,
officers or employees of it or any Subsidiary will, and that it will cause its
and its Subsidiaries’ agents, advisors and other representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any Subsidiary) not to, directly or indirectly, (i) solicit,
initiate or encourage (including by way of furnishing nonpublic information),
or take any other action to facilitate, any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer to its
stockholders) that constitutes, or may reasonably be expected to lead to, any
Competing Transaction, (ii) enter into or maintain or continue discussions or
negotiations with any Person in furtherance of such inquiries or to obtain a
proposal or offer for a Competing Transaction, (iii) agree to, approve or
endorse any Competing Transaction or enter into any letter of intent or other
Contract relating to any Competing Transaction or (iv) authorize or permit any
of the officers, directors or employees of the Company or any of its
Subsidiaries, or any investment banker, financial advisor, attorney, accountant
or other representative retained by the Company or any of its Subsidiaries, to
take any such action. The Company shall notify CIG and the NBCU Entities as
promptly as practicable (and in any event within one (1) Business Day after the
Company attains knowledge thereof), orally and in writing, if any proposal or
offer, or any inquiry or contact with any Person with respect thereto,
regarding a Competing Transaction is made, specifying the material terms and
conditions thereof and the identity of the party making such proposal or offer
or inquiry or contact (including material amendments or proposed material
amendments). The Company shall, and shall direct or cause its and its
Subsidiaries’ directors, officers, employees,
agents,
advisors and other representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any Subsidiary) to,
immediately cease and cause to be terminated any discussions or negotiations
with any Person that may have been conducted heretofore with respect to a
Competing Transaction. The Company shall not release any Person from, or waive
any provision of, any confidentiality or standstill agreement to which it is a
party and the Company also agrees to promptly request each Person that has
heretofore executed a confidentiality agreement in connection with its
consideration of acquiring (whether by merger, acquisition of stock or assets
or otherwise) the Company or any Subsidiary, if any, to return (or if permitted
by the applicable confidentiality agreement, destroy) all confidential
information heretofore furnished to such Person by or on behalf of the Company
or any Subsidiary.
(b) Notwithstanding
anything to the contrary in this Section 10.05, prior to the Exchange Offer
Closing or the Exchange Offer Expiration, as applicable, the Board may furnish
information to, and enter into discussions with, a Person who has made an
unsolicited, written, bona fide proposal or offer regarding a Competing
Transaction, and the Board has (i) determined, in its good faith judgment
(after consultation with its financial advisor), that such proposal or offer
constitutes or is reasonably likely to constitute a Superior Proposal, (ii)
determined, in its good faith judgment after consultation with outside legal
counsel (who may be the Company’s regularly engaged outside legal
counsel), that, in light of such Superior Proposal, the furnishing of such
information or entering into discussions is required to comply with its
fiduciary obligations to the Company and its stockholders under applicable Law,
(iii) provided written notice to CIG and the NBCU Entities of its intent to
furnish information or enter into discussions with such Person and (iv)
obtained from such Person an executed confidentiality agreement (it being
understood that such confidentiality agreement and any related agreements shall
not include any provision calling for any exclusive right to negotiate with
such party or having the effect of prohibiting the Company from satisfying its
obligations under the Transaction Agreements to which it is a
party).
(c) Except
as otherwise provided in this Agreement, neither the Board nor any committee
thereof shall withdraw or modify, or propose to withdraw or modify, in a manner
adverse to CIG and the NBCU Entities, the approval or recommendation by the
Board or any such committee of the Transaction Agreements to which the Company
is a party and the Transaction, including the Tender Offer and the Reverse
Stock Split, or approve or recommend, or cause or permit the Company to enter
into any letter of intent, agreement or obligation with respect to, any
Competing Transaction.
(d) The
parties acknowledge and agree that nothing contained herein shall affect or in
any way interfere with the Company’s Obligation to comply with Rule 14d-9
under the Exchange Act.
SECTION
10.06 Directors’
and Officers’ Indemnification and Insurance.
(a) The
Company agrees that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
(and rights for advancement of expenses) now existing in favor of the current
or former directors or officers of the Company (the “Indemnified
D&Os”)
as provided in its Certificate of Incorporation or By-laws and any
indemnification or other agreements of the Company as in effect on the date of
this Agreement shall continue in full force and effect in accordance with their
terms subsequent to the Effective
Time.
Further, the Certificate of Incorporation and By-laws of the Company after the
Effective Time shall contain provisions no less favorable with respect to
indemnification, advancement of expenses and exculpation of former or present
directors and officers than are presently set forth in the Certificate of
Incorporation and By-laws of the Company, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of any such individuals, except as amendments may be required by the DGCL
during such period.
(b) The
Company shall, at its option, either (A) purchase a tail policy of
directors’ and officers’ liability insurance which shall be in effect
for a period of six years from the Effective Time, if available, and shall
contain substantially the same coverage and amount as, and contain terms and
conditions no less advantageous, in the aggregate, than the coverage provided
in the D&O Insurance Policies or (B) use its reasonable best efforts to
maintain in effect for six years from the Effective Time, if available, the
D&O Insurance Policies (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not materially less favorable), in either case with respect
to matters occurring prior to the Effective Time; provided,
however, that
in no event shall the Company be required to expend pursuant to this Section
10.06(b) more than $2,500,000 as a
premium for the tail policy or an amount per year equal to 300% of current
annual premiums paid by the Company for such insurance (which premiums the
Company represents and warrants to be $940,000 in the aggregate), as the case
may be.
(c) In the
event the Company or any of its successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
the Company or at CIG’s option, CIG, shall assume the obligations set
forth in this Section 10.06.
(d) This
Section 10.06 shall continue in effect subsequent to the Effective Time, is
intended to benefit the Company and each Indemnified D&O, shall be binding
on all successors and assigns of the Company, and shall be enforceable by the
Indemnified D&O. The provisions of this Section 10.06 are intended to be
for the benefit of, and will be enforceable by, each Indemnified D&O, his
or her heirs, and his or her representatives and are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such Person may have by contract or otherwise.
SECTION
10.07 Notification
of Certain Matters. Each
party hereto shall give prompt notice to the other parties of (a) the
occurrence or non-occurrence of any event, the occurrence or non-occurrence of
which reasonably could be expected to cause any representation or warranty
contained in the Transaction Agreements to which it is a party to be untrue or
inaccurate in any material respect, (b) any failure of the Company, CIG or the
NBCU Entities, as the case may be, to comply with or satisfy in any material
respect any covenant or agreement to be complied with or satisfied by it
thereunder, (c) any other material development relating to the business,
prospects, financial condition or results of operations of the Company and the
Subsidiaries and (d) any notice received by, and any communication made to, the
FCC, and the
general
status of any FCC filing with respect to the exercise of the Call Right by CIG
and the Transaction; provided, however, that the delivery of any notice
pursuant to this Section 10.07 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION
10.08 Further
Action; Reasonable Best Efforts. (a)
Upon the terms and subject to the conditions of this Agreement, each of the
parties hereto shall use its reasonable best efforts to (i) make promptly its
respective filings, and thereafter make any other required submissions, under
applicable Law with respect to the Transaction, (ii) promptly file or cause
their respective affiliates to promptly file one or more applications with the
FCC seeking the FCC Approval, (iii) diligently prosecute the FCC Application,
including responding to any requests from the FCC or its staff, (iv) take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable under applicable Law to consummate and
make effective the Transaction, including, without limitation, using its
reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are necessary for
the consummation of the Transaction and to fulfill the conditions set forth in
Article XI and the conditions to the Tender Offer and the Exchange Offer set
forth on Annex A and Annex B, respectively, (v) consummate and make effective,
in the most expeditious manner practicable, the Transaction, (vi) execute and
deliver any additional instruments or other documents necessary to consummate
the Transaction and to fully carry out the terms of each of the Transaction
Agreements to which it is a party, (vii) contest and resist any Action, whether
judicial or administrative, and to have vacated, lifted, reversed or overturned
any Governmental Order (whether temporary, preliminary or permanent) that is in
effect and that restricts, prevents or prohibits consummation of the
Transaction, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal and (viii) assist and
cooperate with each other in connection with the foregoing.
(b) Each of
the parties agrees not to, and shall not permit any of its respective
affiliates to, take any action in connection with or related to the Transaction
that would reasonably be expected to prevent or materially delay or impede
receipt of the FCC Approval.
(c) In order
to avoid disruption or delay in the processing of the FCC applications, CIG and
the Company agree to request, as part of such applications, that the FCC apply
its policy permitting license assignments and transfers in transactions
involving multiple markets to proceed, notwithstanding the pendency of one or
more license renewal applications. CIG agrees to make such representations and
undertakings as may be necessary or appropriate to invoke such policy,
including undertakings to assume the position of applicant with respect to any
pending license renewal applications, and to assume the risks relating to such
renewal applications.
SECTION
10.09 Public
Announcements. The
parties hereto shall consult with each other before issuing any press release
or otherwise making any public statements with respect to the Transaction
Agreements or the Transaction and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by Law or the rules of any applicable stock exchange, and except where
the Board determines, after consultation with its outside counsel, that the
failure to make any such press release or public
statement
would be inconsistent with its fiduciary duties under applicable Law. The
initial press release to be issued announcing the execution of this Agreement
and the Transaction shall be in the form reasonably agreed to by all the
parties hereto.
SECTION
10.10 Exchange
of NBCU Series B Preferred.
Promptly following the Exchange Offer Closing or immediately prior to the
Contingent Exchange, as applicable, NBC Palm Beach I shall surrender and
deliver to the Company one or more certificates representing all remaining NBCU
Series B Preferred it holds (after giving effect to Sections 2.05 and 5.04)
plus any accrued but unpaid dividends thereon in exchange for (i) $31,070,000
aggregate stated liquidation preference of Series E-1 Convertible Preferred,
(ii) the NBCU Option II and (iii) Series D Convertible Preferred with an
aggregate stated liquidation preference equal to $21,070,000 less than the
total aggregate stated liquidation preference of NBCU Series B Preferred
surrendered by NBC Palm Beach I pursuant to this Section 10.10. Immediately
following receipt of the certificates representing the respective aggregate
stated liquidation preference of NBCU Series B Preferred surrendered by NBC
Palm Beach I pursuant to this Section 10.10, the Company shall cancel such
certificates and issue to NBC Palm Beach I certificates representing such
aggregate stated liquidation preference of Series E-1 Convertible Preferred and
Series D Convertible Preferred, respectively, as shall be determined pursuant
to the preceding sentence.
SECTION
10.11 Exchange
of Series F Non-Convertible Preferred.
Promptly following the Exchange Offer Closing or immediately prior to the
Contingent Exchange, as applicable, CIG shall surrender and deliver to the
Company (a) one or more certificates representing $95,584,689 aggregate stated
liquidation preference of Series F Non-Convertible Preferred in exchange for
$95,584,689 aggregate stated liquidation preference of (i) Series A-2 Preferred
Stock, or (ii) in the case of a Minority Exchange, Series C Preferred Stock and
(b) one or more certificates representing $114,961,259 aggregate stated
liquidation preference of Series F Non-Convertible Preferred in exchange for
$200,000,000 aggregate stated liquidation preference of Series E-2 Convertible
Preferred. Immediately following receipt of such certificates representing an
aggregate stated liquidation preference of $210,000,000 of Series F
Non-Convertible Preferred Stock surrendered by CIG, the Company shall cancel
such certificates and issue to CIG certificates representing $95,584,689
aggregate stated liquidation preference of Series C Convertible Preferred and
$200,000,000 aggregate stated liquidation preference of Series E-2 Convertible
Preferred, respectively.
SECTION
10.12 Transfer
of Series B Convertible Subordinated Debt. If
applicable, promptly following the Exchange Offer Closing or the occurrence of
the Contingent Exchange, as applicable, NBC Palm Beach I shall transfer to CIG
a note or notes representing up to $10,000,000 in principal amount of the
Series B Convertible Subordinated Debt it receives in the Contingent Exchange,
with such amount determined in accordance with the methodology described on
Schedule 10.12.
SECTION
10.13 Exchange
of Series A-2 Preferred Stock or Series C Preferred Stock Following the Call
Closing.
Promptly following the Call Closing, CIG shall be entitled to surrender and
deliver to the Company one or more certificates representing the Series A-2
Preferred Stock or Series C Preferred Stock, as the case may be, that CIG
received pursuant to Section 10.11, in exchange for Series C Convertible
Preferred with an equal aggregate stated
liquidation
preference. Immediately following receipt of the certificate or certificates
representing the Series A-2 Preferred Stock or Series C Preferred Stock, as the
case may be, surrendered by CIG, the Company shall cancel such certificate and
issue to CIG one or more certificates representing Series C Convertible
Preferred with an aggregate stated liquidation preference in the amount set
forth in the preceding sentence.
SECTION
10.14 Exchange
of Series A-2 Preferred Stock or Series C Preferred Stock in Absence of Call
Closing. (a) In
the event the Call Closing does not occur on or prior to the Call Deadline (as
defined in the Call Agreement) or the FCC Approval is denied, NBC Palm Beach I
shall deliver to CIG one or more notes representing an aggregate principal
amount of Series B Convertible Subordinated Debt held by NBC Palm Beach I after
giving effect to Section 10.12, if any, in exchange for one or more
certificates representing an equal aggregate stated liquidation preference of
the Series A-2 Preferred Stock or Series C Preferred Stock, as the case may be,
that CIG received pursuant to Section 5.04(a).
(b) To the
extent CIG holds any Series A-2 Preferred Stock or Series C Preferred Stock, as
the case may be, after giving effect to Section 10.14(a), CIG shall be entitled
to surrender and deliver to the Company one or more certificates representing
(i) all remaining Series A-2 Preferred Stock it holds in exchange for an equal
aggregate stated liquidated preference of Series A-3 Convertible Preferred and
(ii) all remaining Series C Preferred Stock it holds in exchange for an equal
aggregate stated liquidation preferred of Series C Convertible Preferred.
Immediately following receipt of the certificates representing the aggregate
stated liquidation preference of Series A-2 Preferred Stock or Series C
Preferred Stock, as the case may be, surrendered by CIG, the Company shall
cancel such certificates and issue to CIG certificates representing such
aggregate stated liquidation preference of Series A-3 Convertible Preferred or
Series C Convertible Preferred, as the case may be, as shall be determined
pursuant to the preceding sentence.
(c) To the
extent NBC Palm Beach I holds any Series A-2 Preferred Stock or Series C
Preferred Stock, as the case may be, as a result of Section 10.14(a), NBC Palm
Beach I shall be entitled to surrender and deliver to the Company one or more
certificates representing (i) all remaining Series A-2 Preferred Stock it holds
in exchange for an equal aggregate stated liquidation preference of Series A-3
Convertible Preferred and (ii) all remaining Series C Preferred Stock it holds
in exchange for an equal aggregate stated liquidation preferred of Series C
Convertible Preferred. Immediately following receipt of the certificates
representing the aggregate stated liquidation preference of Series A-2
Preferred Stock or Series C Preferred Stock, as the case may be, surrendered by
NBC Palm Beach I, the Company shall cancel such certificates and issue to NBC
Palm Beach I certificates representing an aggregate stated liquidation
preference of Series A-3 Convertible Preferred or Series C Convertible
Preferred, as the case may be, as shall be determined in accordance with the
preceding sentence.
SECTION
10.15 Termination
of Certain Existing Agreements.
(a) The
Company and the NBCU Entities shall take all actions necessary, appropriate and
advisable, and shall assist and cooperate with each other, to terminate the
Stockholder Agreement, the Investment Agreement, the Registration Rights
Agreement and the Xxxxxx Management and Proxy Agreement, dated November 7,
2005, among the Company, PMC, Xx. Xxxxxx and certain of the
Company’s
Subsidiaries, effective as of the Call Closing, including executing and
delivering any instruments or documents necessary for such termination.
(b) Each of
the NBCU Entities hereby waives all of its rights, powers and remedies
available at law or in equity or otherwise arising out of any breach, violation
or non-performance by the Company (A) prior to the date hereof of (i) Section
2.2(a) of the Stockholder Agreement as a result of the failure of the Company
to use its reasonable best efforts to cause the Board to consist of nine
members and (ii) Section 3.8(a) of the Stockholder Agreement as a result of the
failure to grant Company Stock Awards for not less than 24 million shares of
Class A Common Stock to selected senior executives of the Company prior to May
6, 2007 and (B) of the Stockholder Agreement or the Investment Agreement
following the date hereof as a result of the execution and delivery of the
Transaction Agreements to which the Company is a party and the performance by
the Company of its obligations thereunder.
SECTION
10.16 Delisting. To the
extent permitted by applicable Law, based on the number of shares outstanding
and the number of record holders of Class A Common Stock, the Company shall
take any and all actions necessary to delist shares of Class A Common Stock
from the American Stock Exchange and deregister the shares of Class A Common
Stock with the SEC following the closing of the Tender Offer or any Subsequent
Expiration Date of the Tender Offer.
SECTION
10.17 Stockholder
Litigation. The
Company shall keep CIG and the NBCU Entities informed, on a current basis, of
the status of any stockholder litigation against the Company or its directors
or officers related to the Transaction and the status of any discussions or
negotiations with respect to the settlement of any such litigation. Following
the date hereof but prior to the closing of the Tender Offer, the Company may
control the settlement of such litigation, but no such settlement shall be
agreed to by the Company without the consent of CIG and the NBCU Entities, such
consent not to be unreasonably withheld with respect to any such settlement not
involving a payment by the Company. Following the closing of the Tender Offer
and prior to the Call Closing CIG and the NBCU Entities shall, upon written
notice to the Company, be entitled to: (a) participate with the Company
regarding the defense of any such stockholder litigation, except to the extent
the Company reasonably determines that such participation by CIG and the NBCU
Entities would result in the waiver of the attorney-client, work product or
other applicable privilege and (b) jointly control (with the Company) any
settlement by the Company of such litigation. Notwithstanding the foregoing,
CIG and the NBCU Entities shall not unreasonably withhold, condition or delay
consent to any settlement involving a release of the Company and payment by the
Company of an amount not exceeding the deductible under any insurance policy
covering claims asserted in such litigation.
SECTION
10.18 CIG
Option to Purchase NBCU Series B Preferred. (a) If the
closing of the Tender Offer has occurred and for any reason other than as a
result of the breach by CIG, or if CIG causes the Company’s breach, by the
Company, of any of its obligations in connection with the Exchange Offer,
neither the Exchange Offer Closing nor the Contingent Exchange occurs, (1) CIG
shall deliver to NBCU a certificate representing $210,000,000 aggregate stated
liquidation preference of Series F Non-Convertible Preferred, duly endorsed in
blank or accompanied by a stock power duly executed in black, with all required
stock transfer tax stamps affixed, and (2) NBCU shall grant CIG an option to
purchase a number of shares of NBCU
Series B
Preferred with an aggregate stated liquidation preference equal to the product
of (a) a fraction (i) the numerator of which is (x) the Offer Price, multiplied
by (y) the total number of shares of Class A Common Stock tendered and accepted
in the Tender Offer, and (ii) the denominator of which is the number of shares
of Class A Common Stock outstanding on the Commencement Date, less the sum of
(A) the Ineligible Shares, plus (B) 6,122,544 shares, multiplied by the Offer
Price, multiplied by (b) $150,000,000. The exercise price of such option will
be equal to (a) the aggregate number of shares of Class A Common Stock acquired
by CIG in the Tender Offer multiplied by (b) the Offer Price. CIG shall be
permitted to pay such exercise price in either cash or shares of Class A Common
Stock, at CIG’s discretion. In the event CIG chooses to pay such exercise
price in shares of Class A Common Stock, NBCU may, at its discretion, elect to
receive an equal number of shares of Class C Common Stock instead of Class A
Common Stock. In the event NBCU elects to receive Class C Common Stock, CIG
shall surrender and deliver to the Company a certificate or certificates
representing the number of shares of Class A Common Stock being used to pay
such exercise price as determined in accordance with this Section 10.18 in
exchange for an equal number of shares of Class C Common Stock and immediately
following receipt of the certificates representing such shares of Class A
Common Stock surrendered by CIG, the Company shall cancel such certificates and
issue to CIG certificates representing an equal number of shares of Class C
Common Stock.
(b) Upon
receipt of the certificate representing $210,000,000 aggregate stated
liquidation preference of Series F Non-Convertible Preferred delivered by CIG
pursuant to Section 10.18(a), NBCU shall surrender and deliver to the Company
such certificate. Immediately following receipt of such certificate delivered
by NBCU, the Company shall cancel such certificate and issue to NBC Palm Beach
I a certificate representing $210,000,000 aggregate stated liquidation
preference of NBCU Series B Preferred in rescission thereof.
SECTION
10.19 Employment
of Certain Company Employees. For a
period of five (5) years following the date hereof, the NBCU Entities and their
Affiliates shall not, directly or indirectly, (i) induce or attempt to induce
Xx. Xxxxxxx to leave the employment of the Company or in any way intentionally
interfere with the relationship between the Company and Xx. Xxxxxxx or (ii) to
the extent such restriction does not violate applicable Law, engage (as an
employee, consultant or otherwise) Xx. Xxxxxxx for any purposes; provided, that
clause (ii) of this Section 10.19 shall not apply to any engagement by the NBCU
Entities or their Affiliates of Xx. Xxxxxxx that was not a result of any
inducement or attempted inducement of Xx. Xxxxxxx by any of the NBCU Entities
or their Affiliates to leave the employment of the Company or any interference
with the relationship between the Company and Xx. Xxxxxxx and if such
engagement occurs no earlier than twelve (12) months after the date Xx. Xxxxxxx
is no longer employed by the Company.
SECTION
10.20 Approval
of Compensation Actions. Prior
to the closing of the Tender Offer, the compensation committee of the Board
shall take all such actions as may be required to approve, as employment
compensation, severance or other employee benefit arrangement, any and all
Compensation Actions taken after the date hereof and prior to the closing of
the Tender Offer that have not already been so approved so as to cause such
compensation, severance or employee benefit arrangements to fall within the
safe harbor contained in Rule 14d-10 of the Exchange Act.
SECTION
10.21 Indemnity
for Prior Breach of Call Agreement, Escrow Agreement and Noncompete
Agreements. The
NBCU Entities shall jointly and severally indemnify and hold harmless CIG and
its Affiliates from and against any and all Losses which are incurred or
suffered by CIG or any of its Affiliates by reason of, or relating to, any
liabilities, obligations or commitments relating to or arising out of any
breach of the Call Agreement, the Escrow Agreement or the Noncompete Agreements
by an NBCU Entity prior to the Commencement Date. For purposes of this Section
10.21, the Losses shall not include any special, reliance or punitive damages,
lost profit or diminution in value.
SECTION
10.22 Indemnity
for Compensation Actions. The
Company shall indemnify and hold harmless CIG and its Affiliates from and
against any and all Losses which are incurred or suffered by CIG or any of its
Affiliates by reason of, or relating to, breach or non-performance of Section
6.07(b) or Section 10.20 by the Company.
SECTION
10.23 Conduct
of the Exchange Offer. The
Company shall cause the Exchange Offer and the Contingent Exchange to be
conducted in a manner so as to qualify as exempt from the registration
requirements of the Securities Act, pursuant to and in accordance with Section
3(a)(9) of the Securities Act, and the Blue Sky Laws.
SECTION
10.24 CUSIP
Numbers. The
Company shall use its reasonable best efforts to obtain CUSIP numbers for all
securities issued to CIG by the Company in connection with the
Transaction.
SECTION
10.25 PMC
Agreement. CIG
and the NBCU Entities acknowledge that the PMC Management and Proxy Agreement,
dated as of November 7, 2005, by and among the Company, Xxxxxx Management
Corporation, a Nevada corporation, Xx. Xxxxxx and certain direct and indirect
wholly-owned subsidiaries of the Company listed on the signature pages thereto,
shall remain in effect subject to termination as provided therein.
ARTICLE
XI
CONDITIONS
PRECEDENT
SECTION
11.01 Conditions
to the Reverse Stock Split. The
obligations of the Company to effect the Reverse Stock Split shall be subject
to the satisfaction of the following conditions at or prior to the Effective
Time; provided,
however, that
the determination of whether any such conditions have been satisfied shall be
made by CIG in its reasonable judgment:
(a) FCC
Approval. The
FCC Approval shall have been received;
(b) Approval
by Holders of Voting Stock. The
Reverse Stock Split and the Restated Certificate of Incorporation effecting the
Reverse Stock Split shall have been approved and adopted by the requisite vote
of the holders of the Voting Stock;
(c) No
Law. No
Governmental Authority shall have enacted, issued, promulgated, enforced or
entered any Law (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the Reverse Stock Split illegal;
(d) Tender
Offer. CIG
shall have purchased all shares of Class A Common Stock validly tendered and
not withdrawn pursuant to the Tender Offer and the Tender Offer shall have been
completed; and
(e) Call
Closing. The
Call Closing shall have occurred.
SECTION
11.02 Frustration
of Closing Conditions. None
of the Company, CIG or the NBCU Entities may rely on the failure of any
condition set forth in this Article XI to be satisfied if such failure was
caused by (a) such party’s failure to use its reasonable best efforts to
satisfy such condition or (b) such party’s intentional, knowing or willful
breach, violation or non-performance of such condition.
ARTICLE
XII
TERMINATION,
AMENDMENT AND WAIVER
SECTION
12.01 Termination
Prior to the Commencement Date. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Commencement Date by any party,
notwithstanding any requisite approval and adoption of this Agreement by the
stockholders of the Company:
(a) By
mutual written consent of the parties hereto; or
(b) By any
party hereto, if any Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling
(whether temporary, preliminary or permanent) that has become final and
nonappealable and has the effect of making consummation of the Transaction
illegal or otherwise preventing or prohibiting consummation of the
Transaction.
SECTION
12.02 Termination
After the Commencement Date. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned if the Call Closing shall not have occurred on or before the 18-month
anniversary of the date hereof (the “Termination
Date”);
provided,
however, that CIG and NBCU together shall have the right to extend the
Termination Date for one additional six-month period if, on the Termination
Date, all of the conditions to the Reverse Stock Split in Section 11.01, other
than the conditions in Sections 11.01(a) and (e), and to the Exchange Offer in
Annex B have been satisfied or waived (if waivable) or shall be then capable of
being satisfied.
SECTION
12.03 Effect
of Termination. (a) In
the event of the termination of this Agreement pursuant to Section 12.01, this
Agreement shall forthwith become void and of no further effect, and there shall
be no liability on the part of any party hereto (or any of its Affiliates,
directors, officers, employees, stockholders, representatives or agents),
except (i) Sections 10.04(b) and (c), this Article XII and Article XIII and
(ii) that nothing herein shall relieve any party from liability for any
knowing, willful or intentional breach of this Agreement by such party prior to
the date of such termination.
(b) In the
event of the termination of this Agreement pursuant to Section 12.02, this
Agreement shall forthwith become void and of no further effect, and there shall
be no liability on the part of any party hereto (or any of its Affiliates,
directors, officers, employees, stockholders, representatives or agents),
except (i) Section 9.1, which shall terminate upon the date CIG is able to
appoint the majority members of the Board, (ii) Sections 5.04, 10.03(a),
10.04(b) and (c), 10.10, 10.11, 10.12, 10.13, 10.14, 10.18, 10.22, this Article
XII and Article XIII and (iii) that nothing herein shall relieve any party from
liability for any knowing, willful or intentional breach of this Agreement by
such party prior to the date of such termination.
SECTION
12.04 Fees
and Expenses. Each
party hereto shall pay its own costs and expenses (including legal, accounting
and broker fees and expenses) incurred in connection
with or relating to this Agreement, the other Transaction Agreements and the
transactions contemplated hereby and thereby; provided,
however, that
if the closing of the Tender Offer shall occur, the Company shall pay and
reimburse the costs and expenses (excluding legal and accounting costs and
expenses) incurred by CIG in connection with the Tender Offer.
SECTION
12.05 Amendment.
Subject to Section 10.03(c), this Agreement may be amended by the parties
hereto at any time prior to the Effective Time; provided, however, that, there
shall be no amendment that by Law requires further approval by the
Company’s stockholders without such approval having been obtained. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
SECTION
12.06 Waiver. At any
time prior to the Effective Time, any party hereto may (a) extend the time for
the performance of any obligation or other act of any other party hereto, (b)
waive any inaccuracy in the representations and warranties of any other party
contained herein or in any document delivered pursuant hereto and (c) subject
to Section 12.05, waive compliance with any agreement of any other party or any
condition to its own obligations contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby. The failure of any party hereto to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
ARTICLE
XIII
GENERAL
PROVISIONS
SECTION
13.01 Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by overnight courier, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
13.01):
If to
the NBCU Entities:
NBC
Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
If to
CIG:
000 X.
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to:
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to:
Xxxxxx
Xxxx
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxx Xxxxxxxx
Xxxxx
Xxxx
Xxxx
Xxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
If to
the Company:
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, XX 00000-0000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With a
copy to:
Holland
& Knight LLP
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
Xxxxx X. Xxxxx
Tel:
000-000-0000
Fax:
000-000-0000
and
Dow,
Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
SECTION
13.02 Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by Law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the Transaction is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in
order
that the Transaction be consummated as originally contemplated to the fullest
extent possible.
SECTION
13.03 Entire
Agreement; Assignment. The
Transaction Agreements and the Exhibits, Annexes and Schedules thereto contain
the entire agreement among the parties thereto with respect to the subject
matter thereof, and supersede all previous agreements, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter, and there are no agreements or understandings
among the parties with
respect to such subject matter other
than those set forth or referred to therein. This Agreement shall not be
assigned by any party hereto without the express prior written consent of all
other parties hereto, except that each of CIG and the NBCU Entities may assign
all or any of its rights and obligations hereunder to its respective
Affiliates, provided that no such assignment shall relieve the assigning party
of its obligations hereunder.
SECTION
13.04 Parties
in Interest. This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 10.06
(which is intended to be for the benefit of the Persons covered thereby and may
be enforced by such Persons).
SECTION
13.05 Specific
Performance. The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
SECTION
13.06 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts executed in and to be performed
in that State (other than those provisions set forth herein that are required
to be governed by the DGCL). All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined exclusively in any New
York state or federal court sitting in the Borough of Manhattan of The City of
New York. The parties hereto hereby (a) submit to the exclusive jurisdiction of
any state or federal court sitting in the Borough of Manhattan of The City of
New York for the purpose of any Action arising out of or relating to this
Agreement brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such Action, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution,
that the Action is brought in an inconvenient forum, that the venue of the
Action is improper, or that this Agreement or the Transaction may not be
enforced in or by any of the above-named courts.
SECTION
13.07 Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.
SECTION
13.08 Waiver
of Jury Trial. Each
of the parties hereto hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or the Transaction. Each of the parties hereto (a) certifies
that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the Transaction, as applicable, by, among other things, the mutual waivers and
certifications in this Section 13.08.
IN
WITNESS WHEREOF, the Company, the NBCU Entities and CIG have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
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ION
MEDIA NETWORKS, INC. |
|
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By: |
/s/ Xxxxxxx Xxxxxx |
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Name:
Xxxxxxx Xxxxxx
Title:
Chief Financial Officer |
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By: |
/s/ Xxxx X. Xxxxxxxx |
| |
|
| |
Name:
Xxxx X. Xxxxxxxx
Title:
Executive Vice President and Chief Financial Officer |
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NBC PALM
BEACH INVESTMENT I, INC. |
|
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx
Title:
Vice President and Treasurer |
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NBC PALM
BEACH INVESTMENT II, INC. |
|
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx
Title:
Vice President and Treasurer |
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By: |
/s/ Xxxxxxx Xxxxxxxxx |
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Name:
Xxxxxxx Xxxxxxxxx
Title:
Managing Director and Deputy General Counsel |
ANNEX
A
Conditions
to the Tender Offer
Notwithstanding
any other provision of this Agreement or the Tender Offer Documents, CIG shall
not be required to accept for payment any shares of Class A Common stock
tendered pursuant to the Tender Offer, if (i) the waiting period applicable to
the Transaction under the HSR Act has not expired or been terminated, in which
case CIG may extend the Tender Offer, or (ii) there shall be any Law
restraining, enjoining or otherwise prohibiting or preventing the consummation
of the Tender Offer, in which case CIG may extend or terminate the Tender
Offer.
The
foregoing conditions are for the sole benefit of CIG and its Affiliates and may
be asserted by CIG regardless of the circumstances giving rise to any such
condition and may be waived by CIG, in whole or in part, at any time and from
time to time prior to the Commencement Date, in its sole discretion;
provided, that
CIG may not assert the foregoing conditions if the occurrence of any such
condition is caused by CIG’s breach, violation or non-performance of the
Transaction Agreements to which it is a party. The failure by CIG at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right; the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other
facts and circumstances; and each such right shall be deemed an ongoing right
that may be asserted at any time and from time to time.
A-1
ANNEX
B
Conditions
to the Exchange Offer
Notwithstanding
any other provision of the Exchange Offer, except as provided by Section
5.01(b) hereto, the Company shall not accept for exchange shares of Senior
Preferred Stock tendered pursuant to the Exchange Offer, if at any time on or
after the date hereof and prior to the expiration of the Exchange Offer, any of
the following conditions shall exist:
(a) there
shall have been instituted or be pending any Action (i) challenging or seeking
to make illegal, materially delay, or otherwise, directly or indirectly,
restrain or prohibit the making of the Exchange Offer, the acceptance for
exchange of shares of Senior Preferred Stock by the Company, or the
consummation of the Transaction; (ii) seeking to prohibit or limit materially
the ownership or operation by the Company or any Subsidiaries of all or any of
the business or assets of the Company or any Subsidiaries that is material to
either the Company and the Subsidiaries, in either case, taken as a whole, or
to compel the Company or any Subsidiaries, as a result of the Transaction, to
dispose of or to hold separate all or any portion of the business or assets of
the Company or any Subsidiaries that is material to the Company and the
Subsidiaries, in each case, taken as a whole, or (iii) which would have a
Material Adverse Effect;
(b) any
Governmental Authority shall have issued a Governmental Order or taken any
other action permanently restraining, enjoining or otherwise prohibiting or
materially delaying or preventing the Transaction and such order, decree,
injunction, ruling or other action shall have become final and
nonappealable;
(c) there
shall have been any Law enacted, promulgated, amended, issued or deemed
applicable to (A) the Company or any Subsidiaries or (B) the Transaction that
results, directly or indirectly, in any of the consequences referred to in
clauses (i) through (iii) of paragraph (a) above;
(d) any
Material Adverse Effect shall have occurred and be continuing;
(e) the
closing of the Tender Offer shall not have occurred;
(f) this
Agreement shall have been terminated in accordance with its terms;
(g) the
Company, CIG and the NBCU Entities shall have agreed that the Company shall
terminate the Exchange Offer or postpone the acceptance for exchange of shares
of Senior Preferred Stock thereunder;
(h) the
representations and warranties of the Company set forth in this Agreement shall
not be true and correct to the extent such failure to be true and correct would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; or
(i) the
Company shall have breached any of its covenants or agreements contained in
this Agreement in any material respect.
SCHEDULE
5.04
Contingent
Exchange Methodology
The
amounts in Section 5.04(a) shall be calculated as follows:
|
1.
|
Overall
Exchange Success Percent shall
be equal to (a) (x) the Total Tendering 14¼% Preferred, plus (y) the
Total Tendering 9¾% Preferred, divided by (b) $639,786,655.
|
|
2.
|
Actual
Subordinated Debt Basket Available shall
be equal to (a) (x) one, minus (y) the Overall Exchange Success Percent,
multiplied by (b) $470,584,689. |
|
3.
|
Amount
of Series B Convertible Subordinated Debt to be Issued to CIG Pursuant to
Section 5.04(a) shall
be equal to (a) the Actual Subordinated Debt Basket Available, multiplied by
(b) (x) $95,584,689, divided by (y) $470,584,689. |
|
4.
|
Amount
of Series B Convertible Subordinated Debt to be Issued to NBCU Pursuant to
Section 5.04(a) shall
be equal to (a) the Actual Subordinated Debt Basket Available, multiplied by
(b) (x) $375,000,000, divided by (y) $470,584,689. |
For
purposes of this Schedule 5.04 and Schedule 10.12, the following terms shall
have the meanings set forth below:
“Total
Tendering 14¼% Preferred”
shall be equal to the total
stated liquidation preference of all
of the 14¼% Preferred Stock owned by holders other than CIG that is
tendered in the Exchange Offer.
“Total
Tendering 14¼% Preferred Percent”
shall be equal to the Total Tendering 14¼% Preferred, divided by
$475,450,218.
“Total
Tendering 9¾% Preferred”
shall be equal to the total stated liquidation preference of all of the
9¾% Preferred Stock owned by holders other than CIG that is tendered in
the Exchange Offer.
“Total
Tendering 9¾% Preferred Percent”
shall be equal to the Total Tendering 9¾% Preferred, divided by
$164,336,438.
SCHEDULE
10.12
Transfer
of Series B Convertible Subordinated Debt
The
amount in Section 10.12 shall be calculated as follows:
Actual
Subordinated Debt Transfer from NBCU to CIG shall
be equal to (a) $10,000,000, multiplied by (b) a fraction, (x) the numerator of
which is (i) 90%, less (ii) the Overall Exchange Success Percent, and (y) the
denominator of which is 90%, provided,
however, that
if the Actual Subordinated Debt Basket Available is equal to $0, then the
Actual Subordinated Debt Transfer from NBCU to CIG shall be $0.
For
purposes of this Schedule 10.12, all capitalized terms used but not otherwise
defined in this Schedule 10.12 shall have the meanings given to them in
Schedule 5.04.
Series
A Convertible Subordinated Debt Indenture Term Sheet
Series
A Convertible Subordinated Debt Indenture Term Sheet
The
Series A Convertible Subordinated Debt Indenture will reflect the following
terms:
|
Issuer
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The
Company. |
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Initial
Holders |
Former
holders of 14¼% Preferred and 9¾% Preferred (including
CIG). |
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Ranking
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Junior
to the Senior Debt and pari passu with the Series B Convertible Subordinated
Debt. |
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Maturity
|
July
2013. |
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Interest
|
11%
annual simple interest coupon, payable quarterly in arrears, in cash, which
amounts shall accrue to the extent not paid in cash. |
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Call
|
Series A
Convertible Subordinated Debt shall not be callable prior to
maturity. |
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Optional
Conversion |
Series A
Convertible Subordinated Debt shall be convertible at any time, at the
holder’s option, into shares of Class D Common Stock at a conversion price
of $0.90 per share of Class D Common Stock, increasing at a rate per annum of
11% from the issuance of Series A Convertible Subordinated Debt through the
date of conversion (the “Series
A Convertible Subordinated Debt Conversion Price”).
|
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Mandatory
Conversion |
At any
time following the first anniversary of the issuance date, Series A Convertible
Subordinated Debt shall be converted (the “Mandatory
Conversion of Series A Convertible Subordinated Debt”)
into shares of Class D Common Stock, at the Series A Convertible Subordinated
Debt Conversion Price, upon the earlier of: (i)
in the event shares of Class A Common Stock or Class D Common Stock are traded
on a national stock exchange, the trading price for fifteen (15) consecutive
trading days of Class A Common Stock or Class D Common Stock on such exchange
is equal to or greater than, (A) in the event the Mandatory Conversion of
Series A Convertible Subordinated Debt occurs after the first anniversary but
prior to the second anniversary of the issuance date, 102% of the Series A
Convertible Subordinated Debt Conversion Price, (B) in the event the Mandatory
Conversion of Series A Convertible Subordinated Debt occurs after the second
anniversary but prior to the third anniversary of the issuance date, 101% of
the Series A Convertible Subordinated Debt Conversion Price, or (C) in the
event the Mandatory Conversion of Series A Convertible Subordinated Debt occurs
after the third anniversary of the issuance date, the Series A Convertible
Subordinated Debt Conversion Price (the price as described in (A), (B) and (C),
as the case may be, the “Series
A Convertible Subordinated Debt Mandatory Conversion Trigger
Price”),
and (ii)
the issuance by the Company of Common Stock at an issue price per share equal
to or greater than the Series A Convertible Subordinated Debt Mandatory
Conversion Trigger Price with an aggregate consideration of no
less |
| |
than
$75,000,000 in such issuance;
provided, that
if such issuance is made to CIG, NBCU or their respective Affiliates, the
designated investment bank shall have provided an opinion
in
customary form to the
Company to the
effect that
the issue price per share of Common Stock is at or
higher than
the fair market value of a share of Common Stock. |
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Adjustment
to Conversion Price |
The
conversion prices shall be subject to customary adjustments for stock splits,
dividends, recapitalizations, below market issues and similar
events. |
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Transferability
|
Series A
Convertible Subordinated Debt shall be freely transferable, subject to
applicable securities laws. |
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Other
Terms |
The
indenture shall contain customary covenants and events of default provisions to
be negotiated by the parties and shall be consistent with the indentures for
the Series B Convertible Subordinated Debt. |
Series B Convertible Subordinated Debt Indenture
Exhibit
B
to the Master Transaction Agreement
Series B Convertible Subordinated Debt Indenture
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ION MEDIA
NETWORKS, INC.
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11% Series B
Mandatorily Convertible Senior Subordinated Notes due 2013
|
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INDENTURE
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Dated as of May
4, 2007
|
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The Bank of New
York Trust Company, N.A., as Trustee
|
i
ii
iii
iv
TIA
SECTION
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INDENTURE
SECTION |
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| Section |
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310 |
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12.01 |
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310(a)(1) |
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8.10 |
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(a)(2) |
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8.10 |
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(a) (3) |
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N.A.** |
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(a) (4) |
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N.A. |
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(a) (5) |
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8.10 |
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(b) |
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8.08, 8.10 |
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(c) |
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N.A. |
| Section |
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311 |
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12.01 |
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311 (a) |
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8.11 |
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(b) |
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8.11 |
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(c) |
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N.A. |
| Section |
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312 |
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12.01 |
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312(a) |
|
2.05 |
| |
|
(b) |
|
12.03 |
| |
|
(c) |
|
12.03 |
| Section |
|
313 |
|
12.01 |
| |
|
313(a) |
|
8.06(a) |
| |
|
(b)(1) |
|
N.A. |
| |
|
(b)(2) |
|
8.06(a) |
| |
|
(c) |
|
8.06(a) |
| |
|
(d) |
|
8.06(b) |
| Section |
|
314 |
|
12.01 |
| |
|
314(a) |
|
5.02(a); 5.03 |
| |
|
(b) |
|
N.A. |
| |
|
(c)(1) |
|
2.02; 9.01; 12.04 |
| |
|
(c)(2) |
|
9.01; 12.04 |
| |
|
(c)(3) |
|
N.A. |
| |
|
(d) |
|
N.A. |
| |
|
(e) |
|
12.04 |
| |
|
(f) |
|
N.A. |
| Section |
|
315 |
|
12.01 |
| |
|
315(a) |
|
8.01(b) |
| |
|
(b) |
|
8.05 |
| |
|
(c) |
|
8.01(a) |
| |
|
(d) |
|
8.01(c) |
| |
|
(d)(2) |
|
8.01(c) |
| |
|
(d)(3) |
|
8.01(c) |
| |
|
(e) |
|
7.11 |
| Section |
|
316 |
|
12.01 |
| |
|
316 (a) |
|
7.05; 10.02(b) |
| |
|
(b) |
|
7.07 |
| |
|
(c) |
|
12.05(a) |
TIA
SECTION
|
|
|
|
INDENTURE
SECTION |
|
|
|
|
|
| Section |
|
317 |
|
12.01 |
| |
|
317(a)(1) |
|
7.08 |
| |
|
317(a)(2) |
|
7.09 |
| |
|
317(b) |
|
2.04 |
| Section |
|
318 |
|
12.01 |
| |
|
| *
|
This
Cross-Reference Table shall not, for any purpose, be deemed a part of this
Indenture.
|
| |
|
| **
|
N.A. means Not
Applicable. |
| |
|
THIS INDENTURE dated as of May 4,
2007 is between ION Media Networks, Inc., a corporation duly organized under
the laws of the State of Delaware (the “Company”), and The Bank of
New York Trust Company, N.A., a national banking association, as Trustee (the
“Trustee”).
In consideration of the purchase
of the Securities (as defined herein) by the Holders thereof, both parties
agree as follows for the benefit of the other and for the equal and ratable
benefit of the Holders of the Securities.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01.
Definitions.
“9¾% Preferred”
means the 9¾% Series A Convertible Preferred Stock, par value $0.001 per
share, of the Company, with a liquidation preference of $10,000 per share, as
it may be modified or amended from time to time.
“14¼% Preferred”
means the 13¼% Cumulative Junior Exchangeable Preferred Stock, par value
$0.001 per share (currently accruing dividends at the rate of 14¼%), of
the Company, with a liquidation preference of $10,000 per share, as it may be
modified or amended from time to time.
“Acquired Debt” means
Debt of a Person (including any Subsidiary) assumed in connection with the
acquisition of assets from such Person.
“Additional Interest”
has the meaning specified in the Registration Rights Agreement. All references
herein to interest accrued or payable as of any date shall include any
Additional Interest accrued or payable as of such date as provided in the
Registration Rights Agreement.
“Affiliate” means, with
respect to any specified person, any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, “control”
when used with respect to any person means the power to direct the management
and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to
the foregoing.
“Agent” means any
Registrar, Paying Agent or Conversion Agent.
“Applicable Conversion
Period” means, with respect to a conversion of Securities, the 10
consecutive Trading Day period commencing on the third Trading Day following
the date the Securities are tendered for conversion.
“Applicable Conversion
Rate” means, as of any Trading Day, the Conversion Rate in effect on such
date after giving effect to any change in the Conversion Price and any
adjustment provided for under Section 4.06.
“Applicable Procedures”
means, with respect to any transfer or exchange of beneficial ownership
interests in a Global Security, the rules and procedures of the Depositary, to
the extent applicable to such transfer or exchange.
“Attributable Debt” in
respect of a Sale and Leaseback Transaction means, at any date of
determination,
(a) if
such Sale and Leaseback Transaction is a Capital Lease Obligation, the amount
of Debt represented thereby according to the definition of “Capital Lease
Obligations” and
(b) in
all other instances, the present value (discounted at the interest rate borne
by the Securities at such time, compounded annually) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Leaseback Transaction (including any period for which
such lease has been extended).
“Average Life” means,
as of any date of determination, with respect to any Debt or Preferred Stock,
the quotient obtained by dividing
(a) the
sum of the product of the numbers of years (rounded to the nearest one-twelfth
of one year) from the date of determination to the dates of each successive
scheduled principal payment of such Debt or redemption or similar payment with
respect to such Preferred Stock multiplied by the amount of such payment by
(b) the
sum of all such payments.
“Average Price” means,
with respect to a conversion of Securities, an amount equal to the average of
the Closing Sale Prices of Conversion Shares for each Trading Day in the
Applicable Conversion Period.
“Beneficial Ownership”
means the definition such term is given in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act.
“Board of Directors”
means either the board of directors of the Company or any committee of the
Board of Directors authorized to act for it with respect to this
Indenture.
“Business Day” means
any day, other than a Saturday, Sunday or any other day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
“Capital Stock” of any
Person means any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person.
“Capital Lease
Obligations” means any obligation under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP; and the
amount of Debt represented by such obligation shall be the capitalized amount
of such obligations determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of
2
rent or any other
amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
“Cash” or
“cash” means such coin or currency of the United States as at any
time of payment is legal tender for the payment of public and private
debts.
“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 obtainable from either
S&P or Xxxxx’x; (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-1 from S&P or at least P-1 from Xxxxx’x; (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 $250,000,000;
(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 which invest substantially all their
assets in securities of the types described in clauses (i) through (v)
above.
“Certificated Security”
means a Security that is in substantially the form attached as Exhibit A but
that does not include the information or the schedule called for by footnote 1
thereof.
“CIG” means CIG Media
LLC, a Delaware limited liability company.
“Class A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Company.
“Class C Common Stock”
means the Class C Non-Voting Common Stock, par value $0.001 per share, of the
Company.
“Class D Common Stock”
means the Class D Non-Voting Common Stock, par value $0.001 per share, of the
Company.
“Closing Sale Price” on
any date means, with respect to the Conversion Shares, the last sale price for
the Conversion Shares, regular way, or, in case no such sale takes place on
such date, the average of the closing bid and asked prices, regular way, for
the Conversion Shares in either case as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Conversion Shares are listed or admitted to trading or,
if the Conversion Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the principal automated quotation
3
system that may then
be in use or, if the Conversion Shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Conversion Shares selected by the Board of
Directors or, in the event that no trading price is available for the
Conversion Shares, the fair market value of the Conversion Shares, as
determined in good faith by the Board of Directors.
“Common Stock” of any
Person means any and all shares, interests or other participations in, and
other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Consolidated EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
broadcast program licenses for such period on a consolidated basis, minus (b)
scheduled payments relating to broadcast program license liabilities, except
that with respect to the Company each of the foregoing items shall be
determined on a consolidated basis with respect to the Company and its
Subsidiaries only; provided, however, that, for purposes of calculating
Consolidated EBITDA during any fiscal quarter, cash income from a particular
Investment of such Person shall be included only if cash income has been
received by such Person as a result of the operation of the business in which
such Investment has been made in the ordinary course without giving effect to
any extraordinary, unusual and non-recurring gains.
“Consolidated Interest
Expense” means, with respect to any Person, for any period, the aggregate
amount of interest which, in conformity with GAAP, would be set forth opposite
the caption “interest expense” or any like caption on an income
statement for such Person and its Subsidiaries on a consolidated basis,
including, but not limited to, imputed interest included in Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing, the net
costs associated with hedging obligations, amortization of other financing fees
and expenses, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest amortized to cost of sales) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, and all time
brokerage fees relating to financing of television stations which the Company
has an agreement or option to acquire.
“Consolidated Net
Income” means, with respect to any Person, for any period, the aggregate
of the 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 (a) the net income of any Person (the “other Person”)
in which the Person in question or any of its
4
Subsidiaries has less
than a 100% interest (which interest does not cause the net income of such
other Person to be consolidated into the net income of the Person in question
in accordance with GAAP) shall be included only to the extent of the amount of
dividends or distributions paid to the Person in question or to the Subsidiary,
(b) the net income of any Subsidiary of the Person in question that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Company and its Subsidiaries) increasing and decreasing Consolidated Net Income
and not otherwise included in the definition of Consolidated EBITDA shall be
excluded.
“Conversion Date”
means, with respect to a Security, the date on which the Holder of the Security
has complied with Section 4.02.
“Conversion Price” per
Conversion Share as of any day means the sum of (x) the result obtained by
dividing (i) $1,000 by (ii) the Applicable Conversion Rate, rounded to the
nearest cent, which price shall be initially $0.75 per share of Conversion
Shares, plus (y) an amount equal to 11% of the quotient yielded in clause (x)
above from the Issue Date to and including the date of calculation calculated
on a non-compound basis per annum on the basis of a 360-day year consisting of
twelve 30-day months with periods less than 30 days being calculated on the
basis of the actual days elapsed.
“Conversion Rate” means
the rate at which the Conversion Shares shall be delivered upon conversion,
which rate shall be initially 1333.3333 shares of Conversion Shares for each
$1,000 principal amount of Securities, as adjusted from time to time pursuant
to the provisions of this Indenture.
“Conversion Record
Date” ” has the meaning provided in Section 4.01(b) hereof.
“Conversion Shares”
means with respect to the Senior Subordinated Debt issued under this Indenture
to (A) CIG (i) shares of Class A Common Stock or (ii) with respect to any
Holder, if such Holder or the Company determines, after consultation with its
outside legal counsel, that such Holder is prevented under applicable laws and
regulations of the FCC from holding shares of Class A Common Stock issuable
upon conversion of such Holder’s Securities, a number of shares of
non-voting Common Stock of the Company (which (1) upon disposition by such
Holder to any Person that the Company and such Holder mutually determine, after
consultation with outside legal counsel, is not prevented under applicable laws
and regulations of the FCC from holding shares of Class A Common Stock or (2)
upon the mutual determination by the Company and such Holder that applicable
laws and regulations of the FCC no longer prohibit such Holder from holding
shares of Class A Common Stock, shall automatically be converted into shares of
Class A Common Stock), into which the Securities are from time to time
5
convertible, and (B)
the NBCU Entities, at NBCU’s option, Class A Common Stock or Class C
Common Stock.
“Corporate Trust
Office” means the office of the Trustee at which at any particular time
the trust created by this Indenture shall be administered, which initially will
be the office of The Bank of New York Trust Company, N.A. located at 00000
Xxxxxxxxx Xxxxxxx, 0xx Xxxxx Xxxxxxxxxxxx, XX 00000,
attention: Corporate Trust Administration.
“Currency Exchange
Protection Agreement” means, in respect of a Person, any foreign exchange
contract, currency swap agreement, currency option or other similar agreement
or arrangement designed to protect such Person against fluctuations in currency
exchange rates.
“Debt” means, with
respect to any Person on any date of determination (without duplication):
(a) the
principal of and premium (if any) in respect of
| |
(1) debt
of such Person for money borrowed and |
|
|
| |
(2) debt
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is liable; |
(b) all
Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale and Leaseback Transactions entered into by such Person;
(c) all
obligations of such Person representing the deferred and unpaid purchase price of
Property, all conditional sale obligations of such Person and all obligations
of such Person under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course
of business, including any obligations in respect of Film Contracts);
(d) all
obligations of such Person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (a) through (c) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit);
(e) the
amount of all obligations of such Person with respect to the Repayment of any
Disqualified Capital Stock or, with respect to any Subsidiary of such Person,
any Preferred Stock (but excluding, in each case, any accrued dividends);
(f) all
obligations of the type referred to in clauses (a) through (e) of other Persons
and all dividends of other Persons for the payment of which, in either case,
such Person is liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any guarantee;
6
(g) all
obligations of the type referred to in clauses (a) through (f) of other Persons
secured by any Lien on any Property of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such Property and the amount of the
obligation so secured; and
(h) to
the extent not otherwise included in this definition, Hedging Obligations of
such Person.
The amount of Debt of any Person
at any date shall be the outstanding principal balance, or the accreted value
of such Debt in the case of Debt issued with original issue discount, at such
date of all unconditional obligations as described above and the maximum
liability upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date. Debt shall not include contingent
obligations arising out of customary indemnification agreements or purchase
price adjustments with respect to the sale of assets or securities. The amount
of Debt represented by a Hedging Obligation shall be equal to:
“Default” means, when
used with respect to the Securities, any event that is or, after notice or
passage of time, or both, would be, an Event of Default.
“Designated Senior
Debt” means:
|
(a) |
any Senior Debt which, at the time of determination, has an aggregate
principal amount of at least $25,000,000 or accreted value in the case of Debt
issued at a discount) and is specifically designated in the instrument
evidencing such Senior Debt as “Designated Senior Debt”;
and |
|
|
|
|
(b) |
the Existing Senior Debt. |
“Disqualified Capital
Stock” means, with respect to any Person, 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, in either case at the option of the holder thereof)
or otherwise
(a) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise,
(b) is
or may become redeemable or repurchaseable at the option of the holder thereof,
in whole or in part, or
(c) is
convertible or exchangeable at the option of the holder thereof for Debt or
Disqualified Capital Stock, on or prior to, in the case of clause (a), (b) or
(c), the [91st] day after the Final Maturity Date of the
Securities.
“Designated Investment
Bank” means an investment bank selected by the Purchasing Party from a
list of three internationally recognized investment banks provided to the
Purchasing Party by the Company pursuant to Section 2.07 of the Master
Transaction Agreement.
7
“Equity Interests”
means Capital Stock and all warrants, options or other rights to acquire
Capital Stock, but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
“Ex-dividend Date”
means the first date upon which a sale of shares of the Conversion Shares does
not automatically transfer the right to receive the relevant distribution from
the seller of the Conversion Shares to its buyer.
“Existing Preferred
Stock” means, collectively, 14¼% Preferred, 9¾% Preferred
and NBCU Series B Preferred.
“Existing Senior Debt”
means, collectively, the Company’s (i) $325,000,000 aggregate principal
amount of First Priority Term Loan due 2012, (ii) $400,000,000 aggregate
principal amount of Floating Rate First Priority Senior Secured Notes due 2012
and (iii) $405,000,000 aggregate principal amount of Floating Rate Second
Priority Senior Secured Notes due 2013.
“Extraordinary Cash
Dividend” means cash dividends with respect to the Conversion Shares the
aggregate amount of which in any fiscal year exceeds 10% of Consolidated EBITDA
of the Company and its subsidiaries for the fiscal year immediately preceding
the payment of such dividend.
“Fair Market Value”
means, with respect to any Property, the sale price for such Property that
could be negotiated in an arm’s-length transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under undue pressure or
compulsion to complete the transaction.
“Final Maturity Date”
means July 31, 2013.
“GAAP” means generally
accepted accounting principles in the United States of America as in effect
from time to time, including those set forth in (1) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (2) the statements and pronouncements of the
Public Company Accounting Oversight Board and the Financial Accounting
Standards Board, (3) such other statements by such other entity as approved by
a significant segment of the accounting profession and (4) the rules and
regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in registration statements filed
under the Securities Act and periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff
of the SEC.
“Global Security” means
a Security in global form that is in substantially the form attached as Exhibit
A and that includes the information and schedule called for in footnote 1
thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.
8
“Holder” or
“Holder of a Security” means the person in whose name a Security is
registered on the Registrar’s books.
“Hedging Obligations”
of any Person means any obligation of such Person pursuant to any Interest Rate
Agreement, Currency Exchange Protection Agreement or any other similar
agreement or arrangement.
“Indenture” means this
Indenture as amended or supplemented from time to time pursuant to the terms of
this Indenture, including the provisions of the TIA that are automatically
deemed to be a part of this Indenture by operation of the TIA.
“Initial Purchasers”
means CIG.
“Interest Payment Date”
means January 31, April 30, July 31 and October 31 of each year.
“Interest Rate
Agreement” means, for any Person, any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement designed to protect against fluctuations in interest rates.
“Issue Date” of any
Security means the date on which the Security was originally issued or deemed
issued as set forth on the face of the Security.
“Mandatory Conversion”
shall have the meaning ascribed to it in Section 4.01(b)(i) hereof.
“Mandatory Conversion
Event” means the later to occur of (a) May 4, 2008 or (b) the earlier to
occur of: (i) the date on which the last sale price for the Conversion Shares,
regular way, or, in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for the Class A Common Stock or
Class D Common Stock, in either case as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Class A Common Stock or Class D Common Stock is listed or
admitted to trading, or, if the Conversion Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
product of (x) the Conversion Price as then in effect and (y) the Mandatory
Conversion Factor; (ii) the issuance by the Company of the Conversion Shares at
an issue price per share not less than the product of (x) the Conversion Price
as then in effect for aggregate gross proceeds (before deduction of
underwriting commissions and other expenses of sale) of not less than
$75,000,000 and (y) the Mandatory Conversion Factor provided that if such
issuance is made to a Purchasing Party, the Designated Investment Bank shall
have provided an opinion in customary form to the Company to the effect that
the issue price per share of Conversion Shares is at or higher than the fair
market value of a Conversion Share.
“Mandatory Conversion
Factor” shall be (i) in the event the
Mandatory Conversion Event occurs after the first anniversary but prior to the
second anniversary of the Issue Date, 102%, (ii)
9
in the event the Mandatory Conversion of the
Securities occurs after the second anniversary but prior to the third
anniversary of the Issue Date, 101%, or (iii) in the event the Mandatory
Conversion of the Securities occurs after the third anniversary of the issuance
date, 100%.
“Mandatory Conversion
Notice” shall have the meaning ascribed to it in Section 4.01(b)(ii)
hereof.
“Master Transaction
Agreement” means that certain Master Transaction Agreement dated as of May
3, 2007, by and among the Company, the NBCU Entities and CIG, as it may be
amended from time to time.
“NBCU Entities” means
NBC Universal, Inc., a Delaware corporation, NBC Palm Beach Investment I, Inc.,
a California corporation, NBC Palm Beach Investment II, Inc., a California
corporation.
“NBCU Series B
Preferred” means the 11% Series B Convertible Exchangeable Preferred
Stock, par value $0.001 per share, of the Company, with a liquidation
preference of $10,000 per share, as it may be modified or amended from time to
time.
“Non-Payment Event of
Default” means any default (other than a Payment Default) the occurrence
of which entitles one or more Persons to accelerate the maturity of any
Designated Senior Debt.
“Officer” means the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Operating Officer, the Chief Financial Officer, the Chief
Accounting Officer, the Controller, the Treasurer, an Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company.
“Officers’
Certificate” means a certificate signed by the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Chief Operating
Officer, the Chief Financial Officer or the Chief Accounting Officer of the
Company and by the Controller, the Treasurer, an Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company, and delivered to the
Trustee.
“Opinion of Counsel”
means a written opinion from legal counsel. The counsel may be an employee of
or counsel to the Company.
“Outstanding” means
Securities outstanding in accordance with Section 2.08.
“Payment Default” means
any default, whether or not any requirement for the giving of notice, the lapse
of time or both, or any other condition to such default becoming an event of
default has occurred, in the payment of principal of (or premium, if any) or
interest on or any other amount payable in connection with Designated Senior
Debt.
“Permitted Junior
Securities” means:
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(a) |
Equity Interests in the Company; or |
10
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(b) |
Unsecured debt securities that are subordinated to all Senior Debt
(and any debt securities issued in exchange for Senior Debt) to substantially
the same extent as, or to a greater extent than, the Securities are
subordinated to the Senior Debt; |
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provided that the term “Permitted Junior Securities” shall
not include any securities distributed pursuant to a plan of reorganization if
the Senior Debt is treated as part of the same class as the Securities for
purposes of such plan of reorganization; provided further that to the extent
that any Senior Debt of the Company outstanding on the date of consummation of
such plan of reorganization is not paid in full in cash on such date, the
holders of any such Senior Debt not so paid in full cash shall have consented
to the terms of such plan of reorganization. |
“Permitted Debt” means
each of the following:
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(a) |
Debt of the Company evidenced by the Securities; |
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(b) |
Existing Senior Debt; |
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(c) |
Debt in respect of Capital Lease Obligations and Purchase Money Debt,
provided that: |
(1) the aggregate
principal amount of such Debt does not exceed the Fair Market Value (on the
date of the incurrence thereof) of the Property acquired, constructed or
leased; and
(2) the aggregate
principal amount of all Debt incurred and then outstanding pursuant to this
clause (b) (together with all Refinancing Debt incurred and then outstanding in
respect of Debt previously incurred pursuant to this clause (c)) does not
exceed 5% of the Company’s consolidated total assets at the date of
incurrence of Permitted Debt pursuant to this clause (c);
(d) Debt of the
Company owing to and held by any Wholly Owned Subsidiary and Debt of a
Subsidiary owing to and held by the Company or any Wholly Owned Subsidiary;
provided that any subsequent issue or transfer of Capital Stock or other event
that results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of any such Debt (except to the Company
or a Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
incurrence of such Debt by the issuer thereof;
(e) Debt under
Interest Rate Agreements entered into by the Company or a Subsidiary for the
purpose of limiting interest rate risk in the ordinary course of the financial
management of the Company or such Subsidiary and not for speculative purposes;
provided that the obligations under such agreements are directly related to
payment obligations on Debt otherwise permitted by Section 5.11;
(f) Debt under
Currency Exchange Protection Agreements entered into by the Company or a
Subsidiary for the purpose of limiting currency exchange rate risks directly
related to transactions entered into by the Company or such Subsidiary in the
ordinary course of business and not for speculative purposes;
11
(g) Debt in
connection with one or more standby letters of credit or performance bonds
issued by the Company or a Subsidiary in the ordinary course of business or
pursuant to self-insurance obligations and not in connection with the borrowing
of money or the obtaining of advances or credit;
(h) Attributable
Debt with respect to Sale and Leaseback Transactions; provided that the
aggregate principal amount outstanding at any one time (together with all
Refinancing Debt incurred and then outstanding in respect of Debt previously
incurred pursuant to this clause (h)) does not exceed $50,000,000;
(i) Debt
outstanding on the Issue Date not otherwise described in clauses (a) through
(i) above;
(j) Refinancing
Debt incurred in respect of Debt incurred pursuant to clause (1) of Section
5.11(a) or clause (a), (b), (c), (h), (i), (j), (l) or (m) of this definition;
provided that Refinancing Debt cannot be used to refinance Disqualified Capital
Stock pursuant to this clause (j) unless such Refinancing Debt consists solely
of Disqualified Capital Stock that has a redemption date and requires the
payment of current dividends in cash no earlier than, and does not provide the
holder thereof remedies that are in the aggregate materially less favorable to
the Company than, the Disqualified Capital Stock being refinanced;
(k) Debt of the
Company or any Subsidiary under any Receivables Facility not to exceed
$35,000,000 at any one time outstanding;
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(l) |
Qualified Subordinated Debt; and |
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(m) |
Debt not to exceed $100,000,000 at any time outstanding. |
“Person” or
“person” means any individual, Company, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any syndicate or group that would be deemed to be a
“person” under Section 13(d)(3) of the Exchange Act or any other
entity.
“Preferred Stock” means
any Capital Stock of a Person, however designated, which entitles the holder
thereof to a preference with respect to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of any other class of Capital Stock
issued by such Person.
“PIK Notes” has the
meaning given such term by the Second Priority Indenture.
“Principal” or
“principal” of a debt security, including the Securities, means the
principal of the debt security plus, when appropriate, the premium, if any, on
the debt security.
“Property” means, with
respect to any Person, any interest of such Person in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible, including
Capital Stock in, and other securities of, any other Person. For purposes of
any calculation required pursuant to this Indenture, the value of any Property
shall be its Fair Market Value.
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“Purchase Money Debt”
means Debt:
(a) consisting
of the deferred purchase price of property, conditional sale obligations,
obligations under any title retention agreement, other purchase money
obligations and obligations in respect of industrial revenue bonds; and
(b) incurred
to finance the acquisition, construction or lease by the Company or any
Subsidiary of such Property, including additions and improvements thereto;
in each case including the
reasonable fees and expenses incurred in connection therewith; provided,
however, that such Debt is incurred within 180 days after the acquisition,
construction or lease of such Property by the Company or such
Subsidiary.
“Qualified Subordinated
Debt” means Debt of the Company constituting the Senior Subordinated Debt
or Subordinated Obligations of the type described in clause (i) of the
definition of Subordinated Obligations if the following conditions are met:
(1) the
Stated Maturity of such Debt is at least 91 days after the Final Maturity Date
of the Securities; and
(2) the
aggregate principal amount (or if incurred with original issue discount, the
aggregate accreted value at issuance) of all such Qualified Subordinated Debt
of the Company (together with any Refinancing Debt in respect thereof) at any
time outstanding shall not exceed $650,000,000 less the aggregate amount of the
obligations under this Indenture then outstanding.
“Purchasing Party”
means CIG, NBC Universal, Inc., a Delaware corporation and their respective
Affiliates.
“Receivables Facility”
means one or more receivables financing facilities, as amended from time to
time, pursuant to which the Company or any of its Subsidiaries sells its
accounts receivable to a Person that is not a Subsidiary.
“Refinance” means, in
respect of any Debt, to refinance, extend, renew, refund, repay, prepay,
repurchase, redeem, defease or retire, or to issue other Debt in exchange or
replacement for, such Debt. “Refinanced” and “Refinancing”
shall have correlative meanings.
“Refinancing Debt”
means any Debt that Refinances any other Debt, including any successive
Refinancings, so long as:
(a) such
Debt is in an aggregate principal amount (or if incurred with original issue
discount, an aggregate issue price) not in excess of the sum of
| |
(1) the
aggregate principal amount then outstanding (or if incurred with original issue
discount, the aggregate accreted value at the date of such Refinancing) of the
Debt being Refinanced and |
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(2) an
amount necessary to pay any fees and expenses, including premiums and
defeasance costs, related to such Refinancing; |
13
(b) the
Average Life of such Debt is equal to or greater than the Average Life of the
Debt being Refinanced;
(c) the
Stated Maturity of such Debt is no earlier than the Stated Maturity of the Debt
being Refinanced; and
(d) with
respect to Debt that is being Refinanced that is subordinate to the Securities,
such Refinancing Debt shall be subordinate to the Securities at least to the
same extent and in the same manner as the Debt being Refinanced.
“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of May 4,
2007, between the Company and the Initial Purchasers, as amended from time to
time in accordance with its terms.
“Regular Record Date”
means, with respect to each Interest Payment Date, the January 15, April 15,
July 15 and October 15 (whether or not a Business Day) as the case may be,
immediately preceding such Interest Payment Date.
“Responsible Officer”
means, when used with respect to the Trustee, any officer within the corporate
trust services department of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such person’s knowledge of and familiarity with the particular
subject and who shall have direct responsibility for administration of this
Indenture.
“Repay” means, in
respect of any Debt, to repay, prepay, repurchase, redeem, legally defease or
otherwise retire such Debt. “Repayment” and “Repaid” shall
have correlative meanings.
“Restricted Global
Security” means a Global Security that is a Restricted Security.
“Restricted Security”
means a Security required to bear the restricted legend set forth in the form
of Security annexed as Exhibit A.
“Rule 144” means Rule
144 under the Securities Act or any successor to such Rule.
“Rule 144A” means Rule
144A under the Securities Act or any successor to such Rule.
“Sale and Leaseback
Transaction” means any direct or indirect arrangement relating to Property
now owned or hereafter acquired whereby the Company or any Subsidiary transfers
such Property to another Person and the Company or any Subsidiary leases it
from such Person.
“Second Priority Notes”
means $405,000,000 aggregate principal amount of the Company’s Floating
Rate Second Priority Senior Secured Notes due 2013 issued on the Issue Date
under the Second Priority Notes Indenture.
“Second Priority Notes
Indenture” means the Indenture, dated as of December 30, 2005, by and
among The Bank of New York trust Company, N.A., as trustee, the Company and the
14
Subsidiary Guarantors
(as defined therein) pursuant to which the Second Priority Notes were
issued.
“SEC” means the
Securities and Exchange Commission.
“Securities” means (x)
11% Series B Mandatorily Convertible Senior Subordinated Notes due 2013 in the
initial aggregate principal amount of $100,000,000, or any of them, as amended
or supplemented from time to time, that are issued under this Indenture on the
date of this Indenture, and (y) any additional notes issued under this
Indenture from time to time, in addition to the Initial Securities, on the same
terms and conditions and with the same CUSIP number as the Initial Securities
(the “Additional Securities” and, together with the Initial
Securities, the “Securities” and each a “Security”). Any
Additional Securities subsequently issued under this Indenture shall be of the
same series as the Initial Securities and shall rank equally with the Initial
Securities. The Initial Securities and any Additional Securities subsequently
issued under this Indenture shall be treated as a single class for all purposes
under this Indenture, including, without limitation, waivers, amendments,
redemptions, repurchases, offers to purchase and conversions.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
“Securities Custodian”
means the Trustee, as custodian with respect to the Securities in global form,
or any successor thereto.
“Senior Debt” of the
Company means:
(a) all
obligations consisting of the principal, premium, if any, and accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company at the
rate specified in the agreement or instrument evidencing such debt, whether or
not such interest is allowed in such proceeding) and any other Obligation in
respect of
|
(i) |
the Existing Senior Debt; |
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(ii) |
Debt of the Company for borrowed money; |
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(iii) |
Debt of the Company evidenced by notes, debentures, bonds or other
similar instruments permitted under this Indenture for the payment of which the
Company is responsible or liable; |
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(iv) |
all Capital Lease Obligations of the Company and all Attributable Debt
in respect of Sale and Leaseback Transactions entered into by the Company;
and |
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(v) |
all obligations of the Company (1) for the reimbursement of any
obligor on any letter of credit, bankers’ acceptance or similar credit
transaction, (2) under Interest Rate Agreements or (3) issued or assumed as the
deferred purchase price of Property and all conditional sale obligations of
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15
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the Company and all obligations under any title retention agreement
permitted under this Indenture; |
provided, however, that Senior
Debt shall not include:
|
(i) |
Debt of the Company that is by its terms subordinate or pari passu in
right of payment to the Securities, including any Senior Subordinated
Debt; |
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(ii) |
any Debt incurred in violation of the provisions of this
Indenture; |
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(iii) |
accounts payable or any other obligations of the Company to trade
creditors created or assumed by the Company in the ordinary course of business
in connection with the obtaining of materials or services; |
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(iv) |
any liability for federal, state, local or other taxes owed or owing
by the Company; |
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(v) |
any obligation of the Company to any Subsidiary; or |
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(vi) |
any obligations with respect to any Capital Stock of the
Company. |
“Senior Subordinated
Debt” of the Company means the Securities and the Series A Convertible
Subordinated Debt and any other subordinated Debt of the Company that
specifically provides that such Debt is to rank pari passu with the Securities
and is not subordinated by its terms to any other subordinated Debt or other
obligation of the Company which is not Senior Debt.
“Series A Convertible
Subordinated Debt” means 11% mandatorily convertible subordinated debt due
2013 to be issued by the Company to holders of 14¼% Preferred and
9¾% Preferred in the Exchange Offer under the Series A Convertible
Subordinated Debt Indenture.
“Series A Convertible
Subordinated Debt Indenture” means the indenture, substantially in the
form of Exhibit A attached to the Master Transaction Agreement, among the
Company, The Bank of New York Trust Company, N.A., as trustee, and subsidiary
guarantors party thereto which govern Series A Convertible Subordinated Debt.
“Significant
Subsidiary” means, in respect of any Person, as of any date of
determination, a Subsidiary of such Person that would constitute a
“significant subsidiary” as such term is defined under Rule 1-02(w)
of Regulation S-X under the Securities Act as in effect on the date of this
Indenture.
“Stated Maturity”
means, with respect to any security, the date specified in such security as the
fixed date on which the payment of principal of such security is due and
payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency beyond the
control of the issuer unless such contingency has occurred).
16
“Subordinated
Obligation” means any Debt of the Company (whether outstanding on the
Issue Date or thereafter incurred) that is subordinate or junior in right of
payment to the Securities pursuant to a written agreement to that effect or
otherwise pursuant to the terms of such Debt.
“Subsidiary” means, in
respect of any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency
within the control of such Person to satisfy) to vote in the election of
directors, managers, general partners or trustees thereof is at the time owned
or controlled, directly or indirectly, by (i) such Person, (ii) such Person and
one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of
such Person.
“TIA” means the Trust
Indenture Act of 1939, as amended, and the rules and regulations thereunder as
in effect on the date of this Indenture, except to the extent that the Trust
Indenture Act or any amendment thereto expressly provides for application of
the Trust Indenture Act as in effect on another date.
“Trading Day” means a
day during which trading in securities generally occurs on principal national
securities exchange on which the Conversion Shares are listed or admitted to
trading or, if the Conversion Shares are not then listed or admitted to trading
on a national securities exchange, on the principal other United States
national or regional securities exchange on which the Conversion Shares are
then listed or, if the Conversion Shares are not then listed on a United States
national or regional securities exchange, on the principal other market on
which the Conversion Shares are then traded. A “Trading Day” only
includes those days that have a scheduled closing time of 4:00 p.m. (New York
City time) or the then standard closing time for regular trading on the
relevant exchange or trading system.
“Transactions” has the
meaning provided in Section 4.01(b)(iv) hereof.
“Trustee” means the
party named as such in the first paragraph of this Indenture until a successor
replaces it in accordance with the provisions of this Indenture, and thereafter
means the successor.
“Vice President” when
used with respect to the Company or the Trustee, means any vice president,
whether or not designated by a number or a word or words added before or after
the title “vice president.”
“Voting Stock” means
shares of the capital stock and any other securities of the Company having the
ordinary power to vote in the election of directors of the Company.
“Wholly Owned
Subsidiary” means, at any time, a Subsidiary all of the Voting Stock of
which (except directors’ qualifying shares) is at such time owned,
directly or indirectly, by the Company or one or more Wholly Owned Subsidiaries
of the Company.
17
Section 1.02.
Other Definitions.
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Term |
Defined in Section |
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“Agent Members” |
2.01 |
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“Bankruptcy Law” |
7.01 |
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“Company Order” |
2.02 |
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“Conversion Agent” |
2.03 |
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“Conversion Date” |
4.02 |
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“Depositary” |
2.01 |
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“DTC” |
2.01 |
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“Event of Default” |
7.01 |
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“Legal Holiday” |
11.07 |
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“Legend” |
2.12 |
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“Notice of Default” |
7.01 |
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“Paying Agent” |
2.03 |
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“Primary Registrar” |
2.03 |
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“QIB” |
2.01 |
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“Receiver” |
7.01 |
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“Registrar” |
2.03 |
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“record date” |
4.06 |
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“Spin-Off” |
4.06(a)(3) |
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“tender offer” |
4.06 |
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Section 1.03.
Trust Indenture Act
Provisions.
Whenever this Indenture refers to
a provision of the TIA, that provision is incorporated by reference in and made
a part of this Indenture. This Indenture shall also include those provisions of
the TIA required to be included herein by the provisions of the Trust Indenture
Reform Act of 1990.
The following TIA terms used in
this Indenture have the following meanings:
“indenture securities”
means the Securities;
“indenture security
holder” means a Holder of a Security;
“indenture to be
qualified” means this Indenture;
“indenture trustee” or
“institutional trustee” means the Trustee; and
“obligor” on the
indenture securities means the Company or any other obligor on the
Securities.
“principal amount”
means the outstanding principal amount of the Securities
All other terms used in this
Indenture that are defined in the TIA, defined by TIA reference to another
statute or defined by any SEC rule and not otherwise defined herein have the
meanings assigned to them therein.
18
Section 1.04.
Rules of
Construction.
Unless the context otherwise
requires:
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(1) a
term has the meaning assigned to it; |
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(2) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP; |
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(3) words
in the singular include the plural, and words in the plural include the
singular; |
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(4) the
term “merger” includes a statutory share exchange and the term
“merged” has a correlative meaning; |
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(5) the
masculine gender includes the feminine and the neuter; |
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(6) references
to agreements and other instruments include subsequent amendments thereto;
and |
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(7) all
“Article”, “Exhibit” and “Section” references are
to Articles, Exhibits and Sections, respectively, of or to this Indenture
unless otherwise specified herein, and the terms “herein,”
“hereof” and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other
subdivision. |
ARTICLE 2
THE SECURITIES
Section 2.01. Form
and Dating.
The Securities and the
Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit A, which Exhibit is incorporated in and
made part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange or automated quotation system rule
or regulation or usage. The Company shall provide any such notations, legends
or endorsements to the Trustee in writing. Each Security shall be dated the
date of its authentication.
(a) Restricted Global Securities. All of the
Securities are initially being offered and sold to qualified institutional
buyers as defined in Rule 144A (collectively, “QIBS” or individually,
each a “QIB”) in reliance on Rule 144A under the Securities Act and
shall be issued initially in the form of one or more Restricted Global
Securities, which shall be deposited on behalf of the purchasers of the
securities represented thereby with the Securities Custodian, as custodian for
the depositary, The Depository Trust Company (“DTC”, and such
depositary, or any successor thereto, being hereinafter referred to as the
“Depositary”), and registered in the name of its nominee, Cede &
Co. (or any successor thereto), for the accounts of participants in the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Securities may from time to
19
time be increased or
decreased by adjustments made on the records of the Securities Custodian as
hereinafter provided, subject in each case to compliance with the Applicable
Procedures.
(b) Global
Securities In General. The Securities issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Security Legend thereon and the “Schedule of Exchanges of Securities”
attached thereto). The Securities issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Security Legend thereon and without the “Schedule of Exchanges of
Securities” attached thereto). Each Global Security shall represent such
of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as appropriate, to reflect replacements, exchanges, purchases, redemptions, or
conversions of such Securities. Any adjustment of the aggregate principal
amount of a Global Security to reflect the amount of any increase or decrease
in the amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 and shall be made on the records of the Trustee and
the Depositary.
Members of, or participants in,
the Depositary (“Agent Members”) shall have no rights under this
Indenture with respect to any Global Security held on their behalf by the
Depositary or under the Global Security, and the Depositary (including, for
this purpose, its nominee) may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and Holder of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall (1) prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or (2) impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.
(c) Book
Entry Provisions. The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(c), authenticate and deliver initially one or
more Global Securities that (1) shall be registered in the name of the
Depositary or its nominee, (2) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instructions and (3) shall bear
legends substantially to the following effect:
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“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
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20
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HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM,
THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.” |
Section 2.02.
Execution and
Authentication.
(a) The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. Initially, $100,000,000 aggregate
principal amount of Initial Securities shall be authenticated and delivered
under this Indenture.
(b) An Officer
shall sign the Securities for the Company by manual or facsimile signature.
Typographic and other minor errors or defects in any such facsimile signature
shall not affect the validity or enforceability of any Security that has been
authenticated and delivered by the Trustee.
(c) If an
officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
(d) A Security
shall not be valid until an authorized signatory of the Trustee by manual
signature signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
(e) The Trustee
shall authenticate and make available for delivery Securities for original
issue upon receipt of a written order or orders of the Company signed by an
Officer of the Company (a “Company Order”). The Company Order shall
specify the amount of Securities to be authenticated, shall provide that all
such securities will be represented by a Restricted Global Security and the
date on which each original issue of Securities is to be authenticated.
(f) The
Trustee shall act as the initial authenticating agent. Thereafter, the Trustee
may appoint an authenticating agent reasonably acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
(g) The
Securities shall be issuable only in registered form without coupons and only
in denominations of $1,000 principal amount and any integral multiple
thereof.
21
Section 2.03.
Registrar, Paying
Agent and Conversion Agent.
(a) The Company
shall maintain one or more offices or agencies where Securities may be
presented for registration of transfer or for exchange (each, a
“Registrar”), one or more offices or agencies where Securities may be
presented for payment (each, a “Paying Agent”), one or more offices
or agencies where Securities may be presented for conversion (each, a
“Conversion Agent”) and one or more offices or agencies where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will at all times maintain a Paying Agent,
Conversion Agent, Registrar and an office or agency where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served in the Borough of Manhattan, The City of New York. One of the Registrars
(the “Primary Registrar”) shall keep a register of the Securities and
of their transfer and exchange.
(b) The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, provided that the Agent may be an Affiliate of the Trustee. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture. If the Company fails to maintain a
Registrar, Paying Agent, Conversion Agent, or agent for service of notices and
demands in any place required by this Indenture, or fails to give the foregoing
notice, the Trustee shall act as such. The Company or any Affiliate of the
Company may act as Paying Agent (except for the purposes of Section 5.01 and
Article 9).
(c) The Company
hereby initially designates the Trustee as Paying Agent, Registrar, Securities
Custodian and Conversion Agent, and initially designates the Corporate Trust
Office of the Trustee as an office or agency where notices and demands to or
upon the Company in respect of the Securities and this Indenture shall be
served.
Section 2.04.
Paying Agent to Hold
Money in Trust.
Prior to 10:00 a.m., New York
City time, on each due date of the payment of principal of, or interest on, any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. Subject to Section 9.02, a
Paying Agent shall hold in trust for the benefit of Holders of Securities or
the Trustee all money held by the Paying Agent for the payment of principal of,
or interest on, the Securities, and shall notify the Trustee of any failure by
the Company (or any other obligor on the Securities) to make any such payment.
If the Company or an Affiliate of the Company acts as Paying Agent, it shall,
before 10:00 a.m., New York City time, on each due date of the principal of, or
interest on, any Securities, segregate the money and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee, and the Trustee may at any time during the
continuance of any Default, upon written request to a Paying Agent, require
such Paying Agent to pay forthwith to the Trustee all sums so held in trust by
such Paying Agent. Upon doing so, the Paying Agent (other than the Company)
shall have no further liability for the money.
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Section 2.05.
Lists of Holders of
Securities.
The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of Securities. If the Trustee is not
the Primary Registrar, the Company shall furnish to the Trustee on or before
each Interest Payment Date and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders of Securities.
Section 2.06.
Transfer and
Exchange.
(a) Subject to
compliance with any applicable additional requirements contained in Section
2.12, when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however, that
every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A, and
completed in a manner satisfactory to the Registrar and duly executed by the
Holder thereof or its attorney duly authorized in writing. To permit
registration of transfers and exchanges, upon surrender of any Security for
registration of transfer or exchange at an office or agency maintained pursuant
to Section 2.03, the Company shall execute and the Trustee shall authenticate
Securities of a like aggregate principal amount at the Registrar’s
request. Any exchange or transfer shall be without charge, except that the
Company or the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto (other
than any such taxes or other governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 2.12(a), 4.02(e), or 4.04.
(b) [reserved]
(c) All
Securities issued upon any transfer or exchange of Securities shall be valid
obligations of the Company, evidencing the same debt and entitled to the same
benefits under this Indenture, as the Securities surrendered upon such transfer
or exchange.
(d) Any
Registrar appointed pursuant to Section 2.03 shall provide to the Trustee such
information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Securities upon transfer or exchange of
Securities.
(e) Each Holder
of a Security agrees to indemnify the Company and the Trustee against any
liability that may result from the transfer, exchange or assignment of such
Holder’s Security in violation of any provision of this Indenture and/or
applicable United States federal or state securities law.
(f) The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly
23
required by, and to
do so if and when expressly required by the terms of, this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
Section 2.07.
Replacement Securities.
(a) If any
mutilated Security is surrendered to the Company, a Registrar or the Trustee,
and the Company, a Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company, the applicable Registrar and the Trustee such
security or indemnity as will be required by them to save each of them
harmless, then, in the absence of notice to the Company, such Registrar or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously
outstanding.
(b) If any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, or is about to be purchased by the Company pursuant to Article
3, or converted pursuant to Article 4, the Company in its discretion may,
instead of issuing a new Security, pay, purchase or convert such Security, as
the case may be.
(c) Upon the
issuance of any new Securities under this Section 2.07, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto as a result of any Securities, at the
request of any Holder, being issued to a Person other than such Holder and any
other reasonable expenses (including the reasonable fees and expenses of the
Trustee or the Registrar) in connection therewith.
(d) Every new
Security issued pursuant to this Section 2.07 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
(e) The
provisions of this Section 2.07 are (to the extent lawful) exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Section 2.08.
Outstanding Securities.
(a) Securities
outstanding at any time are all Securities authenticated by the Trustee, except
for those canceled by it, those purchased pursuant to Article 3, those
converted pursuant to Article 4, those delivered to the Trustee for
cancellation or surrendered for transfer or exchange and those described in
this Section 2.08 as not outstanding.
(b) If a
Security is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Company receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.
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(c) If a Paying
Agent (other than the Company or an Affiliate of the Company) holds in respect
of the outstanding Securities on the Final Maturity Date money sufficient to
pay the principal of (including premium, if any), accrued interest and
Additional Interest, if any, on Securities (or portions thereof) payable on
that date, then on and after the Final Maturity Date, as the case may be, such
Securities (or portions thereof, as the case may be) shall cease to be
outstanding and cash interest and Additional Interest, if any, on them shall
cease to accrue.
(d) Subject to
the restrictions contained in Section 2.09, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
Section 2.09.
Treasury Securities.
In determining whether the
Holders of the required principal amount of Securities have concurred in any
notice, direction, waiver or consent, securities owned by the Company or any
other obligor on the Securities or by any Affiliate of the Company or of such
other obligor shall be disregarded, except that, for purposes of determining
whether the Trustee shall be protected in relying on any such notice,
direction, waiver or consent, only Securities which a Responsible Officer of
the Trustee with responsibility for this Indenture actually knows are so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction
of the Trustee the pledgee’s right so to act with respect to the
Securities and that the pledgee is not the Company or any other obligor on the
Securities or any Affiliate of the Company or of such other obligor.
Section 2.10.
Temporary Securities.
Until definitive Securities are
ready for delivery, the Company may prepare and execute, and, upon receipt of a
Company Order, the Trustee shall authenticate and deliver, temporary
Securities. Temporary Securities shall be substantially in the form of
definitive securities but may have variations that the Company with the consent
of the Trustee considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate and deliver definitive Securities in exchange for temporary
Securities.
Holders of temporary Securities
shall be entitled to all of the benefits of this Indenture.
Section 2.11.
Cancellation.
The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar, the Paying
Agent and the Conversion Agent shall forward to the Trustee or its agent any
Securities surrendered to them for transfer, exchange, purchase, payment or
conversion. The Trustee and no one else shall cancel, in accordance with its
standard procedures, all Securities surrendered for transfer, exchange,
purchase, payment, conversion or cancellation and shall dispose of the
cancelled Securities in accordance with its customary procedures or deliver the
canceled Securities to the Company upon its request therefor. All Securities
which are purchased or otherwise acquired by the Company or any of its
Subsidiaries prior to the Final Maturity Date pursuant to Article 3 shall be
delivered to the Trustee for cancellation, and the Company may not hold or
resell such Securities or issue any new Securities to replace any such
Securities or any Securities that any Holder has converted pursuant to Article
4.
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Section 2.12.
Legend; Additional
Transfer and Exchange Requirements.
(a) If
Securities are issued upon the transfer, exchange or replacement of Securities
subject to restrictions on transfer and bearing the legends set forth on the
forms of Securities attached as Exhibit A (collectively, the
“Legend”), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company
and the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel if requested by the Company or such Registrar, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144 under the
Securities Act or that such Securities are not “restricted” within
the meaning of Rule 144 under the Securities Act; provided that no such
evidence need be supplied in connection with the sale of such Security pursuant
to a registration statement that is effective at the time of such sale. Upon
(1) provision of such satisfactory evidence if requested or (2) notification by
the Company to the Trustee and Registrar of the sale of such Security pursuant
to a registration statement that is effective at the time of such sale, the
Trustee, at the written direction of the Company, shall authenticate and
deliver a Security that does not bear the Legend. If the Legend is removed from
the face of a Security and the Security is subsequently held by an Affiliate of
the Company, the Legend shall be reinstated.
(b) A Global
Security may not be transferred, in whole or in part, to any Person other than
the Depositary or a nominee or any successor thereof, and no such transfer to
any such other Person may be registered; provided that the foregoing
shall not prohibit any transfer of a Security that is issued in exchange for a
Global Security but is not itself a Global Security. No transfer of a Security
to any Person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of such Person.
Notwithstanding any other provisions of this Indenture or the Securities,
transfers of a Global Security, in whole or in part, shall be made only in
accordance with this Section 2.12.
(c) Subject to
Section 2.12(b) and in compliance with Section 2.12(d), every Security shall be
subject to the restrictions on transfer provided in the Legend. Whenever any
Restricted Security other than a Restricted Global Security is presented or
surrendered for registration of transfer or in exchange for a Security
registered in a name other than that of the Holder, such Security must be
accompanied by a certificate in substantially the form set forth in Exhibit A,
dated the date of such surrender and signed by the Holder of such Security, as
to compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.
(d) The
restrictions imposed by the Legend upon the transferability of any Security
shall cease and terminate when such Security has been sold pursuant to an
effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for
26
exchange to the
Registrar in accordance with the provisions of this Section 2.12 (accompanied,
in the event that such restrictions on transfer have terminated by reason of a
transfer in compliance with Rule 144 or any successor provision, by, if
requested by the Company or the Registrar, an Opinion of Counsel reasonably
acceptable to the Company and the Registrar and addressed to the Company and
the Registrar, to the effect that the transfer of such Security has been made
in compliance with Rule 144 or such successor provision), be exchanged for a
new Security, of like tenor and aggregate principal amount, which shall not
bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the offer and sale of
the Securities under the Securities Act. The Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the aforementioned Opinion of Counsel or registration statement.
As used in Sections 2.12(c) and
(d), the term “transfer” encompasses any sale, pledge, transfer,
hypothecation or other disposition of any Security.
(e) The
provisions below shall apply only to Global Securities:
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(1) Each
Global Security authenticated under this Indenture shall be registered in the
name of the Depositary or a nominee thereof and delivered to such Depositary or
a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for purposes of this Indenture. |
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(2) Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security
shall not be exchanged in whole or in part for a Security registered, and no
transfer of a Global Security in whole or in part shall be registered in the
name of any Person other than the Depositary or one or more nominees thereof;
provided that a Global Security may be exchanged for securities registered in
the names of any person designated by the Depositary in the event that (A) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or such Depositary has ceased to be a
“clearing agency” registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after receiving such
notice or becoming aware that the Depositary has ceased to be a “clearing
agency,” or (B) an Event of Default has occurred and is continuing with
respect to the Securities. Any Global Security exchanged pursuant to subclause
(A) above shall be so exchanged in whole and not in part, and any Global
Security exchanged pursuant to subclause (B) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security issued in
exchange for a Global Security or any portion thereof shall be a Global
Security; provided further that any such Security so issued that is registered
in the name of a Person other than the Depositary or a nominee thereof shall
not be a Global Security. |
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(3) Securities
issued in exchange for a Global Security or any portion thereof shall be issued
in definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Security or portion
thereof to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. Any Global Security to be exchanged in
whole shall be surrendered by the |
27
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Depositary to the Trustee, as Registrar. With regard to any Global
Security to be exchanged in part, either such Global Security shall be so
surrendered for exchange or, if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Security, the principal
amount thereof shall be reduced, by an amount equal to the portion thereof to
be so exchanged, by means of an appropriate adjustment made on the records of
the Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof. |
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(4) Subject
to clause (6) of this Section 2.12(e), the registered Holder may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that
may hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities. |
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(5) In
the event of the occurrence of any of the events specified in clause (2) of
this Section 2.12(e), the Company will promptly make available to the Trustee a
reasonable supply of Certificated Securities in definitive, fully registered
form, without interest coupons. |
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(6) Neither
Agent Members nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Security
registered in the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the case may be,
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and Holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or such nominee, as the case may be, or impair, as
between the Depositary, its Agent Members and any other Person on whose behalf
an Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a Holder of any Security. |
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(7) At
such time as all interests in a Global Security have been converted, canceled
or exchanged for Securities in certificated form, such Global Security shall,
upon receipt thereof, be cancelled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the Securities
Custodian, subject to Section 2.11 of this Indenture. At any time prior to such
cancellation, if any interest in a Global Security is converted, canceled or
exchanged for Securities in certificated form, the principal amount of such
Global Security shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Securities Custodian, be
appropriately reduced, and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of the
Trustee, to reflect such reduction. |
(f) Until
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision thereto), any stock
certificate representing Conversion Shares issued upon conversion of any
Security shall bear the restrictive
28
legend required to be
included with a Restricted Security, unless such Conversion Shares have been
sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer) or transferred in compliance with Rule 144 under the Securities
Act (or any successor provision thereto), or such Conversion Shares have been
issued upon conversion of Securities that have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Act or pursuant to Rule 144 under the Securities Act (or any successor
provision thereto), or unless otherwise agreed by the Company in writing with
written notice thereof to the transfer agent.
Any such Conversion
Shares as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
restrictive legend set forth therein have been satisfied may, upon surrender of
the certificates representing such Conversion Shares for exchange in accordance
with the procedures of the transfer agent for the Conversion Shares, be
exchanged for a new certificate or certificates for a like number of Conversion
Shares, which shall not bear the restrictive legend required by this
section.
Section 2.13.
CUSIP Numbers.
The Company in issuing the
Securities may use one or more “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of
purchase as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a purchase
and that reliance may be placed only on the other identification numbers
printed on the Securities, and any such purchase shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the “CUSIP” numbers.
ARTICLE 3
REPURCHASE
Section 3.01.
Purchase of Securities
in Open Market.
The Company may repurchase
Securities in the open market, by tender at any price or by negotiated
transactions. The Company shall surrender any Security purchased by the Company
to the Trustee for cancellation. Any securities surrendered to the Trustee for
cancellation may not be reissued or resold by the Company and will be canceled
promptly in accordance with Section 2.11.
ARTICLE 4
CONVERSION
Section 4.01.
Conversion and
Conversion Rate.
(a) Optional
Conversion. Upon compliance with the provisions of this Article 4, at the
option of the Holder thereof, any Security or portion thereof that is an
integral multiple of $1,000 principal amount may be converted at the option of
the Holder thereof, at any time and from time
29
to time, into a
number of Conversion Shares equal to (A) the principal amount of the Securities
so converted plus accrued and unpaid interest thereon through the Conversion
Date, divided by (B) the Conversion Price then in effect.
(b) Mandatory
Conversion.
(i) At any time following the first anniversary of
the Issue Date, upon the occurrence of a Mandatory Conversion Event,
unless previously converted at the option of the Holder in accordance with the
provisions hereof, each outstanding Security or portion thereof that is an
integral multiple of $1,000 principal amount shall, without notice to holders
thereof, convert automatically (the “Mandatory Conversion”) into a
number of Conversion Shares equal to (A)(x) the principal amount of the
Securities so converted plus accrued and unpaid interest thereon through the
Conversion Date multiplied by (y) the Mandatory Conversion Factor, divided by
(B) the Conversion Price then in effect.
(ii) Promptly
following a Mandatory Conversion Event, written notice (the “Mandatory
Conversion Notice”) shall be given by first class mail, postage prepaid,
to each Holder who is a Holder on the date such notice is given at such
Holder’s address as it appears on the list of Holders of Securities,
provided that no failure to give such notice or any deficiency therein shall
affect the validity of the procedures for the Mandatory Conversion as to the
Holder or Holders to whom the Company has failed to give said notice or to whom
such notice was effected. Each Holder shall surrender all Securities held by
such Holder to the Company, duly endorsed (or otherwise in proper form for
transfer, as determined by the Company) and the Company shall issue to such
Holder that number of Conversion Shares to which such Holder is entitled, as
calculated in accordance with this paragraph; provided, however, that if a
Holder shall notify the Company within five (5) Business Days of receipt of the
Mandatory Conversion Notice that it wishes to receive non-voting Common Stock
in accordance with this paragraph, the Company shall issue such Holder that
number of shares of non-voting Common Stock to which such Holder is entitled as
calculated in accordance with this paragraph.
(iii) The
Company shall cause, prior to, or as promptly as practicable following the
occurrence of a Mandatory Conversion Event, the Conversion Shares issuable upon
a Mandatory Conversion Event (or in the case of a Holder’s election to
convert into non-voting Common Stock, upon conversion of such non-voting Common
Stock) to be approved for listing on the principal securities exchange on which
the Class A Common Stock and Class D Common Stock may at the time be listed for
trading, subject to official notification of issuance, prior to the date of
issuance thereof. Notwithstanding anything in this Indenture to the contrary,
the Mandatory Conversion shall not become effective until such time as the
conditions for listing the Class A Common Stock and Class D Common Stock
issuable upon conversion of the Securities on the principal securities exchange
on which the Class A Common Stock and Class D Common Stock may be listed for
trading, if any and if applicable, have been satisfied.
(iv) Notwithstanding
anything to the contrary contained in this Section 4.01(b), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional Securities pursuant to the transactions contemplated by the Master
Transaction Agreement (the “Transactions”).
30
(c) Provisions
of this Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.
Section 4.02.
Conversion
Procedure.
(a) To convert a
Security, a Holder must (1) complete and manually sign the conversion notice on
the back of the Security and deliver such notice to a Conversion Agent, (2)
surrender the Security to a Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by a Conversion Agent, (4) pay
all transfer or similar taxes, if required pursuant to Section 4.04, and (5)
pay an amount equal to the interest as required by Section 4.02(c). The date on
which the Holder satisfies all of those requirements is the “Conversion
Date.” Anything herein to the contrary notwithstanding, in the case
of Global Securities, conversion notices may be delivered and such Securities
may be surrendered for conversion in accordance with the Applicable Procedures
as in effect from time to time.
(b) The person
in whose name the Conversion Shares are issuable upon conversion shall be
deemed to be a Holder of record of such Conversion Shares on the later of the
Conversion Date provided, however, that no surrender of a
Security on any Conversion Date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the Conversion Shares upon conversion as the record Holder or
Holders of such Conversion Shares on such date, but such surrender shall be
effective to constitute the person or persons entitled to receive such
Conversion Shares as the record Holder or Holders thereof for all purposes at
the close of business on the next succeeding day on which such stock transfer
books are open; provided further that such conversion shall be at the
Conversion Rate in effect on the Conversion Date as if the stock transfer books
of the Company had not been closed. Upon conversion of a Security, such person
shall no longer be a Holder of such Security. Except as set forth in this
Indenture, no payment or adjustment will be made for dividends or distributions
declared or made on the Conversion Shares issued upon conversion of a Security
prior to the issuance of such shares.
(c) Holders of
Securities surrendered for conversion (in whole or in part) during the period
from the close of business on any Regular Record Date to the opening of
business on the next succeeding Interest Payment Date will receive the
quarterly interest payment payable on such Securities on the corresponding
Interest Payment Date notwithstanding the conversion (such interest being
payable on the corresponding Interest Payment Date to the Holder of the
Security as of the close of business on the Regular Record Date). However, such
Holders must deliver to the Conversion Agent an amount in cash equivalent to
such interest payment in order to convert their Securities; provided,
however, that no such payment shall be required to be made with respect to
overdue interest (including Additional Interest), if any overdue interest
exists at the time of conversion with respect to such Securities. Except as
otherwise provided in this Section 4.02(c), no payment or adjustment will be
made for accrued interest on a converted Security.
(d) Subject to
Section 4.02(c), nothing in this Section shall affect the right of a Holder in
whose name any Security is registered at the close of business on a Regular
Record Date to receive the interest payable on such Security on the related
Interest Payment Date in accordance with the terms of this Indenture, the
Securities and the Registration Rights Agreement. If a
31
Holder converts more
than one Security at the same time, the amount of cash to be paid and the
number of the Conversion Shares issuable upon the conversion, if any (and the
amount of any cash in lieu of fractional shares pursuant to Section 4.03),
shall be based on the aggregate principal amount of all Securities so
converted.
(e) In the case
of any Security which is converted in part only, upon such conversion the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, without service charge, a new Security or Securities of
authorized denominations in an aggregate principal amount equal to, and in
exchange for, the unconverted portion of the principal amount of such Security.
A Security may be converted in part, but only if the principal amount of such
part is an integral multiple of $1,000 and the principal amount of such
Security to remain outstanding after such conversion is equal to $1,000 or any
integral multiple of $1,000 in excess thereof.
Section 4.03.
Fractional
Shares.
The Company will not issue
fractional Conversion Shares upon conversion of Securities. If more than one
Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares that shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount of the Securities (or
specified portions thereof to the extent permitted hereby) so surrendered. The
Company will pay a cash adjustment based upon the Closing Sale Price as of the
close of business on the first Business Day preceding the date of
conversion.
Section 4.04.
Taxes on
Conversion.
If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue or delivery of Conversion Shares upon such conversion. The
Company shall also pay any such tax with respect to cash received in lieu of
fractional shares. The Holder shall pay any such tax which is due because the
Holder requests the shares to be issued or delivered in a name other than the
Holder’s name, in which case the Holder shall pay that tax prior to
receipt of such Conversion Shares. The Conversion Agent may refuse to deliver
the certificate representing the Conversion Shares being issued in a name other
than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name. Nothing herein shall preclude any
tax withholding required by law or regulation.
Section 4.05.
Company to Provide
Stock.
(a) The Company
shall, prior to issuance of any Securities hereunder, and from time to time as
may be necessary, reserve, out of its authorized but unissued Conversion
Shares, a sufficient number of Conversion Shares to permit the conversion of
all Outstanding Securities into Conversion Shares.
(b) All shares
of Conversion Shares delivered upon conversion of the Securities shall be newly
issued shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive or similar rights of any
securityholder of the Company.
32
(c) The Company
will endeavor promptly to comply with all federal and state securities laws
regulating the offer and delivery of Conversion Shares upon conversion of
Securities.
Section 4.06.
Adjustment of
Conversion Rate.
(a) The Company
will adjust the Conversion Rate if the following events occur:
| |
(1) If
the Company issues Conversion Shares as a dividend or distribution on the
Conversion Shares to all Holders of the Conversion Shares, or if the Company
effects a share split or share combination, the Conversion Rate will be
adjusted based on the following formula: |
|
|
| |
CR1 = CR0
x OS1
OS0 |
|
|
| |
where, |
|
|
|
CR0
= |
the Conversion Rate in effect immediately prior to the Ex-Dividend
Date for such dividend or distribution, or in effect on the effective date of
such share split or share combination, as applicable; |
|
|
|
|
CR1 =
|
the new Conversion Rate in effect immediately after the Ex-Dividend
Date for such dividend or distribution, or in effect on the effective date of
such share split or share combination, as applicable; |
|
|
|
|
OS0
= |
the number of shares of the Conversion Shares outstanding immediately
prior to the Ex-Dividend Date for such dividend or distribution, or outstanding
on the effective date of such share split or share combination, as applicable;
and |
|
|
|
|
OS1
= |
the number of shares of the Conversion Shares outstanding immediately
after the Ex-Dividend Date for such dividend or distribution, or outstanding on
the effective date of such share split or share combination, as
applicable. |
|
|
|
| |
Any adjustment made pursuant to this clause (1) shall become effective
on the date that is immediately after (x) the date fixed for the determination
of shareholders entitled to receive such dividend or other distribution or (y)
the date on which such split or combination becomes effective, as applicable.
If any dividend or distribution described in this clause (1) is declared but
not so paid or made, the new Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect if the dividend or distribution
had not been declared. |
|
|
| |
(2) If
the Company issues to all holders of Conversion Shares any rights, warrants,
options or other securities entitling them for a period of not more than 45
days after the date of issuance thereof to subscribe for or purchase the
Conversion Shares, or issues to all holders of Conversion Shares securities
convertible into Conversion Shares for a period of not more than 45 days after
the date of issuance thereof, in either case at an exercise price per share of
the Conversion Shares or a conversion price per share of the Conversion Shares
less than the Closing Sale Price of the Conversion Shares on the |
33
| |
Business Day immediately preceding the time of announcement of such
issuance, the Conversion Rate will be adjusted based on the following
formula: |
|
|
| |
CR1 = CR0
x (OS0 + X)
(OS0 + Y) |
|
|
| |
where, |
|
|
|
CR0
= |
the Conversion Rate in effect immediately prior to the Ex-Dividend
Date for such distribution; |
|
|
|
|
CR1
= |
the Conversion Rate in effect immediately after the Ex-Dividend Date
for such distribution; |
|
|
|
|
OS0
= |
the number of shares of the Conversion Shares outstanding immediately
prior to the Ex-Dividend Date for the distribution; |
|
|
|
|
X =
|
the total number of shares of the Conversion Shares issuable
pursuant to such rights, warrants, options, other securities or convertible
securities; and |
|
|
|
|
Y = |
the number of shares of the Conversion Shares equal to the
quotient of (A) the aggregate price payable to exercise such rights, warrants,
options, other securities or convertible securities divided by (B) the average
of the Closing Sale Prices of the Conversion Shares for the 10 consecutive
Trading Days ending on the Business Day immediately preceding the date of
announcement for the issuance, the rights, warrants, options, other securities
or convertible securities. |
|
|
|
| |
For purposes of this paragraph (2), in determining whether any rights,
warrants, options, other securities or convertible securities entitle the
holders to subscribe for or purchase, or exercise a conversion right for,
Conversion Shares at less than the applicable Closing Sale Price of the
Conversion Shares, and in determining the aggregate exercise or conversion
price payable for such Conversion Shares, there shall be taken into account any
consideration received by the Company for such rights, warrants, options, other
securities or convertible securities and any amount payable on exercise or
conversion thereof, with the value of such consideration, if other than cash,
to be determined by the Board of Directors of the Company. If any right,
warrant, option, other security or convertible security described in this
clause (2) is not exercised or converted prior to the expiration of the
exercisability or convertibility thereof, the new Conversion Rate shall be
readjusted to the Conversion Rate that would then be in effect if such right,
warrant, option, other security or convertible security had not been so
issued. |
|
|
| |
(3) If
the Company distributes shares of its capital stock, evidences of indebtedness
or other assets or property to all holders of the Conversion Shares, excluding:
|
|
|
| |
(A) dividends,
distributions, rights, warrants, options, other securities or convertible
securities referred to in clause (1) or (2) above; |
34
| |
(B) dividends
or distributions paid exclusively in cash; and |
|
|
| |
(C) Spin-Offs
described below in this clause (3), |
|
|
| |
then the Conversion Rate will be adjusted based on the following
formula: |
|
|
| |
CR1 = CR0
x XX0
(XX0
– FMV) |
|
|
| |
where, |
|
|
|
CR0 = |
the Conversion Rate in effect immediately prior to the Ex-Dividend
Date for such distribution; |
|
|
|
|
CR1 = |
the new Conversion Rate in effect immediately after the Ex-Dividend
Date for such distribution; |
|
|
|
|
SP0 = |
the average of the Closing Sale Prices of the Conversion Shares for
the 10 consecutive Trading Days prior to the Business Day immediately preceding
the earlier of the record date or the Ex-Dividend Date for such distribution;
and |
|
|
|
|
FMV = |
the fair market value (as determined in good faith by the
Company’s Board of Directors) of the shares of capital stock, evidences of
indebtedness, assets or property distributed with respect to each outstanding
share of Conversion Shares on the earlier of the record date or the Ex-Dividend
Date for such distribution. |
|
|
|
| |
An
adjustment to the Conversion Rate made pursuant to the immediately preceding
paragraph shall become effective on the day immediately after the date fixed
for the determination of holders of the Conversion Shares entitled to receive
such distribution. |
|
|
| |
If
the Company distributes to all holders of the Conversion Shares, capital stock
of any class or series, or similar equity interest, of or relating to a
Subsidiary or other of the Company’s business units (a
“Spin-Off”), the Conversion Rate in effect immediately before the
close of business on the date fixed for determination of holders of the
Conversion Shares entitled to receive such distribution will be adjusted based
on the following formula: |
|
|
| |
CR1 = CR0 x (FMV0
+ MP0)
MP0 |
|
|
| |
where, |
|
|
|
CR0 = |
the Conversion Rate in effect immediately prior to the 10th Trading
Day immediately following and including the effective date of the Spin-Off;
|
35
|
CR1 = |
the new Conversion Rate immediately after the 10th Trading Day
immediately following, and including, the effective date of the Spin-Off;
|
|
|
|
|
FMV0 = |
the average of the Closing Sale Prices of the capital stock or similar
equity interest distributed to Holders of the Conversion Shares applicable
to one share of the Conversion Shares over the first 10 consecutive Trading
Days after the effective date of the Spin-Off; and |
|
|
|
|
MP0 = |
the average of the Closing Sale Price of the Conversion
Shares over the first 10 consecutive Trading Days after the effective date
of the Spin-Off. |
|
|
|
| |
An
adjustment to the Conversion Rate made pursuant to the immediately preceding
paragraph will occur on the 11th Trading Day from and including the
effective date of the Spin-Off. If any such dividend or distribution described
in this paragraph (3) is declared but not paid or made, the new Conversion Rate
shall be readjusted to be the Conversion Rate that would then be in effect if
such dividend or distribution had not been declared. |
|
|
| |
(4) If
the Company makes any Extraordinary Cash Dividend (without regard to when paid)
to all holders of Conversion Shares, the Conversion Rate will be adjusted based
on the following formula: |
CR1 =
CR0
x XX0
XX0
– C
where,
|
CR0 = |
the Conversion Rate in effect immediately prior to the Ex-Dividend
Date for such Extraordinary Cash Dividend; |
|
|
|
|
CR1 = |
the new Conversion Rate immediately after the Ex-Dividend Date for
such Extraordinary Cash Dividend; |
|
|
|
|
SP0 = |
the average of the Closing Sale Prices of the Conversion Shares for
the 10 consecutive Trading Days prior to the Business Day immediately preceding
the earlier of the record date or the day prior to the Ex Dividend Date for
such Extraordinary Cash Dividend; and |
|
|
|
|
C = |
the amount in cash per share that the Company distributes to Holders
of the Conversion Shares in respect of such Extraordinary Cash
Dividend. |
|
|
|
| |
An
adjustment to the Conversion Rate made pursuant to this paragraph (4) shall
become effective on the date immediately after the date fixed for the
determination of Holders of Conversion Shares entitled to receive such
Extraordinary Cash Dividend. If any Extraordinary Cash Dividend described in
this paragraph (4) is declared but not so paid or made, the new Conversion Rate
shall be readjusted to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. |
|
|
| |
(5)
[reserved] |
36
(b) In addition
to the adjustments pursuant to Section 4.06(a), the Company may in its sole
discretion increase the Conversion Rate as the Company’s Board of
Directors deems advisable to avoid or diminish any income tax to Holders of the
Conversion Shares resulting from any dividend or distribution of capital stock
(or rights to acquire shares of Conversion Shares) or from any event treated as
such for income tax purposes. The Company may also, from time to time, to the
extent permitted by applicable law, increase the Conversion Rate by any amount
for any period if the Company’s Board of Directors has determined that
such increase would be in the Company’s best interests. If the
Company’s Board of Directors makes such determination, it will be
conclusive and the Company shall mail to Holders a notice of the increased
Conversion Rate and the period during which it will be in effect at least 15
days prior to the date the increased Conversion Rate takes effect in accordance
with applicable law.
(c) For purposes
of this Section 4.06, “record date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the Holders of
Conversion Shares have the right to receive any cash, securities or other
property or in which the Conversion Shares (or other applicable security) is
exchanged or converted into any combination of cash, securities or other
property, the date fixed for determination of shareholders entitled to receive
such cash, security or other property (whether or not such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(d) [reserved]
(e) [reserved]
Section 4.07.
No Adjustment.
(a) No
adjustment in the Conversion Rate shall be required if Holders may participate
in the transactions set forth in Section 4.06 above (to the same extent as if
the Securities had been converted into Conversion Shares immediately prior to
the time at which eligibility is determined for such transactions) without
converting the Securities held by such Holders.
(b) The
Conversion Rate will not be adjusted except as specifically set forth in
Section 4.06. Without limiting the foregoing, the Conversion Rate will not be
adjusted for:
| |
(1) the
issuance of any Conversion Shares pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on the
Company’s securities and the investment of additional optional amounts in
shares of the Company’s common stock under any plan; |
|
|
| |
(2) the
issuance of any Conversion Shares or options or rights to purchase those shares
pursuant to any present or future employee, director, trustee or consultant
benefit plan, employee agreement or arrangement or program of the
Company; |
|
|
| |
(3) the
issuance of any Conversion Shares pursuant to any option, warrant, right, or
exercisable, exchangeable or convertible security outstanding as of the date
the Securities were first issued; |
|
|
| |
(4) a
change in the par value of the Conversion Shares; and |
37
| |
(5) accumulated
and unpaid dividends or distributions. |
(c) No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Conversion Rate as
last adjusted; provided, however, that any adjustments which would be required
to be made but for this Section 4.07(c) shall be carried forward and taken into
account in any subsequent adjustment. All required calculations under this
Article 4 shall be made to the nearest cent or to the nearest one- thousandth
of a share, as the case may be, with one half cent and 0.0005 of a share,
respectively, being rounded upward.
Section 4.08.
Notice of
Adjustment.
Whenever the Conversion Rate is
required to be adjusted pursuant to this Indenture, the Company shall promptly
mail to Holders a notice of the adjustment and file with the Trustee an
Officers’ Certificate briefly stating the facts requiring the adjustment
and the manner of computing it. Failure to mail such notice or any defect
therein shall not affect the validity of any such adjustment. Unless and until
the Trustee shall receive an Officers’ Certificate setting forth an
adjustment of the Conversion Rate, the Trustee may assume without inquiry that
the Conversion Rate has not been adjusted and that the last Conversion Rate of
which it has knowledge remains in effect.
Section 4.09.
Notice of Certain
Transactions.
In the event that there is a
dissolution or liquidation of the Company, the Company shall mail to Holders
and file with the Trustee a notice stating the proposed effective date. The
Company shall mail such notice at least 10 days before such proposed effective
date. Failure to mail such notice or any defect therein shall not affect the
validity of any transaction referred to in this Section 4.09.
Section 4.10.
[reserved]
Section 4.11.
Withholding.
Upon surrender of a Security for
conversion, the Holder shall deliver to the Company cash equal to the amount
that the Company is required to deduct and withhold under applicable law in
connection with such conversion; provided, however, that if the Holder
does not deliver such cash, the Company may deduct and withhold from the
consideration otherwise deliverable to such Holder the amount required to be
deducted and withheld under applicable law.
Section 4.12.
Trustee’s
Disclaimer.
The Trustee shall have no duty to
determine when an adjustment under this Article 4 should be made, how it should
be made or what such adjustment should be, but may accept as conclusive
evidence of that fact or the correctness of any such adjustment, and shall be
protected in relying upon, an Officers’ Certificate, including the
Officers’ Certificate with respect thereto which the Company is obligated
to file with the Trustee pursuant to Section 4.08. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities.
38
ARTICLE 5
COVENANTS
Section 5.01.
Payment of
Securities.
(a) The Company
shall promptly make all payments in respect of the Securities on the dates and
in the manner provided in the Securities and this Indenture. A payment of
principal or interest or Additional Interest, if any, shall be considered paid
on the date it is due if the Paying Agent (other than the Company) holds by
10:00 a.m., New York City time, on that date money, deposited by or on behalf
of the Company sufficient to make the payment. Subject to Section 4.02, accrued
and unpaid interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Principal, interest and Additional Interest, if any, in each
case if payable, shall be considered paid on the applicable date due if on such
date the Trustee or the Paying Agent holds, in accordance with this Indenture,
money sufficient to pay all such amounts then due. The Company shall, to the
fullest extent permitted by law, pay interest in immediately available funds on
overdue principal amount and interest at the annual rate borne by the
Securities compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand.
(b) Payment of
the principal of and interest, if any, on the Securities shall be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (which shall initially be at the address set
forth in Section 2.03(c)) or at the Corporate Trust Office of the Trustee in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address appears in
the Register; provided further that a Holder with an aggregate principal amount
in excess of $2,000,000 will be paid by wire transfer in immediately available
funds at the election of such Holder if such Holder has provided wire transfer
instructions to the Trustee at least 10 Business Days prior to the payment
date. Any wire transfer instructions received by the Trustee will remain in
effect until revoked by the Holder.
Section 5.02.
SEC and Other
Reports.
(a) The Company
shall deliver to the Trustee, upon request, within 15 days after the Company is
required to file the same with the SEC or within 15 days of such Trustee
request, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein,
39
including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).
Section 5.03.
Compliance
Certificates.
The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2007), an Officers’
Certificate (signed by one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Operating Officer, the
Chief Financial Officer or the Chief Accounting Officer of the Company) as to
the signer’s knowledge after due inquiry of the Company’s compliance
with all terms, conditions and covenants on its part contained in this
Indenture and stating whether or not the signer knows of any Default or Event
of Default. If such signer knows of such a Default or Event of Default, the
Officers’ Certificate shall describe the Default or Event of Default and
the efforts to remedy the same. For the purposes of this Section 5.03,
compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
Section 5.04.
Further Instruments
and Acts.
The Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
Section 5.05.
Maintenance of
Corporate Existence.
Subject to Article 6, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 5.06.
Rule 144A Information
Requirement.
If at any time the Company is not
subject to the reporting requirements of the Exchange Act, the Company shall
promptly furnish to the Holders, beneficial owners and prospective purchasers
of the Securities or underlying Conversion Shares, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) of the
Securities Act to facilitate the resale of those Securities or Conversion
Shares pursuant to Rule 144A.
Section 5.07.
Stay, Extension and
Usury Laws.
The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or accrued but
unpaid interest or Additional Interest, if any, on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
40
Section 5.08.
Payment of Additional
Interest.
If Additional Interest is payable
by the Company pursuant to the Registration Rights Agreement, the Company shall
deliver to the Trustee an Officers’ Certificate to that effect stating (i)
the amount of such Additional Interest that is payable, (ii) the reason why
such Additional Interest is payable and (iii) the date on which such Additional
Interest is payable. Unless and until a Responsible Officer of the Trustee
receives such a certificate, the Trustee may assume without inquiry that no
such Additional Interest is payable. If the Company has paid Additional
Interest directly to the Persons entitled to such Additional Interest, the
Company shall deliver to the Trustee a certificate setting forth the
particulars of such payment.
Section 5.09.
Maintenance of Office
or Agency.
The Company will maintain an
office or agency of the Trustee, Registrar and Paying Agent where securities
may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, purchase or redemption and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. The Corporate Trust Office shall initially be one
such office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 12.02.
The Company may also from time to
time designate one or more other offices or agencies where the Securities may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency.
Section 5.10.
Limitation on Layered Debt.
The Company shall not, and shall
not permit any Subsidiary to, incur, directly or indirectly, any Debt that is
subordinate or junior in right of payment to any Senior Debt unless such Debt
is Senior Subordinated Debt or is expressly subordinated in right of payment to
Senior Subordinated Debt.
Section 5.11.
Limitation on
Debt.
(a) The
Company shall not, and shall not permit any Subsidiary to, incur, directly or
indirectly, any Debt other than Permitted Debt unless:
(1) after
giving effect to the incurrence of such Debt and the application of the
proceeds thereof, the ratio of total Debt to the Company’s Consolidated
EBITDA (determined on a pro forma basis for the last four full fiscal quarters
for which financial statements are available at the date of determination)
would be less than 8.5 to 1.0; and provided further, however, that if the Debt
which is the subject of a determination under this provision is Debt to be
incurred in connection with the simultaneous acquisition of any Person,
business, property or assets, then
41
such ratio shall be
determined by giving effect (on a pro forma basis, as if the transaction had
occurred at the beginning of the four quarter period) to both the incurrence of
the Acquired Debt or other Debt by the Company and the inclusion in the
Company’s Consolidated EBITDA of the Consolidated EBITDA of the acquired
Person, business, property or assets; and
(2) no
Default or Event of Default would occur as a consequence of such incurrence or
be continuing following such incurrence.
(b) Notwithstanding
anything to the contrary contained in this Section 5.11,
(i) accrual
of interest, accretion or amortization of original issue discount and the
payment of interest or dividends in the form of additional Debt (including PIK
Notes, if any, issued to satisfy the Company’s interest payment
obligations under the Existing Senior Debt), will be deemed not to be an
incurrence of Debt for purposes of this covenant; and
(ii) for
purposes of determining compliance with this Section 5.11, in the event that an
item of Debt (including Acquired Debt) meets the criteria of more than one of
the categories of Permitted Debt described in clauses (a) through (m) of such
definition or is entitled to be incurred pursuant to clause (1) of Section
5.11(a), the Company will, in its sole discretion, classify (or later
reclassify in whole or in part, in its sole discretion) such item of Debt in
any manner that complies with this covenant.
ARTICLE 6
CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR
LEASE
Section 6.01.
Company May
Consolidate, Etc., Only on Certain Terms.
The Company shall not, in any
transaction or series of related transactions, consolidate with, or sell,
lease, assign, transfer or otherwise convey all or substantially all of its
assets to, or merge with or into, any other Person, unless:
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(1) either
the Company shall be the continuing corporation, or the successor person, if
other than the corporation, formed by or resulting from any consolidation or
merger or which shall have received the transfer of all or substantially all of
its assets is a company organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall
expressly assume, by supplemental indenture executed by the successor
corporation and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest, if any, on and all Additional
Interest, if any, payable in respect of all of the outstanding Securities
issued under this Indenture and the due and punctual performance and observance
of all of the other covenants and conditions contained in the Securities and
this Indenture to be performed or observed by the Company; |
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(2) immediately
after giving effect to the transaction, no Event of Default, and no event
which, after notice or the lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and |
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(3) the
Company shall have, at or prior to the effective date of such consolidation,
merger or transfer, delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
complies with this Article 6.01 and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture complies with
this Article, and that all conditions precedent herein provided for relating to
such transaction have been complied with. |
Section 6.02.
Successor
Substituted.
Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease substantially as an entity, of the properties and
assets of the Company and its Subsidiaries, taken as a whole, in accordance
with Section 6.01, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, and except for obligations the predecessor Person may
have under a supplemental indenture, the predecessor Person shall be released
from all obligations and covenants under this Indenture and the
Securities.
ARTICLE 7
DEFAULT AND REMEDIES
Section 7.01.
Events of
Default.
(a) The
following events are “Events of Default”:
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(1) a
default for 30 days in the payment of any interest on or any Additional
Interest payable in respect of the Securities; |
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(2) a
default in the payment of any principal of or premium, if any, on, Securities,
whether on the Final Maturity Date or any earlier date of redemption or
repurchase or otherwise; |
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(3) a
default in the performance, or breach, of any other covenant or warranty
contained in the Securities or this Indenture, continued for 60 days after
written notice as provided to the Company by the Trustee or 25% of the Holders;
provided, however, that if such default pertains to the failure to
deliver copies of annual reports and the information, documents and other
reports after the Company is required to file them with the SEC, such default
must have been continued for 90 days after written notice is provided to the
Company by the Trustee or the Holders of not less than 25% in principal amount
of the outstanding Securities; |
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(4) a
default under any Debt by the Company or any Subsidiary that results in
acceleration of the maturity of such Debt, or failure to pay any such Debt at
maturity, in |
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an
aggregate amount of Debt greater than $10,000,000 or its foreign currency
equivalent at the time; |
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(5) one
or more final judgments, orders or decrees of any court or regulatory or
administrative agency for the payment of money in excess of $10,000,000, either
individually or in the aggregate (exclusive of any portion of any such payment
covered by insurance, if and to the extent the insurer has acknowledged in
writing its liability therefor), shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
discharged or fully bonded and either (a) any creditor shall have commenced an
enforcement proceeding upon such judgment, order or decree or (b) there shall
have been a period of 60 consecutive days during which a stay of enforcement of
such judgment or order, by reason of an appeal or otherwise, shall not be in
effect; |
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(6) the
Company, or any Significant Subsidiary of the Company, pursuant to or within
the meaning of any Bankruptcy Law: |
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(A) commences
as a debtor a voluntary case or proceeding; |
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(B) consents
to the entry of an order for relief against it in an involuntary case or
proceeding or the commencement of any case against it; |
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(C) consents
to the appointment of a Receiver of it or for all or substantially all of its
property; |
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(D) makes a
general assignment for the benefit of its creditors; |
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(E) files
a petition in bankruptcy or answer or consent seeking reorganization or relief;
or |
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(F) consents
to the filing of such a petition or the appointment of or taking possession by
a Receiver; and |
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(7) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: |
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(G) grants
relief against the Company or any Significant Subsidiary of the Company in an
involuntary case or proceeding or adjudicates the Company or any Significant
Subsidiary of the Company insolvent or bankrupt; |
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(H) appoints
a Receiver of the Company or any Significant Subsidiary of the Company or for
all or substantially all of the property of the Company or any Significant
Subsidiary of the Company; or |
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(I) orders
the winding up or liquidation of the Company or any Significant Subsidiary of
the Company; |
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and in each case the order or decree remains unstayed and in effect
for 60 consecutive days. |
The term “Bankruptcy
Law” means Title 11 of the United States Code (or any successor thereto)
or any similar federal or state law for the relief of debtors. The term
“Receiver” means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
(b) The Company
will deliver to the Trustee, within five Business Days after becoming aware of
the occurrence of a Default or Event of Default, written notice thereof.
Section 7.02.
Acceleration.
If an Event of Default (other
than an Event of Default specified in clause (6) or (7) of Section 7.01(a))
occurs and is continuing, the Trustee may, by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding may, by notice to the Company and the Trustee, declare the
principal amount and accrued and unpaid interest, if any, and accrued and
unpaid Additional Interest, if any, through the date of declaration on all the
Securities to be immediately due and payable. Upon such a declaration, such
principal amount and such accrued and unpaid interest, if any, and such accrued
and unpaid Additional Interest, if any, shall be due and payable immediately.
If there are any amounts outstanding under any of the instruments constituting
Senior Debt, such amounts shall become due and payable upon the first to occur
of an acceleration under any of the instruments constituting Senior Debt or
five Business Days after receipt by the Company and the Representative under
any Senior Debt of notice of the acceleration of the instruments constituting
Senior Debt unless all Events of Default specified in such Acceleration Notice
have been cured or waived. If an Event of Default specified in Section
7.01(a)(6) or (7) occurs in respect of the Company or any Significant
Subsidiary and is continuing, the principal amount and accrued but unpaid
interest, if any, and accrued and unpaid Additional Interest, if any, on all
the Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders of
Securities. At any time after such a declaration of acceleration with respect
to the Securities has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of not less than a majority in principal amount of the
Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
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(1) the
Company has paid or deposited with the Trustee a sum sufficient to pay in the
currency in which the Securities are payable: |
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(A) all
overdue installments of interest on and any Additional Interest payable in
respect of all outstanding Securities, |
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(B) the
principal of (and premium, if any, on) any outstanding Securities which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates borne by or provided for in the
Securities, |
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(C) to
the extent that payment of such interest is lawful, interest upon overdue
installments of interest and any Additional Interest at the rate or rates borne
by or provided for in the Securities, and |
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(D) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and |
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(2) all
Events of Default with respect to the Securities, other than the nonpayment of
the principal of (or premium, if any) or interest on the Securities which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 7.04. |
Section 7.03.
Other Remedies.
(a) If an Event
of Default occurs and is continuing, the Trustee may, but shall not be
obligated to, pursue any available remedy by proceeding at law or in equity to
collect payment of the principal amount and accrued and unpaid interest, if
any, and accrued and unpaid Additional Interest, if any, on the Securities or
to enforce the performance of any provision of the Securities or this
Indenture.
(b) The Trustee
may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by
applicable law.
Section 7.04.
Waiver of Defaults and
Events of Default.
Subject to Sections 7.07 and
10.02, the Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may waive an existing
Default or Event of Default and its consequences, except an uncured Default or
Event of Default in the payment of the principal of, premium, if any, or any
accrued but unpaid interest or Additional Interest, if any, on any Security, an
uncured failure by the Company to convert any Securities into Conversion Shares
and cash, as applicable, or any Default or Event of Default in respect of any
provision of this Indenture or the Securities which, under Section 10.02,
cannot be modified or amended without the consent of the Holder of each
Security affected. When a Default or Event of Default is waived, it is cured
and ceases to exist.
Section 7.05.
Control by Majority.
The Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of another Holder or the Trustee, or that may involve the Trustee in personal
liability unless the Trustee is offered security or indemnity
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satisfactory to it;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 7.06.
Limitations on
Suits.
(a) A Holder may
not pursue any remedy with respect to this Indenture or the Securities (except
actions for payment of overdue principal, premium, if any, or interest or for
the conversion of the Securities pursuant to Article 4) unless:
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(1) the
Holder gives to the Trustee written notice of a continuing Event of
Default; |
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(2) the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities make a written request to the Trustee to pursue the
remedy; |
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(3) such
Holder or Holders offer to the Trustee security or indemnity satisfactory to it
against any loss, liability or expense; |
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(4) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and |
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(5) no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in aggregate principal
amount of the Securities then outstanding. |
(b) No Holder of
a Security shall have any right under any provision of this Indenture or the
Securities to affect, disturb, or prejudice the rights of another Holder of a
Security or to obtain a preference or priority over another Holder of a
Security.
Section 7.07.
Rights of Holders to
Receive Payment and to Convert.
Notwithstanding any other
provision of this Indenture, the right of any Holder of a Security to receive
payment of the principal, interest, if any, or Additional Interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities and this Indenture, and to convert such
Security in accordance with Article 4, and to bring suit for the enforcement of
any such payment on or after such respective due dates or for the right to
convert in accordance with Article 4, is absolute and unconditional and shall
not be impaired or affected without the consent of the Holder.
Section 7.08.
Collection Suit by
Trustee.
If an Event of Default described
in clause (1) or (2) of Section 7.01(a) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or another obligor on the Securities for the whole amount owing
with respect to the Securities and such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
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Section 7.09.
Trustee May File
Proofs of Claim.
The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor on the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any money
or other property payable or deliverable on any such claims and to distribute
the same, and any Receiver in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 8.07, and to the extent
that such payment of the reasonable compensation, expenses, disbursements and
advances in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other property which the
Holders may be entitled to receive in such proceedings, whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to,
or, on behalf of any Holder, to authorize, accept or adopt any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 7.10.
Priorities.
(a) If the
Trustee collects any money pursuant to this Article 7, it shall pay out the
money in the following order:
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(1) First,
to the Trustee for amounts due under Section 8.07; |
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(2) Second,
to Holders for amounts due and unpaid on the Securities for the principal,
interest, and Additional Interest, as applicable, ratably, without preference
or priority of any kind, according to such respective amounts due and payable
on the Holders’ Securities; and |
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(3) Third,
the balance, if any, to the Company. |
(b) The Trustee
may fix a record date and payment date for any payment to Holders pursuant to
this Section 7.10.
Section 7.11.
Undertaking for
Costs.
In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees and expenses, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section 7.11 does not
apply to a suit
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made by the Trustee,
a suit by a Holder pursuant to Section 7.07, or a suit by Holders of more than
25% in aggregate principal amount of the Securities then outstanding. This
Section 7.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.
ARTICLE 8
TRUSTEE
Section 8.01.
Obligations of
Trustee.
(a) If an Event
of Default of which a Responsible Officer of the Trustee shall have actual
knowledge has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture and use the same degree of
care and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) Except
during the continuance of an Event of Default of which a Responsible Officer of
the Trustee shall have actual knowledge:
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(1) the
Trustee need perform only those duties as are specifically set forth in this
Indenture and no others and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and |
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(2) in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. The Trustee, however, shall examine any
certificates and opinions which by any provision hereof are specifically
required to be delivered to the Trustee to determine whether or not they
conform to the requirements of this Indenture, but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein. |
This Section 8.01(b) shall be in
lieu of Section 315(a) of the TIA and such Section 315(a) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
(c) The Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except
that:
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(1) this
paragraph does not limit the effect of Section 8.01(b); |
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(2) the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and |
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(3) the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 7.05. |
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This Section 8.01(c) shall be in
lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such
Sections are hereby expressly excluded from this Indenture as permitted by the
TIA.
(d) No provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers unless the Trustee
shall have received security or indemnity satisfactory to it against potential
costs and liabilities incurred by it relating thereto.
(e) Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c) and (d) of this Section 8.01.
(f) The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.
Section 8.02.
Rights of
Trustee.
(a) Subject to
Section 8.01:
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(1) The
Trustee may rely conclusively and shall be fully protected in acting or
refraining from acting upon on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document. |
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(2) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to Section 13.04(b).
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers’ Certificate or Opinion of
Counsel. |
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(3) The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys or custodians, and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent, attorney or custodian appointed by the Trustee with due
care. |
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(4) The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.
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(5) The
Trustee may consult with counsel of its selection, and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection in respect of any such action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel. |
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(6) The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or |
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indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction. |
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(7) The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company, and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand from the Company’s own
funds. |
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(8) The
Trustee shall not be deemed to have notice or knowledge of any Default, Event
of Default or unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a Default
is received by the Trustee at the Corporate Trust Office, and such notice
references the Securities and this Indenture. In the absence of receipt of such
notice or actual knowledge, the Trustee may conclusively assume that there is
no Default or Event of Default. |
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(9) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
including, without limitation as Paying Agent, Registrar and Conversion Agent,
and to each agent, custodian and other Person employed to act hereunder.
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(10) The right of
the Trustee to perform any discretionary act enumerated in this Indenture shall
not be construed as a duty, and the Trustee shall not be answerable for other
than its own gross negligence or willful misconduct in the performance of such
act. |
Section 8.03.
Individual Rights of
Trustee.
The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 8.10 and 8.11.
Section 8.04.
Trustee’s
Disclaimer.
The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities and the Trustee assumes no responsibility for their correctness. It
shall not be accountable for the Company’s use of the proceeds from the
Securities and it shall not be responsible for any statement in the Securities
other than its certificate of authentication.
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Section 8.05.
Notice of Default or
Events of Default.
If a Default or an Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Holder of a Security notice of all uncured Defaults or
Events of Default known to it within 90 days after it occurs, unless that
default shall have been cured or waived. However, the Trustee may withhold the
notice if and for so long as a committee of its Responsible Officers in good
faith determines that withholding notice is in the interests of Holders of
Securities, except in the case of a Default or an Event of Default in payment
of the principal of, or premium, if any, or interest on any Security when due
or in the payment of any redemption or purchase obligation, or the
Company’s failure to convert Securities when obligated to convert them.
This Section 8.05 is in lieu of section 315(b) of the TIA and such provision is
expressly excluded from this Indenture as permitted by the TIA.
Section 8.06.
Reports by Trustee to
Holders.
(a) If a report
is required by TIA Section 313, within 60 days after each May 15, beginning
with the May 15 following the date of this Indenture, the Trustee shall mail to
each Holder of Securities a brief report dated as of such May 15 that complies
with TIA Section 313(a). If required by TIA Section 313, the Trustee also shall
comply with TIA Sections 313(b)(2) and (c). In the event that no events have
occurred under the applicable sections of the TIA, the Trustee shall be under
no duty or obligation to provide such reports.
(b) A copy of
each report at the time of its mailing to Holders of Securities shall be mailed
to the Company and, to the extent required by the TIA, filed with the SEC, and
each stock exchange, if any, on which the Securities are listed. The Company
shall notify the Trustee whenever the Securities become listed on any stock
exchange or listed or admitted to trading on any quotation system and any
changes in the stock exchanges or quotation systems on which the Securities are
listed or admitted to trading and of any delisting thereof.
Section 8.07.
Compensation and
Indemnity.
(a) The Company
shall pay to the Trustee from time to time such compensation (as agreed to from
time to time by the Company and the Trustee in writing) for its services (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses may include the reasonable compensation,
disbursements and expenses of the Trustee’s agents and counsel.
(b) The Company
shall indemnify the Trustee or any predecessor Trustee (which for purposes of
this Section 8.07 shall include its officers, directors, employees and agents)
for, and hold it harmless against, any and all loss, claim, damage, liability
or expense including taxes (other than franchise taxes and taxes based upon,
measured by or determined by the income of the Trustee), incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture or any action or failure to act as authorized or within
the discretion or rights or powers conferred upon the Trustee hereunder
including the reasonable costs and expenses of the Trustee and its counsel in
defending (including reasonable legal fees
52
and expenses) itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company need not pay for any settlement effected without its
prior written consent, which shall not be unreasonably withheld. Anything in
this Indenture to the contrary notwithstanding, in no event shall the Trustee
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee has
been advised of the likelihood of such loss or damage and regardless of the
form of action.
(c) The Company
need not reimburse the Trustee for any expense or indemnify it against any loss
or liability incurred by it resulting from its gross negligence, willful
misconduct or bad faith.
(d) The Trustee
shall have a senior claim to which the Securities are hereby made subordinate
on all money or property held or collected by the Trustee. The obligations of
the Company under this Section 8.07 shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the
Trustee.
(e) When the
Trustee incurs expenses or renders services after an Event of Default specified
in clause (6) or (7) of Section 7.01(a) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this Section shall
survive the termination of this Indenture.
Section 8.08.
Replacement of Trustee.
(a) The Trustee
may resign by so notifying the Company. The Holders of a majority in aggregate
principal amount of the Securities then outstanding may remove the Trustee by
so notifying the Trustee and the Company and may, with the Company’s
written consent, appoint a successor Trustee. The Company may remove the
Trustee at any time, so long as no Default or Event of Default has occurred and
is continuing, and appoint a Successor Trustee in accordance with this Section
8.08.
(b) If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor Trustee. If the
Company fails to promptly appoint a successor Trustee, the Trustee shall have
the right to choose a qualified Trustee as successor, and the Company shall
appoint such successor as Trustee. The resignation or removal of a Trustee
shall not be effective until a successor Trustee shall have delivered the
written acceptance of its appointment as described below.
(c) If a
successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of 10% in principal amount of the Securities then outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee at
the expense of the Company.
(d) If the
Trustee fails to comply with Section 8.10, any Holder who has been a bona fide
holder of indenture securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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(e) A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Immediately after that, the retiring Trustee shall
transfer all property held by it as Trustee to the successor Trustee and be
released from its obligations (exclusive of any liabilities that the retiring
Trustee may have incurred while acting as Trustee) hereunder, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
(f) A
retiring Trustee shall not be liable for the acts or omissions of any successor
Trustee after its succession.
(g) Notwithstanding replacement of the Trustee
pursuant to this Section 8.08, the Company’s obligations under Section
8.07 shall continue for the benefit of the retiring Trustee.
Section 8.09.
Successor Trustee by
Merger, Etc.
If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all of its corporate
trust business (including the administration of this Indenture) to, another
corporation, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee; provided such transferee
corporation shall qualify and be eligible under Section 8.10. Such successor
Trustee shall promptly mail notice of its succession to the Company and each
Holder.
Section 8.10.
Eligibility;
Disqualification.
The Trustee shall always satisfy
the requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition. If at any time the Trustee shall cease to satisfy
any such requirements, it shall resign immediately in the manner and with the
effect specified in this Article 8. The Trustee shall be subject to the
provisions of TIA Section 310(b). Nothing herein shall prevent the Trustee from
filing with the SEC the application referred to in the penultimate paragraph of
TIA Section 310(b).
Section 8.11.
Preferential
Collection of Claims Against Company.
The Trustee shall comply with TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE
Section 9.01.
Satisfaction and
Discharge of Indenture.
(a) This
Indenture shall cease to be of further force and effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided
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for and except as
further provided below), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when either:
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(A) all
Securities theretofore authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.07 and (ii) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 9.03) have been delivered to the Trustee for cancellation;
or |
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(B) all
such Securities not theretofore delivered to the Trustee for cancellation have
become due and payable, whether at the Final Maturity Date or upon conversion
or otherwise; |
provided that
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(1) the
Company has deposited with the Trustee, a Paying Agent (other than the Company
or any of its Affiliates) or a Conversion Agent, if applicable, immediately
available funds in trust and/or Conversion Shares, if applicable, for the
purpose of and in an amount sufficient to pay and discharge all indebtedness
and obligations related to such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest (including Additional
Interest, if any) to the date of such deposit (in the case of Securities which
have become due and payable) or Conversion Date, as the case may
be; |
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(2) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and |
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(3) the
Company has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein relating
to the satisfaction and discharge of this Indenture have been complied
with. |
(b) Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company with respect to the conversion
privilege and the Conversion Rate of the Securities pursuant to Article 4, the
obligations of the Company to the Trustee under Section 8.07 and, if money
shall have been deposited with the Trustee pursuant to clause (2) of Section
9.01(a), the provisions of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 5.01
and 12.05, Article 4, and this Article 9, shall survive until the Securities
have been paid in full.
Section 9.02.
Application of Trust
Money.
Subject to the provisions of
Section 9.03, the Trustee or a Paying Agent shall hold in trust, for the
benefit of the Holders, all money deposited with it pursuant to Section 9.01
and shall apply the deposited money in accordance with this Indenture and the
Securities to the payment of the principal of and interest on the
Securities.
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Section 9.03.
Repayment to
Company.
(a) The Trustee
and each Paying Agent shall promptly pay to the Company upon request any excess
money (1) deposited with them pursuant to Section 9.01 and (2) held by them at
any time.
(b) The Trustee
and each Paying Agent shall, subject to applicable abandonment property laws,
pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years after a right to
such money has matured; provided, however, that the Trustee or such Paying
Agent, before being required to make any such payment, may at the expense of
the Company cause to be mailed to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein,
which shall be at least 30 days from the date of such mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Holders entitled to money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.
Section 9.04.
Reinstatement.
If the Trustee or any Paying
Agent is unable to apply any money in accordance with Section 9.02 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.01 until such time as the Trustee or such Paying Agent is
permitted to apply all such money in accordance with Section 9.02; provided,
however, that if the Company has made any payment of the principal of or
interest on any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive any such payment from the money held by the Trustee or such Paying
Agent.
ARTICLE 10
AMENDMENTS; SUPPLEMENTS AND WAIVERS
Section 10.01.
Without Consent of Holders.
Without the consent of any
Holders of the Securities, the Company, when authorized by or pursuant to a
resolution of the Board of Directors, and the Trustee may enter into an
indenture to indentures supplemental hereto for any of the following
purposes:
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(a) to
evidence the succession or addition of another Person to the Company and the
assumption by any such successor of covenants of the Company under this
Indenture; |
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(b) to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred upon the Company in this
Indenture; |
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(c) to
add any additional Events of Default for the benefit of the Holders of all the
Securities; |
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(d) to
permit or facilitate the issuance of the Securities in uncertificated form,
provided that such action shall not adversely affect the Holders in any
material respect. |
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(e) to
secure the Securities; |
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(f) to
make any change to the provisions of Article 12 (Subordination of Securities)
that would limit or terminate the benefits available to any holder of Senior
Debt under such provisions; |
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(g) to
evidence and provide for the acceptance of appointment by a successor Trustee
and to add to or change any of the provisions of this Indenture as is necessary
to provide for or facilitate the administration of the trusts under this
Indenture by more than one Trustee; |
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(h) to
provide for rights of Holders of the Securities if any reclassification or
change of Conversion Shares or any consolidation, merger or sale of all or
substantially all of the Company’s property or assets occurs; |
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(i) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act, as contemplated
by this Indenture or otherwise; |
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(j) to
cure any ambiguity, defect or inconsistency in this Indenture provided that
such action shall not adversely affect the Holders in any material
respect; |
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(k) to
supplement any of the provisions of this Indenture to the extent necessary to
permit or facilitate satisfaction and discharge of the Securities under this
Indenture, provided that such action shall not adversely affect the interests
of the Holders in any material respect; or |
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(l) to
take any other action that will not adversely affect the Holders. |
The Trustee is hereby
authorized to join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into any such
supplemental indenture which adversely affects its own rights, duties or
immunities under this Indenture. No amendment may be made to the subordination
provisions of this Indenture that adversely affects the rights of any holder of
Designated Senior Debt then outstanding unless the holders of such Designated
Senior Debt (or their Representative) consent to such change. The consent of
the holders of the Securities is not necessary to approve the particular form
of any proposed amendment. It is sufficient if such consent approves the
substance of the proposed amendment
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Section 10.02.
With Consent of Holders.
(a) The Company and the Trustee
may amend or supplement this Indenture or the Securities with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Securities then outstanding and affected by such amendment or supplement
(voting together as a single class). However, subject to Section 10.04, without
the written consent of each Holder affected, an amendment, supplement or waiver
may not:
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(i) change
the stated maturity of the principal of, or any installment of principal of, or
interest (including Additional Interest, if any) on, the
Securities; |
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(ii) reduce
the principal amount of, the rate of interest (including Additional Interest,
if any) on the Securities, or change any of the Company’s obligations to
pay Additional Interest; |
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(iii) change
the timing or reduce the amount payable on the repurchase of the
Securities; |
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(iv) make
any change that impairs or adversely affects the rights of a Holder to convert
Securities in accordance herewith; |
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(v) change
the place of payment, or the coin or currency, for payment of principal of, or
interest (including Additional Interest, if any) on, the
Securities; |
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(vi) impair
the right to institute suit for the enforcement of any payment on or with
respect to Securities or the delivery of the Conversion Value as required by
this Indenture upon a conversion of Securities; |
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(vii) reduce the
above stated percentage in principal amount of Outstanding Securities necessary
to modify or amend this Indenture, to waive compliance with specified
provisions thereof or specified defaults and consequences thereunder or to
reduce the quorum or voting requirements set forth in this Indenture;
or |
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(viii) modify any of
the provisions of this Section 10.02 or Section 7.02, 7.04, 7.05 or 8.08(a) of
this Indenture, except to increase the required percentage to effect such
action or to provide that specified other provisions of this Indenture may not
be modified or waived without the consent of the Holders of each outstanding
Security affected thereby. |
(b) Without
limiting the provisions of Section 10.02(a) hereof, the Holders of a majority
in principal amount of the Securities then outstanding may, on behalf of all
the Holders of all Securities, (i) waive compliance by the Company with the
restrictive provisions of this Indenture, and (ii) waive any past Default or
Event of Default under this Indenture and its consequences, except an uncured
failure to pay when due the principal amount, accrued and unpaid interest,
accrued and unpaid Additional Interest, or in the obligation to deliver
Conversion Shares or cash, if any and as applicable, or in respect of any
provision which under this Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
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(c) After
an amendment, supplement or waiver under this Section 10.02 becomes effective,
the Company shall promptly mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or
waiver.
(d)
[reserved]
(e)
For purposes of
this Indenture, Securities will be deemed Outstanding if they have been
authenticated and delivered under this Indenture unless, among other things,
the Securities have matured or been cancelled, converted or repurchased.
Section 10.03.
Compliance with Trust Indenture
Act.
Every amendment to or supplement
of this Indenture or the Securities shall comply with the TIA as in effect at
the date of such amendment or supplement.
Section 10.04.
Revocation and Effect of
Consents.
(a) Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Security
or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to its Security or portion of a Security if the Trustee receives the notice
of revocation before the date the amendment, supplement or waiver becomes
effective.
(b) After an
amendment, supplement or waiver becomes effective, it shall bind every Holder
of a Security.
Section 10.05.
Notation on or Exchange of
Securities.
If an amendment, supplement or
waiver changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.
Section 10.06.
Trustee to Sign Amendments,
Etc.
The Trustee shall sign any
amendment or supplemental indenture authorized pursuant to this Article 10 if
the amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
in its sole discretion, but need not sign it. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be provided with
and, subject to Section 8.01, shall be fully protected in relying upon, an
Officer’s Certificate and Opinion of Counsel stating that such amendment
or supplemental indenture is authorized or permitted by this Indenture. The
Company may not sign an amendment or supplement indenture until the Board of
Directors approves it.
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Section 10.07.
Effect of Supplemental
Indentures.
Upon the execution of any
supplemental indenture under this Article 10, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE 11
REDEMPTION
Section 11.01.
Redemption.
The Company shall not have the
right to redeem any Securities prior to the Final Maturity Date.
ARTICLE 12
SUBORDINATION OF SECURITIES
Section 12.01.
Securities Subordinate to Senior
Debt.
The Company covenants and agrees,
and each Holder of the Securities by its acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner hereinafter set forth in this
Article 12, the Debt represented by the Securities and the payment of the
principal of, premium, if any, interest on, and Additional Interest, if any, on
the Securities are hereby expressly made subordinate and subject in right of
payment as provided in this Article 12 to the prior payment in full in cash or
Cash Equivalents or, as acceptable to the holders of Senior Debt, in any other
manner, of all Senior Debt.
This Article 12 shall constitute
a continuing offer to all Persons who, in reliance upon such provisions, become
holders of or continue to hold Senior Debt; and such provisions are made for
the benefit of the holders of Senior Debt; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.
Section 12.02. Payment
over Proceeds upon Dissolution, etc.
In the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its assets, whether
voluntary or involuntary or (b) any liquidation, dissolution or other
winding-up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any general assignment for the
benefit of creditors or other marshalling of assets or liabilities of the
Company (except in connection with the merger or consolidation of the Company
or its liquidation or dissolution following the transfer of substantially all
of its assets, upon the terms and conditions permitted as described under
Section 6.01), then and in any such event:
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(i) the
holders of Senior Debt of the Company shall be entitled to receive payment in
full in cash or Cash Equivalents or, as acceptable to the holders of Senior
Debt, in any other manner, of all amounts due on or in respect of all Senior
Debt of the Company, or provision shall be made for such payment, before the
Holders of the Securities are entitled to receive or retain any payment or
distribution of any kind or character on account of principal of, premium, if
any, interest on, or Additional Interest, if any, on the Securities;
and |
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(ii) any
payment or distribution of assets of the Company of any kind or character,
whether in cash, Property or securities, by set-off or otherwise, to which the
Holders or the Trustee would be entitled but for the provisions of this Article
12 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 otherwise, directly to the holders of Senior Debt or
their representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Debt may
have been issued, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Debt held or represented by each, to the extent
necessary to make payment in full in cash, Cash Equivalents or, as acceptable
to holders of Senior Debt, in any other manner, of all Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Debt; and |
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(iii) in
the event that, notwithstanding the foregoing provisions of this Section 12.02,
the Trustee or the Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including, without limitation, by way of set-off
or otherwise, in respect of principal of, premium, if any, interest on,
Additional Interest, if any, on or any other obligation owing in respect of,
the Securities before all Senior Debt of the Company is paid in full or payment
thereof provided for, then and in such event such payment or distribution shall
be held by the recipient in trust for the benefit of holders of Senior Debt and
shall be immediately paid over or delivered to the holders of Senior Debt or
their representative or representatives to the extent necessary to make payment
in full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to or for the
holders of Senior Debt. |
The consolidation of the Company
with, or the merger of Company with or into, another Person or the liquidation
or dissolution of the Company following the conveyance, transfer or lease of
its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article 6 hereof shall not be deemed a
dissolution, winding-up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of the Company for
the purposes of this Article 12 if the Person formed by such consolidation or
the surviving entity of such merger or the person which acquires by conveyance,
transfer or lease such properties and assets substantially as an entirety, as
the case may be, shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions set forth in such Article 6
hereof.
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Section 12.03.
Suspension of Payment when
Designated Senior Debt in Default.
(a) Unless
Section 12.02 hereof shall be applicable, after the occurrence of a Payment
Default, no payment or distribution of any assets or securities of the Company
or any Subsidiary of any kind or character (including, without limitation,
cash, property and any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of the Company being
subordinated to the payment of the Securities by the Company) may be made by or
on behalf of the Company or any Subsidiary, including, without limitation, by
way of set-off or otherwise, for or on account of principal of, premium, if
any, interest on, or Additional Interest, if any, on the Securities (except in
the form of Permitted Junior Securities), or for or on account of the purchase,
redemption or other acquisition of the Securities (except in the form of
Permitted Junior Securities), and neither the Trustee nor any Holder or owner
of any Securities shall take or receive from the Company or any Subsidiary,
directly or indirectly in any manner, payment in respect of all or any portion
of the Securities (except in the form of Permitted Junior Securities) following
the delivery by the representative of the holders of Designated Senior Debt
(the “Representative”) to the Trustee of written notice of the
occurrence of a Payment Default, and in any such event, such prohibition shall
continue until (A) such Payment Default has been cured or waived or has ceased
to exist or (B) such Designated Senior Debt has been paid in full in cash;
provided, however, that the Company may pay the Securities without regard to
the foregoing if the Company and the Trustee receive written notice approving
such payment from the Representative of such issue of Designated Senior Debt.
At such time as the prohibition set forth in the preceding sentence shall no
longer be in effect, subject to the provisions of the following paragraph (b),
the Company shall resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless
Section 12.02 hereof shall be applicable, upon the occurrence of a Non-Payment
Event of Default on any Designated Senior Debt, no payment or distribution of
any assets of the Company of any kind shall be made by the Company, including,
without limitation, by way of set-off or otherwise, on account of any principal
of, premium, if any, or interest on the Securities (except in the form of
Permitted Junior Securities) or on account of the purchase or redemption or
other acquisition of Securities (except in the form of Permitted Junior
Securities) for a period (“Payment Blockage Period”) commencing on
the date of receipt by the Trustee of written notice from the Representative of
such Non-Payment Event of Default unless and until (subject to any blockage of
payments that may then be in effect under the preceding paragraph (a)) the
earliest of (w) more than 179 days shall have elapsed since the date of receipt
of such written notice by the Trustee, (x) such Non-Payment Event of Default
shall have been cured or waived or is otherwise no longer continuing, (y) such
Designated Senior Debt shall have been paid in full in cash or Cash Equivalents
or (z) such Payment Blockage Period shall have been terminated by written
notice to the Company or the Trustee from the Representative initiating such
Payment Blockage Period, or the holders of at least a majority in principal
amount of such issue of Designated Senior Debt, after which, in the case of
clause (w), (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Securities, including any missed payments.
Notwithstanding any other provisions of this Indenture, no Non-Payment Event of
Default with respect to Designated Senior Debt which existed or was continuing
on the date of the commencement of any Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of a second
Payment Blockage Period initiated by the Representative, whether or not within
the Initial Blockage
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Period, unless such
Non-Payment Event of Default shall have been cured or waived for a period of
not less than 90 consecutive days. In no event shall a Payment Blockage Period
extend beyond 179 days from the date of the receipt by the Trustee of the
notice referred to in this Section 12.03(b) (the “Initial Blockage
Period”). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced under this Section 12.03(b) until at least 180
consecutive days have elapsed from the last day of the Initial Blockage
Period.
(c) In the event
that, notwithstanding the foregoing, the Trustee or the Holder of any Security
shall have received any payment prohibited by the foregoing provisions of this
Section 12.03, then and in such event such payment shall be paid over and
delivered forthwith to the Representative initiating the Payment Blockage
Period, in trust for distribution to the holders of Senior Debt or, if no
amounts are then due in respect of Senior Debt, promptly returned to the
Company, or otherwise as a court of competent jurisdiction shall direct.
Section 12.04.
Trustee’s relation to Senior
Debt.
With respect to the holders of
Senior Debt, the Trustee is to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article 12, and no
implied covenants or obligations with respect to the holders of Senior Debt
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and the Trustee
shall not be liable to any holder of Senior Debt if it shall mistakenly pay
over or deliver to Holders, the Company or any other Person moneys or assets to
which any holder of Senior Debt shall be entitled by virtue of this Article 12
or otherwise.
Section 12.05.
Subrogation to Rights of Holder of
Senior Debt.
Upon the payment in full of all
Senior Debt, the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,
Property and securities applicable to Senior Debt until the principal of,
premium, if any and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Debt of any cash, Property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article 12, and no payments over pursuant to the provisions of this Article 12
to the holders of Senior Debt by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior Debt
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of Senior Debt.
If any payment or distribution to
which the Holders would otherwise have been entitled but for the provisions of
this Article 12 shall have been applied, pursuant to the provisions of this
Article 12, to the payment of all amounts payable under the Senior Debt of the
Company, then and in such case the Holders shall be entitled to receive from
the holders of such Senior Debt at the time outstanding any payments or
distributions received by such holders of such Senior Debt in excess of the
amount sufficient to pay all amounts payable under or in respect of such Senior
Debt in full in cash or Cash Equivalents.
63
Section 12.06.
Provisions Solely to Define
Relative Rights.
The provisions of this Article 12
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Securities on the one hand and the holders of Senior Debt on
the other hand. Nothing contained in this Article 12 or elsewhere in this
Indenture or in the Securities is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, premium, if any, and
interest on or Additional Interest, if any, on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt; or (c) prevent
the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon a Default or an Event of Default
under this Indenture, subject to the rights, if any, under this Article 12 of
the holders of Senior Debt (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Company referred to in
Section 12.02 hereof, to receive, pursuant to and in accordance with such
Section, cash, Property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 12.03,
to prevent any payment prohibited by such Section or enforce their rights
pursuant to Section 12.03(c) hereof. The failure to make a payment on account
of principal of, premium, if any, or interest on or Additional Interest, if
any, on the Securities by reason of any provision of this Article 12 shall not
be construed as preventing the occurrence of a Default or an Event of Default
hereunder.
Section 12.07.
Trustee to Effectuate
Subordination.
Each Holder of a Security by his
acceptance thereof authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any
and all such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the
unpaid balance of the indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such a claim to be
approved. If the Trustee does not file such a claim prior to 30 days before the
expiration of the time to file such a claim, the holders of Senior Debt, or any
Representative, may file such a claim on behalf of Holders of the
Securities.
Section 12.08. No Waiver
of Subordination Provisions.
(a) No right of
any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
64
(b) Without
limiting the generality of subsection (a) of this Section 12.08, the holders of
Senior Debt may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article 12 or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do
any one or more of the following: (1) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person
liable in any manner for the collection or payment of Senior Debt; and (4)
exercise or refrain from exercising any rights against the Company and any
other Person.
Section 12.09.
Notice to Trustee.
(a) The Company
shall give prompt written notice to the Trustee of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee at
its Corporate Trust Office in respect of the Securites. Notwithstanding the
provisions of this Article 12 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Debt or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section 12.09, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 12.09 at least five Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose under this Indenture
(including, without limitation, the payment of the principal of, premium, if
any, or interest on or Additional Interest, if any, on any Security), then,
anything herein contained to the contrary notwithstanding but without limiting
the rights and remedies of the holders of Senior Debt or any trustee, fiduciary
or agent therefor, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within five Business Days prior to such date; nor shall the
Trustee be charged with knowledge of the curing of any such default or the
elimination of the act or condition preventing any such payment unless and
until the Trustee shall have received an Officers’ Certificate to such
effect.
(b) Subject to
the provisions of Section 8.01 hereof, the Trustee shall be entitled to rely on
the delivery to it of a written notice to the Trustee and the Company by a
Person representing itself to be a holder of Senior Debt (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, fiduciary or agent therefor); provided,
however, that failure to give such notice to the Company shall not affect in
any way the ability of the Trustee to rely on such notice. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article 12, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such
65
Person under this
Article 12, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 12.10. Reliance
on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution
of assets of the Company referred to in this Article 12, the Trustee, subject
to the provisions of Section 8.01 hereof, and the Holders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Senior Debt and other Debt of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12; provided
that the foregoing shall apply only if such court has been fully apprised of
the provisions of this Article 12.
Section 12.11. Rights of
Trustee as a Holder of Senior Debt; Preservation of Trustee’s
Rights.
The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article 12 with
respect to any Senior Debt which may at any time be held by it, to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this
Article 12 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 8.07 hereof.
Section 12.12.
Article Applicable to Paying
Agents.
In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be
then acting hereunder, the term “Trustee” as used in this Article 12
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article 12
in addition to or in place of the Trustee.
Section 12.13.
No Suspension of Remedies.
Nothing contained in this Article
12 shall limit the right of the Trustee or the Holders of the Securities to
take any action to accelerate the maturity of the Securities pursuant to
Article 7 or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article 12 of the holders, from
time to time, of Senior Debt.
66
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust
Indenture Act Controls.
If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the TIA through operation of Section 318(c)
thereof, such imposed duties shall control.
Section 13.02.
Notices.
Any demand, authorization notice,
request, consent or communication shall be given in writing and delivered in
person or mailed by first-class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission (confirmed by delivery in person or mail
by first-class mail, postage prepaid, or by guaranteed overnight courier) to
the following facsimile numbers:
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If to the Company: |
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ION Media Networks, Inc.
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial and Officer General
Counsel |
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Copy to: |
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Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx
Xxxxx
Xxx Xxxx, XX 00000 |
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Attention: Xxxxx Xxxxx
Fax: 000-000-0000 |
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if
to the Trustee, to: |
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The Bank of New York Trust Company, N.A.
00000 Xxxxxxxxx Xxxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000 |
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Attention: Corporate Trust
Administration
Fax: 000-000-0000 |
Such notices or communications
shall be effective when received.
The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
67
Any notice or communication
mailed to a Holder of a Security shall be mailed by first-class mail or
delivered by an overnight delivery service to it at its address shown on the
register kept by the Primary Registrar.
Failure to mail a notice or
communication to a Holder of a Security or any defect in it shall not affect
its sufficiency with respect to other Holders of Securities. If a notice or
communication to a Holder of a Security is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
If the Company mails any notice
to a Holder of a Security, it shall mail a copy to the Trustee and each
Registrar, Paying Agent and Conversion Agent.
Section 13.03.
Communications by Holders with
Other Holder.
Holders of Securities may
communicate pursuant to TIA Section 312(b) with other Holders of Securities
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
Section 13.04.
Certificate and Opinion as to
Conditions Precedent.
Upon any request or application
by the Company to the Trustee to take any action under this Indenture, the
Company shall furnish to the Trustee:
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(1) an
Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent (including any covenants, compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and |
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(2) an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent (including any covenants, compliance with which
constitutes a condition precedent) have been complied with. |
(b) Each
Officers’ Certificate and Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
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(1) a
statement that the person making such certificate or opinion has read such
covenant or condition; |
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(2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; |
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(3) a
statement that, in the opinion of such person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and |
68
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(4) a
statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers’ Certificate
or certificates of public officials. |
Section 13.05. Record
Date for Vote or Consent of Holders of Securities.
(a) The Company
(or, in the event deposits have been made pursuant to Section 9.01, the
Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than 30
days prior to the date of the commencement of solicitation of such action.
Notwithstanding the provisions of Section 10.04, if a record date is fixed,
those persons who were Holders of Securities at the close of business on such
record date (or their duly designated proxies), and only those persons, shall
be entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date.
(b) A meeting
will be permitted to be called at any time by the Trustee, and also, upon
request, by the Company or the Holders of at least 10% in principal amount of
the Outstanding Securities, in any such case upon written notice given as
provided in this Indenture. Except for any consent that must be given by the
Holder of each Security affected by specified modifications and amendments of
this Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present will be permitted to be adopted by the
affirmative vote of the Holders entitled to vote a majority in aggregate
principal amount of the Outstanding Securities represented at that meeting;
provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities.
Any resolution passed or decision taken at any meeting of Holders of Securities
duly held in accordance with this Indenture will be binding on all Holders of
such Securities, whether or not present or represented at the meeting. The
quorum at any meeting of Holders of the Securities called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of such Outstanding Securities;
provided, however, that if any action is to be taken at such meeting
with respect to a consent or waiver which may be given by the Holders of not
less than a specified percentage in principal amount of the Outstanding
Securities, the persons holding or representing such specified percentage in
principal amount of such Outstanding Securities will constitute a
quorum.
(c) Notwithstanding the foregoing provisions, if any
action is to be taken at a meeting of Holders of the Securities with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action that this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage in principal amount of all Outstanding
Securities affected thereby:
69
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(1) there
shall be no minimum quorum requirement for such meeting; and |
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(2) the
principal amount of such Outstanding Securities that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under this Indenture. |
Section 13.06. Rules by
Trustee, Paying Agent, Registrar and Conversion Agent.
The Trustee may make reasonable
rules (not inconsistent with the terms of this Indenture) for action by or at a
meeting of Holders. Any Registrar, Paying Agent or Conversion Agent may make
reasonable rules for its functions.
Section 13.07.
Legal Holidays.
A “Legal Holiday” is a
Saturday, Sunday or a day on which state or federally chartered banking
institutions in New York, New York are authorized or obligated to close. If a
payment date is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a Regular Record Date is a Legal Holiday, the record
date shall not be affected.
Section 13.08. Governing
Law.
This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State
of New York.
Section 13.09.
No Adverse Interpretation of Other
Agreements.
This Indenture may not be used to
interpret another indenture, loan or debt agreement of the Company or a
Subsidiary of the Company. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.
Section 13.10.
No Recourse Against Others.
No director, officer, employee,
incorporator or shareholder of the Company, as such, will have any liability
for any obligations of the Company under the Securities, this Indenture, or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Securities. The waiver may not be effective to waive
liabilities under the federal securities laws.
Section 13.11.
No Security Interest
Created.
Nothing in this Indenture or in
the Securities, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, now in
effect or hereafter enacted and made effective, in any jurisdiction.
70
Section 13.12.
Successors.
All agreements of the Company in
this Indenture and the Securities shall bind its successor. All agreements of
the Trustee in this Indenture shall bind its successor.
Section 13.13.
Multiple Counterparts.
The parties may sign multiple
counterparts of this Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent the same agreement.
Section 13.14.
Separability.
If any provisions in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 13.15.
Table of Contents, Headings,
Etc.
The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 13.16.
Waiver of Jury Trial.
EACH OF THE COMPANY AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.
Section 13.17.
Force Majeure.
In
no event shall the Trustee be responsible or liable for any failure or delay in
the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall
use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the
circumstances.
[SIGNATURE PAGES
FOLLOWS]
71
IN WITNESS WHEREOF, the parties
have caused this Indenture to be duly executed as of the date and year first
written above.
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ION MEDIA NETWORKS, INC. |
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By: /s/ Xxxxxxx Xxxxxx |
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Name: Xxxxxxx Xxxxxx |
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Title: Chief Financial Officer |
72
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THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Trustee |
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By: /s/ Xxxxxxxxx
Xxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxx |
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Title: Assistant Treasurer |
73
EXHIBIT A
[FORM OF FACE OF
SECURITY]
UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND,
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.1
THIS SECURITY AND THE CONVERSION
SHARES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER:
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(1) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY CONVERSION
SHARES ISSUABLE UPON CONVERSION OF THE SECURITY EXCEPT (A) TO ION MEDIA
NETWORKS, INC. (THE “COMPANY”) OR ANY OF ITS SUBSIDIARIES, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF RESALE OR TRANSFER; AND |
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| _________________________ |
| 1 |
This paragraph should be included only if
the Security is a Global Security. |
A-1
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(2) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
PURSUANT TO CLAUSE 1(B) ABOVE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
THE TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE,
AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 1(C) ABOVE, THE
HOLDER MUST, PRIOR TO THE TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE), ANY CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. |
A-2
ION MEDIA NETWORKS,
INC.
.
11% Series B
Mandatorily Convertible Senior Subordinated Notes due 2013
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| No.
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CUSIP: ___________ |
ION MEDIA NETWORKS, INC., a
Delaware Corporation promises to pay to ______ or registered assigns, the
principal amount of _____ dollars ($[ ]) on July 31,
2013, as adjusted per the Schedule of Exchanges attached hereto.
This Security shall bear interest
as specified on the other side of this Security. This Security is convertible
as specified on the other side of this Security.
Additional provisions of this
Security are set forth on the other side of this Security.
Dated:
____________
SIGNATURE PAGE
FOLLOWS
A-3
IN WITNESS WHEREOF, the Company
has caused this instrument to be duly executed.
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ION MEDIA NETWORKS, INC. |
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By: |
___________________________________________ |
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Name: |
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Title: |
Dated:
_____________
Trustee’s
Certificate of Authentication: This is one of the Securities referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK
TRUST COMPANY, N.A.,
as Trustee
| By: |
_____________________________________ |
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Authorized Signatory |
A-4
[FORM OF REVERSE SIDE
OF SECURITY]
ION MEDIA NETWORKS,
INC.
11% SERIES B MANDATORILY CONVERTIBLE SENIOR SUBORDINATED NOTES DUE
2013
This Security is one of a duly
authorized issue of notes, debentures, bonds, or other evidences of
indebtedness of the Company (hereinafter called the “Securities”) of
the series hereinafter specified, all issued or to be issued under and pursuant
to an Indenture, dated as of May 4, 2007 between the Company and The Bank of
New York Trust Company, N.A., as trustee, and reference is hereby made to the
Indenture, and all modifications and amendments and indentures supplemental
thereto relating to the Securities, for a description of the rights,
limitations of rights, obligations, duties, and immunities thereunder of the
Trustee, the Company and the Holders of the Securities and the terms upon which
the Securities are authenticated and delivered. Terms used herein without
definition and which are defined in the Indenture have the meanings assigned to
them in the Indenture.
1.
INTEREST
The Securities shall bear
interest at the rate of 11% per annum from May 4, 2007 or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, as the case may be, payable quarterly in arrears on January
31, April 30, July 31 and October 31 of each year (each, an “Interest
Payment Date”), commencing on July 31, 2007, until the principal hereof is
paid or duly made available for payment. Interest payable on each Interest
Payment Date shall equal the amount of interest accrued for the period
commencing on and including the immediately preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or commencing on
and including May 4, 2007, if no interest has been paid or duly provided
for) and ending on and including the day preceding such Interest Payment Date.
Interest will cease to accrue on a Security upon its maturity or conversion.
Interest on the Securities will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
The Company may, at
its option, elect to pay interest on the Securities:
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(ii) by
deferring the payment of all such interest to any subsequent Interest Payment
Date. |
The Company must
elect (A) the form of interest payment with respect to each Interest Payment
Date and (B) whether the Company will pay in cash any previously deferred
interest by delivering a notice to the Trustee 5 Business Days prior to the
Regular Record Date for such Interest Payment Date. The Trustee shall promptly
deliver a corresponding notice to the Holders. For the avoidance of doubt,
interest that is deferred shall not be added to the principal of the Securities
or earn interest.
A-5
2.
METHOD OF
PAYMENT
Except as provided in the
Indenture, the Company shall pay interest on the Securities to the Persons who
are Holders of record of Securities at the close of business (whether or not a
Business Day) on the January 15, April 15, July 15 and October 15 immediately
preceding the applicable Interest Payment Date (each, a “Regular Record
Date”). Holders must surrender Securities to a Paying Agent and comply
with the other terms of the Indenture to collect the principal amount, plus, if
applicable, accrued and unpaid interest (including Additional Interest, if any)
payable as herein provided at maturity. The Company shall pay, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts, all amounts due in cash with respect to the Securities on
the dates and in the manner provided in this Security and the Indenture.
3.
PAYING
AGENT, CONVERSION AGENT AND SECURITY REGISTRAR
Initially, the Trustee shall act
as Paying Agent, Conversion Agent and Security Registrar. The Company hereby
initially designates the Corporate Trust Office of the Trustee in New York, New
York as the office to be maintained by it where this Security may be presented
for payment, registration of transfer or exchange, where notices or demands to
or upon the Company in respect of this Security or the Indenture may be served
and where the Securities may be surrendered for conversion in accordance with
the provisions of paragraph 6 hereof and the Indenture. The Company may appoint
and change any Paying Agent, Conversion Agent, Security Registrar or
co-registrar or approve a change in the office through which any Paying Agent
acts without notice, other than notice to the Trustee.
4.
REDEMPTION BY THE COMPANY
The Company shall not have the
right to redeem any Securities prior to the Final Maturity Date.
5.
CONVERSION
The Securities shall be
convertible into the consideration specified in the Indenture at such times,
upon compliance with such conditions and upon the terms set forth in the
Indenture.
At any time following the first anniversary of
the Issue Date, upon the occurrence of a Mandatory Conversion Event,
unless previously converted at the option of the Holder in accordance with the
provisions of Section 4.01(a) of the Indenture, each outstanding Security or
portion thereof that is an integral multiple of $1,000 principal amount shall,
without notice to Holders thereof, convert automatically (the “Mandatory
Conversion”) into a number of Conversion Shares equal to (A)(x) the
principal amount of the Securities so converted plus accrued and unpaid
interest thereon through the Conversion Date multiplied by (y) the Mandatory
Conversion Factor, divided by (B) the Conversion Price then in effect.
The initial Conversion Price
shall be $0.75 per Conversion Share and shall increase from the Issue Date at
the rate of 11% per annum. The Conversion Price and the initial Conversion Rate
of 1333.3333 Conversion Shares per $1,000 principal amount of Securities are
subject to adjustment in certain circumstances as specified in the Indenture.
A-6
To convert this Security if this
Security is in book-entry form, the Holder must convert by book-entry transfer
to the Conversion Agent through the facilities of DTC and the conversion notice
must comply with all applicable DTC procedures. To convert this Security if
this Security is held in certificated form, the Holder must (a) complete and
manually sign the irrevocable conversion notice set forth below (or complete
and manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent at the office maintained by the Conversion Agent for such
purpose, (b) surrender such Security to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. The date on which
the Holder satisfies all such requirements shall be deemed to be the date on
which this Security shall have been tendered for conversion.
6.
RANKING
The Securities are senior
subordinated obligations of the Company junior to the Senior Debt and pari
passu with all Senior Subordinated Debt.
7.
DENOMINATIONS; TRANSFER; EXCHANGE
This Security is issuable only in
fully registered, book-entry form, in denominations of $1,000 and integral
multiples thereof. This Security may be exchanged for a like aggregate
principal amount of Securities of other authorized denominations at the office
or agency of the Company in The City of New York, in the manner and subject to
the limitations provided herein and in the Indenture, but without the payment
of any charge except for any tax or other governmental charge imposed in
connection therewith. Upon due presentment for registration of transfer of this
Security at the office or agency of the Company in The City of New York, one or
more new Securities of authorized denominations in an equal aggregate principal
amount will be issued to the transferee in exchange therefor, and bearing such
restrictive legends as may be required by the Indenture, but without payment of
any charge except for any tax or other governmental charge imposed in
connection therewith.
8.
PERSONS
DEEMED OWNERS
The Holder of this Security may
be treated as the owner of this Security for all purposes, and none of the
Company or the Trustee nor any authorized agent of the Company or the Trustee
shall be affected by any notice to the contrary, except as required by
law.
9.
ADDITIONAL RIGHTS OF HOLDERS
In addition to the rights
provided to Holders of Securities under the Indenture, Holders shall have all
the rights set forth in the Registration Rights Agreement, dated as of May 4,
2007, among the Company and the Initial Purchasers named therein.
10.
MODIFICATION AND
AMENDMENT; WAIVER
The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Securities under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in the aggregate
principal amount of all Outstanding
A-7
Securities affected
thereby (voting together as a single class). The Indenture also provides that
certain amendments or modifications may not be made without the consent of each
Holder to be affected thereby. Furthermore, provisions in the Indenture permit
the Holders of a majority in the aggregate principal amount of the Outstanding
Securities, in certain instances, to waive, on behalf of all of the Holders of
Securities, certain past defaults under the Indenture and their consequences.
Any such waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and other
Securities issued upon the registration of transfer hereof or in exchange
hereof, or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
11.
DEFAULTS AND
REMEDIES
The Indenture sets forth events
that constitute an Event of Default under the Indenture. If an Event of Default
shall occur and be continuing, there may be declared due and payable the
principal amount (together with accrued and unpaid interest) on the Securities
in the manner and with the effect provided in the Indenture. If certain
bankruptcy or insolvency events occur and continue with respect to the Company
or a Significant Subsidiary, the Securities shall automatically become due and
payable in accordance with the terms of the Indenture.
12.
CONSOLIDATION,
MERGER, AND SALE OF ASSETS
In the event of a consolidation
or merger of the Company or a sale, lease or conveyance of all or substantially
all of the assets of the Company as described in Article 6 of the Indenture,
the successor entity to the Company shall succeed to and be substituted for the
Company and may exercise the rights and powers of the Company under the
Indenture, and thereafter, except in the case of a lease, the Company shall be
relieved of all obligations and covenants under the Indenture and the
Securities.
13.
TRUSTEE AND
AGENT DEALINGS WITH THE COMPANY
The Trustee, Paying Agent,
Conversion Agent and Registrar under the Indenture, each in its individual or
any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by the Company or its
Affiliates and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee, Paying Agent, Conversion
Agent or Xxxxxxxxx.
00.
CALCULATIONS IN
RESPECT OF THE SECURITIES
Except as otherwise specifically
stated herein or in the Indenture, all calculations to be made in respect of
the Securities shall be the obligation of the Company. These calculations
include, but are not limited to, determinations of the Conversion Price and
Conversion Rate applicable to the Securities. All calculations made by the
Company or its agent as contemplated pursuant to the terms hereof and of the
Indenture shall be made in good faith and, absent manifest error, shall be
final and binding on the Company and the Holders. The Company shall provide a
schedule of calculations to the Trustee, and the Trustee shall be entitled to
rely upon the accuracy of the calculations by the Company without independent
verification. The Trustee shall forward calculations made by the Company to any
Holder of Securities upon request within 20 Business Days of the effective date
of any adjustment.
A-8
15.
GOVERNING
LAW
The Indenture and this Security
shall be governed by and construed in accordance with the laws of the State of
New York.
A-9
ASSIGNMENT
FORM
To assign this Security, fill in
the form below:
I or we assign and transfer this
Security to
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| (Insert assignee’s soc. sec. or tax I.D. no.) |
| |
| |
| |
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| (Print or type assignee’s name, address and zip code) |
and irrevocably
appoint
| |
| agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him or her. |
| |
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Your Signature |
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| Date: |
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(Sign exactly as your name appears on the
other side of this
Security) |
* Signature
guaranteed by:
By:
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| * |
The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the
Trustee. |
A-10
CONVERSION
NOTICE
To convert this Security into
Conversion Shares of the Company, check the box:
To convert only part of this
Security, state the principal amount to be converted (must be $1,000 or a
integral multiple of $1,000): $
.
If you want the stock certificate
made out in another person’s name, fill in the form below:
| |
| (Insert assignee’s soc. sec. or tax I.D. no.) |
| |
| |
| |
| |
| (Print or type assignee’s name, address and zip code) |
| |
| |
Your Signature |
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|
| Date: |
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|
| |
(Sign exactly as your name appears on the
other side of this
Security) |
* Signature
guaranteed by:
By:
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|
|
| * |
The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the
Trustee. |
A-11
SCHEDULE OF EXCHANGES
OF SECURITIES(1)
The following exchanges,
purchases or conversions of a part of this Global Security have been
made:
Principal Amount of this
Global Security
Following Such Decrease
Date of Exchange (or
Increase) |
|
Authorized Signatory of
Securities Custodian |
|
Amount of Decrease in
Principal Amount of this
Global Security |
|
Amount of Increase in
Principal Amount of this
Global Security |
|
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| 1. |
This schedule should be included only if the Security is a Global
Security. |
A-12
CERTIFICATE TO BE
DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF RESTRICTED
SECURITIES
Re: 11%
Series B Mandatorily Convertible Senior Subordinated Notes due 2013 (the
“Securities”) of ION Media Networks, Inc.
This certificate
relates to $
principal
amount of Securities owned in (check applicable box)
o book-entry or o definitive form
by
(the “Transferor”).
The Transferor has requested a
Registrar or the Trustee to exchange or register the transfer of such
Securities.
In connection with
such request and in respect of each such Security, the Transferor does hereby
certify that the Transferor is familiar with transfer restrictions relating to
the Securities as provided in Section 2.12 of the Indenture dated as of May 4,
2007 between ION Media Networks, Inc. and The Bank of New York, as trustee (the
“Indenture”), and the transfer of such Security is being made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”) (check applicable box), or
the transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):
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Such Security is being transferred pursuant to an effective
registration statement under the Securities Act. |
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|
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Such Security is being acquired for the Transferor’s own account,
without transfer. |
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Such Security is being transferred to the Company or a Subsidiary (as
defined in the Indenture) of the Company. |
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Such Security is being transferred to a person the Transferor
reasonably believes is a “qualified institutional buyer” (as defined
in Rule 144A or any successor provision thereto (“Rule 144A”) under
the Securities Act) that is purchasing for its own account or for the account
of a “qualified institutional buyer”, in each case to whom notice has
been given that the transfer is being made in reliance on such Rule 144A, and
in each case in reliance on Rule 144A. |
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Such Security is being transferred pursuant to and in compliance with
an exemption from the registration requirements under the Securities Act in
accordance with Rule 144 (or any successor thereto) (“Rule 144”)
under the Securities Act. |
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Such Security is being transferred to a non-U.S. Person in an offshore
transaction in compliance with Rule 904 of Regulation S under the Securities
Act (or any successor thereto). |
A-13
| |
Such Security is being transferred pursuant to and in compliance with
an exemption from the registration requirements of the Securities Act (other
than an exemption referred to above) and as a result of which such Security
will, upon such transfer, cease to be a “restricted security” within
the meaning of Rule 144 under the Securities Act. |
A-14
The Transferor acknowledges and
agrees that, if the transferee will hold any such Securities in the form of
beneficial interests in a Global Security which is a “restricted
security” within the meaning of Rule 144 under the Securities Act, then
such transfer can only be made pursuant to (i) Rule 144A under the Securities
Act and such transferee must be a “qualified institutional buyer” (as
defined in Rule 144A) or (ii) Regulation S under the Securities Act.
| Date: |
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(Insert Name of Transferor) |
A-15
EXHIBIT
C to the Master Transaction Agreement
NBCU Option I
Exhibit
C to the
Master
Transaction Agreement
NBCU
Call Option I Agreement
CALL
AGREEMENT
CALL
AGREEMENT, dated as of May 4, 2007 (this “Agreement”),
by and among CIG Media LLC (“CM”),
a Delaware limited liability company controlled by Citadel Limited Partnership,
an Illinois limited partnership (“CLP”),
and NBC PALM BEACH INVESTMENT II, INC., a California corporation (the
“Investor”).
WITNESSETH:
WHEREAS,
on May 3, 2007, ION Media Networks, Inc., a Delaware Corporation (the
“Company”),
NBC Universal, Inc., NBC Palm Beach Investment I, Inc., the Investor, and CM
entered into the Master Transaction Agreement (the “Master
Transaction Agreement”)
which provides for a restructuring of the Company’s ownership and capital
structure (the “Transaction”),
including, among other things, the transfer of the call right (the
“Original
Call Right”)
granted pursuant to the Original Call Agreement (as defined below) to CM; and
WHEREAS,
pursuant to Section 11.01 of the Master Transaction Agreement, the execution
and delivery of this Agreement is a condition to the commencement of the
transactions contemplated by the Master Transaction Agreement; and
WHEREAS,
following the exercise and closing of the Original Call Right, CM wishes to
grant the Investor the right to purchase the Call Shares (as defined below),
subject to the terms and conditions of this Agreement; and
WHEREAS,
on the Effective Date and after giving effect to the consummation of the
transactions contemplated by the Original Call Agreement, CM shall be the
record and beneficial owner of the Call Shares.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE
I
DEFINED
TERMS
Section
1.1 Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below:
“Action”
means any claim, demand, action, suit, arbitration, proceeding or investigation
by or before any Governmental Authority.
“Affiliate”
means, with respect to any Person, any other Person that controls, is
controlled by, or is under common control with, such Person. As used in this
definition,
“control”
(including its correlative meanings, “controlled by” and “under
common control with”) means the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).
“Business
Day”
means any day, other than a Saturday, Sunday or a day on which commercial banks
in New York, New York are authorized or obligated by Law or executive order to
close.
“Call
Closing”
has the meaning assigned to it in Section 2.4.
“Call
Notice”
has the meaning assigned to it in Section 2.3.
“Call
Period”
means the five-year period commencing on the earlier of the Business Day
following (i) the six-month anniversary of the Effective Date and (ii) the date
on which the Class A Common Stock is deregistered with the Securities and
Exchange Commission, provided that the Call Period shall be automatically
extended for successive five-year periods commencing upon each successive five
year anniversary of the Effective Date.
“Call
Price”
has the meaning assigned to it in Section 2.2.
“Call
Right”
has the meaning assigned to it in Section 2.2.
“Call
Shares”
means the 8,311,639 shares of Class B Common Stock and 15,455,062 shares of
Class A Common Stock owned by CM, and any shares of common stock of the Company
or other securities that may be received by CM with respect to such Call Shares
(x) as a result of a stock dividend or distribution on, stock split or reverse
stock split of, or similar event with respect to Call Shares or (y) in a
merger, consolidation, combination, reclassification, recapitalization or
similar transaction involving the Company.
“Class
A Common Stock”
means the Class A Common Stock, par value $0.001 per share, of the
Company.
“Class
B Common Stock”
means the Class B Common Stock, par value $0.001 per share, of the
Company.
“CLP”
has the meaning assigned to it in the Preamble
“CM”
has the meaning assigned to it in the Preamble.
“Common
Stock”
means the Class A Common stock and the Class B Common Stock.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984, the Cable Television
Consumer Protection and Competition Act of 1992 and the
2
Telecommunications
Act of 1996) and all rules and regulations of the FCC, in each case as from
time to time in effect.
“Company”
has the meaning assigned to it in the Recitals.
“Effective
Date”
means the date of the closing of the transactions contemplated by the Original
Call Agreement.
“Exercise
Notice”
has the meaning assigned to it in Section 2.3(b).
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the date hereof.
“FCC
Application”
means the application to be filed with the FCC, if such application is required
to be filed under the Communications Act, in connection with the exercise of
the Call Right by the Investor requesting that the FCC consent to the Transfer
of the Call Shares pursuant to this Agreement.
“Final
Order”
means an action or actions by the FCC that have not been reversed, stayed,
enjoined, set aside, annulled, or suspended, and with respect to which no
requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
“Governmental
Authority”
means any federal, national, supranational, state, provincial, local, or other
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.
“Governmental
Order”
means any order, writ, judgment, injunction, decree, stipulation, determination
or award issued or entered by or with any Governmental Authority.
“HSR
Act”
means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
“Investor”
has the meaning assigned to it in the Preamble.
“Law”
means any provision of any (i) federal, state, provincial, local, foreign or
similar statute, law, ordinance, regulation, rule, code, administrative
interpretation, regulation or other requirement of any Governmental Authority
or (ii) Governmental Order.
“Lien”
means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement or any financing lease having substantially the same effect as any of
the foregoing).
3
“Master
Transaction Agreement”
has the meaning assigned to it in the Recitals.
“NBCU”
means NBC Universal, Inc., a Delaware corporation.
“Original
Call Agreement”
means the Call Agreement, dated as of November 7, 2005, among Xx. Xxxxxx X.
Xxxxxx, certain of his Affiliates and the Investor, as such agreement may be
amended from time to time.
“Original
Call Right”
has the meaning assigned to it in the Recitals.
“Xxxxxx
Stockholders”
has the meaning assigned to it in the Master Transaction
Agreement.
“Permitted
Liens”
means (i) mechanics’, carriers’, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, (ii) Liens arising
under original purchase price conditioned sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent
with past practice, (iii) statutory Liens for Taxes not yet due and payable,
(iv) Liens arising under federal or state securities laws and (v) Liens arising
under the Stockholders’ Agreement.
“Person”
means an individual, corporation, unincorporated association, partnership,
group (as defined in subsection 13(d)(3) of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder), trust,
joint stock company, joint venture, business trust or unincorporated
organization, limited liability company, any governmental entity or any other
entity of whatever nature.
“Put/Call
Agreement”
means the Put/Call Agreement, dated as of the date hereof, between NBCU and
CM.
“Restricted
Period”
means the period commencing on the Effective Date and ending on the later of
the Business Day following the earlier of (i) the six-month anniversary of the
Effective Date and (ii) the deregistration of the Class A Common Stock with the
Securities and Exchange.
“Restricted
Transfer Period”
has the meaning assigned to it in Section 2.5.
“Series
F Non-Convertible Preferred”
means the 8% Series E Non-Convertible Preferred Stock, par value $.001 per
share, of the Company, to be issued pursuant the Certificate of Designations of
the Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of 8% Series E Non-Convertible Preferred Stock and Qualifications,
Limitations and Restrictions Thereof, to be filed with the Secretary of State
of the State of Delaware.
“Stockholders’
Agreement”
means the Stockholders’ Agreement, dated as of May 4, 2007, among the
Company, NBCU and CLP, as from time to time amended, modified or supplemented.
4
“Subsidiary”
means, with respect to the Company, a corporation, partnership, limited
liability company, joint venture or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, directly or indirectly, through one or more intermediaries (including,
without limitation, other Subsidiaries), or both, by the Company.
“Transaction”
has the meaning assigned to it in the Recitals.
“Transaction
Agreements”
has the meaning assigned to it in the Master Transaction
Agreement.
“Transfer”
means, with respect to the Call Shares or the Call Right, any assignment,
pledge, offer or other transfer or disposal of any interest in such shares or
right.
“2005
Agreements”
has the meaning assigned to it in the Master Transaction
Agreement.
ARTICLE
II
CALL
RIGHT
Section
2.1 Effectiveness.
The Call Right granted pursuant to Section 2.2(a) shall be effective as of the
date of the closing of the acquisition of the Call Shares by CM pursuant to the
Original Call Agreement.
Section
2.2 Call
Right.
(a) CM
hereby grants to the Investor, effective as of the Effective Date, an
irrevocable right following the Restricted Period to purchase from CM during
the Call Period all of the Call Shares on the terms and conditions set forth
herein (the “Call
Right”).
The Call Right shall be granted as part of the mutual consideration set forth
in the transactions described in the Master Transaction Agreement, including,
without limitation, Sections 2.02 and 2.05 in the Master Transaction
Agreement.
(b) Following
the Restricted Period, at any time during the Call Period, the Investor may
exercise the Call Right, in whole but not in part, and subject to the terms and
conditions set forth herein, purchase from CM the Call Shares for a purchase
price (the “Call
Price”)
equal to the sum of (1) $0.40
multiplied by all of the shares of Class B Common Stock owned by CM on the
Effective Date which are Call Shares and are delivered at the Call Closing and
(2) $0.40
multiplied by all of the shares of Class A Common Stock owned by CM on the
Effective Date which are Call Shares and are delivered at the Call Closing. The
price per share of Class B Common Stock and Class A Common Stock specified in
the previous sentence and the Call Price shall be equitably adjusted to reflect
any conversions, reclassifications,
5
reorganizations,
stock dividends, stock splits, reverse splits and similar events which occur
with respect to the Common Stock after the date hereof and on or prior to the
Call Closing.
Section
2.3 Exercise
of Call Right; Call Notice.
(a)
Following the Restricted Period, exercise of the Call Right shall be
accomplished by the Investor sending notice of such exercise (the
“Call
Notice”)
to CM at the address provided for in Section 5.1 of this Agreement at any time
during the Call Period. The Call Notice shall state the Call Price and the
place at which the Call Closing will be conducted.
(b) In the
event the Investor determines to exercise the Call Right, the Investor shall
deliver written notice to CM stating that the Investor intends to exercise the
Call Right and requesting that CM cooperate (and that CM use its commercially
reasonable best efforts to cause the Company and its Subsidiaries to cooperate)
with the Investor to file any applications that may be required in connection
with the exercise of the Call Right, including the FCC Application, if
applicable, and under the HSR Act (the “Exercise
Notice”).
As promptly as practicable, but in no event later than 20 Business Days after
the giving of the Exercise Notice, the parties shall (and CM shall use its
commercially reasonable best efforts to cause the Company and its Subsidiaries
to) make any filings required under the Communications Act and/or HSR Act.
Section
2.4 Call
Closing.
(a) The
closing (the “Call
Closing”)
of the exercise of the Call Right and the purchase and sale of the Call Shares
shall occur as promptly as practicable following, but in no event less than
five Business Days following, the receipt of any required consent, approval,
authorization or other order of, action by, or any required filing with or
notification to, any Governmental Authority or any required third party consent
referred to in Section 4.1(b) below, including, without limitation, (i) the
expiration or termination of any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Call Shares and
(ii) approval by the FCC of the FCC Application, which approval shall have
become a Final Order, subject to the last sentence of this Section 2.4(a). If
the Call Closing shall not have occurred on or before the 18-month anniversary
of the date of the Exercise Notice, then such Exercise Notice shall be of no
further force and effect and neither CM nor the Investor shall be obligated to
consummate the Call Closing with respect to such Exercise Notice; provided that
following such date, this Agreement and the Call Right shall continue in full
force and effect and the Investor shall retain all rights hereunder subject to
the terms and conditions contained herein. The Call Closing shall occur at the
place designated in the Call Notice. The requirement for a Final Order may be
waived by the Investor in its sole discretion.
(b) At the
Call Closing, (i) CM shall deliver to the Investor certificates representing
all of the Call Shares, duly endorsed in blank or accompanied by stock powers
duly executed in blank, with all necessary stock transfer stamps affixed
thereto free and clear of all Liens other than Permitted Liens, and (ii) the
Investor shall pay the Call Price by wire transfer in immediately available
funds to the account or accounts specified by CM. CM shall furnish necessary
account information at least two Business Days prior to the Call Closing.
Section
2.5 Limitation
on Transfer of the Call Shares by CM. From
the Effective Date until the earlier of (i) the Call Closing or (ii) the
expiration of the Call Period (the “Restricted
Transfer Period”),
except as provided in the Put/Call Agreement, CM shall not
6
Transfer
any of the Call Shares; provided,
however, that,
subject to applicable Law, at any time during the Restricted Transfer Period CM
may Transfer all (but not less than all) of the Call Shares in connection with
the Transfer by CM and its Affiliates of all of the securities of the Company
owned by CM and its Affiliates; provided,
further,
however, except
as provided in the Put/Call Agreement, it shall be a condition of such Transfer
that the transferee of the Call Shares agrees in writing to assume all of the
obligations of CM under this Agreement and that the Call Shares continue to be
subject to the Call Right in accordance with the terms and conditions of this
Agreement.
Section
2.6 Conversion
of Call Shares. During
the Restricted Transfer Period, CM shall not convert any of the Call Shares
into any other security of the Company.
Section
2.7 Legends. CM
agrees to, and will request the Company to cause, the imprinting, for so long
as appropriate, of substantially the following legends on certificates
representing any of the Call Shares:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
STOCKHOLDERS’ AGREEMENT, DATED AS OF MAY 4, 2007, AMONG ION MEDIA
NETWORKS, INC., CIG MEDIA LLC AND NBC UNIVERSAL, INC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE PUT/CALL
AGREEMENT DATED AS OF MAY 4, 2007 BETWEEN NBC UNIVERSAL, INC. AND CIG
MEDIA LLC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A CALL
AGREEMENT DATED AS OF MAY 4, 2007,
BETWEEN CIG MEDIA LLC AND NBC PALM BEACH INVESTMENT II, INC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OF 1933 OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.
Section
2.8 Termination
of the Call Right. The
right of the Investor to purchase the Call Shares pursuant to this Agreement
shall terminate upon the earliest to occur of the (i) expiration of the Call
Period prior to the delivery of the Exercise Notice by the Investor to CM and
(ii) written consent of the parties hereto.
7
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations
and Warranties of CM. CM
represents and warrants to the Investor as follows:
(a) Existence;
Compliance with Law. CM is
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization and has all necessary power and authority to
enter into this Agreement, to carry out its obligations and to consummate the
transactions contemplated hereby. CM is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so
licensed or qualified and in good standing would not adversely affect the
ability of CM to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement. The execution and delivery by CM
of this Agreement, the performance by CM of its obligations hereunder and the
consummation by CM of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of CM and its members. This
Agreement has been duly executed and delivered by CM, and (assuming due
authorization, execution and delivery by the other parties) this Agreement
constitutes legal, valid and binding obligations of CM, enforceable against CM
in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency (including all Laws relating to fraudulent transfers),
reorganization, moratorium or similar Laws affecting creditors’ rights
generally and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
(b) Authorization;
Enforceable Obligations.
Assuming that all consents, approvals, authorizations and other actions
described in Section 3.1(c) have been obtained or have occurred and any
applicable waiting period has expired or been terminated, and except as may
result from any facts or circumstances relating solely to the Investor, the
execution, delivery and performance of this Agreement does not and will not
(i) violate, conflict with or result in the breach of the limited
liability company agreement (or similar organizational documents) of CM, (ii)
conflict with or violate any Law or Governmental Order applicable to CM or
(iii) conflict with, result in any breach of, constitute a default (or
event which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of
termination, acceleration or cancellation of, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which CM or any of its subsidiaries is a
party, except, in the case of clauses (ii) and (iii), as would not materially
and adversely affect the ability of CM to carry out its obligations under, and
to consummate the transactions contemplated by, this Agreement.
(c) Governmental
Consents. The
execution, delivery and performance by CM of this Agreement and the
transactions contemplated hereby do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority, except (i) the pre-merger
notification and waiting period requirements of the HSR Act and the approval by
the FCC pursuant to Section 310(d) of the Communications
8
Act in
connection with the exercise of the Call Right, (ii) where failure to
obtain such consent, approval, authorization or action, or to make such filing
or notification, would not prevent or materially delay the consummation by CM
of the transactions contemplated by this Agreement or (iii) as may be necessary
as a result of any facts or circumstances relating solely to the
Investor.
(d) Capitalization;
Ownership. As of
the Effective Date, CM will own the Call Shares. Upon delivery of and payment
for the Call Shares at the Call Closing as provided herein, the Investor shall
acquire good title to the Call Shares delivered by CM, free and clear of all
Liens other than Permitted Liens. As of the date hereof, CM is not a party to,
and has no knowledge of, any voting trust, proxy or any other agreement or
understanding with respect to the Call Shares other than as created by the
Transaction Agreements.
Section
3.2 Representations
and Warranties of the Investor. The
Investor represents and warrants to CM as follows:
(a) Existence;
Compliance with Law. The
Investor is duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its organization and has all necessary power and
authority to enter into this Agreement, to carry out its obligations and to
consummate the transactions contemplated hereby. The Investor is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which the properties owned or leased by it or the operation of its business
makes such licensing or qualification necessary, except to the extent that the
failure to be so licensed or qualified and in good standing would not adversely
affect the ability of the Investor to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement. The execution and
delivery by the Investor of this Agreement, the performance by the Investor of
its obligations hereunder and the consummation by the Investor of the
transactions contemplated hereby have been duly authorized by all requisite
action on the part of the Investor and its stockholders. This Agreement has
been duly executed and delivered by the Investor, and (assuming due
authorization, execution and delivery by the other parties) this Agreement
constitutes legal, valid and binding obligations of the Investor, enforceable
against the Investor in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including all Laws relating to fraudulent
transfers), reorganization, moratorium or similar Laws affecting
creditors’ rights generally and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding at law
or in equity).
(b) Authorization;
Enforceable Obligations.
Assuming that all consents, approvals, authorizations and other actions
described in Section 3.2(c) have been obtained and any applicable waiting
period has expired or been terminated, and except as may result from any facts
or circumstances relating solely to CM, the execution, delivery and performance
of this Agreement does not and will not (i) violate, conflict with or
result in the breach of the certificate of incorporation or bylaws (or similar
organizational documents) of the Investor, (ii) conflict with or violate any
Law or Governmental Order applicable to the Investor or (iii) conflict
with, result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
acceleration or cancellation of, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or
9
arrangement
to which the Investor or any of its subsidiaries is a party, except, in the
case of clauses (ii) and (iii), as would not materially and adversely affect
the ability of the Investor to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement.
(c) Governmental
Consents. The
execution, delivery and performance by the Investor of this Agreement and the
transactions contemplated hereby do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority, except (i) the pre-merger
notification and waiting period requirements of the HSR Act and the approval by
the FCC pursuant to Section 310(d) of the Communications Act in connection with
the exercise of the Call Right, (ii) where failure to obtain such consent,
approval, authorization or action, or to make such filing or notification,
would not prevent or materially delay the consummation by the Investor of the
transactions contemplated by this Agreement or (iii) as may be necessary as a
result of any facts or circumstances relating solely to the other party
hereto.
ARTICLE
IV
OTHER
AGREEMENTS
Section
4.1 Governmental
Filings; Consents.
(a) Each of
the parties to this Agreement shall use its commercially reasonable best
efforts to obtain (and CM shall use its commercially reasonable best efforts to
cause the Company and the Subsidiaries to obtain) all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be
or become necessary for its execution and delivery of, and the performance of
its obligations pursuant to, this Agreement, including approval by the FCC of
the FCC Application pursuant to Section 310(d) of the Communications Act and
any approvals required under the HSR Act, and will cooperate fully with the
other party in promptly seeking to obtain all such authorizations, consents,
orders and approvals. Each party hereto agrees to use its commercially
reasonable best efforts to supply as promptly as practicable to the appropriate
Governmental Authorities any additional information and documentary material
that may be requested in connection with obtaining such authorizations,
consents, orders and approvals, including the FCC Application or pursuant to
the HSR Act.
(b) Following
receipt of the Exercise Notice, CM shall, or shall use its commercially
reasonable best efforts to cause the Company and the Subsidiaries to, give
promptly such notices to third parties and use its or their reasonable best
efforts to obtain such third party consents and estoppel certificates as the
Investor and CM may in their reasonable discretion deem necessary in connection
with the transactions contemplated by this Agreement. The Investor shall
cooperate and use all reasonable efforts to assist CM in giving such notices
and obtaining such consents and estoppel certificates; provided, however, that
neither the Investor nor CM shall have any obligation to give any guarantee or
other consideration of any nature in connection with any such notice, consent
or estoppel certificate or to consent to any change in the terms of any
agreement or arrangement which such party in its reasonable discretion may deem
adverse to the interests of such party, the Company or any
Subsidiary.
10
Section
4.2 Inconsistent
Actions. Once
the FCC Application has been filed, and for so long as it is pending, neither
the Investor nor CM shall take any action that could reasonably be expected to
delay or hinder the grant of the FCC Application.
Section
4.3 Distribution.
Investor shall acquire the Call Shares for investment purposes only and not
with a view to any distribution thereof in violation of the Securities Act, and
shall not sell any Call Shares purchased pursuant to this Agreement except in
compliance with the Securities Act and applicable state securities or
“blue sky” laws.
ARTICLE
V
MISCELLANEOUS
Section
5.1 Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by overnight courier, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
5.1):
(a)
If to
the Investor, to:
NBC Palm
Beach Investment II, Inc.
c/o NBC
Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
(b)
If to
CM, to:
000 X.
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
11
with a
copy to:
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
and
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
Section
5.2 Entire
Agreement; Amendment; Waiver. The
Transaction Agreements and the documents described therein or attached or
delivered pursuant thereto set forth the entire agreement between the parties
thereto with respect to the transactions contemplated by such agreements. Any
provision of this Agreement may be amended or modified in whole or in part at
any time only by an agreement in writing signed by all of the parties. No
failure on the part of any party to exercise, and no delay in exercising, any
right shall operate as a waiver thereof nor shall any single or partial
exercise by any party of any right preclude any other or future exercise
thereof or the exercise of any other right.
Section
5.3 Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by Law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the Transaction is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the Transaction be consummated as originally
contemplated to the fullest extent possible.
Section
5.4 Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.
Section
5.5 Governing
Law; Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of New York applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any New York state or
12
federal
court sitting in the Borough of Manhattan of The City of New York. The parties
hereto hereby (a) submit to the exclusive jurisdiction of any state or federal
court sitting in the Borough of Manhattan of The City of New York for the
purpose of any Action arising out of or relating to this Agreement brought by
any party hereto, and (b) irrevocably waive, and agree not to assert by way of
motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement may not be enforced in or by any of the above-named
courts.
Section
5.6 Waiver
of Jury Trial. Each
of the parties hereto hereby waives to the fullest extent permitted by
applicable Law any right it may have to a trial by jury with respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
hereto have been induced to enter into this Agreement, as applicable, by, among
other things, the mutual waivers and certifications in this Section
5.6.
Section
5.7 Successors
and Assigns; Third Party Beneficiaries. CM may
not assign this Agreement or assign any of its rights or delegate any of its
duties under this Agreement without the prior written consent of the Investor,
provided that without the prior written consent of the Investor, CM may assign
this Agreement or assign its rights and delegate its duties to an Affiliate or
in connection with a transfer permitted under Section 2.5 of this Agreement,
but no such assignment or delegation shall relieve CM of any of its obligations
hereunder. Following the Restricted Period, the Investor may freely assign this
Agreement or assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of CM; provided,
however, that
in the event of any assignment or delegation to an Affiliate, no such
assignment or delegation shall relieve the Investor of any of its obligations
hereunder and; provided,
further,
however, that
any such assignment by the Investor shall only be made in compliance with the
applicable rules and regulations of the FCC and the Securities Exchange
Commission. The Investor may not assign this Agreement or assign any of its
rights or delegate any of its duties under this Agreement during the Restricted
Period. Any assignee of the Investor pursuant to this Section 5.7 shall be
deemed to be the Investor for all purposes under this Agreement. Any purported
assignment in violation of this Section 5.7 shall be null and void. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any Person, other than the parties hereto and their respective successors
and permitted assignees, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors and
permitted assignees, and for the benefit of no other Person.
Section
5.8 Remedies. No
right, power or remedy conferred upon any party in this Agreement shall be
exclusive, and each such right, power or remedy shall be cumulative and in
addition to every other right, power or remedy whether conferred in this
Agreement or now or hereafter available at law or in equity or by statute or
otherwise. No course of dealing among the Investor, the Company and CM and no
delay in exercising any right, power or remedy
13
conferred
in this Agreement or now or hereafter existing at law or in equity or by
statute or otherwise shall operate as a waiver or otherwise prejudice any such
right, power or remedy. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in addition to any
other remedy to which they are entitled at law or in equity.
Section
5.9 Further
Assurances. Each
party shall execute and deliver such additional instruments and other documents
and shall take such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this Agreement and
the transactions contemplated hereby.
Section
5.10 Headings,
Captions and Table of Contents. The
section headings, captions and table of contents contained in this Agreement
are for reference purposes only, are not part of this Agreement and shall not
affect the meaning or interpretation of this Agreement.
14
IN
WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by
their respective duly authorized representative all as of the date first above
stated.
| |
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CIG MEDIA
LLC |
|
|
|
| |
By: |
Citadel Limited
Partnership,
its Manager |
| |
|
|
| |
By: |
Citadel Investment Group, L.L.C.,
its General Partner |
| |
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By: |
/s/ Xxxxxxx Xxxxxxxxx |
| |
Name: Xxxxxxx Xxxxxxxxx |
| |
Title: Managing
Director and Deputy General Counsel |
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NBC PALM BEACH
INVESTMENT II, INC. |
|
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By: |
/s/ Xxxx X. Xxxxxxxx |
| |
Name: Xxxx X. Xxxxxxxx |
| |
Title: Vice President
and Treasurer |
EXHIBIT
D to the Master Transaction Agreement
NBCU Option II
Exhibit
D to the
Master
Transaction Agreement
NBCU
Call Option II Agreement
CALL
AGREEMENT
CALL
AGREEMENT, dated as of May 4, 2007 (this “Agreement”),
by and among ION Media Networks, Inc., a Delaware corporation
(“ION”),
and NBC PALM BEACH INVESTMENT I, INC., a California corporation
(“Palm
Beach I”).
WITNESSETH:
WHEREAS,
on May 3, 2007, ION, NBC Universal, Inc., Palm Beach I, NBC Palm
Beach Investment II, Inc., a California corporation
(“Palm
Beach II”),
and CIG Media LLC, a Delaware limited liability company
(“CM”),
entered into the Master Transaction Agreement (the “Master
Transaction Agreement”)
which provides for a restructuring of the Company’s ownership
and capital structure (the “Transaction”);
and
WHEREAS,
pursuant to Section 11.01 of the Master Transaction Agreement, the
execution and delivery of this Agreement is a condition to the
commencement of the transactions contemplated by the Master
Transaction Agreement; and
WHEREAS,
on the date hereof, CM and Palm Beach II entered into a Call
Agreement (the “NBCU
Option I Agreement”)
pursuant to which, effective as of the Effective Date, CM granted to
Palm Beach II an irrevocable right to purchase from CM 8,311,639
shares of Class B Common Stock (as defined below) and 15,455,062
shares of Class A Common Stock (as defined below), both as adjusted
for stock dividends and distributions, stock splits, reverse stock
splits, or similar events, owned by CM, subject to the terms and
conditions set forth in the NBCU Option I Agreement; and
WHEREAS,
ION wishes to grant Palm Beach I the right to purchase the Call
Shares (as defined below), subject to the terms and conditions of
this Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINED
TERMS
Section
1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
“Action”
means any claim, demand, action, suit, arbitration, proceeding or
investigation by or before any Governmental Authority.
“Affiliate”
means, with respect to any Person, any other Person that controls, is
controlled by, or is under common control with, such Person. As used
in this definition,
“control”
(including its correlative meanings, “controlled by” and
“under common control with”) means the possession, directly
or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or
otherwise).
“Business
Day”
means any day, other than a Saturday, Sunday or a day on which
commercial banks in New York, New York are authorized or obligated by
Law or executive order to close.
“Call
Closing”
has the meaning assigned to it in Section 2.4.
“Call
Notice”
has the meaning assigned to it in Section 2.3.
“Call
Period”
means the five-year period commencing on the Effective Date, provided
that the Call Period shall be automatically extended for successive
five-year periods commencing upon each successive five-year
anniversary of the Effective Date.
“Call
Price”
has the meaning assigned to it in Section 2.2.
“Call
Right”
has the meaning assigned to it in Section 2.2.
“Call
Shares”
means 26,688,361 shares of Class B Common Stock, as such amount may
be adjusted (x) as a result of a stock dividend or distribution on,
stock split or reverse stock split of, or similar event with respect
to, Call Shares or (y) in a merger, consolidation, combination,
reclassification, recapitalization or similar transaction involving
the Company.
“Class
A Common Stock”
means the shares of Class A Common Stock, par value $0.001 per share,
of ION.
“Class
B Common Stock”
means the shares of Class B Common Stock, par value $0.001 per share,
of ION.
“CLP”
has the meaning assigned to it in the Recitals.
“CM”
has the meaning assigned to it in the Recitals.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984, the Cable
Television Consumer Protection and Competition Act of 1992 and the
Telecommunications Act of 1996) and all rules and regulations of the
FCC, in each case as from time to time in effect.
“Company”
has the meaning assigned to it in the Recitals.
“Effective
Date”
means the date of the closing of the transactions contemplated by the
Original Call Agreement.
2
“FCC”
means the Federal Communications Commission and any successor
governmental entity performing functions similar to those performed
by the Federal Communications Commission on the date
hereof.
“FCC
Application”
means the application to be filed with the FCC, if such application
is required to be filed under the Communications Act, in connection
with the exercise of the Call Right by the Investor requesting that
the FCC consent to the Transfer of the Call Shares pursuant to this
Agreement.
“Final
Order”
means an action or actions by the FCC that have not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect
to which no requests are pending for administrative or judicial
review, reconsideration, appeal, or stay, and the time for filing any
such requests and the time for the FCC to set aside the action on its
own motion have expired.
“Governmental
Authority”
means any federal, national, supranational, state, provincial, local,
or other government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial
or arbitral body.
“Governmental
Order”
means any order, writ, judgment, injunction, decree, stipulation,
determination or award issued or entered by or with any Governmental
Authority.
“HSR
Act”
means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated
thereunder.
“ION”
has the meaning assigned to it in the Preamble.
“Law”
means any provision of any (i) federal, state, provincial, local,
foreign or similar statute, law, ordinance, regulation, rule, code,
administrative interpretation, regulation or other requirement of any
Governmental Authority or (ii) Governmental Order.
“Lien”
means any mortgage, pledge, hypothecation, assignment, encumbrance,
lien (statutory or other) or security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or
other title retention agreement or any financing lease having
substantially the same effect as any of the foregoing).
“Master
Transaction Agreement”
has the meaning assigned to it in the Recitals.
“Original
Call Agreement”
means the Call Agreement, dated as of November 7, 2005, among Xx.
Xxxxxx X. Xxxxxx, certain of his Affiliates and Palm Beach II,
as such agreement may be amended from time to time.
“Palm
Beach I”
has the meaning assigned to it in the Preamble.
“Palm
Beach II”
has the meaning assigned to it in the Recitals.
“Person”
means an individual, corporation, unincorporated association,
partnership, group (as defined in subsection 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), trust, joint stock company,
joint venture, business trust or unincorporated organization, limited
liability company, any governmental entity or any other entity of
whatever nature.
“Put/Call
Agreement”
means the Put/Call Agreement, dated as of the date hereof, between
NBC Universal, Inc. and CM.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“Series
B Convertible Preferred”
means the 11% Series B Convertible Preferred Stock, par value $0.001
per share, of the Company, with a liquidation preference of $10,000
per share, as it may be modified from time to time.
“Subsidiary”
means, with respect to the Company, a corporation, partnership,
limited liability company, joint venture or other entity of which
shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned,
directly or indirectly, through one or more intermediaries
(including, without limitation, other Subsidiaries), or both, by the
Company.
“Transaction”
has the meaning assigned to it in the Recitals.
“Transaction
Agreements”
has the meaning assigned to it in the Master Transaction
Agreement.
“Transfer”
means, with respect to the Call Shares or the Call Right, any sale,
assignment, pledge, offer or other transfer or disposal of any
interest in such shares or right.
ARTICLE
II
CALL
RIGHT
Section
2.1 Effectiveness.
The Call Right granted pursuant to Section 2.2(a) shall be effective
as of the date of the closing of the transactions contemplated by the
Original Call Agreement.
Section
2.2 Call Right. (a)
ION hereby grants to Palm Beach I, effective as of the Effective
Date, an irrevocable right to purchase from ION during the Call
Period all of the Call Shares on the terms and conditions set forth
herein (the “Call
Right”).
In consideration for the grant of the Call Right, Palm Beach I hereby
surrenders and delivers, effective as of, and
subject
to the occurrence of, the Effective Date, an amount of shares of
Series B Convertible Preferred it owns, determined in accordance with
Section 10.10 of the Master Agreement.
(b) At
any time during the Call Period, Palm Beach I may exercise the Call
Right, in whole or in part, and subject to the terms and conditions
set forth herein, purchase from ION the Call Shares for a purchase
price (the “Call
Price”)
equal to the sum of $0.50 multiplied by the number of Call Shares
specified in the Call Notice (as defined below). The price per Call
Share specified in the previous sentence and the Call Price shall be
equitably adjusted to reflect any conversions, reclassifications,
reorganizations, stock dividends, stock splits, reverse splits and
similar events which occur with respect to the Class B Common Stock
after the date hereof and on or prior to a Call Closing.
Section
2.3 Exercise of Call Right; Call Notice. (a)
Exercise of the Call Right shall be accomplished by Palm Beach I
sending notice of such exercise (the “Call
Notice”)
to ION at the address provided for in Section 5.1 of this Agreement
at any time during the Call Period. The Call Notice shall state the
total number of Call Shares Palm Beach I wishes to purchase, the
denominations of the certificate or certificates evidencing such Call
Shares Palm Beach I wishes to receive, the Call Price and the place
such Call Closing will be conducted.
(b) As
promptly as practicable, but in no event later than 20 Business
Days after the giving of a Call Notice, to the extent required by
applicable Law, the parties shall make any filings required under the
Communications Act and/or HSR Act.
Section
2.4 Call Closing. (a)
Each closing (a “Call
Closing”)
of the exercise of the Call Right and the purchase and sale of the
Call Shares included in a Call Notice shall occur as promptly as
practicable following, but in no event less than five Business Days
following, the receipt of any required consent, approval,
authorization or other order of, action by, or any required filing
with or notification to, any Governmental Authority or any required
third party consent referred to in Section 4.1(b) below, including,
without limitation, (i) the expiration or termination of any waiting
period (and any extension thereof) under the HSR Act applicable to
the purchase of the Call Shares and (ii) approval by the FCC of
the FCC Application, which approval shall have become a Final Order,
provided that requirement for a Final Order may be waived by Palm
Beach I in its sole discretion. If the Call Closing shall not have
occurred on or before the 18-month anniversary of the date of the
Exercise Notice, then such Exercise Notice shall be of no further
force and effect and neither ION nor Palm Beach I shall be obligated
to consummate the Call Closing with respect to such Exercise Notice;
provided that following such date, this Agreement and the Call Right
shall continue in full force and effect and Palm Beach I shall retain
all rights hereunder subject to the terms and conditions contained
herein. The Call Closing shall occur at the place designated in the
Call Notice.
(b) At
a Call Closing, (i) ION shall deliver to Palm Beach I certificates
representing the applicable number of Call Shares free and clear of
all Liens (in the denominations specified in the Call Notice) and
shall record Palm Beach I as the holder of record of the Call Shares
purchased at the Call Closing in the stock transfer books of ION and
(ii) Palm Beach I shall pay the Call Price by wire transfer in
immediately available funds to the account or accounts specified by
ION. ION shall furnish necessary account information at least two
Business Days prior to such Call Closing.
Section
2.5 Reservation for Issuance. At all times following the
Effective Date and until the earlier of the (i) the expiration of the
Call Period prior to the delivery by Palm Beach I of a Call Notice
and (ii) a Call Closing with respect to all of the remaining Call
Shares, ION shall keep reserved for issuance (a) the number of shares
of Class B Common Stock equal to the Call Shares subject to the Call
Right and (b) the number of shares of Class A Common Stock issuable
upon conversion of the Call Shares subject to the Call
Right.
Section
2.6 Legends. Palm Beach I agrees to the imprinting, for so
long as appropriate, of substantially the following legends on
certificates representing any of the Call Shares:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
STOCKHOLDERS’ AGREEMENT, DATED AS OF MAY 4, 2007, AMONG ION
MEDIA NETWORKS, INC., CIG MEDIA LLC AND NBC UNIVERSAL, INC., AND THE
CALL AGREEMENT DATED AS OF MAY 4 2007, BETWEEN ION MEDIA NETWORKS,
INC. AND NBC PALM BEACH INVESTMENT I, INC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OF 1933 OR AN EXEMPTION THEREFROM AND, IN EACH
CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS.
Section
2.7 Termination of the Call Right. The right of Palm Beach I
to purchase the Call Shares pursuant to this Agreement shall
terminate upon the earliest to occur of the (i) expiration of the
Call Period prior to the delivery of a Call Notice by Palm Beach I to
ION and (ii) written consent of the parties hereto.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations and Warranties of ION. ION represents and
warrants to Palm Beach I as follows:
(a) Existence;
Compliance with Law.
ION is duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its organization and has all
necessary power and authority to enter into this Agreement, to carry
out its obligations and to consummate the transactions contemplated
hereby. ION is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the properties owned or
leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be
so licensed or qualified and in good standing would not adversely
affect the ability of ION to carry out its obligations under, and to
consummate the transactions contemplated by,
this
Agreement. The execution and delivery by ION of this Agreement, the
performance by ION of its obligations hereunder and the consummation
by ION of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of ION and its
stockholders. This Agreement has been duly executed and delivered by
ION, and (assuming due authorization, execution and delivery by the
other parties) this Agreement constitutes legal, valid and binding
obligations of ION, enforceable against ION in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency
(including all Laws relating to fraudulent transfers),
reorganization, moratorium or similar Laws affecting creditors’
rights generally and subject to the effect of general principles of
equity (regardless of whether considered in a proceeding at law or in
equity).
(b) Authorization;
Enforceable Obligations.
Assuming that all consents, approvals, authorizations and other
actions described in Section 3.1(c) have been obtained or have
occurred and any applicable waiting period has expired or been
terminated, and except as may result from any facts or circumstances
relating solely to Palm Beach I, the execution, delivery and
performance of this Agreement does not and will not (i) violate,
conflict with or result in the breach of the limited liability
company agreement (or similar organizational documents) of ION, (ii)
conflict with or violate any Law or Governmental Order applicable to
ION or (iii) conflict with, result in any breach of, constitute
a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or
give to others any rights of termination, acceleration or
cancellation of, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which ION or any of its subsidiaries is
a party, except, in the case of clauses (ii) and (iii), as would not
materially and adversely affect the ability of ION to carry out its
obligations under, and to consummate the transactions contemplated
by, this Agreement.
(c) Governmental
Consents.
The execution, delivery and performance by ION of this Agreement and
the transactions contemplated hereby do not and will not require any
consent, approval, authorization or other order of, action by, filing
with or notification to, any Governmental Authority, except
(i) the pre-merger notification and waiting period requirements
of the HSR Act and the approval by the FCC pursuant to Section 310(d)
of the Communications Act in connection with the exercise of the Call
Right, (ii) where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification,
would not prevent or materially delay the consummation by ION of the
transactions contemplated by this Agreement or (iii) as may be
necessary as a result of any facts or circumstances relating solely
to Palm Beach I.
(d) Capitalization.
As of the Effective Date, ION will have taken all necessary corporate
action to authorize, reserve and permit it to issue, and at all times
from the date hereof until such time as the obligation to deliver
Call Shares upon the exercise of the Call Right terminates, will have
reserved, all the Call Shares issuable pursuant to this Agreement and
shares of Class A Common Stock issuable upon conversion of the Call
Shares, and ION will take all necessary corporate action to authorize
and reserve and permit it to issue all additional shares of Class B
Common Stock or other securities that may be issued pursuant this
Agreement, all of which, upon their issuance and delivery in
accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, and shall be delivered
free and clear of all Liens and not subject to any preemptive rights.
Section
3.2 Representations and Warranties of Palm Beach I. Palm Beach
I represents and warrants to ION as follows:
(a) Existence;
Compliance with Law.
Palm Beach I is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its organization and has all
necessary power and authority to enter into this Agreement, to carry
out its obligations and to consummate the transactions contemplated
hereby. Palm Beach I is duly licensed or qualified to do business and
is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except to the extent that the
failure to be so licensed or qualified and in good standing would not
adversely affect the ability of Palm Beach I to carry out its
obligations under, and to consummate the transactions contemplated
by, this Agreement. The execution and delivery by Palm Beach I of
this Agreement, the performance by Palm Beach I of its obligations
hereunder and the consummation by Palm Beach I of the transactions
contemplated hereby have been duly authorized by all requisite action
on the part of Palm Beach I and its stockholders. This Agreement has
been duly executed and delivered by Palm Beach I, and (assuming due
authorization, execution and delivery by the other parties) this
Agreement constitutes legal, valid and binding obligations of Palm
Beach I, enforceable against Palm Beach I in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency
(including all Laws relating to fraudulent transfers),
reorganization, moratorium or similar Laws affecting creditors’
rights generally and subject to the effect of general principles of
equity (regardless of whether considered in a proceeding at law or in
equity).
(b) Authorization;
Enforceable Obligations.
Assuming that all consents, approvals, authorizations and other
actions described in Section 3.2(c) have been obtained and any
applicable waiting period has expired or been terminated, and except
as may result from any facts or circumstances relating solely to ION,
the execution, delivery and performance of this Agreement does not
and will not (i) violate, conflict with or result in the breach
of the certificate of incorporation or bylaws (or similar
organizational documents) of Palm Beach I, (ii) conflict with or
violate any Law or Governmental Order applicable to Palm Beach I or
(iii) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or
give to others any rights of termination, acceleration or
cancellation of, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which Palm Beach I or any of its
subsidiaries is a party, except, in the case of clauses (ii) and
(iii), as would not materially and adversely affect the ability of
Palm Beach I to carry out its obligations under, and to consummate
the transactions contemplated by, this Agreement.
(c) Accredited
Investor.
Upon exercise of the Call Right, Palm Beach I shall acquire the
shares of Class A Common Stock to be issued upon exercise thereof
solely for the account of Palm Beach I and not as a nominee for any
other party, and for investment, and Palm Beach I shall not offer,
sell or otherwise dispose of any such shares of Class A Common Stock
except under circumstances that will not result in a violation of the
Securities Act or any applicable state securities laws. Palm Beach I
is an institutional accredited investor (within the meaning of
subparagraphs (a)(1), ((2), (3) or (7) of Rule 501 under the
Securities Act).
(d) Governmental
Consents.
The execution, delivery and performance by Palm Beach I of this
Agreement and the transactions contemplated hereby do not and will
not require any consent, approval, authorization or other order of,
action by, filing with or notification to, any Governmental
Authority, except (i) the pre-merger notification and waiting
period requirements of the HSR Act and the approval by the FCC
pursuant to Section 310(d) of the Communications Act in connection
with the exercise of the Call Right, (ii) where failure to
obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent or materially delay
the consummation by Palm Beach I of the transactions contemplated by
this Agreement or (iii) as may be necessary as a result of any facts
or circumstances relating solely to the other party
hereto.
ARTICLE
IV
OTHER
AGREEMENTS
Section
4.1 Governmental Filings; Consents. (a)
Each of the parties to this Agreement shall use its commercially
reasonable best efforts to obtain (and ION shall cause the
Subsidiaries to obtain) all authorizations, consents, orders and
approvals of all Governmental Authorities and officials that may be
or become necessary for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement, including
approval by the FCC of the FCC Application pursuant to Section 310(d)
of the Communications Act and any approvals required under the HSR
Act, and will cooperate fully with the other party in promptly
seeking to obtain all such authorizations, consents, orders and
approvals. Each party hereto agrees to use its commercially
reasonable best efforts to supply as promptly as practicable to the
appropriate Governmental Authorities any additional information and
documentary material that may be requested in connection with
obtaining such authorizations, consents, orders and approvals,
including the FCC Application or pursuant to the HSR
Act.
(b) Following
receipt of the Call Notice, ION shall, or shall cause the
Subsidiaries to, give promptly such notices to third parties and use
its or their reasonable best efforts to obtain such third party
consents and estoppel certificates as Palm Beach I and ION may in
their reasonable discretion deem necessary in connection with the
transactions contemplated by this Agreement. Palm Beach I shall
cooperate and use all reasonable efforts to assist ION in giving such
notices and obtaining such consents and estoppel certificates;
provided, however, that neither Palm Beach I nor ION shall have any
obligation to give any guarantee or other consideration of any nature
in connection with any such notice, consent or estoppel certificate
or to consent to any change in the terms of any agreement or
arrangement which Palm Beach I or the Company in its reasonable
discretion may deem adverse to the interests of Palm Beach I, ION or
any Subsidiary.
Section
4.2 Inconsistent Actions. Once the FCC Application has been
filed and for so long as it is pending, neither Palm Beach I nor ION
shall take any action that could reasonably be expected to delay or
hinder the grant of the FCC Application.
Section
4.3 Distribution. Investor shall acquire the Call Shares for
investment purposes only and not with a view to any distribution
thereof in violation of the
Securities
Act, and shall not sell any Call Shares purchased pursuant to this
Agreement except in compliance with the Securities Act and applicable
state securities or “blue sky” laws.
ARTICLE
V
MISCELLANEOUS
Section
5.1 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in
person, by overnight courier, by facsimile or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section 5.1):
| |
(a) |
If
to Palm Beach I, to: |
NBC
Palm Beach Investment I, Inc.
c/o
NBC Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
with
a copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With
a copy to:
Holland
& Knight LLP
00
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Attention:
Xxxxx X. Xxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
Section
5.2 Entire Agreement; Amendment; Waiver. The Transaction
Agreements and the documents described therein or attached or
delivered pursuant thereto set forth the entire agreement between the
parties thereto with respect to the transactions contemplated by such
agreements. Any provision of this Agreement may be amended or
modified in whole or in part at any time only by an agreement in
writing signed by all of the parties. No failure on the part of any
party to exercise, and no delay in exercising, any right shall
operate as a waiver thereof nor shall any single or partial exercise
by any party of any right preclude any other or future exercise
thereof or the exercise of any other right.
Section
5.3 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by Law
or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long
as the economic or legal substance of the Transaction is not affected
in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable
manner in order that the Transaction be consummated as originally
contemplated to the fullest extent possible.
Section
5.4 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same
agreement.
Section
5.5 Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the Laws of the State
of New York applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined exclusively in any
New York state or federal court sitting in the Borough of Manhattan
of The City of New York. The parties hereto hereby (a) submit to the
exclusive jurisdiction of any state or federal court sitting in the
Borough of Manhattan of The City of New York for the purpose of any
Action arising out of or relating to this Agreement brought by any
party hereto, and (b) irrevocably waive, and agree not to assert by
way of motion, defense, or otherwise, in any such Action, any claim
that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from
attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that
this Agreement may not be enforced in or by any of the above-named
courts.
Section
5.6 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable Law any right it
may have to a trial by jury with respect to any litigation directly
or indirectly arising out of, under or in connection with this
Agreement. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party
has
represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce that foregoing waiver and
(b) acknowledges that it and the other hereto have been induced to
enter into this Agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 5.6.
Section
5.7 Successors and Assigns; Third Party Beneficiaries. ION may
not assign this Agreement or assign any of its rights or delegate any
of its duties under this Agreement without the prior written consent
of Palm Beach I. Palm Beach I may freely assign this Agreement or
assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of ION, provided,
however,
that in the event of an assignment or delegation to an Affiliate, no
such assignment or delegation shall relieve Palm Beach I of any of
its obligations hereunder and; provided,
further,
however,
that any such assignment by Palm Beach I shall be made in compliance
with the applicable rules and regulations of the FCC and the
Securities and Exchange Commission. Any assignee of Palm Beach I
shall be deemed to be Palm Beach I for all purposes under this
Agreement. Any purported assignment in violation of this Section 5.7
shall be null and void. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any Person, other
than the parties hereto and their respective successors and permitted
assignees, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the parties hereto and their
respective successors and permitted assignees, and for the benefit of
no other Person.
Section
5.8 Remedies. No right, power or remedy conferred upon any
party in this Agreement shall be exclusive, and each such right,
power or remedy shall be cumulative and in addition to every other
right, power or remedy whether conferred in this Agreement or now or
hereafter available at law or in equity or by statute or otherwise.
No course of dealing among Palm Beach I and ION and no delay in
exercising any right, power or remedy conferred in this Agreement or
now or hereafter existing at law or in equity or by statute or
otherwise shall operate as a waiver or otherwise prejudice any such
right, power or remedy. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the
parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in addition to any other remedy to which
they are entitled at law or in equity.
Section
5.9 Further Assurances. Each party shall execute and deliver
such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby.
Section
5.10 Headings, Captions and Table of Contents. The section
headings, captions and table of contents contained in this Agreement
are for reference purposes only, are not part of this Agreement and
shall not affect the meaning or interpretation of this
Agreement.
12
IN
WITNESS WHEREOF, this Agreement has been executed by the parties
hereto or by their respective duly authorized representative all as
of the date first above stated.
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ION MEDIA
NETWORKS, INC |
|
|
|
| |
By: /s/
Xxxxxxx Xxxxxx |
|
| |
Name: Xxxxxxx Xxxxxx |
| |
Title: Chief
Financial Officer |
| |
|
|
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NBC PALM
BEACH INVESTMENT I, INC. |
|
|
|
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By: /s/
Xxxx X. Xxxxxxxx |
|
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Name: Xxxx X. Xxxxxxxx |
| |
Title: Vice
President and Treasurer |
EXHIBIT
E to the Master Transaction Agreement
Registration
Rights Agreement for New Securities
Exhibit
E to the
Master
Transaction Agreement
Registration
Rights Agreement for New Securities
REGISTRATION
RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT, dated as of May 4, 2007 (this “Agreement”),
by and among ION Media Networks, Inc., a Delaware corporation (the
“Company”),
NBC Universal, Inc., a Delaware corporation (together with its Affiliates,
“NBCU”)
and CIG Media LLC, a Delaware limited liability company (“CIG”,
and together with NBCU, the “Investors”).
WHEREAS,
the Company and the Investors entered into that certain Master Transaction
Agreement, dated as of May 3, 2007 (as such agreement may be amended, modified,
supplemented or restated from time to time, the “Master
Transaction Agreement”),
pursuant to which the parties agreed to undertake various transactions to
restructure the Company’s ownership and capital structure (the
“Transaction”);
WHEREAS,
as an integral part of the Transaction, CIG and NBCU will each receive certain
securities of the Company that are convertible into, or exchangeable or
exercisable for, shares of Class A Common Stock, Class C Common Stock, or Class
D Common Stock as the case may be, and the Company has agreed to provide the
Holders (as defined below) certain registration rights with respect to such
securities under the Securities Act;
WHEREAS,
the Company’s shares of Class A Common Stock are currently registered with
the SEC and quoted on the American Stock Exchange; and
WHEREAS,
the execution and delivery of this Agreement by the parties hereto is a
condition to the commencement of the Transaction pursuant to the Master
Transaction Agreement.
NOW,
THEREFORE, in consideration of the mutual premises and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1.
Definitions. (a)
Capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms in the Master Transaction Agreement. For
purposes of this Agreement, the following terms have the following
meanings:
“Common
Shares”
means shares of (i) Common Stock and (ii) other securities of the Company,
including Convertible Securities, NBCU Option I, NBCU Option II and Warrant,
that are convertible into, or exercisable or exchangeable for, shares of Class
A Common Stock, Class C Common Stock or Class D Common Stock.
“control”
(including its correlative meanings, “controlled by” or “under
common control with”) 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
securities or partnership or other ownership interests, by contract or
otherwise.
“Convertible
Securities”
means, collectively, Series A Convertible Subordinated Debt, Series B
Convertible Subordinated Debt, Series A Convertible Preferred, Series B
Convertible Preferred, Series C Convertible Preferred and Series D Convertible
Preferred.
“Holders”
means each of the Investors that from time to time owns Convertible Securities
or Registrable Securities and each of their permitted transferees pursuant to
Section 11(e) who agree to be bound by the provisions of this Agreement in
accordance with said section; provided,
however, that a
Holder shall no longer be a Holder at the date that such Holder owns of record
less than 10,000 shares of Registrable Securities on an as-converted basis.
“Initial
Public Offering”
means the initial underwritten sale of equity securities by the Company or a
Holder pursuant to an effective registration statement under the Securities
Act.
“NASDAQ”
means National Association of Securities Dealers Automated Quotation
System.
“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance
upon Rule 430A under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
“Registrable
Securities”
means (A) all shares of Class A Common Stock or Class D Common Stock held from
time to time by the Holders and (B) all shares of Class A Common Stock or Class
D Common Stock issued or issuable upon (i) conversion of the Convertible
Securities held from time to time by the Holders, (ii) exercise of the Warrant
or (iii) conversion of Class B Common Stock and Class C Common Stock;
provided,
however, that
Registrable Securities shall cease to be Registrable Securities when (A) a
Registration Statement covering such Registrable Securities has been declared
effective by the SEC under the Securities Act and such Registrable Securities
have been disposed of pursuant to such effective Registration Statement, (B)
such Registrable Securities have been disposed of by a Holder pursuant to Rule
144 or Rule 145 under the Securities Act, (C) the Registrable Securities of a
Holder can, in the opinion of counsel satisfactory to the Company and such
Holder, each in their reasonable judgment, be so distributed to the public
pursuant to Rule 144 under the Securities Act in any three-month period or (D)
such Registrable Securities have been sold, assigned or otherwise transferred
to a Person other than a Holder. For purposes of this Agreement, Registrable
Securities shall also include any shares of Class A Common Stock or Class D
Common Stock or other securities (including shares of Class A Common Stock or
Class D Common Stock underlying such other securities) that may be received by
the Holders (x) as a result of a stock dividend, stock distribution or stock
split of Registrable Securities or Convertible Securities or
2
(y) on
account of Registrable Securities or Convertible Securities in a merger,
consolidation, combination, reclassification, recapitalization or similar
transaction involving the Company.
“Registration
Statement”
means any registration statement of the Company under the Securities Act that
covers any of the Registrable Securities, Convertible Securities, any shares of
Class A Common Stock or Class D Common Stock or other securities that would be
convertible into, or exchangeable or exercisable for, shares of Class A Common
Stock or Class D Common Stock pursuant to the provisions of this Agreement,
including in the Prospectus, any preliminary prospectus, all amendments and
supplements to such registration statement (including post-effective
amendments), all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
“Underwritten
Offering”
shall mean a distribution, registered pursuant to the Securities Act, in which
securities of the Company are sold to the public through one or more
underwriters.
(b) The
following terms have the meanings set forth in the Section set forth opposite
such term:
|
Term
|
|
Section
|
|
Agreement
|
|
Preamble
|
|
Authorizing
Certificate |
|
3(a)
|
|
Black-Out
|
|
5
|
|
CIG
|
|
Preamble
|
|
Company
|
|
Preamble
|
|
Conversion
Securities |
|
11(d)
|
|
Convertible
Subordinated Debt |
|
Recitals
|
|
Demand
Notice |
|
3(a)
|
|
Demand
Registration |
|
3(a)
|
|
Indemnified
Party |
|
7(c)
|
|
Indemnifying
Party |
|
7(c)
|
|
Initiating
Holders |
|
3(c)
|
|
Investors
|
|
Preamble
|
|
Losses
|
|
7(a)
|
|
Maximum
Number of Securities |
|
3(c)
|
|
Master
Transaction Agreement |
|
Recitals
|
|
NBCU
|
|
Preamble
|
|
Participating
Demand Holders |
|
3(b)
|
|
Participating
Notice |
|
3(b)
|
|
Participating
Piggy-Back Holders |
|
4(a)
|
|
Piggy-Back
Registration |
|
4(a)
|
|
Shelf
Registration |
|
3(d)
|
|
Shelf
Registration Statement |
|
3(d)
|
|
Special
Counsel |
|
5(a)
|
|
Suspension
Notice |
|
5
|
|
Transaction
|
|
Recitals
|
3
2.
Methodology for Calculation; Effective Timing.
(a) Methodology
for Calculation of Common Shares. For
purposes of calculating (i) the number of Common Shares as of any particular
date and (ii) the number of Common Shares owned by a Person hereunder (and the
percentage of Common Shares owned by a Person), such number of Common Shares
shall be calculated as though each Common Share had been on such date converted
into, or exchanged or exercised for, the number of shares of Class A Common
Stock or Class D Common Stock which such Common Shares would be entitled to be
converted into or exchanged or exercised for. In the event of any stock split,
stock dividend, reverse stock split, any combination of Class A Common Stock or
Class D Common Stock or any similar event, with respect to all references in
this Agreement to a Holder or Holders holding a number of Common Shares, the
applicable number shall be appropriately adjusted to give effect to such stock
split, stock dividend, reverse stock split, any combination of Class A Common
Stock or Class D Common Stock or any similar event.
(b) Effective
Time. The
Registration Rights Agreement, dated as of September 15, 1999, between the
Company and NBCU, as amended from time to time, shall terminate and have no
further force or effect, and this Agreement shall become effective, in each
case upon the Exchange Offer Closing or the Exchange Offer Expiration, as
applicable.
3.
Demand Registration.
(a) Requests
for Registration by Holders.
Subject to the terms and conditions of this Agreement, at any time and from
time to time after the consummation of an Initial Public Offering, one or more
Holders shall have the right, by delivering the Company a written notice (a
“Demand
Notice”),
to require the Company to register Registrable Securities under the Securities
Act covering all or part of such Holder or Holders’ Registrable Securities
(which specifies the intended method or methods of disposition thereof) (a
“Demand
Registration”),
and after receipt of a Demand Notice, the Company shall use its reasonable best
efforts to effect a registration of Registrable Securities under the Securities
Act; provided, that
the Holders shall not make in the aggregate more than three (3) Demand
Registrations each under this Agreement; provided,
further, that:
(i) no such Demand Registration may be required unless the Holders requesting
such Demand Registration provide to the Company a certificate (the
“Authorizing
Certificate”)
seeking to include Registrable Securities in such Demand Registration with an
aggregate market value not less than $25,000,000 (calculated based on the
closing sale price of such securities on the principal securities exchange
where such securities are listed on the trading day immediately preceding the
date of the Demand Notice) as of the date the Demand Notice is given, and (ii)
no Demand Notice may be given prior to ninety (90) days after the effective
date of the immediately preceding Demand Registration or, if later, the date on
which a registration pursuant to this Section 3 is terminated in its entirety
prior to the effective date of the applicable Registration Statement. The
Authorizing Certificate shall set forth (A) the name of each Holder signing
such Authorizing Certificate, (B) the number of Registrable Securities held by
each such Holder, and, if different, the number of Registrable Securities such
Holder has elected to have registered, and (C) the intended methods of
disposition of the Registrable Securities. A Holder shall be permitted to
withdraw in good faith all or a part of the Registrable Securities from a
Demand Registration at any time prior to the effective date of such Demand
Registration, in which event the Company shall promptly amend or, if requested
by the remaining Holders, promptly
4
withdraw
the related Registration Statement. A good faith decision by a Holder to
withdraw Registrable Securities from registration shall not affect the
Company’s obligations hereunder even if the amount remaining to be
registered has an aggregate market value of $25,000,000 (calculated in the
manner described above) as of the date the Demand Notice is given; provided, that:
(1) subject to the satisfaction of the requirements in this Section 3, such
continuing registration shall constitute a Demand Registration, (2) any
withdrawing Holders (or the other Holders participating in the subject
registration) did not include the withdrawn Registrable Securities in the
Authorizing Certificate as a means of circumventing the applicable $25,000,000
threshold described in this Section 3(a), and (3) any withdrawing Holders shall
reimburse the Company for any filing fees paid to the SEC with respect to the
withdrawn Registrable Securities. A registration that is terminated in its
entirety prior to the effective date of the applicable Registration Statement
or that has not remained effective for the required period set forth in Section
3(b) shall not constitute a Demand Registration.
(b)
Filing
and Effectiveness. The
Company shall file a Registration Statement relating to any Demand Registration
as promptly as practicable, but in any event no later than sixty (60) days
after receipt of a Demand Notice, with the SEC and use its reasonable best
efforts to cause such Registration Statement to be declared effective as soon
as practicable thereafter and to remain effective for a period of time
reasonably required for the disposition of the Registrable Securities covered
by such Registration Statement. If any Demand Registration is requested to be
effected as a shelf registration pursuant to Rule 415 under the Securities Act
by the Holders demanding such Demand Registration, the Company shall keep the
Registration Statement filed in respect thereof effective for a period of six
(6) months from the date on which the SEC declares such Registration Statement
effective or such shorter period that will terminate when all Registrable
Securities covered by such Registration Statement have been sold pursuant to
such Registration Statement. The Company shall promptly, and in any event
within ten (10) Business Days after receipt of a Demand Notice, notify all
other Holders in writing of the receipt of such Demand Notice and each such
other Holder shall have the right to have all or a part of such Holder’s
Registrable Securities included in such registration thereof by delivering a
written notice (a “Participating
Notice”)
to the Company within ten (10) Business Days after receipt of the
aforementioned notice from the Company (each Holder that delivers a
Participating Notice to the Company pursuant to this Section 3(b), a
“Participating
Demand Holder”).
Each Participating Demand Holder shall specify in the Participating Notice the
number of Registrable Securities that such Participating Demand Holder elects
to include in such registration and the Company shall include in such
registration all Registrable Securities requested by the Participating Demand
Holders for inclusion as specified in the Participation Notices.
(c)
Priority
on Demand Registration. If the
Demand Notice includes a request for an Underwritten Offering and the managing
underwriter or underwriters of such Underwritten Offering, selected by the
Company pursuant to Section 8, to which such Demand Registration relates advise
the Holder or Holders initiating the Demand Registration pursuant to Section
3(a) (the “Initiating
Holders”)
and the Participating Demand Holders in writing that the total amount of
Registrable Securities that the Initiating Holders and the Participating Demand
Holders intend to include in such Demand Registration is in the aggregate such
as to materially and adversely affect the success of such offering, then the
number of Registrable Securities to be included in such Demand Registration
shall be reduced and there shall be included in such Underwritten Offering the
number of Registrable Securities that, in the opinion of such
5
managing
underwriter or underwriters, can be sold without materially and adversely
affecting the success of such Underwritten Offering (the “Maximum
Number of Securities”)
and the
Participating Demand Holders and the Initiating Holders shall be entitled to
participate on a pro rata basis based on the amount of Registrable Securities
requested to be included in such Underwritten Offering by each such
Participating Demand Holder and Initiating Holder so as not to exceed the
Maximum Number of Securities.
(d) Postponement
of Demand Registration. The
Company shall be entitled to postpone the filing period of any Demand
Registration or suspend the effectiveness of any Registration Statement for a
reasonable period of time not in excess of ninety (90) calendar days if the
Company determines, in the good faith exercise of the business judgment of the
Board, that such registration and offering could materially interfere with a
bona fide business or financing transaction of the Company or would require
disclosure of information, the premature disclosure of which could materially
and adversely affect the Company; provided, that
the Company shall not invoke this right more than twice in any twelve
(12)-month period; and provided,
further, that
the Company shall not register any of its securities during such postponement
or suspension period. In the event that the Company determines to postpone the
filing of, or suspend the effectiveness of, a Registration Statement, it shall
promptly (i) furnish to all Initiating Holders and Participating Demand Holders
a certificate signed by the Company’s chief executive officer or chief
financial officer stating that the decision to postpone or suspend was made by
the Board in accordance with this Section 3(d) and (ii) notify all Initiating
Holders and Participating Demand Holders in writing when the events or
circumstances permitting such postponement or suspension have
ended.
4.
Piggy-Back Registration.
(a) Right
to Piggyback. If the
Company proposes to file a Registration Statement, whether or not for its own
account, under the Securities Act on any form (other than a registration
statement on Form S-4 or S-8 or any successor form for securities to be offered
in a transaction of the type referred to in Rule 145 under the Securities Act
or to employees of the Company pursuant to any employee benefit plan,
respectively) for the registration of shares of Class A Common Stock or Class D
Common Stock or other securities that would be convertible into, or
exchangeable or exercisable for, shares of Class A Common Stock or Class D
Common Stock (a “Piggy-Back
Registration”),
it shall give written notice to all Holders at least twenty (20) Business Days
prior to the initial filing with the SEC of such piggy-back Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company in the Piggy-Back
Registration. The notice referred to in the preceding sentence shall offer the
Holders the opportunity to register such amount of Registrable Securities as
each such Holder may request. Each Holder desiring to have Registrable
Securities registered under this Section 4 (a) (a “Participating
Piggy-Back Holder”)
shall advise the Company in writing within ten (10) Business Days after the
date of receipt of the aforementioned notice from the Company, setting forth
the amount of such Registrable Securities for which registration is requested.
Subject to the limitations set forth in Section 4(b), the Company shall
thereupon include in such Piggyback Registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein, and shall use its reasonable best efforts to effect registration of
such Registrable Securities under the Securities Act. The Participating
Piggy-Back Holders shall be permitted to withdraw all or part
6
of the
Registrable Securities from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration.
(b) Priority
on Piggyback Registrations. If the
Piggy-Back Registration relates to an Underwritten Offering and the managing
underwriter or underwriters of such Underwritten Offering, selected by the
Company pursuant to Section 8, to which such Piggy-Back Registration relates
advise the Participating Piggy-Back Holders in writing that the total amount of
Registrable Securities that such Participating Piggy-Back Holders intend to
include in the Piggy-Back Registration in addition to any other securities the
Company intends to register would be greater than the total number of
securities which can be sold in such Underwritten Offering without having a
material adverse affect on the success of such Underwritten Offering, the
Company shall include in such Piggy-Back Registration (i) first, 100% of the
Class A Common Stock, Class D Common Stock or other securities that would be
convertible into, or exchangeable or exercisable for, shares of Class A Common
Stock or Class D Common Stock the Company proposes to sell, and (ii) second, to
the extent of the number of Registrable Securities requested to be included in
such registration which, with the advice of such managing underwriter or
underwriters, can be sold without having the adverse effect referred to above,
the number of Registrable Securities which the Participating Piggy-Back Holders
have requested to be included in such registration, such amount to be allocated
pro rata among all Participating Piggy-Back Holders on the basis of the
relative amount of Registrable Securities requested to be included therein by
each Participating Piggy-Back Holder.
5.
Registration Procedures. In connection with the Company’s
registration obligations pursuant to Sections 3 and 4, the Company shall use
its reasonable best efforts to effect such registrations to permit the sale of
such Registrable Securities in accordance with the intended method or methods
of disposition thereof and pursuant thereto, the Company shall as expeditiously
as possible, and in each case to the extent applicable (it being understood
that the obligations of the Company in clauses (a), (b), (d), (e), (h), (j),
(k), (m), (n) and (p) of this Section 5 shall be subject to Section
3(d)):
(a) prepare
and file with the SEC a Registration Statement or Registration Statements on
any appropriate form under the Securities Act available for the sale of the
Registrable Securities by the holders thereof in accordance with the intended
method or methods of distribution thereof, and cause each such Registration
Statement to become effective and remain effective as provided herein;
provided,
however,
that the
Company agrees that, at the request of a Holder exercising a demand
registration right under Section 3, at such time as the Company becomes a
“well-known seasoned issuer,” as such term is defined in Rule 405
under the Securities Act, the Company will register an offering pursuant to
Section 3 on an “automatic shelf registration statement,” as such
term is defined in Rule 405 under the Securities
Act, and
provided,
further,
however, that
before filing a Registration Statement or Prospectus or any amendments or
supplements thereto (including documents that would be incorporated or deemed
to be incorporated therein by reference) the Company shall furnish to the
Holders holding Registrable Securities covered by such Registration Statement,
not more than one counsel chosen by the Holders holding a majority of the
Registrable Securities being registered (“Special
Counsel”)
and the managing underwriter or underwriters, if any, copies of all such
documents proposed to be filed, which documents shall be subject to the review
of such
7
Holders,
such Special Counsel and such underwriter or underwriters, and the Company
shall not file any such Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (excluding such documents that, upon
filing, will be incorporated or deemed to be incorporated by reference therein)
to which the Holders holding a majority of the Registrable Securities covered
by such Registration Statement or the managing underwriter or underwriters, if
any, could reasonably conclude to be potentially misleading, omit a material
fact or fail to comply with rules or common practice of the SEC or the
securities industry; and the Company shall not be deemed to have used its
reasonable best efforts to keep a Registration Statement effective during the
applicable period if it voluntarily takes any action that would result in the
Holders of such Registrable Securities not being able to sell such Registrable
Securities during that period, unless such action is required under applicable
law or otherwise undertaken by the Company in good faith and for valid business
reasons (not including avoidance of the Company’s obligations hereunder),
including the acquisition or divestiture of assets;
(b) prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable periods specified in Section 3; cause
the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement as so amended or in such Prospectus as
so supplemented;
(c) notify
the selling Holders and the managing underwriter or underwriters, if any,
promptly, and (if requested by any such Person) confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information or the receipt by the Company of any comment letter
from the SEC with respect to a Registration Statement or related Prospectus,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if at any
time the representations and warranties of the Company contained in any
agreement contemplated by Section 5(m) (including any underwriting agreement)
cease to be true and correct in any material respect, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the occurrence of any event that makes any statement made in
such Registration Statement or related Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in a Registration Statement,
Prospectus or any such document so that, in the case of the Registration
Statement, it
8
shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and, in the case of the Prospectus, it shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vii) of the
Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate;
(d) use
every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible
moment;
(e) if
requested by the Holders holding a majority of the Registrable Securities being
registered or the managing underwriter or underwriters, if any, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as such Holders or the managing underwriter or underwriters, if
any, reasonably conclude, based on the advice of their counsel, must be
included therein as may be required by applicable law and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided,
however, that
the Company shall not be required to take any actions under this Section 5(e)
that are not, in the opinion of counsel for the Company, in compliance with
applicable law;
(f) furnish
to each selling Holder and each managing underwriter, if any, without charge,
at least one conformed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements (but excluding
schedules, all documents incorporated or deemed incorporated therein by
reference and all exhibits, unless requested in writing by such Holder or
underwriter);
(g) deliver
to each selling Holder and each managing underwriter, if any, without charge as
many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; and, subject to the
last paragraph of this Section 5, the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the selling
Holders and the managing underwriters, if any, in connection with the offering
and sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto;
(h) prior to
any public offering of Registrable Securities, register or qualify or cooperate
with the selling Holders, the managing underwriter or underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as any seller or underwriter reasonably
requests in writing; use all reasonable efforts to keep such registration or
qualification (or exemption therefrom) effective during the period the
9
applicable
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in each
such jurisdiction of the Registrable Securities covered by the applicable
Registration Statement; provided,
however, that
the Company shall not be required to (i) qualify to do business in any
jurisdiction where it is not then so required to be qualified or (ii) take any
action that would subject it to taxation or service of process in any such
jurisdiction where it is not then so subject;
(i) cooperate
with the selling Holders and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and enable such Registrable Securities to be
in such denominations and registered in such names as the managing
underwriters, if any, shall request at least two (2) Business Days prior to the
closing of any sale of Registrable Securities to the underwriters;
(j) upon the
occurrence of any event contemplated by Section 5(c)(vi) or 5(c)(vii), prepare
a supplement or post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold thereunder, such
Prospectus shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(k) if
requested by the Holders holding a majority of the Registrable Securities
covered by such Registration Statement or the managing underwriter or
underwriters, if any, use its reasonable best efforts to cause all Registrable
Securities covered by such Registration Statement to be (i) listed on each
securities exchange, if any, on which securities issued by the Company of the
same class are then listed or, if no such securities issued by the Company are
then so listed, on the New York Stock Exchange or another national securities
exchange if the securities qualify to be so listed or (ii) authorized to be
quoted on the NASDAQ or the National Market System of NASDAQ, if the
securities qualify to be so quoted;
(l) if
needed, engage an appropriate transfer agent and provide the transfer agent
with printed certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and provide a CUSIP number for the
Registrable Securities;
(m) enter
into such customary agreements (including, in the event of an Underwritten
Offering, an underwriting agreement in form, scope and substance as is
customary in underwritten offerings) and take all such other commercially
reasonable and customary actions in connection therewith (including those
reasonably requested by the Holders holding a majority of the Registrable
Securities being sold or, in the event of an Underwritten Offering, those
reasonably requested by the managing underwriter or underwriters) in order to
facilitate the disposition of such Registrable Securities and in such
connection, and where an underwriting agreement is entered into in connection
with
10
an
underwritten registration, (i) make such representations and warranties to the
underwriters with respect to the businesses of the Company and its
Subsidiaries, the Registration Statement, Prospectus and documents incorporated
by reference or deemed incorporated by reference therein, if any, in each case,
in form, substance and scope as are customarily made by issuers to underwriters
in underwritten offerings and confirm the same if and when requested; (ii) in
the case of an Underwritten Offering, obtain opinions of counsel to the Company
and updates thereof, which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriter or underwriters,
if any, and if such Registrable Securities are not being sold through an
Underwritten Offering, then to the Holders of Registrable Securities requesting
registration, addressed to each of the underwriters or the Holders of
Registrable Securities, as applicable, covering the matters customarily covered
in opinions requested in offerings and such other matters as may be reasonably
requested by such underwriters or Holders, as applicable; (iii) in the case of
an Underwritten Offering, use reasonable efforts to obtain “comfort”
letters and updates thereof from the independent certified public accountants
of the Company (and, if necessary, any other certified public accountants of
any Subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be,
included in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in “comfort” letters in connection with
underwritten offerings; and (iv) deliver such documents and certificates as may
be reasonably requested by the managing underwriter or underwriters, if any, to
evidence the continued validity of the representations and warranties of the
Company and its Subsidiaries made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting
agreement entered into by the Company. The foregoing actions shall be taken in
connection with each closing under such underwriting agreement as and to the
extent required thereunder;
(n) upon
three (3) Business Days’ notice, make available for reasonable inspection
during normal business hours by a representative of the Holders holding
Registrable Securities being sold, any underwriter participating in any
disposition of Registrable Securities, and any attorney or accountant retained
by such selling Holders or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and its
Subsidiaries, and cause the officers, directors and employees of the Company
and its Subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement; provided,
however, that
any records, information or documents that are designated by the Company in
writing as confidential at the time of delivery of such records, information or
documents shall be kept confidential by such Persons unless (i) such records,
information or documents are in the public domain or otherwise publicly
available, (ii) disclosure of such records, information or documents is
required by any Governmental Authority or Governmental Order or is necessary to
respond to inquiries of any Governmental Authority, or (iii) disclosure of such
records, information or documents, in the reasonable opinion of counsel to such
Person, is otherwise required by law (including, without limitation, pursuant
to the requirements of the Securities Act);
11
(o) comply
with all applicable rules and regulations of the SEC and make generally
available to its security holders earning statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 calendar days after
the end of any 12 month period (or 90 calendar days after the end of any
12-month period if such period is a fiscal year), subject to any applicable
extension pursuant to Rule 12b-25 of the Exchange Act, (i) commencing at the
end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering, or
(ii) if not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company, after the effective date of a
Registration Statement, which statement shall cover such 12-month period; and
(p) In
connection with any Underwritten Offering, cause appropriate members of
management to be available for meetings with prospective purchasers of
Registrable Securities and prepare and present to potential investors customary
“road show” material, in each case in accordance with the
recommendations of the underwriters and in all respects in a manner consistent
with other new issuances of securities in an offering of a similar size to such
offering of Registrable Securities.
The
Company may require each selling Holder of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as the Company may,
from time to time, reasonably request in writing, and the Company may exclude
from such registration the Registrable Securities of any Holder who
unreasonably fails to furnish such information within a reasonable time after
receiving such request. The Company may require each selling Holder of
Registrable Securities (i) to agree to sell such Registrable Securities on the
basis reasonably provided in any underwriting agreements entered into in
connection with such offering pursuant to Section 5(m) and (ii) to complete and
execute all questionnaires, powers of attorney, custody agreements,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting agreements.
Each
Holder shall be deemed to have agreed by virtue of its acquisition of
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 3(d) or 5(c) (other
than 5(c)(i)) (a “Suspension
Notice”),
such Holder shall forthwith discontinue (“Black-Out”)
disposition of such Registrable Securities covered by such Registration
Statement or Prospectus until such Holder’s receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(j), or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and such Holder has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. Except as expressly provided herein, there shall
be no limitation with regard to the number of Suspension Notices that the
Company is entitled to give hereunder; provided,
however, that
in no event shall the aggregate number of days the Holders are subject to
Black-Out during any period of 12 consecutive months exceed 90
days.
12
6.
Expenses.
All fees
and expenses incident to the performance of or compliance with this Agreement
by the Company shall be borne by the Company whether or not any of the
Registration Statements become effective. Such fees and expenses shall include,
without limitation, (i) all registration and filing fees (including fees and
expenses for compliance with securities or “blue sky” laws), (ii)
printing expenses (including expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing a reasonable number of Prospectuses if the printing of such
Prospectuses is requested by the Holders holding a majority of the Registrable
Securities included in any Registration Statement), (iii) messenger, telephone
and delivery expenses incurred by the Company, (iv) fees and disbursements of
counsel for the Company incurred by the Company, (v) fees and disbursements of
all independent certified public accountants referred to in Section 5(m)(iii)
(including the expenses of any special audit and “comfort” letter
required by or incident to such performance) incurred by the Company, (vi)
Securities Act liability insurance, if any, (vii) fees and expenses of Special
Counsel retained by the Holders in connection with the registration and sale of
their Registrable Securities not in excess of $50,000 per single registration,
and (viii) fees and expenses of the Company and the underwriters relating to
“road show” investor presentations. In addition, the Company shall
pay internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which securities of
the same class issued by the Company are then listed and the fees and expenses
of any Person, including special experts, retained by the Company. In no event,
however, shall the Company be responsible for any underwriting discount or
selling commission with respect to any sale of Registrable Securities pursuant
to this Agreement, and the Holders shall be responsible on a pro rata basis for
any taxes of any kind (including transfer taxes) with respect to any
disposition, sale or transfer of Registrable Securities and for any legal,
accounting and other expenses incurred by them in connection with any
Registration Statement.
7.
Indemnification and Contribution.
(a) Indemnification
by the Company. The
Company shall, without limitation as to time, indemnify and hold harmless, to
the fullest extent permitted by law, each Holder holding Registrable Securities
registered pursuant to this Agreement, the officers, directors and agents and
employees of each of them, each Person who controls such a Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of any such controlling
Person, from and against all losses, claims, damages, liabilities, costs
(including the costs of investigation and attorneys’ fees) and expenses,
in each case joint or several (collectively, “Losses”),
as incurred, arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement,
Prospectus or form of Prospectus or in any amendment or supplement thereto or
in any preliminary prospectus or in any
“free writing prospectus,” as such term is defined in Rule 405 under
the Securities Act, utilized in connection with any related
offering, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except
13
insofar
and to the extent as the same are based upon information furnished in writing
to the Company by such Holder for use therein.
(b) Indemnification
by Holders. In
connection with any Registration Statement in which a Holder is participating,
such Holder shall furnish to the Company in writing such information as the
Company reasonably requests for use in connection with any Registration
Statement, Prospectus or preliminary prospectus and shall severally and not
jointly indemnify, to the fullest extent permitted by law, the Company, its
directors and officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, from and against all Losses arising out of or based upon
any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus, or in any
“free writing prospectus,” as such term is defined in Rule 405 under
the Securities Act, utilized in connection with any related
offering, or
arising out of or based upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company for use in such Registration Statement, Prospectus or preliminary
prospectus or in any
“free writing prospectus” and was
relied upon by the Company in the preparation of such Registration Statement,
Prospectus or preliminary prospectus. In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the
proceeds (net of payment of all expenses) received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings. If any
Person shall become entitled to indemnification hereunder (an
“Indemnified
Party”),
it shall give prompt notice to the party from which such indemnification is
sought (the “Indemnifying
Party”)
of any claim or of the commencement of any action or proceeding with respect to
which such Indemnified Party seeks indemnification or contribution pursuant
hereto; provided,
however, that
the failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from any obligation or liability except to the extent that
such Indemnifying Party has been prejudiced materially by such failure. All
reasonable fees and expenses (including any reasonable fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) shall be paid to the Indemnified Party (provided appropriate
documentation for such expenses is also submitted with such notice), as
incurred, within five (5) calendar days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder). The
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement or otherwise seek to terminate any action or proceeding in which any
Indemnified Party is or could be a party and as to which indemnification or
contribution could be sought by such Indemnified Party under this Section 7,
unless such judgment, settlement or other termination includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release, in form and substance reasonably satisfactory
to the Indemnified Party, from all liability in respect of such claim or
litigation for which such Indemnified Party would be entitled to
indemnification hereunder. In the case of parties indemnified pursuant to
Section 7(a) above, counsel to the Indemnified Parties shall be selected by the
Holder or Holders which are the Indemnified Party and, in the case of parties
indemnified pursuant to Section 7(b) above, counsel to the Indemnified
14
Parties
shall be selected by the Company. Notwithstanding the foregoing sentence, in
case any such action is brought against any Indemnified Party, and such
Indemnified Party notifies the Indemnifying Party of the commencement thereof,
the Indemnifying Party shall be entitled to participate therein and, to the
extent it may wish and if the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party pursuant to Section 7(a) or 7(b),
as applicable, jointly with any other Indemnifying Party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Party. Notwithstanding the election of the Indemnifying Party to
assume the defense of such litigation or proceeding, such Indemnified Party
shall have the right to employ separate counsel and to participate in the
defense of such litigation or proceeding, and the Indemnifying Party shall bear
the reasonable fees, costs and expenses of such separate counsel and shall pay
such fees, costs and expenses at least quarterly (provided that with respect to
any single litigation or proceeding or with respect to several litigations or
proceedings involving substantially similar legal claims, such Indemnifying
Party shall not be required to bear the fees, costs and expenses of more than
one such counsel) if (i) in the reasonable judgment of such Indemnified Party
the use of counsel chosen by such Indemnifying Party to represent such
Indemnified Party would present such counsel with a conflict of interest, (ii)
the defendants in, or targets of, any such litigation or proceeding include
both an Indemnifying Party and an Indemnified Party, and such Indemnified Party
shall have reasonably concluded that there may be legal defenses available to
it or to other Indemnified Parties which are different from or additional to
those available to such Indemnifying Party (in which case such Indemnifying
Party shall not have the right to direct the defense of such action on behalf
of the Indemnified Party), (iii) such Indemnifying Party shall not have
employed counsel satisfactory to such Indemnifying Party, in the exercise of
such Indemnified Party’s reasonable judgment, to represent such
Indemnified Party within a reasonable time after notice of the institution of
such litigation or proceeding or (iv) any Indemnifying Party shall authorize in
writing such Indemnified Party to employ separate counsel at the expense of
such Indemnifying Party.
(d) Contribution. If the
indemnification provided for in this Section 7 is unavailable to an Indemnified
Party under Section 7(a) or 7(b) in respect of any Losses or is insufficient to
hold such Indemnified Party harmless, then each applicable Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall, severally but not
jointly, contribute to the amount paid or payable by such Indemnified Party as
a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party or Indemnifying Parties, on the one
hand, and such Indemnified Party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party or Indemnifying Parties, on the one hand, and such
Indemnified Party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or related to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with any action or
proceeding.
15
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), an Indemnifying Party that
is a selling Holder shall not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold by
such Indemnifying Party and distributed to the public were offered to the
public exceeds the amount of any damages that such Indemnifying Party has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The
indemnity, contribution and expense reimbursement obligations of the Company
hereunder shall be in addition to any liability the Company may otherwise have
hereunder or otherwise. The provisions of this Section 7 shall survive the sale
of the Registrable Securities pursuant to a Registration Statement,
notwithstanding any permitted transfer of the Registrable Securities by any
Holder thereof or any termination of this Agreement.
8.
Selection of Managing Underwriters. If any of the Registrable Securities
included in any Demand Registration are to be sold in an Underwritten Offering,
the Holders holding a majority of the Registrable Securities included in the
Demand Notice may select an investment banker or investment bankers and a
manager or managers to manage the Underwritten Offering; provided that
such investment banker or bankers are reasonably acceptable to the Company. If
any Piggyback Registration is an Underwritten Offering, the Company shall have
the exclusive right to select an investment banker or investment bankers and a
manager or managers to administer the offering. The Company agrees that, in
connection with any Underwritten Offering hereunder, it shall undertake to
offer customary indemnification to the participating underwriters.
9.
Limitations on Registration of Other Securities; Representation. From
and after the date hereof, the Company shall not, without the prior written
consent of the Holders of 75% of the Registrable Securities on an as-converted
basis, enter into any agreement with any holder or prospective holder of any
securities of the Company that would allow such holder or prospective holder to
have any registration rights the terms of which, when taken as a whole, are as
favorable as or more favorable than the registration rights granted to the
Holders hereunder unless the Company shall also give such rights to the Holders
hereunder.
10.
No Inconsistent Agreements. The Company shall not hereafter enter into
any agreement with respect to its securities that is inconsistent with or
adversely affects, in any material respects, the rights granted to the Holders
in this Agreement.
11.
Miscellaneous.
(a) Specific
Performance. The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance
16
with the
terms hereof and that the parties and the Holders shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or
equity.
(b) Amendments
and Waivers.
This
Agreement may be amended or modified only if such amendment or modification is
in wring and signed by the Company and the Holders of 75% of the Registrable
Securities on an as-converted basis. Any waiver of any provisions hereof shall
be valid if set forth in an instrument in writing signed by the waiving party
or parties to be bound thereby. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
any provision hereof in accordance with its terms.
(c) Notices. All
notices, requests, consents and other communications hereunder to any party
hereto shall be deemed to be sufficient if contained in a written instrument
delivered in person, by telecopy, by overnight courier or by first class
registered or certified mail (return receipt requested, postage prepaid) to
such party at the address set forth below (or at such other address or to the
attention of such other Person as shall be specified by such party in a notice
given in accordance with this Section 11(c)) and to any Holder at such address
as indicated by the Company’s records (or at such address or to the
attention of such other Person as shall be specified by such Holder in a notice
given in accordance with this Section 11(c)):
If to
NBCU:
NBC
Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
If to
CIG:
CIG
Media LLC
000 X.
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
17
with a
copy to:
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to:
Xxxxxx
Xxxx
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxx Xxxxxxxx
Xxxxx
Xxxx
Xxxx
Xxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
If to
the Company:
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, XX 00000-0000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With a
copy to:
Holland
& Knight LLP
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
Xxxxx X. Xxxxx
Tel:
000-000-0000
Fax:
000-000-0000
and
Dow,
Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
18
All such
notices, requests, consents and other communications shall be deemed to have
been given hereunder when received.
(d) Merger
or Consolidation of the Company. If the
Company is a party to any merger or consolidation pursuant to which the
Convertible Securities or Registrable Securities are converted into, or
exchanged or exercised for, securities or the right to receive securities of
any other Person (“Conversion
Securities”),
the issuer of such Conversion Securities shall assume (in a writing delivered
to all Holders) all obligations of the Company hereunder. The Company shall not
effect any merger or consolidation described in the immediately preceding
sentence unless the issuer of the Conversion Securities complies with this
Section 11(d).
(e) Successors
and Assigns; Third Party Beneficiaries.
Subject to the terms and conditions of the Stockholders’ Agreement and
this Agreement, any transferee of all or a portion of the Convertible
Securities or Registrable Securities owned from time to time by the Investors
shall become a Holder hereunder to the extent it (i) agrees in writing to be
bound by all of the provisions applicable hereunder to the transferring Holder
(such acknowledgment being evidenced by execution of a Counterpart and
Acknowledgement in the form of Exhibit A) and (ii) owns of record not less than
10,000 shares of Registrable Securities on an as-converted basis. This
Agreement shall inure solely to the benefit of and be solely enforceable by the
Company, the Investors and the Holders and their respective successors and
permitted assignees.
(f) Headings. The
headings and subheadings in this Agreement are included for convenience and
identification only and are in no way intended to describe, interpret, define
or limit the scope, extent or intent of this Agreement or any provision
hereof.
(g) Governing
Law; Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any New York state or
federal court sitting in the Borough of Manhattan of The City of New York. The
parties hereto hereby (a) submit to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan of The City of New York for
the purpose of any action or proceeding arising out of or relating to this
Agreement brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such action or
proceeding, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that the action or proceeding is brought in an inconvenient
forum, that the venue of the action or proceeding is improper, or that this
Agreement or the transactions contemplated hereby may not be enforced in or by
any of the above-named courts.
(h) Waiver
of Jury Trial. Each
of the parties hereto hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or the Transaction. Each of the parties hereto (a) certifies
that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the
19
other
hereto have been induced to enter into this Agreement and the Transaction, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 11(h).
(i) Severability.
Whenever possible, each term and provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
If any term or provision hereof is invalid, illegal or incapable of being
enforced by law or public policy, all other terms and provisions hereof shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent
possible.
(j) Entire
Agreement. This
Agreement, the other Transaction Agreements and the other writings referred to
herein or therein or delivered pursuant hereto or thereto which form a part
hereof or thereof contain the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof or thereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, with respect to the subject matter
hereof or thereof.
(k) Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.
[Signature
appears on next page]
20
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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ION
MEDIA NETWORKS, INC. |
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By: /s/
Xxxxxxx Xxxxxx |
|
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Name:
Xxxxxxx Xxxxxx |
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Title:
Chief Financial Officer |
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NBC
UNIVERSAL, INC. |
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By: /s/ Xxxx
X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx |
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Title:
Executive Vice President and Chief Financial Officer |
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CIG
MEDIA LLC |
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By: |
Citadel
Limited Partnership, its Portfolio Manager |
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By: |
Citadel
Investment Group, L.L.C., its General Partner |
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By: |
/s/
Xxxxxxx Xxxxxxxxx |
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Name:
Xxxxxxx Xxxxxxxxx |
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Title:
Managing Director and Deputee General Counsel |
21
REGISTRATION
RIGHTS AGREEMENT
COUNTERPART
AND ACKNOWLEDGMENT
| RE: |
The
Registration Rights Agreement (the “Agreement”)
dated as of May 4, 2007, by
and
among the Company, NBC Universal, Inc. and CIG Media LLC
|
The
undersigned hereby agrees to be bound by the terms of the Agreement as a party
to the Agreement, and shall be entitled to all benefits of the Holders (as
defined in the Agreement) and shall be subject to all obligations and
restrictions of the Holders pursuant to the Agreement, as fully and effectively
as though the undersigned had executed a counterpart of the Agreement together
with the other parties to the Agreement. The undersigned hereby acknowledges
having received and reviewed a copy of the Agreement.
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Date: |
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Number of Shares of
Registrable Securities: ________________ |
Address
for Notices:
with
copies to:
EXHIBIT
F to the Master Transaction Agreement
Series
A-1 Convertible Preferred Certificate of Designation
Exhibit F
to the Master Transaction
Agreement
Series A-1 Convertible Preferred
Certificate of Designation
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
12% SERIES A-1 MANDATORILY CONVERTIBLE
PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 12%
Series A-1 Mandatorily Convertible Preferred Stock, par value $.001 per share,
with a liquidation preference of $10,000 per share, consisting of 8,500 shares,
having the designations, preferences, relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
resolution as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the
“12% Series A-1 Mandatorily Convertible Preferred Stock.” The number
of shares constituting such series shall be 8,500 and are referred to as the
“Series A-1 Convertible Preferred.” The liquidation preference of the
Series A-1 Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
A-1 Convertible Preferred shall, with respect to dividends and distributions
upon liquidation, winding up or dissolution of the Corporation, rank
(i) senior to the Junior Preferred Stock, to all classes of Common Stock
of the Corporation and to each other class of Capital Stock of the Corporation
or series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series A-1 Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior Securities”); (ii) on a parity with Pari Passu Preferred
Stock and with any class of Capital Stock of the Corporation or series of
Preferred Stock of the Corporation hereafter created the terms of which
expressly provide that such class or
1
series will rank on a parity with the Series
A-1 Convertible Preferred as to dividends and distributions upon liquidation,
winding up or dissolution of the Corporation (collectively referred to as
“Parity Securities”), provided that any such Parity Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Parity Securities; and (iii) junior to
each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series A-1 Convertible
Preferred as to dividends and distributions upon liquidation, winding up or
dissolution of the Corporation (collectively referred to as
“Senior Securities”), provided that any such Senior Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Senior Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series A-1 Convertible Preferred at the higher of (x) a rate per annum equal to
12% of the Issue Price and (y) the aggregate cash dividends per share paid on
the Class D Common Stock from (A) the later of the Issue Date or the date of
the last payment of a cash dividend on the Class D Common Stock to (B) the date
of such determination, multiplied by the number of shares of Class D Common
Stock into which each share of Series A-1 Convertible Preferred is convertible.
All dividends shall accrue and be cumulative, whether or not earned or
declared, on a quarterly basis, in arrears, from the Issue Date, but shall be
payable only at such time or times as may be fixed by the Board of Directors or
as otherwise provided herein and shall not compound. Dividends shall be payable
to those Holders who are Holders on such dates as the Board of Directors may
determine with respect to such dividends. Dividends shall cease to accrue and
accumulate in respect of shares of the Series A-1 Convertible Preferred on the
date of conversion of such shares or the date of the redemption of such shares
unless the Corporation shall have failed to pay or make available for payment
the relevant redemption price on the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series A-1 Convertible Preferred pursuant to paragraph (c)(i)
shall be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the Junior Securities, including, without limitation, the Common Stock of the
Corporation, an amount in cash equal to the greater of (A) the Liquidation
Preference for each outstanding share of Series A-1 Convertible Preferred,
plus, without duplication, an amount in cash equal to accumulated and unpaid
dividends thereon to the date fixed for such liquidation, dissolution or
winding up, and (B) the amount per share which would
2
have been payable upon such liquidation,
dissolution or winding up to the holders of shares of Class A Common Stock or
such other class or series of stock into which the Series A-1 Convertible
Preferred is then convertible (assuming the conversion of each share of then
convertible Series A-1 Convertible Preferred and without deduction for the
Liquidation Preference otherwise payable pursuant to clause (A) hereof),
multiplied by the number of shares of Class A Common Stock into which such
shares of Series A-1 Convertible Preferred are then convertible. Except as
provided in the preceding sentence, Holders of Series A-1 Convertible Preferred
shall not be entitled to any distribution in the event of any liquidation,
dissolution or winding up of the affairs of the Corporation. If the assets of
the Corporation are not sufficient to pay in full the liquidation payments
payable to the Holders and to any holders of all other Parity Securities, then
such assets shall be distributed among the Holders and any holders of such
other Parity Securities ratably in accordance with the respective amounts that
would be payable on such shares of Series A-1 Convertible Preferred and any
such shares of other Parity Securities if all amounts payable thereon were paid
in full.
(ii) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series A-1 Convertible Preferred for cash on
August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series A-1 Convertible Preferred as to the Holder
or Holders to whom the Corporation has failed to give said notice or to whom
such notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series A-1
Convertible Preferred; and
3
(3) that dividends on the shares of the
Series A-1 Convertible Preferred shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the Redemption
Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series A-1 Convertible
Preferred held by such Holder to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place or places designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such shares shall be payable in
cash to the Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be canceled and
retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series A-1 Convertible Preferred shall cease to accumulate on
the Redemption Date, and all rights of the Holders shall terminate with respect
to the Series A-1 Convertible Preferred on the Redemption Date, other than the
right to receive the Redemption Price, without interest; provided,
however, that if the Redemption Notice shall have been given
and the funds necessary for redemption (including an amount in respect of all
dividends that will accrue to the Redemption Date) shall have been segregated
and irrevocably deposited in trust for the equal and ratable benefit of the
Holders, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
A-1 Convertible Preferred are outstanding, the Corporation may not issue any
additional shares of Series A-1 Convertible Preferred or any new class of
Parity Securities or Senior Securities (or amend the provisions of any existing
class of Capital Stock to make such class of Capital Stock Parity Securities or
Senior Securities) without the approval of Holders holding at least a majority
of the then outstanding shares of Series A-1 Convertible Preferred, voting or
consenting, as the case may be, together as one class given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting; provided, however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
A-1 Convertible Preferred or prohibit the redemption by the Corporation of the
Series A-1 Convertible Preferred pursuant to paragraph (e)(i) above, in an
amount sufficient to Refinance any series of Senior Securities, in whole or in
part, with such shares being
4
issued no sooner than the date the
Corporation Refinances such series of Senior Securities.
(B) So long as any shares of the Series A-1
Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series
A-1 Convertible Preferred, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of any class, including
Preferred Stock, shall not require the consent of Holders and shall not be
deemed to affect adversely the rights, preferences or privileges of such
Holders.
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
A-1 Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be organized and existing
under the laws of the United States or any State thereof or the District of
Columbia; (B) the Series A-1 Convertible Preferred shall be converted into or
exchanged for and shall become shares of such successor, transferee or
resulting Person with the same powers, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereon, that the Series A-1 Convertible Preferred had immediately
prior to such transaction; (C) immediately after giving effect to such
transactions, no Voting Rights Triggering Event shall have occurred or shall
have occurred after the Issue Date and be continuing; and (D) the Corporation
has delivered to the transfer agent for the Series A-1 Convertible Preferred
prior to the consummation of the proposed transaction an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with the terms hereof and that all conditions
precedent herein relating to such transaction have been satisfied. For purposes
of the foregoing, 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 of the
Corporation, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the
5
Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.
(iii) (A) If the Corporation fails to
discharge any redemption or conversion obligation with respect to the Series
A-1 Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series A-1
Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein shall be the exclusive remedy at law
or in equity of the Holders for any Voting Rights Triggering Event.
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series A-1 Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series A-1 Convertible Preferred addressed to the
secretary of the Corporation shall, call a special meeting of the Holders, for
the purpose of electing the directors which the Holders are entitled to elect.
If such meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of said written request upon the
secretary of the Corporation, or within 20 days after mailing the same within
the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series A-1 Convertible Preferred may designate
in writing one of their number to call such meeting at the reasonable expense
of the Corporation, and such meeting may be called by the Holder so designated
upon the notice required for the annual meetings of stockholders of the
Corporation and shall be held at the place for holding the annual meetings of
stockholders. Any Holder of Series A-1 Convertible Preferred so designated
shall have, and the Corporation shall provide, access to the lists of
stockholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then
6
outstanding shares of Series A-1 Convertible
Preferred shall be required to constitute a quorum of such Series A-1
Convertible Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware, each Holder entitled to vote with
respect to such matter shall be entitled to one vote for each then outstanding
share of Series A-1 Convertible Preferred so held.
(g) Conversion.
(i) Optional Conversion. Each share of the Series A-1 Convertible Preferred is
convertible at the option of the Holder thereof, at any time and from time to
time, into (A) a number of shares of Class D Common Stock equal to the Issue
Price of the shares of Series A-1 Convertible Preferred surrendered for
conversion plus accrued and unpaid dividends thereon, divided by (B) the
Conversion Price then in effect, except that if shares of Series A-1
Convertible Preferred are called for redemption the conversion right will
terminate at the close of business on the Redemption Date. No fractional shares
or securities representing fractional shares will be issued upon conversion; in
lieu of fractional shares the Corporation will pay a cash adjustment based upon
the Common Stock Value as of the close of business on the first Business Day
preceding the date of conversion. The Series A-1 Convertible Preferred shall be
converted by the holder thereof by surrendering the certificate or certificates
representing the shares of Series A-1 Convertible Preferred to be converted,
appropriately completed, to the transfer agent for the Common Stock. The
transfer agent shall issue one or more certificates representing the Class D
Common Stock in the name or names requested by such Holder. The transfer agent
will deliver to such Holder a new certificate representing the shares of Series
A-1 Convertible Preferred in excess of those being surrendered for conversion.
The conversion rights stated herein are subject to compliance by the Holder
with all applicable laws and regulations.
(ii) Mandatory Conversion. At any time following the first anniversary of the
Issue Date, upon the occurrence of a Mandatory Conversion Event, including a
Mandatory Conversion Event that occurs after the Redemption Date to the extent
any share of Series A-1 Convertible Preferred remains outstanding after the
Redemption Date, unless previously converted at the option of Holders in
accordance with the provisions hereof, each outstanding share of Series A-1
Convertible Preferred
7
shall, without notice to Holders, convert
automatically (the “Mandatory
Conversion”) into (A) a number of
shares of Class D Common Stock equal to the Issue Price of the shares of Series
A-1 Convertible Preferred so converted plus accrued and unpaid dividends
thereon, divided by the (B) Conversion Price then in effect. No fractional
shares or securities representing fractional shares will be issued upon
conversion; in lieu of fractional shares the Corporation will pay a cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of the occurrence of such Mandatory
Conversion Event. Promptly following a Mandatory Conversion Event, written
notice (the “Mandatory Conversion
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice or any
deficiency therein shall affect the validity of the procedures for the
Mandatory Conversion as to the Holder or Holders to whom the Corporation has
failed to give said notice or to whom such notice was effected. Each Holder
shall surrender the certificate or certificates representing all shares of
Series A-1 Convertible Preferred held by such Holder to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation) and the Corporation shall issue to such Holder that number of
shares of Class D Common Stock to which such Holder is entitled, as calculated
in accordance with this paragraph.
(iii) (A) In case the Corporation shall (I)
pay a dividend or distribution in shares of Class D Common Stock on its shares
of Class D Common Stock, (II) subdivide its outstanding shares of Class D
Common Stock into a greater number of shares, (III) combine its outstanding
shares of Class D Common Stock into a smaller number of shares, or (IV) issue,
by reclassification of its shares of Class D Common Stock, any shares of its
Capital Stock (each such transaction being called a “Stock
Transaction”), then and in each
such case, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of a share of Series A-1 Convertible Preferred
surrendered for conversion after the record date fixing stockholders to be
affected by such Stock Transaction shall be entitled to receive upon conversion
the number of shares of Class D Common Stock which such Holder would have been
entitled to receive after the happening of such event had such share of Series
A-1 Convertible Preferred been converted immediately prior to such record date.
Such adjustment shall be made whenever any Stock Transaction occurs, but shall
also be effective retroactively as to shares of Series A-1 Convertible
Preferred converted between such record date and the date of the happening of
any such Stock Transaction.
(B) If the Corporation shall, at any time or
from time to time while any shares of Series A-1 Convertible Preferred are
outstanding, issue or sell any right or warrant to purchase, acquire or
subscribe for shares of Class D Common Stock (including a right or warrant with
respect to any security convertible into or exchangeable for shares of Class D
Common Stock) generally to holders of its Common Stock (including by way of a
reclassification of shares or a recapitalization of the Corporation), for a
consideration on the date of such issuance or sale less than the Common Stock
Value of the shares of Class D Common Stock underlying such rights or warrants
on the date of such issuance or sale, then and in each such case, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which shall be the sum of (I) the
8
Common Stock Value per share of Class D
Common Stock on the first Business Day after the date of the public
announcement of the actual terms (including the price terms) of such issuance
or sale multiplied by the number of shares of Class D Common Stock outstanding
immediately prior to such issuance or sale plus (II) the aggregate Fair Market
Value of the consideration to be received by the Corporation in connection with
the issuance or sale of the rights or warrants plus the aggregate consideration
to be received in respect of the purchase of the shares of Class D Common Stock
underlying such rights or warrants, and the denominator of which shall be the
Common Stock Value per share of Class D Common Stock on the Business Day
immediately preceding the public announcement of the actual terms (including
the price terms) of such issuance or sale multiplied by the aggregate number of
shares of Class D Common Stock (I) outstanding immediately prior to such
issuance or sale plus (II) underlying such rights or warrants at the time of
such issuance or sale. For the purposes of the preceding sentence, the
aggregate consideration receivable by the Corporation in connection with the
issuance or sale of any such right or warrant shall be deemed to be equal to
the sum of the aggregate offering price (before deduction of reasonable
underwriting discounts or commissions and expenses) of all such rights or
warrants. No adjustment to the Conversion Price pursuant to this paragraph (B)
shall be made if, in conjunction with any such issuance or sale by the
Corporation generally to holders of its Common Stock, the Corporation issues or
offers to sell to the Holders such rights or warrants on the same basis as the
Holders would have received had their shares of Series A-1 Convertible
Preferred been converted into shares of Class D Common Stock immediately prior
to the such issuance or sale. Upon the expiration or termination of any such
rights or warrants without the exercise of such rights or warrants, the
Conversion Price then in effect shall be adjusted immediately to the Conversion
Price which would have been in effect at the time of such expiration or
termination had such rights or warrants, to the extent outstanding immediately
prior to such expiration or termination, never been issued, although such
adjustment shall not effect previously converted shares.
(C) In the event the Corporation shall at
any time or from time to time while any shares of Series A-1 Convertible
Preferred are outstanding declare, order, pay or make a dividend or other
distribution generally to holders of its Common Stock in stock or other
securities or rights or warrants to subscribe for securities of the Corporation
or any of its subsidiaries or evidences of Indebtedness of the Corporation or
any other person or pay any Extraordinary Cash Dividend (other than any
dividend or distribution on the Class D Common Stock (I) referred to in
paragraphs (A) or (B) above or (II) if in conjunction therewith the Corporation
declares and pays or makes a dividend or distribution on each share of Series
A-1 Convertible Preferred which is the same as the dividend or distribution
that would have been made or paid with respect to such share of Series A-1
Convertible Preferred had such share been converted into shares of Class D
Common Stock immediately prior to the record date for any such dividend or
distribution on the Class D Common Stock), then, and in each such case, an
appropriate adjustment to the Conversion Price shall be made so that the Holder
of each share of Series A-1 Convertible Preferred shall be entitled to receive,
upon the conversion thereof, the number of shares of Class D Common Stock
determined by multiplying (x) the number of shares of Class D Common Stock into
which such share was convertible on the day immediately prior to the record
date fixed for the determination of stockholders entitled
9
to receive such dividend or distribution by
(y) a fraction, the numerator of which shall be the Common Stock Value per
share of Class D Common Stock as of such record date, and the denominator of
which shall be such Common Stock Value per share of Class D Common Stock less
the Fair Market Value per share of Class D Common Stock of such dividend or
distribution (as determined in good faith by the Board of Directors, as
evidenced by a Board Resolution mailed to each holder of Series A-1 Convertible
Preferred). An adjustment made pursuant to this paragraph (C) shall be made
upon the opening of business on the next Business Day following the date on
which any such dividend or distribution is made and shall be effective
retroactively to the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution.
(D) In the event the Company shall, at any
time or from time to time while any shares of Series A-1 Convertible Preferred
are outstanding, repurchase (a “Repurchase”) any portion of the Class D Common Stock from
holders generally at a premium over the Common Stock Value thereof on the next
trading day immediately preceding the consummation of such Repurchase, then and
in the case of each Repurchase the Conversion Price in effect immediately prior
thereto shall be adjusted by multiplying such Conversion Price by the fraction
the numerator of which is (I) the product of (x) the number of shares of Class
D Common Stock outstanding immediately before such Repurchase multiplied by (y)
the Common Stock Value per share of Class D Common Stock on the next trading
day immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class D Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class D Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class D Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series A-1 Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
(iv) No adjustment in the Conversion Price
will be required to be made in any case until cumulative adjustments amount to
1% or more of the Conversion Price, but any such adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(v) In the event of any capital
reorganization (other than a capital reorganization covered by paragraph
(ii)(C) above) or reclassification of outstanding shares of Common Stock of the
Corporation (other than a reclassification covered by paragraph (ii)(A) above),
or in case of any merger, consolidation or other corporate combination of the
Corporation with or into another corporation, or in case of any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a “Transaction”), each share of Series A-1 Convertible Preferred
shall continue to remain outstanding if the Corporation is the Surviving Person
(as defined below) of such Transaction, and shall be subject to all the
provisions hereof, as in effect prior to such Transaction, or if the
10
Corporation is not the Surviving Person,
each share of Series A-1 Convertible Preferred shall be exchanged in such
Transaction for a new series of convertible preferred stock of the Surviving
Person, or in the case of a Surviving Person other than a corporation,
comparable securities of such Surviving Person, in either case having economic
terms as nearly equivalent as possible to, and with the same voting and other
rights as, the Series A-1 Convertible Preferred, including entitling the holder
thereof to receive, upon presentation of the certificate therefor to the
Surviving Person subsequent to the consummation of such Transaction, the kind
and amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Class D Common Stock into which one share of Series A-1
Convertible Preferred was convertible immediately prior to such Transaction. In
case securities or property other than Common Stock shall be issuable or
deliverable upon conversion as aforesaid, then all references in this paragraph
(v) shall be deemed to apply, so far as appropriate and as nearly as may be, to
such other securities or property. If the holders of Class D Common Stock have
the opportunity to elect the form of consideration to be received by them in
such Transaction, then from and after the effective date of such Transaction,
the Series A-1 Convertible Preferred shall be convertible into the
consideration that a majority of the holders of the Class D Common Stock who
made such election received in such Transaction.
Notwithstanding anything contained herein to
the contrary, the Corporation will not effect any Transaction unless, prior to
the consummation thereof, proper provision is made to ensure that the holders
of shares of Series A-1 Convertible Preferred will be entitled to receive the
benefits afforded by this paragraph (v).
For purposes of this paragraph (v),
“Surviving Person” shall mean the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with which
the Series A-1 Convertible Preferred or Common Stock of the Corporation is
exchanged, converted or reclassified into the securities of any other Person or
cash or any other property.
(vi) The conversion price shall initially
equal $0.90 per share, and shall increase from and after the Issue Date at a
rate equal to the dividend rate on the Series A-1 Convertible Preferred as set
forth in paragraph (c)(i) (the “Conversion Price”). The Conversion Price shall be subject to
adjustment as provided in this paragraph (g).
(vii) From and after an Initial Public
Offering, the Corporation shall cause the shares of Class D Common Stock
issuable upon conversion of the Series A-1 Convertible Preferred to be approved
for listing on the principal securities exchange on which the Class D Common
Stock may at the time be listed for trading, subject to official notification
of issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class D Common Stock issuable upon
conversion of the Series A-1
11
Convertible Preferred on the principal
securities exchange on which the Class D Common Stock may be listed for
trading, if any and if applicable, have been satisfied.
(viii) Notwithstanding anything to the
contrary contained in this paragraph (g), there shall be no adjustment to the
Conversion Price in connection with any issuance of additional shares of Series
A-1 Convertible Preferred or any other securities that are or may be or become
issued or issuable in connection with the transactions contemplated by the
Master Transaction Agreement.
(h) Reissuance of Series A-1 Convertible
Preferred. Shares of Series A-1
Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series A-1 Convertible Preferred must be in
compliance with the terms hereof.
(i) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. As used in this definition, “control” (including its
correlative meanings, “controlled by” and “under common control
with”) means the possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
12
“Business Day” means any day except a Saturday, a Sunday, or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
“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, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not
a corporation, any and all partnership, membership 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 capital lease
obligations under GAAP and, for purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Class A Common Stock” means the Class A Common Stock, par value $.001
per share, of the Corporation.
“Class D Common Stock” means the Class D Non-Voting Common Stock, par
value $.001 per share, of the Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Common Stock Value” on any date means, with respect to the Class A
Common Stock or the Class D Common Stock, the last sale price for the Class A
Common Stock or the Class D Common Stock, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, for the Class A Common Stock or the Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or the Class D Common Stock is listed or admitted to
trading or, if neither the Class A Common Stock nor the Class D Common Stock is
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the principal automated
quotation system that may then be in use or, if neither the Class A Common
Stock nor the Class D Common Stock is quoted by any such organization, the
average of the closing bid and asked
13
prices as furnished by a professional market
maker making a market in the Class A Common Stock or the Class D Common Stock
selected by the Board of Directors or, in the event that no trading price is
available for the Class A Common Stock or the Class D Common Stock, the fair
market value of the Class A Common Stock, as determined in good faith by the
Board of Directors.
“Communications Act” means the Communications Act of 1934, as amended
(including, without limitation, the Cable Communications Policy Act of 1984 and
the Cable Television Consumer Protection and Competition Act of 1992) and all
rules and regulations of the FCC, in each case as from time to time in
effect.
“Consolidated EBITDA” means, for any Person, for any period, an amount
equal to (a) the sum of Consolidated Net Income for such period, plus, to the
extent deducted from the revenues of such Person in determining Consolidated
Net Income, (i) the provision for taxes for such period based on income or
profits and any provision for taxes utilized in computing a loss in
Consolidated Net Income above, plus (ii) Consolidated Interest Expense, net of
interest income earned on cash or cash equivalents for such period (including,
for this purpose, dividends on preferred stock only to the extent that such
dividends were deducted in determining Consolidated Net Income), plus (iii)
depreciation for such period on a consolidated basis, plus (iv) amortization of
intangibles and broadcast program licenses for such period on a consolidated
basis, minus (b) scheduled payments relating to broadcast program license
liabilities, except that with respect to the Corporation each of the foregoing
items shall be determined on a consolidated basis with respect to the
Corporation and its Subsidiaries only; provided,
however, that, for purposes of calculating Consolidated EBITDA
during any fiscal quarter, cash income from a particular Investment of such
Person shall be included only if cash income has been received by such Person
as a result of the operation of the business in which such Investment has been
made in the ordinary course without giving effect to any extraordinary, unusual
and non-recurring gains.
“Consolidated Interest Expense” means, with respect to any Person, for any
period, the aggregate amount of interest which, in conformity with GAAP, would
be set forth opposite the caption “interest expense” or any like
caption on an income statement for such Person and its Subsidiaries on a
consolidated basis, including, but not limited to, imputed interest included in
Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing, the net costs associated with hedging obligations, amortization of
other financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other non-cash
interest expense (other than interest amortized to cost of sales) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, and all
14
time brokerage fees relating to financing of
television stations which the Corporation has an agreement or option to
acquire.
“Consolidated Net Income” means, with respect to any Person, for any
period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
“Conversion Price” has the meaning ascribed to it in paragraph
(g)(vi) hereof.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Designated Investment Bank” means an investment bank selected by the
Purchasing Party from a list of three internationally recognized investment
banks provided to the Purchasing Party by the Company pursuant to Section 2.07
of the Master Transaction Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Extraordinary Cash Dividend” means cash dividends with respect to the Class A
Common Stock the aggregate amount of which in any fiscal year exceeds 10% of
Consolidated EBITDA of the Corporation and its subsidiaries for the fiscal year
immediately preceding the payment of such dividend.
15
“Fair Market Value” of any consideration other than cash or of any
securities shall mean the amount which a willing buyer would pay to a willing
seller in an arm’s-length transaction as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors or a
committee thereof.
“FCC” means
the Federal Communications Commission and any successor governmental entity
performing functions similar to those performed by the Federal Communications
Commission on the Issue Date.
“GAAP” means
generally accepted accounting principles consistently applied as in effect in
the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series A-1 Convertible Preferred
as reflected in the stock books of the Corporation.
“Initial Public Offering” means the initial underwritten sale of equity
securities of the Corporation occurring after the Issue Date pursuant to an
effective registration statement under the Securities Act.
“Issue Date”
means the date of the issuance of Series A-1 Convertible Preferred.
“Issue Price” means $10,000 per share of Series A-1 Convertible
Preferred.
“Junior Preferred Stock” means, collectively, (i) 14¼% Preferred,
(ii) 9¾% Preferred, (iii) Series B Convertible Preferred, (iv) Series C
Preferred Stock, (v) Series C Convertible Preferred, (vi) Series D Convertible
Preferred, (vii) Series E-1 Convertible Preferred, (viii) Series E-2
Convertible Preferred, and (ix) Series F Non-Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Mandatory Conversion” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory Conversion Event” means the earlier to occur of: (i) the date on
which the last sale price for the Class A Common Stock or Class D Common Stock,
regular way, or, in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for the Class A Common Stock or
Class D Common Stock, in either case as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Class A Common Stock or Class D Common Stock is listed or
admitted to trading, or, if neither Class A Common Stock nor Class D
16
Common Stock is listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and other expenses of
sale) of not less than $75,000,000, provided that if such issuance is made to a
Purchasing Party, the Designated Investment Bank shall have provided an opinion
in customary form to the Company to the effect that the issue price per share
of Common Stock is at or higher than the fair market value of a share of Common
Stock.
“Mandatory Conversion Notice” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory
Conversion Trigger Price” means
(A) in the event the Mandatory Conversion Event occurs on or after the first
anniversary but prior to the second anniversary of the Issue Date, 102% of the
Conversion Price, (B) in the event the Mandatory Conversion Event occurs on or
after the second anniversary but prior to the third anniversary of the Issue
Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Obligations” means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to
17
whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the taking of any proposed action have been taken. Such
opinion shall also include the statements called for in the second sentence
under “Officers’ Certificate”.
“Pari Passu Preferred Stock” means collectively, (i) Series A-2 Preferred
Stock and (ii) Series A-3 Convertible Preferred, in each case as defined in the
Master Transaction Agreement.
“Parity Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing Party” means CIG Media LLC, NBC Universal, Inc. and
their respective Affiliates.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in
paragraph (e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
18
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Series A-1 Convertible Preferred” has the meaning ascribed to it in paragraph (a)
hereof.
“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, 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,
owned by such Person.
“Stock Transaction” has the meaning ascribed to it in paragraph
(g)(iii) hereof.
“Surviving Person” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Transaction” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned Subsidiary” means any Subsidiary all of the outstanding
voting securities (other than directors’ qualifying shares) of which are
owned, directly or indirectly, by the Corporation.
19
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this 4th day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chief Financial
Officer
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Certificate of Designation
EXHIBIT
G to the Master Transaction Agreement
Series
A-2 Preferred Stock Certificate of Designation
Exhibit G
to the Master Transaction
Agreement
Series A-2 Preferred Stock Certificate of
Designation
CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
8% SERIES A-2 NON-CONVERTIBLE PREFERRED
STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 8%
Series A-2 Non-Convertible Preferred Stock, par value $.001 per share, with a
liquidation preference of $10,000 per share, consisting of 11,000 shares,
having the designations, preferences, relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
resolution as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the “8%
Series A-2 Non-Convertible Preferred Stock.” The number of shares
constituting such series shall be 11,000 and are referred to as the
“Series A-2 Non-Convertible Preferred.” The liquidation preference of
the Series A-2 Non-Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
A-2 Non-Convertible Preferred shall, with respect to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation,
rank (i) senior to the Junior Preferred Stock and all classes of Common Stock
of the Corporation and to each other class of Capital Stock of the Corporation
or series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series A-2 Non-Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior Securities”); (ii) on a parity with the Pari Passu Preferred
Stock and with any class of Capital Stock of the Corporation or series of
Preferred Stock of the Corporation hereafter created the terms of which
expressly provide that such class or series
will rank on a parity with the Series A-2
Non-Convertible Preferred as to dividends and distributions upon liquidation,
winding up or dissolution of the Corporation (collectively referred to as
“Parity Securities”), provided that any such Parity Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Parity Securities; and (iii) junior to
each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series A-2 Non-Convertible
Preferred as to dividends and distributions upon liquidation, winding up or
dissolution of the Corporation (collectively referred to as
“Senior Securities”), provided that any such Senior Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Senior Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series A-2 Non-Convertible Preferred at a rate per annum equal to 8% of the
Issue Price. All dividends shall accrue and be cumulative, whether or not
earned or declared, on a quarterly basis, in arrears, from the Issue Date, but
shall be payable only at such time or times as may be fixed by the Board of
Directors or as otherwise provided herein and shall not compound. Dividends
shall be payable to those Holders who are Holders on such dates as the Board of
Directors may determine with respect to such dividends. Dividends shall cease
to accrue and accumulate in respect of shares of the Series A-2 Non-Convertible
Preferred on the date of the redemption of such shares unless the Corporation
shall have failed to pay or make available for payment the redemption price on
the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series A-2 Non-Convertible Preferred pursuant to paragraph (c)(i)
shall be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the Junior Securities, including, without limitation, the Common Stock of the
Corporation, an amount in cash equal to the Liquidation Preference for each
outstanding share of Series A-2 Non-Convertible Preferred, plus, without
duplication, an amount in cash equal to accumulated and unpaid dividends
thereon to the date fixed for such liquidation, dissolution or winding up.
Except as provided in the preceding sentence, Holders of Series A-2
Non-Convertible Preferred shall not be entitled to any distribution in the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to the Holders and to any holders of all other
Parity Securities, then such assets shall be distributed among the Holders and
any holders of such other Parity Securities ratably in accordance with the
2
respective amounts that would be payable on
such shares of Series A-2 Non-Convertible Preferred and any such shares of
other Parity Securities if all amounts payable thereon were paid in
full.
(A) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series A-2 Non-Convertible Preferred for cash
on August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series A-2 Non-Convertible Preferred as to the
Holder or Holders to whom the Corporation has failed to give said notice or to
whom such notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series A-2
Non-Convertible Preferred; and
(3) that dividends on the shares of the
Series A-2 Non-Convertible Preferred shall cease to accumulate on such
Redemption Date unless the Corporation defaults in the payment of the
Redemption Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series A-2
Non-Convertible Preferred held by such Holder to the Corporation, duly endorsed
(or otherwise in proper form for transfer, as determined by the Corporation),
in the manner and at the place or places designated in the Redemption Notice,
and on the Redemption Date the full Redemption Price for such shares shall be
payable in cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
canceled and retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series A-2 Non-Convertible Preferred shall cease to accumulate
on the Redemption Date, and all rights of the Holders shall terminate with
respect to the Series A-2 Non-Convertible
3
Preferred on the Redemption Date, other than
the right to receive the Redemption Price, without interest; provided,
however, that if the Redemption Notice shall have been given
and the funds necessary for redemption (including an amount in respect of all
dividends that will accrue to the Redemption Date) shall have been segregated
and irrevocably deposited in trust for the equal and ratable benefit of the
Holders, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
A-2 Non-Convertible Preferred are outstanding, the Corporation may not issue
any additional shares of Series A-2 Non-Convertible Preferred or any new class
of Parity Securities or Senior Securities (or amend the provisions of any
existing class of Capital Stock to make such class of Capital Stock Parity
Securities or Senior Securities) without the approval of Holders holding at
least a majority of the then outstanding shares of Series A-2 Non-Convertible
Preferred, voting or consenting, as the case may be, together as one class
given in person or by proxy, either in writing or by resolution adopted at an
annual or special meeting; provided,
however, that the Corporation may, without the approval of such
Holders issue additional shares of Parity Securities or Senior Securities
(including shares issued in payment of dividends thereon in accordance with
their respective certificates of designation) and which Senior Securities or
Parity Securities do not require the Corporation to pay dividends thereon on a
current basis in cash, or require cash dividends to be paid at a rate not in
excess of three percentage points greater than the dividend rate borne by any
series of Senior Securities and which do not prohibit the payment of dividends
other than in cash on the Series A-2 Non-Convertible Preferred or prohibit the
redemption by the Corporation of the Series A-2 Non-Convertible Preferred
pursuant to paragraph (e)(i) above, in an amount sufficient to Refinance any
series of Senior Securities, in whole or in part, with such shares being issued
no sooner than the date the Corporation Refinances such series of Senior
Securities.
(B) So long as any shares of the Series A-2
Non-Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series
A-2 Non-Convertible Preferred, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of any class, including
Preferred Stock, shall not require the consent of Holders and shall not be
deemed to affect adversely the rights, preferences or privileges of such
Holders.
4
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
A-2 Non-Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be a corporation
incorporated and existing under the laws of the United States or any State
thereof or the District of Columbia; (B) the Series A-2 Non-Convertible
Preferred shall be converted into or exchanged for and shall become shares of
such successor, transferee or resulting Person with the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereon, that the Series A-2
Non-Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series A-2 Non-Convertible Preferred prior to the consummation of
the proposed transaction an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer complies with
the terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the Corporation fails to
discharge the redemption obligation with respect to the Series A-2
Non-Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series A-2
Non-Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein shall be the exclusive remedy at law
or in equity of the Holders for any Voting Rights Triggering Event.
5
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series A-2 Non-Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series A-2 Non-Convertible Preferred addressed to
the secretary of the Corporation shall, call a special meeting of the Holders,
for the purpose of electing the directors which the Holders are entitled to
elect. If such meeting shall not be called by a proper officer of the
Corporation within 20 days after personal service of said written request upon
the secretary of the Corporation, or within 20 days after mailing the same
within the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series A-2 Non-Convertible Preferred may
designate in writing one of their number to call such meeting at the reasonable
expense of the Corporation, and such meeting may be called by the Holder so
designated upon the notice required for the annual meetings of stockholders of
the Corporation and shall be held at the place for holding the annual meetings
of stockholders. Any Holder of Series A-2 Non-Convertible Preferred so
designated shall have, and the Corporation shall provide, access to the lists
of stockholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then outstanding shares of
Series A-2 Non-Convertible Preferred shall be required to constitute a quorum
of such Series A-2 Non-Convertible Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware,
6
each Holder entitled to vote with respect to
such matter shall be entitled to one vote for each then outstanding share of
Series A-2 Non-Convertible Preferred so held.
(g) Reissuance of Series A-2 Non-Convertible
Preferred. Shares of Series A-2
Non-Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series A-2 Non-Convertible Preferred must be in
compliance with the terms hereof.
(h) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(i) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(j) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
“Business Day” means any day except a Saturday, a Sunday, or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
“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, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not
a corporation, any and all partnership, membership or other equity interests of
such Person.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Commission”
means the Securities and Exchange Commission.
7
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Holder”
means a holder of then outstanding shares of Series A-2 Non-Convertible
Preferred as reflected in the stock books of the Corporation.
“Issue Date”
means the date of the issuance of Series A-2 Non-Convertible Preferred.
“Issue Price” means $10,000 per share of Series A-2
Non-Convertible Preferred.
“Junior Preferred Stock” means collectively, (i) 14¼% Preferred,
(ii) 9¾% Preferred, (iii) Series B Convertible Preferred, (iv) Series C
Preferred Stock, (v) Series C Convertible Preferred, (vi) Series D Convertible
Preferred, (vii) Series E-1 Convertible Preferred, (viii) Series E-2
Convertible Preferred, and (ix) Series F Non-Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to
8
whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the taking of any proposed action have been taken. Such
opinion shall also include the statements called for in the second sentence
under “Officers’ Certificate”.
“Pari Passu Preferred Stock” means collectively, the Series A-1 Convertible
Preferred and Series A-3 Convertible Preferred, in each case as defined in the
Master Transaction Agreement.
“Parity Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in paragraph
(e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinancing” has the correlative meaning.
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Series A-2 Non-Convertible Preferred” has the meaning ascribed to it in paragraph (a)
hereof.
“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
9
cast in the election of directors under
ordinary circumstances shall at the time be owned, directly or indirectly, 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,
owned by such Person.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned Subsidiary” means any Subsidiary all of the outstanding
voting securities (other than directors’ qualifying shares) of which are
owned, directly or indirectly, by the Corporation.
10
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this 4th day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chief Financial
Officer
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Certificate of Designation
EXHIBIT
H to the Master Transaction Agreement
Series
A-3 Convertible Preferred Certificate of Designation
Exhibit
H to the
Master
Transaction Agreement
Series
A-3 Convertible Preferred Certificate of Designation
CERTIFICATE
OF DESIGNATION OF THE POWERS,
PREFERENCES
AND RELATIVE, PARTICIPATING,
OPTIONAL
AND OTHER SPECIAL RIGHTS OF
12%
SERIES A-3 MANDATORILY CONVERTIBLE PREFERRED STOCK
AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
ION
Media Networks, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that, pursuant to the authority
conferred upon the board of directors of the Corporation (the
“Board
of Directors”)
by the Certificate of Incorporation of the Corporation, as amended (hereinafter
referred to as the “Certificate
of Incorporation”),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors, on May 3, 2007, duly approved
and adopted the following resolution:
RESOLVED,
that, pursuant to the authority vested in the Board of Directors by the
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of 12% Series A-3 Mandatorily
Convertible Preferred Stock, par value $.001 per share, with a liquidation
preference of $10,000 per share, consisting of 11,000 shares, having the
designations, preferences, relative, participating, optional and other special
rights and the qualifications, limitations and restrictions thereof that are
set forth in the Certificate of Incorporation and in this resolution as
follows:
(a) Designation. There
is hereby created out of the authorized and unissued shares of Preferred Stock
of the Corporation a series of Preferred Stock designated as the “12%
Series A-3 Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 11,000 and are referred to as the
“Series A-3 Convertible Preferred.” The liquidation preference of the
Series A-3 Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The
Series A-3 Convertible Preferred shall, with respect to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation,
rank (i) senior to the Junior Preferred Stock, to all classes of Common
Stock of the Corporation and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created,
the terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series A-3 Convertible Preferred as to dividends and
distributions upon liquidation, winding up or dissolution of the
Corporation
(collectively referred to, together with all classes of Common Stock of the
Corporation, as “Junior
Securities”);
(ii) on a parity with Pari Passu Preferred Stock and with any class of Capital
Stock of the Corporation or series of Preferred Stock of the Corporation
hereafter created the terms of which expressly provide that such class or
series will rank on a parity with the Series A-3 Convertible Preferred as to
dividends and distributions upon liquidation, winding up or dissolution of the
Corporation (collectively referred to as “Parity
Securities”),
provided that any such Parity Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Parity Securities; and (iii) junior to each other class of Capital
Stock of the Corporation or series of Preferred Stock of the Corporation
hereafter created the terms of which expressly provide that such class or
series will rank senior to the Series A-3 Convertible Preferred as to dividends
and distributions upon liquidation, winding up or dissolution of the
Corporation
(collectively referred to as “Senior
Securities”),
provided that any such Senior Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Senior Securities.
(c) Dividends.
(i) Beginning
on the Issue Date, the Holders shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available therefor,
dividends on each share of Series A-3 Convertible Preferred at the higher of
(x) a rate per annum equal to 12% of the Issue Price and (y) the aggregate cash
dividends per share paid on the Class A Common Stock from (A) the later of the
Issue Date or the date of the last payment of a cash dividend on the Class A
Common Stock to (B) the date of such determination, multiplied by the number of
shares of Class A Common Stock into which each share of Series A-3 Convertible
Preferred is convertible. All dividends shall accrue and be cumulative, whether
or not earned or declared, on a quarterly basis, in arrears, from the Issue
Date, but shall be payable only at such time or times as may be fixed by the
Board of Directors or as otherwise provided herein and shall not compound.
Dividends shall be payable to those Holders who are Holders on such dates as
the Board of Directors may determine with respect to such dividends. Dividends
shall cease to accrue and accumulate in respect of shares of the Series A-3
Convertible Preferred on the date of conversion of such shares or the date of
the redemption of such shares unless the Corporation shall have failed to pay
or make available for payment the relevant redemption price on the date fixed
for redemption.
(ii) All
dividends paid with respect to shares of the Series A-3 Convertible Preferred
pursuant to paragraph (c)(i) shall be paid in cash pro rata to the Holders
entitled thereto.
(d) Liquidation.
(i) In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, each Holder shall be entitled to be paid, out
of the assets of the Corporation available for distribution to its stockholders
and before any distribution shall be made or any assets distributed to the
holders of any of the Junior Securities, including, without limitation, the
Common Stock of the Corporation, an
amount
in cash equal to the greater of (A) the Liquidation Preference for each
outstanding share of Series A-3 Convertible Preferred, plus, without
duplication, an amount in cash equal to accumulated and unpaid dividends
thereon to the date fixed for such liquidation, dissolution or winding up, and
(B) the amount per share which would have been payable upon such liquidation,
dissolution or winding up to the holders of shares of Class A Common Stock or
such other class or series of stock into which the Series A-3 Convertible
Preferred is then convertible (assuming the conversion of each share of then
convertible Series A-3 Convertible Preferred and without deduction for the
Liquidation Preference otherwise payable pursuant to clause (A) hereof),
multiplied by the number of shares of Class A Common Stock into which such
shares of Series A-3 Convertible Preferred are then convertible. Except as
provided in the preceding sentence, Holders of Series A-3 Convertible Preferred
shall not be entitled to any distribution in the event of any liquidation,
dissolution or winding up of the affairs of the Corporation. If the assets of
the Corporation are not sufficient to pay in full the liquidation payments
payable to the Holders and to any holders of all other Parity Securities, then
such assets shall be distributed among the Holders and any holders of such
other Parity Securities ratably in accordance with the respective amounts that
would be payable on such shares of Series A-3 Convertible Preferred and any
such shares of other Parity Securities if all amounts payable thereon were paid
in full.
(ii) For the
purposes of this paragraph (d), neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more entities
shall be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation.
(e) Redemption.
(i) Mandatory
Redemption. The
Corporation shall redeem, in the manner provided for in paragraph (e)(ii)
hereof, and out of funds legally available therefor all of the outstanding
shares of Series A-3 Convertible Preferred for cash on August 31, 2013 (the
“Redemption
Date”),
at a price per share equal to the Redemption Price.
(ii) Procedures
for Redemption.
(A) At
least 90 days prior to the Redemption Date, written notice (the
“Redemption
Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series A-3 Convertible Preferred
as to the Holder or Holders to whom the Corporation has failed to give said
notice or to whom such notice was defective. The Redemption Notice shall
state:
(1) the
Redemption Price;
(2) that the
Holder is to surrender to the Corporation, in the manner, at the place or
places and at the price designated, its certificate or certificates
representing the shares of Series A-3 Convertible Preferred; and
(3) that
dividends on the shares of the Series A-3 Convertible Preferred shall cease to
accumulate on such Redemption Date unless the Corporation defaults in the
payment of the Redemption Price.
(B) Each
Holder shall surrender the certificate or certificates representing all shares
of Series A-3 Convertible Preferred held by such Holder to the Corporation,
duly endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place or places designated in the
Redemption Notice, and on the Redemption Date the full Redemption Price for
such shares shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(C) On and
after the Redemption Date, unless the Corporation defaults in the payment in
full of the Redemption Price, dividends on the Series A-3 Convertible Preferred
shall cease to accumulate on the Redemption Date, and all rights of the Holders
shall terminate with respect to the Series A-3 Convertible Preferred on the
Redemption Date, other than the right to receive the Redemption Price, without
interest; provided,
however, that
if the Redemption Notice shall have been given and the funds necessary for
redemption (including an amount in respect of all dividends that will accrue to
the Redemption Date) shall have been segregated and irrevocably deposited in
trust for the equal and ratable benefit of the Holders, then, at the close of
business on the day on which such funds are segregated and set aside, the
Holders shall cease to be stockholders of the Corporation and shall be entitled
only to receive the Redemption Price.
(f) Voting
Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long
as any shares of the Series A-3 Convertible Preferred are outstanding, the
Corporation may not issue any additional shares of Series A-3 Convertible
Preferred or any new class of Parity Securities or Senior Securities (or amend
the provisions of any existing class of Capital Stock to make such class of
Capital Stock Parity Securities or Senior Securities) without the approval of
Holders holding at least a majority of the then outstanding shares of Series
A-3 Convertible Preferred, voting or consenting, as the case may be, together
as one class given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided,
however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
A-3
Convertible
Preferred or prohibit the redemption by the Corporation of the Series A-3
Convertible
Preferred pursuant to paragraph (e)(i) above, in an amount sufficient to
Refinance any series of Senior Securities, in whole or in part, with such
shares being issued no sooner than the date the Corporation Refinances such
series of Senior Securities.
(B) So long
as any shares of the Series A-3 Convertible Preferred are outstanding, the
Corporation shall not amend this Certificate of Designation so as to affect
materially and adversely the rights, preferences or privileges of Holders
without the affirmative vote or consent of Holders holding at least a majority
of the then outstanding shares of Series A-3 Convertible Preferred, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting.
(C) Except
as set forth in paragraph (f)(i)(A) above, the creation, authorization or
issuance of any shares of any Junior Securities, Parity Securities or Senior
Securities or the increase or decrease in the amount of authorized Capital
Stock of any class, including Preferred Stock, shall not require the consent of
Holders and shall not be deemed to affect adversely the rights, preferences or
privileges of such Holders.
(ii) Without
the affirmative vote or consent of Holders holding at least a majority of the
then outstanding shares of Series A-3 Convertible Preferred, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Corporation’s assets (as an entirety or substantially as an entirety in
one transaction or series of related transactions) to, another Person (other
than a Wholly-Owned Subsidiary with, into or to another Wholly-Owned
Subsidiary) or adopt a plan of liquidation unless (A) either (I) the
Corporation is the surviving or continuing Person or (II) the Person (if other
than the Corporation) formed by such consolidation or into which the
Corporation is merged or the Person that acquires by conveyance, transfer or
lease the properties and assets of the Corporation substantially as an entirety
or, in the case of a plan of liquidation, the Person to which assets of the
Corporation have been transferred shall be organized and existing under the
laws of the United States or any State thereof or the District of Columbia; (B)
the Series A-3 Convertible Preferred shall be converted into or exchanged for
and shall become shares of such successor, transferee or resulting Person with
the same powers, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereon,
that the Series A-3 Convertible Preferred had immediately prior to such
transaction; (C) immediately after giving effect to such transactions, no
Voting Rights Triggering Event shall have occurred or shall have occurred after
the Issue Date and be continuing; and (D) the Corporation has delivered to the
transfer agent for the Series A-3 Convertible Preferred prior to the
consummation of the proposed transaction an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
complies with the terms hereof and that all conditions precedent herein
relating to such transaction have been satisfied. For purposes of the
foregoing, 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 of
the Corporation, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.
(iii) (A) If the
Corporation fails to discharge any redemption or conversion obligation with
respect to the Series A-3 Convertible Preferred (such failure being a
“Voting
Rights Triggering Event”),
then, subject to paragraph (f)(iii)(E) below, Holders of at least a majority of
the then outstanding shares of Series A-3 Convertible Preferred, voting
separately and as one class, shall have the exclusive right to elect the lesser
of two directors and that number of directors constituting 25% of the members
of the Board of Directors, at a meeting called for such purpose following the
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the Holders
expire (other than as described in (f)(iii)(B) below), and the number of
directors constituting the Board of Directors shall be increased by the number
of directors so elected by the Holders. The voting rights provided herein shall
be the exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(B) The
right of the Holders voting together as a separate class to elect members of
the Board of Directors as set forth in paragraph (f)(iii)(A) above shall
continue until such time as in all other cases, the failure, breach or default
giving rise to such Voting Rights Triggering Event is remedied, cured or waived
by Holders of at least a majority of the then outstanding shares of Series A-3
Convertible Preferred that are entitled to vote thereon, at which time (I) the
special right of the Holders so to vote as a class for the election of
directors and (II) the term of office of the directors elected by the Holders
shall each terminate and such persons shall cease to be members of the Board of
Directors. At any time after voting power to elect directors shall have become
vested and be continuing in the Holders pursuant to paragraph (f)(iii) hereof,
or if vacancies shall exist in the offices of directors elected by such
Holders, a proper officer of the Corporation may, and upon the written request
of Holders of at least 25% of the then outstanding shares of Series A-3
Convertible Preferred addressed to the secretary of the Corporation shall, call
a special meeting of the Holders, for the purpose of electing the directors
which the Holders are entitled to elect. If such meeting shall not be called by
a proper officer of the Corporation within 20 days after personal service of
said written request upon the secretary of the Corporation, or within 20 days
after mailing the same within the United States by certified mail, addressed to
the secretary of the Corporation at its principal executive offices, then
Holders of at least 25% of the then outstanding shares of Series A-3
Convertible Preferred may designate in writing one of their number to call such
meeting at the reasonable expense of the Corporation, and such meeting may be
called by the Holder so designated upon the notice required for the annual
meetings of stockholders of the Corporation and shall be held at the place for
holding the annual meetings of stockholders. Any Holder of Series A-3
Convertible Preferred so designated shall have, and the Corporation shall
provide, access to the lists of stockholders to be called pursuant to the
provisions hereof.
(C) At any
meeting held for the purpose of electing directors at which the Holders shall
have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of Holders of at least a majority
of the then outstanding shares of Series A-3 Convertible Preferred shall be
required to constitute a quorum of such Series A-3 Convertible
Preferred.
(D) Any
vacancy occurring in the office of a director elected by the Holders may be
filled by the remaining director (if any) elected by the Holders unless and
until such vacancy shall be filled by the Holders.
(E) The
provisions of this paragraph (f)(iii) shall apply only to those Holders, if
any, that would be permitted to vote in the election of directors of the
Corporation pursuant to applicable laws and regulations of the FCC, with such
Holders together being treated as the class of Holders entitled to exercise
such rights. The determination as to whether any Holder would not be permitted
to exercise such voting rights shall be made jointly by any such Holder(s) and
the Corporation.
(iv) In any
case in which the Holders shall be entitled to vote pursuant to this paragraph
(f) or pursuant to the General Corporation Law of the State of Delaware, each
Holder entitled to vote with respect to such matter shall be entitled to one
vote for each then outstanding share of Series A-3 Convertible Preferred so
held.
(g) Conversion.
(i) Optional
Conversion. Each
share of the Series A-3 Convertible Preferred is convertible at the option of
the Holder thereof, at any time and from time to time, into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series A-3
Convertible Preferred surrendered for conversion plus accrued and unpaid
dividends thereon, divided by (B) the Conversion Price then in effect, except
that if shares of Series A-3 Convertible Preferred are called for redemption
the conversion right will terminate at the close of business on the Redemption
Date. No fractional shares or securities representing fractional shares will be
issued upon conversion; in lieu of fractional shares the Corporation will pay a
cash adjustment based upon the Common Stock Value as of the close of business
on the first Business Day preceding the date of conversion. The Series A-3
Convertible Preferred shall be converted by the holder thereof by surrendering
the certificate or certificates representing the shares of Series A-3
Convertible Preferred to be converted, appropriately completed, to the transfer
agent for the Common Stock. The transfer agent shall issue one or more
certificates representing the Conversion Shares in the name or names requested
by such Holder. The transfer agent will deliver to such Holder a new
certificate representing the shares of Series A-3 Convertible Preferred in
excess of those being surrendered for conversion. The conversion rights stated
herein are subject to compliance by the Holder with all applicable laws and
regulations, including, without limitation, the Communications Act, and as a
condition precedent to the Corporation’s obligation to issue Conversion
Shares to a Holder or its designee(s), the Corporation may require that such
Holder deliver to the Corporation an opinion of legal counsel reasonably
acceptable to the Corporation to the
effect
that the issuance of Conversion Shares to such Holder or its designee(s) upon
conversion will not violate or conflict with the Communications
Act.
(ii) Mandatory
Conversion. At any
time following the first anniversary of the Issue Date, upon the occurrence of
a Mandatory Conversion Event, including a Mandatory Conversion Event that
occurs after the Redemption Date to the extent any share of Series A-3
Convertible Preferred remains outstanding after the Redemption Date, unless
previously converted at the option of Holders in accordance with the provisions
hereof, each outstanding share of Series A-3 Convertible Preferred shall,
without notice to Holders, convert automatically (the “Mandatory
Conversion”)
into (A) a number of Conversion Shares equal to the Issue Price of the shares
of Series A-3 Convertible Preferred so converted plus accrued and unpaid
dividends thereon, divided by the (B) Conversion Price then in effect. No
fractional shares or securities representing fractional shares will be issued
upon conversion; in lieu of fractional shares the Corporation will pay a cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of the occurrence of such Mandatory
Conversion Event. Promptly following a Mandatory Conversion Event, written
notice (the “Mandatory
Conversion Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice or any deficiency therein shall affect the validity of the
procedures for the Mandatory Conversion as to the Holder or Holders to whom the
Corporation has failed to give said notice or to whom such notice was effected.
Each Holder shall surrender the certificate or certificates representing all
shares of Series A-3 Convertible Preferred held by such Holder to the
Corporation, duly endorsed (or otherwise in proper form for transfer, as
determined by the Corporation) and the Corporation shall issue to such Holder
that number of shares of Class A Common Stock to which such Holder is entitled,
as calculated in accordance with this paragraph; provided,
however, that
if a Holder shall notify the Corporation within five (5) Business Days of
receipt of the Mandatory Conversion Notice that it wishes to receive Class C
Common Stock in accordance with this paragraph, the Corporation shall issue
such Holder an equal number of shares of Class C Common Stock to which such
Holder is entitled as calculated in accordance with this
paragraph.
(iii) (A) In
case the Corporation shall (I) pay a dividend or distribution in shares of
Class A Common Stock on its shares of Class A Common Stock, (II) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares,
(III) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or (IV) issue, by reclassification of its shares of Class A
Common Stock, any shares of its Capital Stock (each such transaction being
called a “Stock
Transaction”),
then and in each such case, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of a share of Series A-3
Convertible Preferred surrendered for conversion after the record date fixing
stockholders to be affected by such Stock Transaction shall be entitled to
receive upon conversion the number of Conversion Shares which such Holder would
have been entitled to receive after the happening of such event had such share
of Series A-3 Convertible Preferred been converted immediately prior to such
record date. Such adjustment shall be made
whenever
any Stock Transaction occurs, but shall also be effective retroactively as to
shares of Series A-3 Convertible Preferred converted between such record date
and the date of the happening of any such Stock Transaction.
(B) If the
Corporation shall, at any time or from time to time while any shares of Series
A-3 Convertible Preferred are outstanding, issue or sell any right or warrant
to purchase, acquire or subscribe for shares of Class A Common Stock (including
a right or warrant with respect to any security convertible into or
exchangeable for shares of Class A Common Stock) generally to holders of its
Common Stock (including by way of a reclassification of shares or a
recapitalization of the Corporation), for a consideration on the date of such
issuance or sale less than the Common Stock Value of the shares of Class A
Common Stock underlying such rights or warrants on the date of such issuance or
sale, then and in each such case, the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction, the numerator of which shall
be the sum of (I) the Common Stock Value per share of Class A Common Stock on
the first Business Day after the date of the public announcement of the actual
terms (including the price terms) of such issuance or sale multiplied by the
number of shares of Class A Common Stock outstanding immediately prior to such
issuance or sale plus (II) the aggregate Fair Market Value of the consideration
to be received by the Corporation in connection with the issuance or sale of
the rights or warrants plus the aggregate consideration to be received in
respect of the purchase of the shares of Class A Common Stock underlying such
rights or warrants, and the denominator of which shall be the Common Stock
Value per share of Class A Common Stock on the Business Day immediately
preceding the public announcement of the actual terms (including the price
terms) of such issuance or sale multiplied by the aggregate number of shares of
Class A Common Stock (I) outstanding immediately prior to such issuance or sale
plus (II) underlying such rights or warrants at the time of such issuance or
sale. For the purposes of the preceding sentence, the aggregate consideration
receivable by the Corporation in connection with the issuance or sale of any
such right or warrant shall be deemed to be equal to the sum of the aggregate
offering price (before deduction of reasonable underwriting discounts or
commissions and expenses) of all such rights or warrants. No adjustment to the
Conversion Price pursuant to this paragraph (B) shall be made if, in
conjunction with any such issuance or sale by the Corporation generally to
holders of its Common Stock, the Corporation issues or offers to sell to the
Holders such rights or warrants on the same basis as the Holders would have
received had their shares of Series A-3 Convertible Preferred been converted
into shares of Class A Common Stock (or Class C Common Stock, as the case may
be) immediately prior to the such issuance or sale. Upon the expiration or
termination of any such rights or warrants without the exercise of such rights
or warrants, the Conversion Price then in effect shall be adjusted immediately
to the Conversion Price which would have been in effect at the time of such
expiration or termination had such rights or warrants, to the extent
outstanding immediately prior to such expiration or termination, never been
issued, although such adjustment shall not effect previously converted
shares.
(C) In the
event the Corporation shall at any time or from time to time while any shares
of Series A-3 Convertible Preferred are outstanding declare, order, pay or make
a dividend or other distribution generally to holders of its Common Stock in
stock or other securities or rights or warrants to subscribe for securities of
the
Corporation
or any of its subsidiaries or evidences of Indebtedness of the Corporation or
any other person or pay any Extraordinary Cash Dividend (other than any
dividend or distribution on the Class A Common Stock (I) referred to in
paragraphs (A) or (B) above or (II) if in conjunction therewith the Corporation
declares and pays or makes a dividend or distribution on each share of Series
A-3 Convertible Preferred which is the same as the dividend or distribution
that would have been made or paid with respect to such share of Series A-3
Convertible Preferred had such share been converted into shares of Class A
Common Stock immediately prior to the record date for any such dividend or
distribution on the Class A Common Stock), then, and in each such case, an
appropriate adjustment to the Conversion Price shall be made so that the Holder
of each share of Series A-3 Convertible Preferred shall be entitled to receive,
upon the conversion thereof, the number of shares of Class A Common Stock
determined by multiplying (x) the number of shares of Class A Common Stock into
which such share was convertible on the day immediately prior to the record
date fixed for the determination of stockholders entitled to receive such
dividend or distribution by (y) a fraction, the numerator of which shall be the
Common Stock Value per share of Class A Common Stock as of such record date,
and the denominator of which shall be such Common Stock Value per share of
Class A Common Stock less the Fair Market Value per share of Class A Common
Stock of such dividend or distribution (as determined in good faith by the
Board of Directors, as evidenced by a Board Resolution mailed to each holder of
Series A-3 Convertible Preferred). An adjustment made pursuant to this
paragraph (C) shall be made upon the opening of business on the next Business
Day following the date on which any such dividend or distribution is made and
shall be effective retroactively to the close of business on the record date
fixed for the determination of stockholders entitled to receive such dividend
or distribution.
(D) In the
event the Company shall, at any time or from time to time while any shares of
Series A-3 Convertible Preferred are outstanding, repurchase (a
“Repurchase”)
any portion of the Class A Common Stock from holders generally at a premium
over the Common Stock Value thereof on the next trading day immediately
preceding the consummation of such Repurchase, then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding immediately before such Repurchase multiplied by (y) the Common
Stock Value per share of Class A Common Stock on the next trading day
immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class A Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class A Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class A Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series A-3 Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
(iv) No
adjustment in the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% or more of the Conversion Price, but
any such adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(v) In the
event of any capital reorganization (other than a capital reorganization
covered by paragraph (ii)(C) above) or reclassification of outstanding shares
of Common Stock of the Corporation (other than a reclassification covered by
paragraph (ii)(A) above), or in case of any merger, consolidation or other
corporate combination of the Corporation with or into another corporation, or
in case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Transaction”),
each share of Series A-3 Convertible Preferred shall continue to remain
outstanding if the Corporation is the Surviving Person (as defined below) of
such Transaction, and shall be subject to all the provisions hereof, as in
effect prior to such Transaction, or if the Corporation is not the Surviving
Person, each share of Series A-3 Convertible Preferred shall be exchanged in
such Transaction for a new series of convertible preferred stock of the
Surviving Person, or in the case of a Surviving Person other than a
corporation, comparable securities of such Surviving Person, in either case
having economic terms as nearly equivalent as possible to, and with the same
voting and other rights as, the Series A-3 Convertible Preferred, including
entitling the holder thereof to receive, upon presentation of the certificate
therefor to the Surviving Person subsequent to the consummation of such
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Transaction
by a holder of that number of shares of Class A Common Stock into which one
share of Series A-3 Convertible Preferred was convertible immediately prior to
such Transaction. In case securities or property other than Common Stock shall
be issuable or deliverable upon conversion as aforesaid, then all references in
this paragraph (v) shall be deemed to apply, so far as appropriate and as
nearly as may be, to such other securities or property. If the holders of Class
A Common Stock have the opportunity to elect the form of consideration to be
received by them in such Transaction, then from and after the effective date of
such Transaction, the Series A-3 Convertible Preferred shall be convertible
into the consideration that a majority of the holders of the Class A Common
Stock who made such election received in such Transaction.
Notwithstanding
anything contained herein to the contrary, the Corporation will not effect any
Transaction unless, prior to the consummation thereof, proper provision is made
to ensure that the holders of shares of Series A-3 Convertible Preferred will
be entitled to receive the benefits afforded by this paragraph
(v).
For
purposes of this paragraph (v), “Surviving
Person”
shall mean the continuing or surviving Person of a merger, consolidation or
other corporate combination, the Person receiving a transfer of all or
substantially all of the properties and assets of the Corporation, or the
Person consolidating with or merging into the Corporation in a merger,
consolidation or other corporate combination in which the Corporation is the
continuing or surviving Person, but in connection with which the Series A-3
Convertible
Preferred
or Common Stock of the Corporation is exchanged, converted or reclassified into
the securities of any other Person or cash or any other property.
(vi) The
conversion price shall initially equal $0.75 per share, and shall increase from
and after the Issue Date at a rate equal to the dividend rate on the Series A-3
Convertible Preferred as set forth in paragraph (c)(i) (the “Conversion
Price”).
The Conversion Price shall be subject to adjustment as provided in this
paragraph (g).
(vii) From and
after an Initial Public Offering, the Corporation shall cause the shares of
Class A Common Stock issuable upon conversion of the Series A-3 Convertible
Preferred (or in the case of a Holder’s election to convert into Class C
Common Stock, upon conversion of such Class C Common Stock) to be approved for
listing on the principal securities exchange on which the Class A Common Stock
may at the time be listed for trading, subject to official notification of
issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class A Common Stock issuable upon
conversion of the Series A-3 Convertible Preferred on the principal securities
exchange on which the Class A Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding
anything to the contrary contained in this paragraph (g), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional shares of Series A-3 Convertible Preferred or any other securities
that are or may be or become issued or issuable in connection with the
transactions contemplated by the Master Transaction Agreement.
(h) Reissuance
of Series A-3 Convertible Preferred. Shares
of Series A-3 Convertible Preferred that have been issued and reacquired in any
manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the General Corporation Law of the
State of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided that
any issuance of such shares as Series A-3 Convertible Preferred must be in
compliance with the terms hereof.
(i) Business
Day. If any
payment or redemption shall be required by the terms hereof to be made on a day
that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board
of Directors”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Board
Resolution”
means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors and to be in
full force and effect.
“Business
Day”
means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other
governmental action to be closed.
“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, including each class of common stock and preferred stock of such Person
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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 capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
“Certificate
of Incorporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Class
A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Corporation.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Common
Stock Value”
on any date means, with respect to the Class A Common Stock or the Class D
Common Stock, the last sale price for the Class A Common Stock or the Class D
Common Stock, regular way, or, in case no such sale takes place on such date,
the average of the closing bid and asked prices, regular way, for the Class A
Common Stock or the Class D Common Stock, in either case as reported in the
principal consolidated transaction reporting system with respect to the
principal national securities exchange on which the Class A Common Stock or the
Class D Common Stock is listed or admitted to trading or, if neither the Class
A Common Stock nor the Class D Common Stock is listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use or, if neither the Class A Common Stock nor the Class D Common Stock
is quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock or the Class D Common Stock selected by the Board of Directors
or, in the event that no trading price is available for the Class A Common
Stock or the Class D Common Stock, the fair market value of the Class A Common
Stock, as determined in good faith by the Board of Directors.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984 and the Cable
Television Consumer Protection and Competition Act of 1992) and all rules and
regulations of the FCC, in each case as from time to time in
effect.
“Consolidated
EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
broadcast program licenses for such period on a consolidated basis, minus (b)
scheduled payments relating to broadcast program license liabilities, except
that with respect to the Corporation each of the foregoing items shall be
determined on a consolidated basis with respect to the Corporation and its
Subsidiaries only; provided,
however, that,
for purposes of calculating Consolidated EBITDA during
any
fiscal quarter, cash income from a particular Investment of such Person shall
be included only if cash income has been received by such Person as a result of
the operation of the business in which such Investment has been made in the
ordinary course without giving effect to any extraordinary, unusual and
non-recurring gains.
“Consolidated
Interest Expense”
means, with respect to any Person, for any period, the aggregate amount of
interest which, in conformity with GAAP, would be set forth opposite the
caption “interest expense” or any like caption on an income statement
for such Person and its Subsidiaries on a consolidated basis, including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing, the net costs associated with
hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense (other than
interest amortized to cost of sales) plus, without duplication, all net
capitalized interest for such period and all interest incurred or paid under
any guarantee of indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, and all time brokerage fees relating to
financing of television stations which the Corporation has an agreement or
option to acquire.
“Consolidated
Net Income”
means, with respect to any Person, for any period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
“Conversion
Price”
has the meaning ascribed to it in paragraph (g)(vi) hereof.
“Conversion
Shares”
means (i) the number of shares of Class A Common Stock or (ii) with respect to
any Holder, if such Holder determines, after consultation with its outside
legal counsel, that such Holder is prevented under the Communications Act from
holding shares of Class A Common Stock issuable upon conversion of such
Holder’s shares of Series A-3 Convertible Preferred, an equal number of
shares of Class C Common Stock of the Corporation (such Class C Common Stock
shall, (1) upon disposition by such Holder to any other Person that such Holder
determines is not prevented under the Communications Act from holding shares of
Class A Common Stock or (2) upon the determination by such Holder that the
Communications Act no longer prohibits such Holder from holding shares of Class
A Common Stock, in either case, after consultation by such Person with outside
legal counsel and, if required by the Corporation, delivery by such Person to
the Corporation an Opinion of Counsel reasonably acceptable to the Corporation
to the effect that the Conversion of such Class C Common Stock to Class A
Common Stock will not violate or conflict with the Communications Act,
automatically be converted into an equal number of shares of Class A Common
Stock), into which the Series A-3 Convertible Preferred is from time to time
convertible.
“Corporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Designated
Investment Bank”
means an investment bank selected by the Purchasing Party from a list of three
internationally recognized investment banks provided to the Purchasing Party by
the Company pursuant to Section 2.07 of the Master Transaction
Agreement.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Consolidated EBITDA of the
Corporation and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s-length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors or a committee thereof.
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the Issue Date.
“GAAP”
means generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series A-3 Convertible Preferred
as reflected in the stock books of the Corporation.
“Initial
Public Offering”
means the initial underwritten sale of equity securities of the Corporation
occurring after the Issue Date pursuant to an effective registration statement
under the Securities Act.
“Issue
Date”
means the date of the issuance of Series A-3 Convertible
Preferred.
“Issue
Price”
means $10,000 per share of Series A-3 Convertible Preferred.
“Junior
Preferred Stock”
means, collectively, (i) 14¼% Preferred, (ii) 9¾% Preferred,
(iii) Series B Convertible Preferred, (iv) Series C Preferred Stock, (v) Series
C Convertible Preferred, (vi) Series D Convertible Preferred, (vii) Series E-1
Convertible Preferred, (viii) Series E-2 Convertible Preferred, and (ix) Series
F Non-Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Junior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Liquidation
Preference”
has the meaning ascribed to it in paragraph (a) hereof.
“Mandatory
Conversion”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Event”
means the earlier to occur of: (i) the date on which the last sale price for
the Class A Common Stock or Class D Common Stock, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for the Class A Common Stock or Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or Class D Common Stock is listed or admitted to trading,
or, if neither Class A Common Stock nor Class D Common Stock is listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and
other
expenses of sale) of not less than $75,000,000, provided that if such issuance
is made to a Purchasing Party, the Designated Investment Bank shall have
provided an opinion in customary form to the Company to the effect that the
issue price per share of Common Stock is at or higher than the fair market
value of a share of Common Stock.
“Mandatory
Conversion Notice”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Trigger Price”
means (A) in the event the Mandatory Conversion Event occurs on or after the
first anniversary but prior to the second anniversary of the Issue Date, 102%
of the Conversion Price, (B) in the event the Mandatory Conversion Event occurs
on or after the second anniversary but prior to the third anniversary of the
Issue Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master
Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, or otherwise relating to, any
Indebtedness.
“Officers’
Certificate”
means a certificate signed by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the Corporation which
certificate shall include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. In addition, such certificate shall
include (i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion
of Counsel”
means an opinion of counsel that, in such counsel’s opinion, all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. Such opinion shall also include the
statements called for in the second sentence under “Officers’
Certificate”.
“Pari
Passu Preferred Stock”
means collectively, (i) Series A-1 Convertible Preferred and (ii) Series A-2
Preferred Stock, in each case as defined in the Master Transaction Agreement.
“Parity
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing
Party”
means CIG Media LLC, NBC Universal, Inc. and their respective Affiliates.
“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
redemption or upon liquidation.
“Redemption
Date”
has the meaning ascribed to it in paragraph (e)(i) hereof.
“Redemption
Notice”
has the meaning ascribed to it in paragraph (e)(ii) hereof.
“Redemption
Price”
means the Issue Price plus (as applicable) all accrued and unpaid dividends
through and including the date of redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Series
A-3 Convertible Preferred”
has the meaning ascribed to it in paragraph (a) hereof.
“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, 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, owned by such Person.
“Stock
Transaction”
has the meaning ascribed to it in paragraph (g)(iii) hereof.
“Surviving
Person”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Transaction”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Voting
Rights Triggering Event”
has the meaning ascribed to it in paragraph (f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary”
means any Subsidiary all of the outstanding voting securities (other than
directors’ qualifying shares) of which are owned, directly or indirectly,
by the Corporation.
IN
WITNESS WHEREOF, said ION Media Networks, Inc. has caused this Certificate to
be signed by its duly authorized officer this 4th day of May,
2007.
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ION
MEDIA NETWORKS, INC. |
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By: |
/s/
Xxxxxxx Xxxxxx |
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Name: Xxxxxxx
Xxxxxx
Title: Chief Financial Officer |
Certificate
of Designation
EXHIBIT
I to the Master Transaction Agreement
Series
B Convertible Preferred Certificate of Designation
Exhibit I
to the Master Transaction
Agreement
Series B Convertible Preferred
Certificate of Designation
CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
12% SERIES B MANDATORILY CONVERTIBLE
PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 12%
Series B Mandatorily Convertible Preferred Stock, par value $.001 per share,
with a liquidation preference of $10,000 per share, consisting of 3,000 shares,
having the designations, preferences, relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
resolution as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the
“12% Series B Mandatorily Convertible Preferred Stock.” The number of
shares constituting such series shall be 3,000 and are referred to as the
“Series B Convertible Preferred.” The liquidation preference of the
Series B Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
B Convertible Preferred shall, with respect to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation, rank (i) senior
to the Junior Preferred Stock, to all classes of Common Stock of the
Corporation and to each other class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series B Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior Securities”); (ii) on a parity with Pari Passu Preferred
Stock and
1
with any class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created
the terms of which expressly provide that such class or series will rank on a
parity with the Series B Convertible Preferred as to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation
(collectively referred to as “Parity Securities”), provided that any such Parity Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Parity Securities; and (iii) junior to
the Senior Preferred Stock and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created
the terms of which expressly provide that such class or series will rank senior
to the Series B Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to as “Senior
Securities”), provided that any
such Senior Securities not issued in accordance with the requirements of
paragraph (f)(i) hereof shall be deemed to be Junior Securities and not Senior
Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series B Convertible Preferred at the higher of (x) a rate per annum equal to
12% of the Issue Price and (y) the aggregate cash dividends per share paid on
the Class D Common Stock from (A) the later of the Issue Date or the date of
the last payment of a cash dividend on the Class D Common Stock to (B) the date
of such determination, multiplied by the number of shares of Class D Common
Stock into which each share of Series B Convertible Preferred is convertible.
All dividends shall accrue and be cumulative, whether or not earned or
declared, on a quarterly basis, in arrears, from the Issue Date, but shall be
payable only at such time or times as may be fixed by the Board of Directors or
as otherwise provided herein and shall not compound. Dividends shall be payable
to those Holders who are Holders on such dates as the Board of Directors may
determine with respect to such dividends. Dividends shall cease to accrue and
accumulate in respect of shares of the Series B Convertible Preferred on the
date of conversion of such shares or the date of the redemption of such shares
unless the Corporation shall have failed to pay or make available for payment
the relevant redemption price on the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series B Convertible Preferred pursuant to paragraph (c)(i) shall
be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the Junior Securities, including, without limitation, the Common Stock of the
Corporation, an amount in cash equal to the greater of (A) the Liquidation
Preference for each
2
outstanding share of Series B Convertible
Preferred, plus, without duplication, an amount in cash equal to accumulated
and unpaid dividends thereon to the date fixed for such liquidation,
dissolution or winding up, and (B) the amount per share which would have been
payable upon such liquidation, dissolution or winding up to the holders of
shares of Class A Common Stock or such other class or series of stock into
which the Series B Convertible Preferred is then convertible (assuming the
conversion of each share of then convertible Series B Convertible Preferred and
without deduction for the Liquidation Preference otherwise payable pursuant to
clause (A) hereof), multiplied by the number of shares of Class A Common Stock
into which such shares of Series B Convertible Preferred are then convertible.
Except as provided in the preceding sentence, Holders of Series B Convertible
Preferred shall not be entitled to any distribution in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation. If
the assets of the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders and to any holders of all other Parity
Securities, then such assets shall be distributed among the Holders and any
holders of such other Parity Securities ratably in accordance with the
respective amounts that would be payable on such shares of Series B Convertible
Preferred and any such shares of other Parity Securities if all amounts payable
thereon were paid in full.
(ii) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series B Convertible Preferred for cash on
August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series B Convertible Preferred as to the Holder or
Holders to whom the Corporation has failed to give said notice or to whom such
notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series B Convertible
Preferred; and
3
(3) that dividends on the shares of the
Series B Convertible Preferred shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the Redemption
Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series B Convertible
Preferred held by such Holder to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place or places designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such shares shall be payable in
cash to the Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be canceled and
retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series B Convertible Preferred shall cease to accumulate on
the Redemption Date, and all rights of the Holders shall terminate with respect
to the Series B Convertible Preferred on the Redemption Date, other than the
right to receive the Redemption Price, without interest; provided,
however, that if the Redemption Notice shall have been given
and the funds necessary for redemption (including an amount in respect of all
dividends that will accrue to the Redemption Date) shall have been segregated
and irrevocably deposited in trust for the equal and ratable benefit of the
Holders, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
B Convertible Preferred are outstanding, the Corporation may not issue any
additional shares of Series B Convertible Preferred or any new class of Parity
Securities or Senior Securities (or amend the provisions of any existing class
of Capital Stock to make such class of Capital Stock Parity Securities or
Senior Securities) without the approval of Holders holding at least a majority
of the then outstanding shares of Series B Convertible Preferred, voting or
consenting, as the case may be, together as one class given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting; provided, however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
B Convertible Preferred or prohibit the redemption by the Corporation of the
Series B Convertible Preferred pursuant to paragraph (e)(i) above, in an amount
sufficient to Refinance any series of Senior Securities, in whole or in part,
with such shares being
4
issued no sooner than the date the
Corporation Refinances such series of Senior Securities.
(B) So long as any shares of the Series B
Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series B
Convertible Preferred, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted at an
annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of any class, including
Preferred Stock, shall not require the consent of Holders and shall not be
deemed to affect adversely the rights, preferences or privileges of such
Holders.
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
B Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be organized and existing
under the laws of the United States or any State thereof or the District of
Columbia; (B) the Series B Convertible Preferred shall be converted into or
exchanged for and shall become shares of such successor, transferee or
resulting Person with the same powers, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereon, that the Series B Convertible Preferred had immediately
prior to such transaction; (C) immediately after giving effect to such
transactions, no Voting Rights Triggering Event shall have occurred or shall
have occurred after the Issue Date and be continuing; and (D) the Corporation
has delivered to the transfer agent for the Series B Convertible Preferred
prior to the consummation of the proposed transaction an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with the terms hereof and that all conditions
precedent herein relating to such transaction have been satisfied. For purposes
of the foregoing, 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 of the
Corporation, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the
5
Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.
(iii) (A) If the Corporation fails to
discharge any redemption or conversion obligation with respect to the Series B
Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series B
Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein shall be the exclusive remedy at law
or in equity of the Holders for any Voting Rights Triggering Event.
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series B Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series B Convertible Preferred addressed to the
secretary of the Corporation shall, call a special meeting of the Holders, for
the purpose of electing the directors which the Holders are entitled to elect.
If such meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of said written request upon the
secretary of the Corporation, or within 20 days after mailing the same within
the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series B Convertible Preferred may designate in
writing one of their number to call such meeting at the reasonable expense of
the Corporation, and such meeting may be called by the Holder so designated
upon the notice required for the annual meetings of stockholders of the
Corporation and shall be held at the place for holding the annual meetings of
stockholders. Any Holder of Series B Convertible Preferred so designated shall
have, and the Corporation shall provide, access to the lists of stockholders to
be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then
6
outstanding shares of Series B Convertible
Preferred shall be required to constitute a quorum of such Series B Convertible
Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware, each Holder entitled to vote with
respect to such matter shall be entitled to one vote for each then outstanding
share of Series B Convertible Preferred so held.
(g) Conversion.
(i) Optional Conversion. Each share of the Series B Convertible Preferred is
convertible at the option of the Holder thereof, at any time and from time to
time, into (A) a number of shares of Class D Common Stock equal to the Issue
Price of the shares of Series B Convertible Preferred surrendered for
conversion plus accrued and unpaid dividends thereon, divided by (B) the
Conversion Price then in effect, except that if shares of Series B Convertible
Preferred are called for redemption the conversion right will terminate at the
close of business on the Redemption Date. No fractional shares or securities
representing fractional shares will be issued upon conversion; in lieu of
fractional shares the Corporation will pay a cash adjustment based upon the
Common Stock Value as of the close of business on the first Business Day
preceding the date of conversion. The Series B Convertible Preferred shall be
converted by the holder thereof by surrendering the certificate or certificates
representing the shares of Series B Convertible Preferred to be converted,
appropriately completed, to the transfer agent for the Common Stock. The
transfer agent shall issue one or more certificates representing the Class D
Common Stock in the name or names requested by such Holder. The transfer agent
will deliver to such Holder a new certificate representing the shares of Series
B Convertible Preferred in excess of those being surrendered for conversion.
The conversion rights stated herein are subject to compliance by the Holder
with all applicable laws and regulations.
(ii) Mandatory Conversion. At any time following the first anniversary of the
Issue Date, upon the occurrence of a Mandatory Conversion Event, including a
Mandatory Conversion Event that occurs after the Redemption Date to the extent
any share of Series B Convertible Preferred remains outstanding after the
Redemption Date, unless previously converted at the option of Holders in
accordance with the provisions hereof, each outstanding share of Series B
Convertible Preferred
7
shall, without notice to Holders, convert
automatically (the “Mandatory
Conversion”) into (A) a number of
shares of Class D Common Stock equal to the Issue Price of the shares of Series
B Convertible Preferred so converted plus accrued and unpaid dividends thereon,
divided by the (B) Conversion Price then in effect. No fractional shares or
securities representing fractional shares will be issued upon conversion; in
lieu of fractional shares the Corporation will pay a cash adjustment based upon
the Common Stock Value as of the close of business on the first Business Day
preceding the date of the occurrence of such Mandatory Conversion Event.
Promptly following a Mandatory Conversion Event, written notice (the
“Mandatory Conversion
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice or any
deficiency therein shall affect the validity of the procedures for the
Mandatory Conversion as to the Holder or Holders to whom the Corporation has
failed to give said notice or to whom such notice was effected. Each Holder
shall surrender the certificate or certificates representing all shares of
Series B Convertible Preferred held by such Holder to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation) and the Corporation shall issue to such Holder that number of
shares of Class D Common Stock to which such Holder is entitled, as calculated
in accordance with this paragraph.
(iii) (A) In case the Corporation shall (I)
pay a dividend or distribution in shares of Class D Common Stock on its shares
of Class D Common Stock, (II) subdivide its outstanding shares of Class D
Common Stock into a greater number of shares, (III) combine its outstanding
shares of Class D Common Stock into a smaller number of shares, or (IV) issue,
by reclassification of its shares of Class D Common Stock, any shares of its
Capital Stock (each such transaction being called a “Stock
Transaction”), then and in each
such case, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of a share of Series B Convertible Preferred
surrendered for conversion after the record date fixing stockholders to be
affected by such Stock Transaction shall be entitled to receive upon conversion
the number of shares of Class D Common Stock which such Holder would have been
entitled to receive after the happening of such event had such share of Series
B Convertible Preferred been converted immediately prior to such record date.
Such adjustment shall be made whenever any Stock Transaction occurs, but shall
also be effective retroactively as to shares of Series B Convertible Preferred
converted between such record date and the date of the happening of any such
Stock Transaction.
(B) If the Corporation shall, at any time or
from time to time while any shares of Series B Convertible Preferred are
outstanding, issue or sell any right or warrant to purchase, acquire or
subscribe for shares of Class D Common Stock (including a right or warrant with
respect to any security convertible into or exchangeable for shares of Class D
Common Stock) generally to holders of its Common Stock (including by way of a
reclassification of shares or a recapitalization of the Corporation), for a
consideration on the date of such issuance or sale less than the Common Stock
Value of the shares of Class D Common Stock underlying such rights or warrants
on the date of such issuance or sale, then and in each such case, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which shall be the sum of (I) the
8
Common Stock Value per share of Class D
Common Stock on the first Business Day after the date of the public
announcement of the actual terms (including the price terms) of such issuance
or sale multiplied by the number of shares of Class D Common Stock outstanding
immediately prior to such issuance or sale plus (II) the aggregate Fair Market
Value of the consideration to be received by the Corporation in connection with
the issuance or sale of the rights or warrants plus the aggregate consideration
to be received in respect of the purchase of the shares of Class D Common Stock
underlying such rights or warrants, and the denominator of which shall be the
Common Stock Value per share of Class D Common Stock on the Business Day
immediately preceding the public announcement of the actual terms (including
the price terms) of such issuance or sale multiplied by the aggregate number of
shares of Class D Common Stock (I) outstanding immediately prior to such
issuance or sale plus (II) underlying such rights or warrants at the time of
such issuance or sale. For the purposes of the preceding sentence, the
aggregate consideration receivable by the Corporation in connection with the
issuance or sale of any such right or warrant shall be deemed to be equal to
the sum of the aggregate offering price (before deduction of reasonable
underwriting discounts or commissions and expenses) of all such rights or
warrants. No adjustment to the Conversion Price pursuant to this paragraph (B)
shall be made if, in conjunction with any such issuance or sale by the
Corporation generally to holders of its Common Stock, the Corporation issues or
offers to sell to the Holders such rights or warrants on the same basis as the
Holders would have received had their shares of Series B Convertible Preferred
been converted into shares of Class D Common Stock immediately prior to the
such issuance or sale. Upon the expiration or termination of any such rights or
warrants without the exercise of such rights or warrants, the Conversion Price
then in effect shall be adjusted immediately to the Conversion Price which
would have been in effect at the time of such expiration or termination had
such rights or warrants, to the extent outstanding immediately prior to such
expiration or termination, never been issued, although such adjustment shall
not effect previously converted shares.
(C) In the event the Corporation shall at
any time or from time to time while any shares of Series B Convertible
Preferred are outstanding declare, order, pay or make a dividend or other
distribution generally to holders of its Common Stock in stock or other
securities or rights or warrants to subscribe for securities of the Corporation
or any of its subsidiaries or evidences of Indebtedness of the Corporation or
any other person or pay any Extraordinary Cash Dividend (other than any
dividend or distribution on the Class D Common Stock (I) referred to in
paragraphs (A) or (B) above or (II) if in conjunction therewith the Corporation
declares and pays or makes a dividend or distribution on each share of Series B
Convertible Preferred which is the same as the dividend or distribution that
would have been made or paid with respect to such share of Series B Convertible
Preferred had such share been converted into shares of Class D Common Stock
immediately prior to the record date for any such dividend or distribution on
the Class D Common Stock), then, and in each such case, an appropriate
adjustment to the Conversion Price shall be made so that the Holder of each
share of Series B Convertible Preferred shall be entitled to receive, upon the
conversion thereof, the number of shares of Class D Common Stock determined by
multiplying (x) the number of shares of Class D Common Stock into which such
share was convertible on the day immediately prior to the record date fixed for
the determination of stockholders entitled
9
to receive such dividend or distribution by
(y) a fraction, the numerator of which shall be the Common Stock Value per
share of Class D Common Stock as of such record date, and the denominator of
which shall be such Common Stock Value per share of Class D Common Stock less
the Fair Market Value per share of Class D Common Stock of such dividend or
distribution (as determined in good faith by the Board of Directors, as
evidenced by a Board Resolution mailed to each holder of Series B Convertible
Preferred). An adjustment made pursuant to this paragraph (C) shall be made
upon the opening of business on the next Business Day following the date on
which any such dividend or distribution is made and shall be effective
retroactively to the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution.
(D) In the event the Company shall, at any
time or from time to time while any shares of Series B Convertible Preferred
are outstanding, repurchase (a “Repurchase”) any portion of the Class D Common Stock from
holders generally at a premium over the Common Stock Value thereof on the next
trading day immediately preceding the consummation of such Repurchase, then and
in the case of each Repurchase the Conversion Price in effect immediately prior
thereto shall be adjusted by multiplying such Conversion Price by the fraction
the numerator of which is (I) the product of (x) the number of shares of Class
D Common Stock outstanding immediately before such Repurchase multiplied by (y)
the Common Stock Value per share of Class D Common Stock on the next trading
day immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class D Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class D Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class D Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series B Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
(iv) No adjustment in the Conversion Price
will be required to be made in any case until cumulative adjustments amount to
1% or more of the Conversion Price, but any such adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(v) In the event of any capital
reorganization (other than a capital reorganization covered by paragraph
(ii)(C) above) or reclassification of outstanding shares of Common Stock of the
Corporation (other than a reclassification covered by paragraph (ii)(A) above),
or in case of any merger, consolidation or other corporate combination of the
Corporation with or into another corporation, or in case of any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a “Transaction”), each share of Series B Convertible Preferred
shall continue to remain outstanding if the Corporation is the Surviving Person
(as defined below) of such Transaction, and shall be subject to all the
provisions hereof, as in effect prior to such Transaction, or if the
10
Corporation is not the Surviving Person,
each share of Series B Convertible Preferred shall be exchanged in such
Transaction for a new series of convertible preferred stock of the Surviving
Person, or in the case of a Surviving Person other than a corporation,
comparable securities of such Surviving Person, in either case having economic
terms as nearly equivalent as possible to, and with the same voting and other
rights as, the Series B Convertible Preferred, including entitling the holder
thereof to receive, upon presentation of the certificate therefor to the
Surviving Person subsequent to the consummation of such Transaction, the kind
and amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Class D Common Stock into which one share of Series B
Convertible Preferred was convertible immediately prior to such Transaction. In
case securities or property other than Common Stock shall be issuable or
deliverable upon conversion as aforesaid, then all references in this paragraph
(v) shall be deemed to apply, so far as appropriate and as nearly as may be, to
such other securities or property. If the holders of Class D Common Stock have
the opportunity to elect the form of consideration to be received by them in
such Transaction, then from and after the effective date of such Transaction,
the Series B Convertible Preferred shall be convertible into the consideration
that a majority of the holders of the Class D Common Stock who made such
election received in such Transaction.
Notwithstanding anything contained herein to
the contrary, the Corporation will not effect any Transaction unless, prior to
the consummation thereof, proper provision is made to ensure that the holders
of shares of Series B Convertible Preferred will be entitled to receive the
benefits afforded by this paragraph (v).
For purposes of this paragraph (v),
“Surviving Person” shall mean the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with which
the Series B Convertible Preferred or Common Stock of the Corporation is
exchanged, converted or reclassified into the securities of any other Person or
cash or any other property.
(vi) The conversion price shall initially
equal $0.90 per share, and shall increase from and after the Issue Date at a
rate equal to the dividend rate on the Series B Convertible Preferred as set
forth in paragraph (c)(i) (the “Conversion Price”). The Conversion Price shall be subject to
adjustment as provided in this paragraph (g).
(vii) From and after an Initial Public
Offering, the Corporation shall cause the shares of Class D Common Stock
issuable upon conversion of the Series B Convertible Preferred to be approved
for listing on the principal securities exchange on which the Class D Common
Stock may at the time be listed for trading, subject to official notification
of issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class D Common Stock issuable upon
conversion of the Series B Convertible
11
Preferred on the principal securities
exchange on which the Class D Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding anything to the
contrary contained in this paragraph (g), there shall be no adjustment to the
Conversion Price in connection with any issuance of additional shares of Series
B Convertible Preferred or any other securities that are or may be or become
issued or issuable in connection with the transactions contemplated by the
Master Transaction Agreement.
(h) Reissuance of Series B Convertible
Preferred. Shares of Series B
Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series B Convertible Preferred must be in
compliance with the terms hereof.
(i) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. As used in this definition, “control” (including its
correlative meanings, “controlled by” and “under common control
with”) means the possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
12
“Business Day” means any day except a Saturday, a Sunday, or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
“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, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not
a corporation, any and all partnership, membership 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 capital lease
obligations under GAAP and, for purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Class A Common Stock” means the Class A Common Stock, par value $.001
per share, of the Corporation.
“Class D Common Stock” means the Class D Non-Voting Common Stock, par
value $.001 per share, of the Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Common Stock Value” on any date means, with respect to the Class A
Common Stock or the Class D Common Stock, the last sale price for the Class A
Common Stock or the Class D Common Stock, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, for the Class A Common Stock or the Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or the Class D Common Stock is listed or admitted to
trading or, if neither the Class A Common Stock nor the Class D Common Stock is
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the principal automated
quotation system that may then be in use or, if neither the Class A Common
Stock nor the Class D Common Stock is quoted by any such organization, the
average of the closing bid and asked
13
prices as furnished by a professional market
maker making a market in the Class A Common Stock or the Class D Common Stock
selected by the Board of Directors or, in the event that no trading price is
available for the Class A Common Stock or the Class D Common Stock, the fair
market value of the Class A Common Stock, as determined in good faith by the
Board of Directors.
“Communications Act” means the Communications Act of 1934, as amended
(including, without limitation, the Cable Communications Policy Act of 1984 and
the Cable Television Consumer Protection and Competition Act of 1992) and all
rules and regulations of the FCC, in each case as from time to time in
effect.
“Consolidated EBITDA” means, for any Person, for any period, an amount
equal to (a) the sum of Consolidated Net Income for such period, plus, to the
extent deducted from the revenues of such Person in determining Consolidated
Net Income, (i) the provision for taxes for such period based on income or
profits and any provision for taxes utilized in computing a loss in
Consolidated Net Income above, plus (ii) Consolidated Interest Expense, net of
interest income earned on cash or cash equivalents for such period (including,
for this purpose, dividends on preferred stock only to the extent that such
dividends were deducted in determining Consolidated Net Income), plus (iii)
depreciation for such period on a consolidated basis, plus (iv) amortization of
intangibles and broadcast program licenses for such period on a consolidated
basis, minus (b) scheduled payments relating to broadcast program license
liabilities, except that with respect to the Corporation each of the foregoing
items shall be determined on a consolidated basis with respect to the
Corporation and its Subsidiaries only; provided,
however, that, for purposes of calculating Consolidated EBITDA
during any fiscal quarter, cash income from a particular Investment of such
Person shall be included only if cash income has been received by such Person
as a result of the operation of the business in which such Investment has been
made in the ordinary course without giving effect to any extraordinary, unusual
and non-recurring gains.
“Consolidated Interest Expense” means, with respect to any Person, for any
period, the aggregate amount of interest which, in conformity with GAAP, would
be set forth opposite the caption “interest expense” or any like
caption on an income statement for such Person and its Subsidiaries on a
consolidated basis, including, but not limited to, imputed interest included in
Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing, the net costs associated with hedging obligations, amortization of
other financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other non-cash
interest expense (other than interest amortized to cost of sales) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, and all
14
time brokerage fees relating to financing of
television stations which the Corporation has an agreement or option to
acquire.
“Consolidated Net Income” means, with respect to any Person, for any
period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
“Conversion Price” has the meaning ascribed to it in paragraph
(g)(vi) hereof.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Designated Investment Bank” means an investment bank selected by the
Purchasing Party from a list of three internationally recognized investment
banks provided to the Purchasing Party by the Company pursuant to Section 2.07
of the Master Transaction Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Extraordinary Cash Dividend” means cash dividends with respect to the Class A
Common Stock the aggregate amount of which in any fiscal year exceeds 10% of
Consolidated EBITDA of the Corporation and its subsidiaries for the fiscal year
immediately preceding the payment of such dividend.
15
“Fair Market Value” of any consideration other than cash or of any
securities shall mean the amount which a willing buyer would pay to a willing
seller in an arm’s-length transaction as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors or a
committee thereof.
“FCC” means
the Federal Communications Commission and any successor governmental entity
performing functions similar to those performed by the Federal Communications
Commission on the Issue Date.
“GAAP” means
generally accepted accounting principles consistently applied as in effect in
the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series B Convertible Preferred as
reflected in the stock books of the Corporation.
“Initial Public Offering” means the initial underwritten sale of equity
securities of the Corporation occurring after the Issue Date pursuant to an
effective registration statement under the Securities Act.
“Issue Date”
means the date of the issuance of Series B Convertible Preferred.
“Issue Price” means $10,000 per share of Series B Convertible
Preferred.
“Junior Preferred Stock” means, collectively, (i) Series D Convertible
Preferred, (ii) Series E-1 Convertible Preferred, (iii) Series E-2 Convertible
Preferred, and (iv) Series F Non-Convertible Preferred, in each case as defined
in the Master Transaction Agreement.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Mandatory Conversion” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory Conversion Event” means the earlier to occur of: (i) the date on
which the last sale price for the Class A Common Stock or Class D Common Stock,
regular way, or, in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for the Class A Common Stock or
Class D Common Stock, in either case as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Class A Common Stock or Class D Common Stock is listed or
admitted to trading, or, if neither Class A Common Stock nor Class D Common
Stock is listed or admitted to trading on any national securities exchange, the
last quoted price, or, if not so quoted, the average of the high bid
16
and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use, for the Class A Common Stock or Class D Common Stock for fifteen
(15) consecutive trading days is equal to or greater than the Mandatory
Conversion Trigger Price as then in effect; and (ii) the issuance by the
Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and other expenses of
sale) of not less than $75,000,000, provided that if such issuance is made to a
Purchasing Party, the Designated Investment Bank shall have provided an opinion
in customary form to the Company to the effect that the issue price per share
of Common Stock is at or higher than the fair market value of a share of Common
Stock.
“Mandatory Conversion Notice” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory
Conversion Trigger Price” means
(A) in the event the Mandatory Conversion Event occurs on or after the first
anniversary but prior to the second anniversary of the Issue Date, 102% of the
Conversion Price, (B) in the event the Mandatory Conversion Event occurs on or
after the second anniversary but prior to the third anniversary of the Issue
Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Obligations” means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
17
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the taking of any proposed action have been taken. Such
opinion shall also include the statements called for in the second sentence
under “Officers’ Certificate”.
“Pari Passu Preferred Stock” means collectively, (i) Series C Preferred Stock
and (ii) Series C Convertible Preferred, in each case as defined in the Master
Transaction Agreement.
“Parity Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing Party” means CIG Media LLC, NBC Universal, Inc. and
their respective Affiliates.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in
paragraph (e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
“Senior Preferred Stock” means, collectively, (i) Series A-1 Convertible
Preferred, (ii) Series A-2 Preferred Stock, (iii) Series A-3 Convertible
Preferred,
18
(iv) 14¼% Preferred, and (v)
9¾% Preferred, in each case as defined in the Master Transaction
Agreement.
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Series B Convertible Preferred” has the meaning ascribed to it in paragraph (a)
hereof.
“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, 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,
owned by such Person.
“Stock Transaction” has the meaning ascribed to it in paragraph
(g)(iii) hereof.
“Surviving Person” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Transaction” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned Subsidiary” means any Subsidiary all of the outstanding
voting securities (other than directors’ qualifying shares) of which are
owned, directly or indirectly, by the Corporation.
19
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this 4th day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
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Certificate of Designation
EXHIBIT
J-1 to the Master Transaction Agreement
Form
of Series C Convertible Preferred Certificate of
Designation
Exhibit
J-1 to the
Master
Transaction Agreement
Form
of Series C Convertible Preferred Certificate of
Designation
CERTIFICATE
OF DESIGNATION OF THE POWERS,
PREFERENCES
AND RELATIVE, PARTICIPATING,
OPTIONAL
AND OTHER SPECIAL RIGHTS OF
8%
SERIES C MANDATORILY CONVERTIBLE PREFERRED STOCK
AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
ION
Media Networks, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that, pursuant to the authority
conferred upon the board of directors of the Corporation (the
“Board
of Directors”)
by the Certificate of Incorporation of the Corporation, as amended (hereinafter
referred to as the “Certificate
of Incorporation”),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors, on May 3, 2007, duly approved
and adopted the following resolution:
RESOLVED,
that, pursuant to the authority vested in the Board of Directors by the
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of 8% Series C Mandatorily Convertible
Preferred Stock, par value $.001 per share, with a liquidation preference of
$10,000 per share, consisting of 11,000 shares, having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in the
Certificate of Incorporation and in this resolution as follows:
(a) Designation. There
is hereby created out of the authorized and unissued shares of Preferred Stock
of the Corporation a series of Preferred Stock designated as the “8%
Series C Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 11,000 and are referred to as the
“Series C Convertible Preferred.” The liquidation preference of the
Series C Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The
Series C Convertible Preferred shall, with respect to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation,
rank (i) senior to the Junior Preferred Stock, to all classes of Common
Stock of the Corporation and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created,
the terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series C Convertible Preferred as to dividends and
distributions upon liquidation, winding up or dissolution of the
1
Corporation
(collectively referred to, together with all classes of Common Stock of the
Corporation, as “Junior
Securities”);
(ii) on a parity with the Pari Passu Preferred Stock and with any class of
Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank on a parity with the Series C Convertible Preferred
as to dividends and distributions upon liquidation, winding up or dissolution
of the Corporation (collectively referred to as “Parity
Securities”),
provided that any such Parity Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Parity Securities; and (iii) junior to the Senior Preferred Stock and
to each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series C Convertible
Preferred as to dividends and distributions upon liquidation, winding up or
dissolution of the Corporation (collectively referred to as “Senior
Securities”),
provided that any such Senior Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Senior Securities.
(c) Dividends.
(i) Beginning
on the Issue Date, the Holders shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available therefor,
dividends on each share of Series C Convertible Preferred at the higher of (x)
a rate per annum equal to 8% of the Issue Price and (y) the aggregate cash
dividends per share paid on the Class A Common Stock from (A) the later of the
Issue Date or the date of the last payment of a cash dividend on the Class A
Common Stock to (B) the date of such determination, multiplied by the number of
shares of Class A Common Stock into which each share of Series C Convertible
Preferred is convertible. All dividends shall accrue and be cumulative, whether
or not earned or declared, on a quarterly basis, in arrears, from the Issue
Date, but shall be payable only at such time or times as may be fixed by the
Board of Directors or as otherwise provided herein and shall not compound.
Dividends shall be payable to those Holders who are Holders on such dates as
the Board of Directors may determine with respect to such dividends. Dividends
shall cease to accrue and accumulate in respect of shares of the Series C
Convertible Preferred on the date of conversion of such shares or the date of
the redemption of such shares unless the Corporation shall have failed to pay
or make available for payment the relevant redemption price on the date fixed
for redemption.
(ii) All
dividends paid with respect to shares of the Series C Convertible Preferred
pursuant to paragraph (c)(i) shall be paid in cash pro rata to the Holders
entitled thereto.
(d) Liquidation.
(i) In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, each Holder shall be entitled to be paid, out
of the assets of the Corporation available for distribution to its stockholders
and before any distribution shall be made or any assets distributed to the
holders of any of the
Junior
Securities, including, without limitation, the Common Stock of the Corporation,
an amount in cash equal to the greater of (A) the Liquidation Preference for
each outstanding share of Series C Convertible Preferred, plus, without
duplication, an amount in cash equal to accumulated and unpaid dividends
thereon to the date fixed for such liquidation, dissolution or winding up, and
(B) the amount per share which would have been payable upon such liquidation,
dissolution or winding up to the holders of shares of Class A Common Stock or
such other class or series of stock into which the Series C Convertible
Preferred is then convertible (assuming the conversion of each share of then
convertible Series C Convertible Preferred and without deduction for the
Liquidation Preference otherwise payable pursuant to clause (A) hereof),
multiplied by the number of shares of Class A Common Stock into which such
shares of Series C Convertible Preferred are then convertible. Except as
provided in the preceding sentence, Holders of Series C Convertible Preferred
shall not be entitled to any distribution in the event of any liquidation,
dissolution or winding up of the affairs of the Corporation. If the assets of
the Corporation are not sufficient to pay in full the liquidation payments
payable to the Holders and to any holders of all other Parity Securities, then
such assets shall be distributed among the Holders and any holders of such
other Parity Securities ratably in accordance with the respective amounts that
would be payable on such shares of Series C Convertible Preferred and any such
shares of other Parity Securities if all amounts payable thereon were paid in
full.
(ii) For the
purposes of this paragraph (d), neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more entities
shall be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation.
(e) Redemption.
(i) Mandatory
Redemption. The
Corporation shall redeem, in the manner provided for in paragraph (e)(ii)
hereof, and out of funds legally available therefor all of the outstanding
shares of Series C Convertible Preferred for cash on August 31, 2013 (the
“Redemption
Date”),
at a price per share equal to the Redemption Price.
(ii) Procedures
for Redemption.
(A) At
least 90 days prior to the Redemption Date, written notice (the
“Redemption
Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series C Convertible Preferred as
to the Holder or Holders to whom the Corporation has failed to give said notice
or to whom such notice was defective. The Redemption Notice shall
state:
(1) the
Redemption Price;
(2) that the
Holder is to surrender to the Corporation, in the manner, at the place or
places and at the price designated, its certificate or certificates
representing the shares of Series C Convertible Preferred; and
(3) that
dividends on the shares of the Series C Convertible Preferred shall cease to
accumulate on such Redemption Date unless the Corporation defaults in the
payment of the Redemption Price.
(B) Each
Holder shall surrender the certificate or certificates representing all shares
of Series C Convertible Preferred held by such Holder to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place or places designated in the
Redemption Notice, and on the Redemption Date the full Redemption Price for
such shares shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(C) On and
after the Redemption Date, unless the Corporation defaults in the payment in
full of the Redemption Price, dividends on the Series C Convertible Preferred
shall cease to accumulate on the Redemption Date, and all rights of the Holders
shall terminate with respect to the Series C Convertible Preferred on the
Redemption Date, other than the right to receive the Redemption Price, without
interest; provided,
however, that
if the Redemption Notice shall have been given and the funds necessary for
redemption (including an amount in respect of all dividends that will accrue to
the Redemption Date) shall have been segregated and irrevocably deposited in
trust for the equal and ratable benefit of the Holders, then, at the close of
business on the day on which such funds are segregated and set aside, the
Holders shall cease to be stockholders of the Corporation and shall be entitled
only to receive the Redemption Price.
(f) Voting
Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long
as any shares of the Series C Convertible Preferred are outstanding, the
Corporation may not issue any additional shares of Series C Convertible
Preferred or any new class of Parity Securities or Senior Securities (or amend
the provisions of any existing class of Capital Stock to make such class of
Capital Stock Parity Securities or Senior Securities) without the approval of
Holders holding at least a majority of the then outstanding shares of Series C
Convertible Preferred, voting or consenting, as the case may be, together as
one class given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided,
however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
C
Convertible Preferred or prohibit the redemption by the Corporation of the
Series C Convertible Preferred pursuant to paragraph (e)(i) above, in an amount
sufficient to Refinance any series of Senior Securities, in whole or in part,
with such shares being issued no sooner than the date the Corporation
Refinances such series of Senior Securities.
(B) So long
as any shares of the Series C Convertible Preferred are outstanding, the
Corporation shall not amend this Certificate of Designation so as to affect
materially and adversely the rights, preferences or privileges of Holders
without the affirmative vote or consent of Holders holding at least a majority
of the then outstanding shares of Series C Convertible Preferred, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting.
(C) Except
as set forth in paragraph (f)(i)(A) above, the creation, authorization or
issuance of any shares of any Junior Securities, Parity Securities or Senior
Securities or the increase or decrease in the amount of authorized Capital
Stock of any class, including Preferred Stock, shall not require the consent of
Holders and shall not be deemed to affect adversely the rights, preferences or
privileges of such Holders.
(ii) Without
the affirmative vote or consent of Holders holding at least a majority of the
then outstanding shares of Series C Convertible Preferred, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Corporation’s assets (as an entirety or substantially as an entirety in
one transaction or series of related transactions) to, another Person (other
than a Wholly-Owned Subsidiary with, into or to another Wholly-Owned
Subsidiary) or adopt a plan of liquidation unless (A) either (I) the
Corporation is the surviving or continuing Person or (II) the Person (if other
than the Corporation) formed by such consolidation or into which the
Corporation is merged or the Person that acquires by conveyance, transfer or
lease the properties and assets of the Corporation substantially as an entirety
or, in the case of a plan of liquidation, the Person to which assets of the
Corporation have been transferred shall be organized and existing under the
laws of the United States or any State thereof or the District of Columbia; (B)
the Series C Convertible Preferred shall be converted into or exchanged for and
shall become shares of such successor, transferee or resulting Person with the
same powers, preferences and relative, participating, optional or other special
rights and the qualifications, limitations or restrictions thereon, that the
Series C Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series C Convertible Preferred prior to the consummation of the
proposed transaction an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with the
terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of
the Corporation, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.
(iii) (A) If the
Corporation fails to discharge any redemption or conversion obligation with
respect to the Series C Convertible Preferred (such failure being a
“Voting
Rights Triggering Event”),
then, subject to paragraph (f)(iii)(E) below, Holders of at least a majority of
the then outstanding shares of Series C Convertible Preferred, voting
separately and as one class, shall have the exclusive right to elect the lesser
of two directors and that number of directors constituting 25% of the members
of the Board of Directors, at a meeting called for such purpose following the
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the Holders
expire (other than as described in (f)(iii)(B) below), and the number of
directors constituting the Board of Directors shall be increased by the number
of directors so elected by the Holders. The voting rights provided herein shall
be the exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(B) The
right of the Holders voting together as a separate class to elect members of
the Board of Directors as set forth in paragraph (f)(iii)(A) above shall
continue until such time as in all other cases, the failure, breach or default
giving rise to such Voting Rights Triggering Event is remedied, cured or waived
by Holders of at least a majority of the then outstanding shares of Series C
Convertible Preferred that are entitled to vote thereon, at which time (I) the
special right of the Holders so to vote as a class for the election of
directors and (II) the term of office of the directors elected by the Holders
shall each terminate and such persons shall cease to be members of the Board of
Directors. At any time after voting power to elect directors shall have become
vested and be continuing in the Holders pursuant to paragraph (f)(iii) hereof,
or if vacancies shall exist in the offices of directors elected by such
Holders, a proper officer of the Corporation may, and upon the written request
of Holders of at least 25% of the then outstanding shares of Series C
Convertible Preferred addressed to the secretary of the Corporation shall, call
a special meeting of the Holders, for the purpose of electing the directors
which the Holders are entitled to elect. If such meeting shall not be called by
a proper officer of the Corporation within 20 days after personal service of
said written request upon the secretary of the Corporation, or within 20 days
after mailing the same within the United States by certified mail, addressed to
the secretary of the Corporation at its principal executive offices, then
Holders of at least 25% of the then outstanding shares of Series C Convertible
Preferred may designate in writing one of their number to call such meeting at
the reasonable expense of the Corporation, and such meeting may be called by
the Holder so designated upon the notice required for the annual meetings of
stockholders of the Corporation and shall be held at the place for holding the
annual meetings of stockholders. Any Holder of Series C Convertible Preferred
so designated shall have, and the Corporation shall provide, access to the
lists of stockholders to be called pursuant to the provisions
hereof.
(C) At any
meeting held for the purpose of electing directors at which the Holders shall
have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of Holders of at least a majority
of the then outstanding shares of Series C Convertible Preferred shall be
required to constitute a quorum of such Series C Convertible
Preferred.
(D) Any
vacancy occurring in the office of a director elected by the Holders may be
filled by the remaining director (if any) elected by the Holders unless and
until such vacancy shall be filled by the Holders.
(E) The
provisions of this paragraph (f)(iii) shall apply only to those Holders, if
any, that would be permitted to vote in the election of directors of the
Corporation pursuant to applicable laws and regulations of the FCC, with such
Holders together being treated as the class of Holders entitled to exercise
such rights. The determination as to whether any Holder would not be permitted
to exercise such voting rights shall be made jointly by any such Holder(s) and
the Corporation.
(iv) In any
case in which the Holders shall be entitled to vote pursuant to this paragraph
(f) or pursuant to the General Corporation Law of the State of Delaware, each
Holder entitled to vote with respect to such matter shall be entitled to one
vote for each then outstanding share of Series C Convertible Preferred so
held.
(g) Conversion.
(i) Optional
Conversion. Each
share of the Series C Convertible Preferred is convertible at the option of the
Holder thereof, at any time and from time to time, into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series C
Convertible Preferred surrendered for conversion plus accrued and unpaid
dividends thereon, divided by (B) the Conversion Price then in effect, except
that if shares of Series C Convertible Preferred are called for redemption the
conversion right will terminate at the close of business on the Redemption
Date. No fractional shares or securities representing fractional shares will be
issued upon conversion; in lieu of fractional shares the Corporation will pay a
cash adjustment based upon the Common Stock Value as of the close of business
on the first Business Day preceding the date of conversion. The Series C
Convertible Preferred shall be converted by the holder thereof by surrendering
the certificate or certificates representing the shares of Series C Convertible
Preferred to be converted, appropriately completed, to the transfer agent for
the Common Stock. The transfer agent shall issue one or more certificates
representing the Conversion Shares in the name or names requested by such
Holder. The transfer agent will deliver to such Holder a new certificate
representing the shares of Series C Convertible Preferred in excess of those
being surrendered for conversion. The conversion rights stated herein are
subject to compliance by the Holder with all applicable laws and regulations,
including, without limitation, the Communications Act, and as a condition
precedent to the Corporation’s obligation to issue Conversion Shares to a
Holder or its designee(s), the Corporation may require that such Holder deliver
to the Corporation an opinion of legal counsel reasonably acceptable to the
Corporation to the
effect
that the issuance of Conversion Shares to such Holder or its designee(s) upon
conversion will not violate or conflict with the Communications
Act.
(ii) Mandatory
Conversion. At any
time following the first anniversary of the Issue Date, upon the occurrence of
a Mandatory Conversion Event, including a Mandatory Conversion Event that
occurs after the Redemption Date to the extent any share of Series C
Convertible Preferred remains outstanding after the Redemption Date, unless
previously converted at the option of Holders in accordance with the provisions
hereof, each outstanding share of Series C Convertible Preferred shall, without
notice to Holders, convert automatically (the “Mandatory
Conversion”)
into (A) a number of Conversion Shares equal to the Issue Price of the shares
of Series C Convertible Preferred so converted plus accrued and unpaid
dividends thereon, divided by the (B) Conversion Price then in effect. No
fractional shares or securities representing fractional shares will be issued
upon conversion; in lieu of fractional shares the Corporation will pay a cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of the occurrence of such Mandatory
Conversion Event. Promptly following a Mandatory Conversion Event, written
notice (the “Mandatory
Conversion Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice or any deficiency therein shall affect the validity of the
procedures for the Mandatory Conversion as to the Holder or Holders to whom the
Corporation has failed to give said notice or to whom such notice was effected.
Each Holder shall surrender the certificate or certificates representing all
shares of Series C Convertible Preferred held by such Holder to the
Corporation, duly endorsed (or otherwise in proper form for transfer, as
determined by the Corporation) and the Corporation shall issue to such Holder
that number of shares of Class A Common Stock to which such Holder is entitled,
as calculated in accordance with this paragraph; provided,
however, that
if a Holder shall notify the Corporation within five (5) Business Days of
receipt of the Mandatory Conversion Notice that it wishes to receive Class C
Common Stock in accordance with this paragraph, the Corporation shall issue
such Holder an equal number of shares of Class C Common Stock to which such
Holder is entitled as calculated in accordance with this
paragraph.
(iii) (A) In
case the Corporation shall (I) pay a dividend or distribution in shares of
Class A Common Stock on its shares of Class A Common Stock, (II) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares,
(III) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or (IV) issue, by reclassification of its shares of Class A
Common Stock, any shares of its Capital Stock (each such transaction being
called a “Stock
Transaction”),
then and in each such case, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of a share of Series C Convertible
Preferred surrendered for conversion after the record date fixing stockholders
to be affected by such Stock Transaction shall be entitled to receive upon
conversion the number of Conversion Shares which such Holder would have been
entitled to receive after the happening of such event had such share of Series
C Convertible Preferred been converted immediately prior to such record date.
Such adjustment shall be made
whenever
any Stock Transaction occurs, but shall also be effective retroactively as to
shares of Series C Convertible Preferred converted between such record date and
the date of the happening of any such Stock Transaction.
(B) If the
Corporation shall, at any time or from time to time while any shares of Series
C Convertible Preferred are outstanding, issue or sell any right or warrant to
purchase, acquire or subscribe for shares of Class A Common Stock (including a
right or warrant with respect to any security convertible into or exchangeable
for shares of Class A Common Stock) generally to holders of its Common Stock
(including by way of a reclassification of shares or a recapitalization of the
Corporation), for a consideration on the date of such issuance or sale less
than the Common Stock Value of the shares of Class A Common Stock underlying
such rights or warrants on the date of such issuance or sale, then and in each
such case, the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which shall be the sum of (I)
the Common Stock Value per share of Class A Common Stock on the first Business
Day after the date of the public announcement of the actual terms (including
the price terms) of such issuance or sale multiplied by the number of shares of
Class A Common Stock outstanding immediately prior to such issuance or sale
plus (II) the aggregate Fair Market Value of the consideration to be received
by the Corporation in connection with the issuance or sale of the rights or
warrants plus the aggregate consideration to be received in respect of the
purchase of the shares of Class A Common Stock underlying such rights or
warrants, and the denominator of which shall be the Common Stock Value per
share of Class A Common Stock on the Business Day immediately preceding the
public announcement of the actual terms (including the price terms) of such
issuance or sale multiplied by the aggregate number of shares of Class A Common
Stock (I) outstanding immediately prior to such issuance or sale plus (II)
underlying such rights or warrants at the time of such issuance or sale. For
the purposes of the preceding sentence, the aggregate consideration receivable
by the Corporation in connection with the issuance or sale of any such right or
warrant shall be deemed to be equal to the sum of the aggregate offering price
(before deduction of reasonable underwriting discounts or commissions and
expenses) of all such rights or warrants. No adjustment to the Conversion Price
pursuant to this paragraph (B) shall be made if, in conjunction with any such
issuance or sale by the Corporation generally to holders of its Common Stock,
the Corporation issues or offers to sell to the Holders such rights or warrants
on the same basis as the Holders would have received had their shares of Series
C Convertible Preferred been converted into shares of Class A Common Stock (or
Class C Common Stock, as the case may be) immediately prior to the such
issuance or sale. Upon the expiration or termination of any such rights or
warrants without the exercise of such rights or warrants, the Conversion Price
then in effect shall be adjusted immediately to the Conversion Price which
would have been in effect at the time of such expiration or termination had
such rights or warrants, to the extent outstanding immediately prior to such
expiration or termination, never been issued, although such adjustment shall
not effect previously converted shares.
(C) In the
event the Corporation shall at any time or from time to time while any shares
of Series C Convertible Preferred are outstanding declare, order, pay or make a
dividend or other distribution generally to holders of its Common Stock in
stock or other securities or rights or warrants to subscribe for securities of
the Corporation or
any of
its subsidiaries or evidences of Indebtedness of the Corporation or any other
person or pay any Extraordinary Cash Dividend (other than any dividend or
distribution on the Class A Common Stock (I) referred to in paragraphs (A) or
(B) above or (II) if in conjunction therewith the Corporation declares and pays
or makes a dividend or distribution on each share of Series C Convertible
Preferred which is the same as the dividend or distribution that would have
been made or paid with respect to such share of Series C Convertible Preferred
had such share been converted into shares of Class A Common Stock immediately
prior to the record date for any such dividend or distribution on the Class A
Common Stock), then, and in each such case, an appropriate adjustment to the
Conversion Price shall be made so that the Holder of each share of Series C
Convertible Preferred shall be entitled to receive, upon the conversion
thereof, the number of shares of Class A Common Stock determined by multiplying
(x) the number of shares of Class A Common Stock into which such share was
convertible on the day immediately prior to the record date fixed for the
determination of stockholders entitled to receive such dividend or distribution
by (y) a fraction, the numerator of which shall be the Common Stock Value per
share of Class A Common Stock as of such record date, and the denominator of
which shall be such Common Stock Value per share of Class A Common Stock less
the Fair Market Value per share of Class A Common Stock of such dividend or
distribution (as determined in good faith by the Board of Directors, as
evidenced by a Board Resolution mailed to each holder of Series C Convertible
Preferred). An adjustment made pursuant to this paragraph (C) shall be made
upon the opening of business on the next Business Day following the date on
which any such dividend or distribution is made and shall be effective
retroactively to the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution.
(D) In the
event the Company shall, at any time or from time to time while any shares of
Series C Convertible Preferred are outstanding, repurchase (a
“Repurchase”)
any portion of the Class A Common Stock from holders generally at a premium
over the Common Stock Value thereof on the next trading day immediately
preceding the consummation of such Repurchase, then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding immediately before such Repurchase multiplied by (y) the Common
Stock Value per share of Class A Common Stock on the next trading day
immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class A Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class A Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class A Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series C Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
(iv) No
adjustment in the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% or more of the Conversion Price, but
any such adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(v) In the
event of any capital reorganization (other than a capital reorganization
covered by paragraph (ii)(C) above) or reclassification of outstanding shares
of Common Stock of the Corporation (other than a reclassification covered by
paragraph (ii)(A) above), or in case of any merger, consolidation or other
corporate combination of the Corporation with or into another corporation, or
in case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Transaction”),
each share of Series C Convertible Preferred shall continue to remain
outstanding if the Corporation is the Surviving Person (as defined below) of
such Transaction, and shall be subject to all the provisions hereof, as in
effect prior to such Transaction, or if the Corporation is not the Surviving
Person, each share of Series C Convertible Preferred shall be exchanged in such
Transaction for a new series of convertible preferred stock of the Surviving
Person, or in the case of a Surviving Person other than a corporation,
comparable securities of such Surviving Person, in either case having economic
terms as nearly equivalent as possible to, and with the same voting and other
rights as, the Series C Convertible Preferred, including entitling the holder
thereof to receive, upon presentation of the certificate therefor to the
Surviving Person subsequent to the consummation of such Transaction, the kind
and amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Class A Common Stock into which one share of Series C
Convertible Preferred was convertible immediately prior to such Transaction. In
case securities or property other than Common Stock shall be issuable or
deliverable upon conversion as aforesaid, then all references in this paragraph
(v) shall be deemed to apply, so far as appropriate and as nearly as may be, to
such other securities or property. If the holders of Class A Common Stock have
the opportunity to elect the form of consideration to be received by them in
such Transaction, then from and after the effective date of such Transaction,
the Series C Convertible Preferred shall be convertible into the consideration
that a majority of the holders of the Class A Common Stock who made such
election received in such Transaction.
Notwithstanding
anything contained herein to the contrary, the Corporation will not effect any
Transaction unless, prior to the consummation thereof, proper provision is made
to ensure that the holders of shares of Series C Convertible Preferred will be
entitled to receive the benefits afforded by this paragraph (v).
For
purposes of this paragraph (v), “Surviving
Person”
shall mean the continuing or surviving Person of a merger, consolidation or
other corporate combination, the Person receiving a transfer of all or
substantially all of the properties and assets of the Corporation, or the
Person consolidating with or merging into the Corporation in a merger,
consolidation or other corporate combination in which the Corporation is the
continuing or surviving Person, but in connection with which the Series C
Convertible
Preferred
or Common Stock of the Corporation is exchanged, converted or reclassified into
the securities of any other Person or cash or any other property.
(vi) The
conversion price shall initially equal $0.75 per share, and shall increase from
and after the Issue Date at a rate equal to the dividend rate on the Series C
Convertible Preferred as set forth in paragraph (c)(i) (the “Conversion
Price”).
The Conversion Price shall be subject to adjustment as provided in this
paragraph (g).
(vii) From and
after an Initial Public Offering, the Corporation shall cause the shares of
Class A Common Stock issuable upon conversion of the Series C Convertible
Preferred (or in the case of a Holder’s election to convert into Class C
Common Stock, upon conversion of such Class C Common Stock) to be approved for
listing on the principal securities exchange on which the Class A Common Stock
may at the time be listed for trading, subject to official notification of
issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class A Common Stock issuable upon
conversion of the Series C Convertible Preferred on the principal securities
exchange on which the Class A Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding
anything to the contrary contained in this paragraph (g), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional shares of Series C Convertible Preferred or any other securities
that are or may be or become issued or issuable in connection with the
transactions contemplated by the Master Transaction Agreement.
(h) Reissuance
of Series C Convertible Preferred. Shares
of Series C Convertible Preferred that have been issued and reacquired in any
manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the General Corporation Law of the
State of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided that
any issuance of such shares as Series C Convertible Preferred must be in
compliance with the terms hereof.
(i) Business
Day. If any
payment or redemption shall be required by the terms hereof to be made on a day
that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board
of Directors”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Board
Resolution”
means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors and to be in
full force and effect.
“Business
Day”
means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other
governmental action to be closed.
“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, including each class of common stock and preferred stock of such Person
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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 capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
“Certificate
of Incorporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Class
A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Corporation.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Common
Stock Value”
on any date means, with respect to the Class A Common Stock or the Class D
Common Stock, the last sale price for the Class A Common Stock or the Class D
Common Stock, regular way, or, in case no such sale takes place on such date,
the average of the closing bid and asked prices, regular way, for the Class A
Common Stock or the Class D Common Stock, in either case as reported in the
principal consolidated transaction reporting system with respect to the
principal national securities exchange on which the Class A Common Stock or the
Class D Common Stock is listed or admitted to trading or, if neither the Class
A Common Stock nor the Class D Common Stock is listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use or, if neither the Class A Common Stock nor the Class D Common Stock
is quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock or the Class D Common Stock selected by the Board of Directors
or, in the event that no trading price is available for the Class A Common
Stock or the Class D Common Stock, the fair market value of the Class A Common
Stock, as determined in good faith by the Board of Directors.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984 and the Cable
Television Consumer Protection and Competition Act of 1992) and all rules and
regulations of the FCC, in each case as from time to time in
effect.
“Consolidated
EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
broadcast program licenses for such period on a consolidated basis, minus (b)
scheduled payments relating to broadcast program license liabilities, except
that with respect to the Corporation each of the foregoing items shall be
determined on a consolidated basis with respect to the Corporation and its
Subsidiaries only; provided,
however, that,
for purposes of calculating Consolidated EBITDA during
any
fiscal quarter, cash income from a particular Investment of such Person shall
be included only if cash income has been received by such Person as a result of
the operation of the business in which such Investment has been made in the
ordinary course without giving effect to any extraordinary, unusual and
non-recurring gains.
“Consolidated
Interest Expense”
means, with respect to any Person, for any period, the aggregate amount of
interest which, in conformity with GAAP, would be set forth opposite the
caption “interest expense” or any like caption on an income statement
for such Person and its Subsidiaries on a consolidated basis, including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing, the net costs associated with
hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense (other than
interest amortized to cost of sales) plus, without duplication, all net
capitalized interest for such period and all interest incurred or paid under
any guarantee of indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, and all time brokerage fees relating to
financing of television stations which the Corporation has an agreement or
option to acquire.
“Consolidated
Net Income”
means, with respect to any Person, for any period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
“Conversion
Price”
has the meaning ascribed to it in paragraph (g)(vi) hereof.
“Conversion
Shares”
means (i) the number of shares of Class A Common Stock or (ii) with respect to
any Holder, if such Holder determines, after consultation with its outside
legal counsel, that such Holder is prevented under the Communications Act from
holding shares of Class A Common Stock issuable upon conversion of such
Holder’s shares of Series C Convertible Preferred, an equal number of
shares of Class C Common Stock of the Corporation (such Class C Common Stock
shall, (1) upon disposition by such Holder to any other Person that such Holder
determines is not prevented under the Communications Act from holding shares of
Class A Common Stock or (2) upon the determination by such Holder that the
Communications Act no longer prohibits such Holder from holding shares of Class
A Common Stock, in either case, after consultation by such Person with outside
legal counsel and, if required by the Corporation, delivery by such Person to
the Corporation an Opinion of Counsel reasonably acceptable to the Corporation
to the effect that the Conversion of such Class C Common Stock to Class A
Common Stock will not violate or conflict with the Communications Act,
automatically be converted into an equal number of shares of Class A Common
Stock), into which the Series C Convertible Preferred is from time to time
convertible.
“Corporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Designated
Investment Bank”
means an investment bank selected by the Purchasing Party from a list of three
internationally recognized investment banks provided to the Purchasing Party by
the Company pursuant to Section 2.07 of the Master Transaction
Agreement.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Consolidated EBITDA of the
Corporation and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s-length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors or a committee thereof.
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the Issue Date.
“GAAP”
means generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series C Convertible Preferred as
reflected in the stock books of the Corporation.
“Initial
Public Offering”
means the initial underwritten sale of equity securities of the Corporation
occurring after the Issue Date pursuant to an effective registration statement
under the Securities Act.
“Issue
Date”
means the date of the issuance of Series C Convertible Preferred.
“Issue
Price”
means $10,000 per share of Series C Convertible Preferred.
“Junior
Preferred Stock”
means, collectively, (i) Series D Convertible Preferred, (ii) Series
E-1 Convertible Preferred, (iii) Series E-2 Convertible Preferred and
(iv) Series F Non-Convertible Preferred, in each case as defined in the
Master Transaction Agreement.
“Junior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Liquidation
Preference”
has the meaning ascribed to it in paragraph (a) hereof.
“Mandatory
Conversion”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Event”
means the earlier to occur of: (i) the date on which the last sale price for
the Class A Common Stock or Class D Common Stock, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for the Class A Common Stock or Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or Class D Common Stock is listed or admitted to trading,
or, if neither Class A Common Stock nor Class D Common Stock is listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and other expenses of
sale) of not less than $75,000,000, provided that if such issuance is made to a
Purchasing Party, the Designated Investment Bank shall have provided an opinion
in customary form to the Company to the effect that the
issue
price per share of Common Stock is at or higher than the fair market value of a
share of Common Stock.
“Mandatory
Conversion Notice”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Trigger Price”
means (A) in the event the Mandatory Conversion Event occurs on or after the
first anniversary but prior to the second anniversary of the Issue Date, 102%
of the Conversion Price, (B) in the event the Mandatory Conversion Event occurs
on or after the second anniversary but prior to the third anniversary of the
Issue Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master
Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, or otherwise relating to, any
Indebtedness.
“Officers’
Certificate”
means a certificate signed by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the Corporation which
certificate shall include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. In addition, such certificate shall
include (i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion
of Counsel”
means an opinion of counsel that, in such counsel’s opinion, all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. Such opinion shall also include the
statements called for in the second sentence under “Officers’
Certificate”.
“Pari
Passu Preferred Stock”
means the Series C Preferred Stock and Series B Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Parity
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing
Party”
means CIG Media LLC, NBC Universal, Inc. and their respective Affiliates.
“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
redemption or upon liquidation.
“Redemption
Date”
has the meaning ascribed to it in paragraph (e)(i) hereof.
“Redemption
Notice”
has the meaning ascribed to it in paragraph (e)(ii) hereof.
“Redemption
Price”
means the Issue Price plus (as applicable) all accrued and unpaid dividends
through and including the date of redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Preferred Stock”
means collectively, (i) Series A-1 Convertible Preferred, (ii) Series A-2
Preferred Stock, (iii) Series A-3 Convertible Preferred,
(iv) 14¼% Preferred and (v) 9¾% Preferred, in each case
as defined in the Master Transaction Agreement.
“Senior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Series
C Convertible Preferred”
has the meaning ascribed to it in paragraph (a) hereof.
“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, 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, owned by such Person.
“Stock
Transaction”
has the meaning ascribed to it in paragraph (g)(iii) hereof.
“Surviving
Person”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Transaction”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Voting
Rights Triggering Event”
has the meaning ascribed to it in paragraph (f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary”
means any Subsidiary all of the outstanding voting securities (other than
directors’ qualifying shares) of which are owned, directly or indirectly,
by the Corporation.
IN
WITNESS WHEREOF, said ION Media Networks, Inc. has caused this Certificate to
be signed by its duly authorized officer this ___ day of May,
2007.
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ION MEDIA NETWORKS,
INC. |
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By: |
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Name: |
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Title: |
Certificate
of Designation
EXHIBIT
J-2 to the Master Transaction Agreement
Form
of Series C Convertible Preferred Certificate of
Designation
Exhibit J-2 to the
Master Transaction
Agreement
Form of Series C Convertible Preferred
Certificate of Designation
CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
8% SERIES C MANDATORILY CONVERTIBLE
PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 8%
Series C Mandatorily Convertible Preferred Stock, par value $.001 per share,
with a liquidation preference of $10,000 per share, consisting of 11,000
shares, having the designations, preferences, relative, participating, optional
and other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
resolution as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the “8%
Series C Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 11,000 and are referred to as the
“Series C Convertible Preferred.” The liquidation preference of the
Series C Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
C Convertible Preferred shall, with respect to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation, rank (i) senior
to the Junior Preferred Stock, to all classes of Common Stock of the
Corporation and to each other class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series C Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the
1
Corporation (collectively referred to,
together with all classes of Common Stock of the Corporation, as
“Junior Securities”); (ii) on a parity with the Pari Passu
Preferred Stock and with any class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation hereafter created the terms of
which expressly provide that such class or series will rank on a parity with
the Series C Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to as “Parity
Securities”), provided that any
such Parity Securities not issued in accordance with the requirements of
paragraph (f)(i) hereof shall be deemed to be Junior Securities and not Parity
Securities; and (iii) junior to the Senior Preferred Stock and to each other
class of Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank senior to the Series C Convertible Preferred as to
dividends and distributions upon liquidation, winding up or dissolution of the
Corporation (collectively referred to as “Senior Securities”), provided that any such Senior Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Senior Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series C Convertible Preferred at the higher of (x) a rate per annum equal to
8% of the Issue Price and (y) the aggregate cash dividends per share paid on
the Class A Common Stock from (A) the later of the Issue Date or the date of
the last payment of a cash dividend on the Class A Common Stock to (B) the date
of such determination, multiplied by the number of shares of Class A Common
Stock into which each share of Series C Convertible Preferred is convertible.
All dividends shall accrue and be cumulative, whether or not earned or
declared, on a quarterly basis, in arrears, from the Issue Date, but shall be
payable only at such time or times as may be fixed by the Board of Directors or
as otherwise provided herein and shall not compound. Dividends shall be payable
to those Holders who are Holders on such dates as the Board of Directors may
determine with respect to such dividends. Dividends shall cease to accrue and
accumulate in respect of shares of the Series C Convertible Preferred on the
date of conversion of such shares or the date of the redemption of such shares
unless the Corporation shall have failed to pay or make available for payment
the relevant redemption price on the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series C Convertible Preferred pursuant to paragraph (c)(i) shall
be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the
2
Junior Securities, including, without
limitation, the Common Stock of the Corporation, an amount in cash equal to the
greater of (A) the Liquidation Preference for each outstanding share of Series
C Convertible Preferred, plus, without duplication, an amount in cash equal to
accumulated and unpaid dividends thereon to the date fixed for such
liquidation, dissolution or winding up, and (B) the amount per share which
would have been payable upon such liquidation, dissolution or winding up to the
holders of shares of Class A Common Stock or such other class or series of
stock into which the Series C Convertible Preferred is then convertible
(assuming the conversion of each share of then convertible Series C Convertible
Preferred and without deduction for the Liquidation Preference otherwise
payable pursuant to clause (A) hereof), multiplied by the number of shares of
Class A Common Stock into which such shares of Series C Convertible Preferred
are then convertible. Except as provided in the preceding sentence, Holders of
Series C Convertible Preferred shall not be entitled to any distribution in the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to the Holders and to any holders of all other
Parity Securities, then such assets shall be distributed among the Holders and
any holders of such other Parity Securities ratably in accordance with the
respective amounts that would be payable on such shares of Series C Convertible
Preferred and any such shares of other Parity Securities if all amounts payable
thereon were paid in full.
(ii) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series C Convertible Preferred for cash on
August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series C Convertible Preferred as to the Holder or
Holders to whom the Corporation has failed to give said notice or to whom such
notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
3
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series C Convertible
Preferred; and
(3) that dividends on the shares of the
Series C Convertible Preferred shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the Redemption
Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series C Convertible
Preferred held by such Holder to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place or places designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such shares shall be payable in
cash to the Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be canceled and
retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series C Convertible Preferred shall cease to accumulate on
the Redemption Date, and all rights of the Holders shall terminate with respect
to the Series C Convertible Preferred on the Redemption Date, other than the
right to receive the Redemption Price, without interest; provided,
however, that if the Redemption Notice shall have been given
and the funds necessary for redemption (including an amount in respect of all
dividends that will accrue to the Redemption Date) shall have been segregated
and irrevocably deposited in trust for the equal and ratable benefit of the
Holders, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
C Convertible Preferred are outstanding, the Corporation may not issue any
additional shares of Series C Convertible Preferred or any new class of Parity
Securities or Senior Securities (or amend the provisions of any existing class
of Capital Stock to make such class of Capital Stock Parity Securities or
Senior Securities) without the approval of Holders holding at least a majority
of the then outstanding shares of Series C Convertible Preferred, voting or
consenting, as the case may be, together as one class given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting; provided, however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
C Convertible Preferred or prohibit the redemption by the Corporation of
the Series C
4
Convertible Preferred pursuant to paragraph
(e)(i) above, in an amount sufficient to Refinance any series of Senior
Securities, in whole or in part, with such shares being issued no sooner than
the date the Corporation Refinances such series of Senior Securities.
(B) So long as any shares of the Series C
Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series C
Convertible Preferred, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted at an
annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of any class, including
Preferred Stock, shall not require the consent of Holders and shall not be
deemed to affect adversely the rights, preferences or privileges of such
Holders.
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
C Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be organized and existing
under the laws of the United States or any State thereof or the District of
Columbia; (B) the Series C Convertible Preferred shall be converted into or
exchanged for and shall become shares of such successor, transferee or
resulting Person with the same powers, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereon, that the Series C Convertible Preferred had immediately
prior to such transaction; (C) immediately after giving effect to such
transactions, no Voting Rights Triggering Event shall have occurred or shall
have occurred after the Issue Date and be continuing; and (D) the Corporation
has delivered to the transfer agent for the Series C Convertible Preferred
prior to the consummation of the proposed transaction an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with the terms hereof and that all conditions
precedent herein relating to such transaction have been satisfied. For purposes
of the foregoing, the transfer (by lease, assignment, sale or
5
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 of the Corporation, the Capital Stock of
which constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the Corporation fails to
discharge any redemption or conversion obligation with respect to the Series C
Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series C
Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein shall be the exclusive remedy at law
or in equity of the Holders for any Voting Rights Triggering Event.
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series C Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series C Convertible Preferred addressed to the
secretary of the Corporation shall, call a special meeting of the Holders, for
the purpose of electing the directors which the Holders are entitled to elect.
If such meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of said written request upon the
secretary of the Corporation, or within 20 days after mailing the same within
the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series C Convertible Preferred may designate in
writing one of their number to call such meeting at the reasonable expense of
the Corporation, and such meeting may be called by the Holder so designated
upon the notice required for the annual meetings of stockholders of the
Corporation and shall be held at the place for holding the annual meetings of
stockholders. Any Holder of Series C Convertible Preferred so designated shall
have, and the Corporation shall provide, access to the lists of stockholders to
be called pursuant to the provisions hereof.
6
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then outstanding shares of
Series C Convertible Preferred shall be required to constitute a quorum of such
Series C Convertible Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware, each Holder entitled to vote with
respect to such matter shall be entitled to one vote for each then outstanding
share of Series C Convertible Preferred so held.
(g) Conversion.
(i) Optional Conversion. Each share of the Series C Convertible Preferred is
convertible at the option of the Holder thereof, at any time and from time to
time, into (A) a number of Conversion Shares equal to the Issue Price of the
shares of Series C Convertible Preferred surrendered for conversion plus
accrued and unpaid dividends thereon, divided by (B) the Conversion Price then
in effect, except that if shares of Series C Convertible Preferred are called
for redemption the conversion right will terminate at the close of business on
the Redemption Date. No fractional shares or securities representing fractional
shares will be issued upon conversion; in lieu of fractional shares the
Corporation will pay a cash adjustment based upon the Common Stock Value as of
the close of business on the first Business Day preceding the date of
conversion. The Series C Convertible Preferred shall be converted by the holder
thereof by surrendering the certificate or certificates representing the shares
of Series C Convertible Preferred to be converted, appropriately completed, to
the transfer agent for the Common Stock. The transfer agent shall issue one or
more certificates representing the Conversion Shares in the name or names
requested by such Holder. The transfer agent will deliver to such Holder a new
certificate representing the shares of Series C Convertible Preferred in excess
of those being surrendered for conversion. The conversion rights stated herein
are subject to compliance by the Holder with all applicable laws and
regulations, including, without limitation, the Communications Act, and as a
condition precedent to the Corporation’s obligation to issue Conversion
Shares to a Holder or its designee(s), the Corporation may require that such
Holder deliver to the Corporation an opinion of legal counsel reasonably
acceptable to the Corporation to the
7
effect that the issuance of Conversion
Shares to such Holder or its designee(s) upon conversion will not violate or
conflict with the Communications Act.
(ii) Mandatory Conversion. At any time following the first anniversary of the
Issue Date, upon the occurrence of a Mandatory Conversion Event, including a
Mandatory Conversion Event that occurs after the Redemption Date to the extent
any share of Series C Convertible Preferred remains outstanding after the
Redemption Date, unless previously converted at the option of Holders in
accordance with the provisions hereof, each outstanding share of Series C
Convertible Preferred shall, without notice to Holders, convert automatically
(the “Mandatory
Conversion”) into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series C
Convertible Preferred so converted plus accrued and unpaid dividends thereon,
divided by the (B) Conversion Price then in effect. No fractional shares or
securities representing fractional shares will be issued upon conversion; in
lieu of fractional shares the Corporation will pay a cash adjustment based upon
the Common Stock Value as of the close of business on the first Business Day
preceding the date of the occurrence of such Mandatory Conversion Event.
Promptly following a Mandatory Conversion Event, written notice (the
“Mandatory Conversion
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice or any
deficiency therein shall affect the validity of the procedures for the
Mandatory Conversion as to the Holder or Holders to whom the Corporation has
failed to give said notice or to whom such notice was effected. Each Holder
shall surrender the certificate or certificates representing all shares of
Series C Convertible Preferred held by such Holder to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation) and the Corporation shall issue to such Holder that number of
shares of Class A Common Stock to which such Holder is entitled, as calculated
in accordance with this paragraph; provided,
however, that if a Holder shall notify the Corporation within
five (5) Business Days of receipt of the Mandatory Conversion Notice that it
wishes to receive Class C Common Stock in accordance with this paragraph, the
Corporation shall issue such Holder an equal number of shares of Class C Common
Stock to which such Holder is entitled as calculated in accordance with this
paragraph.
(iii) (A) In case the Corporation shall (I)
pay a dividend or distribution in shares of Class A Common Stock on its shares
of Class A Common Stock, (II) subdivide its outstanding shares of Class A
Common Stock into a greater number of shares, (III) combine its outstanding
shares of Class A Common Stock into a smaller number of shares, or (IV) issue,
by reclassification of its shares of Class A Common Stock, any shares of its
Capital Stock (each such transaction being called a “Stock
Transaction”), then and in each
such case, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of a share of Series C Convertible Preferred
surrendered for conversion after the record date fixing stockholders to be
affected by such Stock Transaction shall be entitled to receive upon conversion
the number of Conversion Shares which such Holder would have been entitled to
receive after the happening of such event had such share of Series C
Convertible Preferred been converted immediately prior to such record date.
Such adjustment shall be made
8
whenever any Stock Transaction occurs, but
shall also be effective retroactively as to shares of Series C Convertible
Preferred converted between such record date and the date of the happening of
any such Stock Transaction.
(B) If the Corporation shall, at any time or
from time to time while any shares of Series C Convertible Preferred are
outstanding, issue or sell any right or warrant to purchase, acquire or
subscribe for shares of Class A Common Stock (including a right or warrant with
respect to any security convertible into or exchangeable for shares of Class A
Common Stock) generally to holders of its Common Stock (including by way of a
reclassification of shares or a recapitalization of the Corporation), for a
consideration on the date of such issuance or sale less than the Common Stock
Value of the shares of Class A Common Stock underlying such rights or warrants
on the date of such issuance or sale, then and in each such case, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which shall be the sum of (I) the Common Stock Value
per share of Class A Common Stock on the first Business Day after the date of
the public announcement of the actual terms (including the price terms) of such
issuance or sale multiplied by the number of shares of Class A Common Stock
outstanding immediately prior to such issuance or sale plus (II) the aggregate
Fair Market Value of the consideration to be received by the Corporation in
connection with the issuance or sale of the rights or warrants plus the
aggregate consideration to be received in respect of the purchase of the shares
of Class A Common Stock underlying such rights or warrants, and the denominator
of which shall be the Common Stock Value per share of Class A Common Stock on
the Business Day immediately preceding the public announcement of the actual
terms (including the price terms) of such issuance or sale multiplied by the
aggregate number of shares of Class A Common Stock (I) outstanding immediately
prior to such issuance or sale plus (II) underlying such rights or warrants at
the time of such issuance or sale. For the purposes of the preceding sentence,
the aggregate consideration receivable by the Corporation in connection with
the issuance or sale of any such right or warrant shall be deemed to be equal
to the sum of the aggregate offering price (before deduction of reasonable
underwriting discounts or commissions and expenses) of all such rights or
warrants. No adjustment to the Conversion Price pursuant to this paragraph (B)
shall be made if, in conjunction with any such issuance or sale by the
Corporation generally to holders of its Common Stock, the Corporation issues or
offers to sell to the Holders such rights or warrants on the same basis as the
Holders would have received had their shares of Series C Convertible Preferred
been converted into shares of Class A Common Stock (or Class C Common Stock, as
the case may be) immediately prior to the such issuance or sale. Upon the
expiration or termination of any such rights or warrants without the exercise
of such rights or warrants, the Conversion Price then in effect shall be
adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such rights or warrants, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, although such adjustment shall not effect previously converted
shares.
(C) In the event the Corporation shall at
any time or from time to time while any shares of Series C Convertible
Preferred are outstanding declare, order, pay or make a dividend or other
distribution generally to holders of its Common Stock in stock or other
securities or rights or warrants to subscribe for securities of the Corporation
or
9
any of its subsidiaries or evidences of
Indebtedness of the Corporation or any other person or pay any Extraordinary
Cash Dividend (other than any dividend or distribution on the Class A Common
Stock (I) referred to in paragraphs (A) or (B) above or (II) if in conjunction
therewith the Corporation declares and pays or makes a dividend or distribution
on each share of Series C Convertible Preferred which is the same as the
dividend or distribution that would have been made or paid with respect to such
share of Series C Convertible Preferred had such share been converted into
shares of Class A Common Stock immediately prior to the record date for any
such dividend or distribution on the Class A Common Stock), then, and in each
such case, an appropriate adjustment to the Conversion Price shall be made so
that the Holder of each share of Series C Convertible Preferred shall be
entitled to receive, upon the conversion thereof, the number of shares of Class
A Common Stock determined by multiplying (x) the number of shares of Class A
Common Stock into which such share was convertible on the day immediately prior
to the record date fixed for the determination of stockholders entitled to
receive such dividend or distribution by (y) a fraction, the numerator of which
shall be the Common Stock Value per share of Class A Common Stock as of such
record date, and the denominator of which shall be such Common Stock Value per
share of Class A Common Stock less the Fair Market Value per share of Class A
Common Stock of such dividend or distribution (as determined in good faith by
the Board of Directors, as evidenced by a Board Resolution mailed to each
holder of Series C Convertible Preferred). An adjustment made pursuant to this
paragraph (C) shall be made upon the opening of business on the next Business
Day following the date on which any such dividend or distribution is made and
shall be effective retroactively to the close of business on the record date
fixed for the determination of stockholders entitled to receive such dividend
or distribution.
(D) In the event the Company shall, at any
time or from time to time while any shares of Series C Convertible Preferred
are outstanding, repurchase (a “Repurchase”) any portion of the Class A Common Stock from
holders generally at a premium over the Common Stock Value thereof on the next
trading day immediately preceding the consummation of such Repurchase, then and
in the case of each Repurchase the Conversion Price in effect immediately prior
thereto shall be adjusted by multiplying such Conversion Price by the fraction
the numerator of which is (I) the product of (x) the number of shares of Class
A Common Stock outstanding immediately before such Repurchase multiplied by (y)
the Common Stock Value per share of Class A Common Stock on the next trading
day immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class A Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class A Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class A Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series C Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
10
(iv) No adjustment in the Conversion Price
will be required to be made in any case until cumulative adjustments amount to
1% or more of the Conversion Price, but any such adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(v) In the event of any capital
reorganization (other than a capital reorganization covered by paragraph
(ii)(C) above) or reclassification of outstanding shares of Common Stock of the
Corporation (other than a reclassification covered by paragraph (ii)(A) above),
or in case of any merger, consolidation or other corporate combination of the
Corporation with or into another corporation, or in case of any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a “Transaction”), each share of Series C Convertible Preferred
shall continue to remain outstanding if the Corporation is the Surviving Person
(as defined below) of such Transaction, and shall be subject to all the
provisions hereof, as in effect prior to such Transaction, or if the
Corporation is not the Surviving Person, each share of Series C Convertible
Preferred shall be exchanged in such Transaction for a new series of
convertible preferred stock of the Surviving Person, or in the case of a
Surviving Person other than a corporation, comparable securities of such
Surviving Person, in either case having economic terms as nearly equivalent as
possible to, and with the same voting and other rights as, the Series C
Convertible Preferred, including entitling the holder thereof to receive, upon
presentation of the certificate therefor to the Surviving Person subsequent to
the consummation of such Transaction, the kind and amount of shares of stock
and other securities and property receivable (including cash) upon the
consummation of such Transaction by a holder of that number of shares of Class
A Common Stock into which one share of Series C Convertible Preferred was
convertible immediately prior to such Transaction. In case securities or
property other than Common Stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this paragraph (v) shall be
deemed to apply, so far as appropriate and as nearly as may be, to such other
securities or property. If the holders of Class A Common Stock have the
opportunity to elect the form of consideration to be received by them in such
Transaction, then from and after the effective date of such Transaction, the
Series C Convertible Preferred shall be convertible into the consideration that
a majority of the holders of the Class A Common Stock who made such election
received in such Transaction.
Notwithstanding anything contained herein to
the contrary, the Corporation will not effect any Transaction unless, prior to
the consummation thereof, proper provision is made to ensure that the holders
of shares of Series C Convertible Preferred will be entitled to receive the
benefits afforded by this paragraph (v).
For purposes of this paragraph (v),
“Surviving Person” shall mean the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with which
the Series C Convertible
11
Preferred or Common Stock of the Corporation
is exchanged, converted or reclassified into the securities of any other Person
or cash or any other property.
(vi) The conversion price shall initially
equal $0.75 per share, and shall increase from and after the Issue Date at a
rate equal to the dividend rate on the Series C Convertible Preferred as set
forth in paragraph (c)(i) (the “Conversion Price”). The Conversion Price shall be subject to
adjustment as provided in this paragraph (g).
(vii) From and after an Initial Public
Offering, the Corporation shall cause the shares of Class A Common Stock
issuable upon conversion of the Series C Convertible Preferred (or in the case
of a Holder’s election to convert into Class C Common Stock, upon
conversion of such Class C Common Stock) to be approved for listing on the
principal securities exchange on which the Class A Common Stock may at the time
be listed for trading, subject to official notification of issuance, prior to
the date of issuance thereof. Notwithstanding anything in this Certificate of
Designation to the contrary, no Holders shall be entitled to exercise the
conversion rights set forth in this paragraph (g) until such time as any
conditions for listing the Class A Common Stock issuable upon conversion of the
Series C Convertible Preferred on the principal securities exchange on which
the Class A Common Stock may be listed for trading, if any and if applicable,
have been satisfied.
(viii) Notwithstanding anything to the
contrary contained in this paragraph (g), there shall be no adjustment to the
Conversion Price in connection with any issuance of additional shares of Series
C Convertible Preferred or any other securities that are or may be or become
issued or issuable in connection with the transactions contemplated by the
Master Transaction Agreement.
(h) Reissuance of Series C Convertible
Preferred. Shares of Series C
Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series C Convertible Preferred must be in
compliance with the terms hereof.
(i) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
12
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
“Business Day” means any day except a Saturday, a Sunday, or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
“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, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not
a corporation, any and all partnership, membership 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 capital lease
obligations under GAAP and, for purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Class A Common Stock” means the Class A Common Stock, par value $.001
per share, of the Corporation.
“Class C Common Stock” means the Class C Non-Voting Common Stock, par
value $.001 per share, of the Corporation.
“Class D Common Stock” means the Class D Non-Voting Common Stock, par
value $.001 per share, of the Corporation.
“Commission”
means the Securities and Exchange Commission.
13
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Common Stock Value” on any date means, with respect to the Class A
Common Stock or the Class D Common Stock, the last sale price for the Class A
Common Stock or the Class D Common Stock, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, for the Class A Common Stock or the Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or the Class D Common Stock is listed or admitted to
trading or, if neither the Class A Common Stock nor the Class D Common Stock is
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the principal automated
quotation system that may then be in use or, if neither the Class A Common
Stock nor the Class D Common Stock is quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Class A Common Stock or the Class D Common
Stock selected by the Board of Directors or, in the event that no trading price
is available for the Class A Common Stock or the Class D Common Stock, the fair
market value of the Class A Common Stock, as determined in good faith by the
Board of Directors.
“Communications Act” means the Communications Act of 1934, as amended
(including, without limitation, the Cable Communications Policy Act of 1984 and
the Cable Television Consumer Protection and Competition Act of 1992) and all
rules and regulations of the FCC, in each case as from time to time in
effect.
“Consolidated EBITDA” means, for any Person, for any period, an amount
equal to (a) the sum of Consolidated Net Income for such period, plus, to the
extent deducted from the revenues of such Person in determining Consolidated
Net Income, (i) the provision for taxes for such period based on income or
profits and any provision for taxes utilized in computing a loss in
Consolidated Net Income above, plus (ii) Consolidated Interest Expense, net of
interest income earned on cash or cash equivalents for such period (including,
for this purpose, dividends on preferred stock only to the extent that such
dividends were deducted in determining Consolidated Net Income), plus (iii)
depreciation for such period on a consolidated basis, plus (iv) amortization of
intangibles and broadcast program licenses for such period on a consolidated
basis, minus (b) scheduled payments relating to broadcast program license
liabilities, except that with respect to the Corporation each of the foregoing
items shall be determined on a consolidated basis with respect to the
Corporation and its Subsidiaries only; provided,
however, that, for purposes of calculating Consolidated EBITDA
during
14
any fiscal quarter, cash income from a
particular Investment of such Person shall be included only if cash income has
been received by such Person as a result of the operation of the business in
which such Investment has been made in the ordinary course without giving
effect to any extraordinary, unusual and non-recurring gains.
“Consolidated Interest Expense” means, with respect to any Person, for any
period, the aggregate amount of interest which, in conformity with GAAP, would
be set forth opposite the caption “interest expense” or any like
caption on an income statement for such Person and its Subsidiaries on a
consolidated basis, including, but not limited to, imputed interest included in
Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing, the net costs associated with hedging obligations, amortization of
other financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other non-cash
interest expense (other than interest amortized to cost of sales) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, and all time
brokerage fees relating to financing of television stations which the
Corporation has an agreement or option to acquire.
“Consolidated Net Income” means, with respect to any Person, for any
period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
15
“Conversion Price” has the meaning ascribed to it in paragraph
(g)(vi) hereof.
“Conversion Shares” means (i) the number of shares of Class A Common
Stock or (ii) with respect to any Holder, if such Holder determines, after
consultation with its outside legal counsel, that such Holder is prevented
under the Communications Act from holding shares of Class A Common Stock
issuable upon conversion of such Holder’s shares of Series C Convertible
Preferred, an equal number of shares of Class C Common Stock of the Corporation
(such Class C Common Stock shall, (1) upon disposition by such Holder to any
other Person that such Holder determines is not prevented under the
Communications Act from holding shares of Class A Common Stock or (2) upon the
determination by such Holder that the Communications Act no longer prohibits
such Holder from holding shares of Class A Common Stock, in either case, after
consultation by such Person with outside legal counsel and, if required by the
Corporation, delivery by such Person to the Corporation an Opinion of Counsel
reasonably acceptable to the Corporation to the effect that the Conversion of
such Class C Common Stock to Class A Common Stock will not violate or conflict
with the Communications Act, automatically be converted into an equal number of
shares of Class A Common Stock), into which the Series C Convertible Preferred
is from time to time convertible.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Designated Investment Bank” means an investment bank selected by the
Purchasing Party from a list of three internationally recognized investment
banks provided to the Purchasing Party by the Company pursuant to Section 2.07
of the Master Transaction Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Extraordinary Cash Dividend” means cash dividends with respect to the Class A
Common Stock the aggregate amount of which in any fiscal year exceeds 10% of
Consolidated EBITDA of the Corporation and its subsidiaries for the fiscal year
immediately preceding the payment of such dividend.
“Fair Market Value” of any consideration other than cash or of any
securities shall mean the amount which a willing buyer would pay to a willing
seller in an arm’s-length transaction as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors or a
committee thereof.
“FCC” means
the Federal Communications Commission and any successor governmental entity
performing functions similar to those performed by the Federal Communications
Commission on the Issue Date.
16
“GAAP” means
generally accepted accounting principles consistently applied as in effect in
the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series C Convertible Preferred as
reflected in the stock books of the Corporation.
“Initial Public Offering” means the initial underwritten sale of equity
securities of the Corporation occurring after the Issue Date pursuant to an
effective registration statement under the Securities Act.
“Issue Date”
means the date of the issuance of Series C Convertible Preferred.
“Issue Price” means $10,000 per share of Series C Convertible
Preferred.
“Junior Preferred Stock” means, collectively, (i) 9¾% Preferred,
(ii) Series B Convertible Preferred, (iii) Series C Preferred Stock
(iv) Series D Convertible Preferred, (v) Series E-1 Convertible
Preferred, (vi) Series E-2 Convertible Preferred and (vii) Series F
Non-Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Mandatory Conversion” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory Conversion Event” means the earlier to occur of: (i) the date on
which the last sale price for the Class A Common Stock or Class D Common Stock,
regular way, or, in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for the Class A Common Stock or
Class D Common Stock, in either case as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Class A Common Stock or Class D Common Stock is listed or
admitted to trading, or, if neither Class A Common Stock nor Class D Common
Stock is listed or admitted to trading on any national securities exchange, the
last quoted price, or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the principal
automated quotation system that may then be in use, for the Class A Common
Stock or Class D Common Stock for fifteen (15) consecutive trading days is
equal to or greater than the Mandatory Conversion Trigger Price as then in
effect; and (ii) the issuance by the Corporation of Common Stock at an issue
price per share not less than the Mandatory Conversion Trigger Price as then in
effect for aggregate gross proceeds (before deduction of underwriting
commissions and other expenses of sale) of not less than $75,000,000, provided
that if such issuance is made to a Purchasing Party, the Designated Investment
Bank shall
17
have provided an opinion in customary form
to the Company to the effect that the issue price per share of Common Stock is
at or higher than the fair market value of a share of Common Stock.
“Mandatory Conversion Notice” has the meaning ascribed to it in paragraph
(g)(ii) hereof.
“Mandatory
Conversion Trigger Price” means
(A) in the event the Mandatory Conversion Event occurs on or after the first
anniversary but prior to the second anniversary of the Issue Date, 102% of the
Conversion Price, (B) in the event the Mandatory Conversion Event occurs on or
after the second anniversary but prior to the third anniversary of the Issue
Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Obligations” means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the taking of any proposed action have been taken. Such
opinion shall also include the statements called for in the second sentence
under “Officers’ Certificate”.
“Pari Passu Preferred Stock” means the 14¼% Preferred as defined in the
Master Transaction Agreement.
“Parity Securities” has the meaning ascribed to it in paragraph (b)
hereof.
18
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing Party” means CIG Media LLC, NBC Universal, Inc. and
their respective Affiliates.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in
paragraph (e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
“Senior Preferred Stock” means collectively, (i) Series A-1
Convertible Preferred, (ii) Series A-2 Preferred Stock, and (iii) Series
A-3 Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Series C Convertible Preferred” has the meaning ascribed to it in paragraph (a)
hereof.
“Subsidiary”, with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority
of the votes
19
entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned, directly or
indirectly, 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, owned by such Person.
“Stock Transaction” has the meaning ascribed to it in paragraph
(g)(iii) hereof.
“Surviving Person” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Transaction” has the meaning ascribed to it in paragraph
(g)(v) hereof.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned Subsidiary” means any Subsidiary all of the outstanding
voting securities (other than directors’ qualifying shares) of which are
owned, directly or indirectly, by the Corporation.
20
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this ___ day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
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Name:
Title:
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Certificate of Designation
EXHIBIT
K to the Master Transaction Agreement
Series
C Preferred Stock Certificate of Designation
Exhibit K to the
Master Transaction Agreement
Series C Preferred Stock Certificate of
Designation
CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
8% SERIES C NON-CONVERTIBLE PREFERRED
STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 8%
Series C Non-Convertible Preferred Stock, par value $.001 per share, with a
liquidation preference of $10,000 per share, consisting of 6,000 shares, having
the designations, preferences, relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof
that are set forth in the Certificate of Incorporation and in this resolution
as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the “8%
Series C Non-Convertible Preferred Stock.” The number of shares
constituting such series shall be 6,000 and are referred to as the “Series
C Non-Convertible Preferred Stock.” The liquidation preference of the
Series C Non-Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
C Non-Convertible Preferred shall, with respect to dividends and distributions
upon liquidation, winding up or dissolution of the Corporation, rank
(i) senior to all Junior Preferred Stock and all classes of Common Stock
of the Corporation and to each other class of Capital Stock of the Corporation
or series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series C Non-Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior Securities”); (ii) on a parity with the Pari Passu Preferred
Stock and with any class of Capital Stock of the Corporation or series of
Preferred Stock of the Corporation hereafter created the terms of which
expressly provide
that such class or series will rank on a
parity with the Series C Non-Convertible Preferred as to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation
(collectively referred to as “Parity Securities”), provided that any such Parity Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Parity Securities; and (iii) junior to
the Senior Preferred Stock and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created
the terms of which expressly provide that such class or series will rank senior
to the Series C Non-Convertible Preferred as to dividends and distributions
upon liquidation, winding up or dissolution of the Corporation (collectively
referred to as “Senior
Securities”), provided that any
such Senior Securities not issued in accordance with the requirements of
paragraph (f)(i) hereof shall be deemed to be Junior Securities and not Senior
Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series C Non-Convertible Preferred at a rate per annum equal to 8% of the Issue
Price. All dividends shall accrue and be cumulative, whether or not earned or
declared, on a quarterly basis, in arrears, from the Issue Date, but shall be
payable only at such time or times as may be fixed by the Board of Directors or
as otherwise provided herein and shall not compound. Dividends shall be payable
to those Holders who are Holders on such dates as the Board of Directors may
determine with respect to such dividends. Dividends shall cease to accrue and
accumulate in respect of shares of the Series C Non-Convertible Preferred on
the date of the redemption of such shares unless the Corporation shall have
failed to pay or make available for payment the relevant redemption price on
the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series C Non-Convertible Preferred pursuant to paragraph (c)(i)
shall be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the Junior Securities, including, without limitation, the Common Stock of the
Corporation, an amount in cash equal to the Liquidation Preference for each
outstanding share of Series C Non-Convertible Preferred, plus, without
duplication, an amount in cash equal to accumulated and unpaid dividends
thereon to the date fixed for such liquidation, dissolution or winding up.
Except as provided in the preceding sentence, Holders of Series C
Non-Convertible Preferred shall not be entitled to any distribution in the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to the Holders and to any holders of all other
Parity Securities, then such assets shall be
2
distributed among the Holders and any
holders of such other Parity Securities ratably in accordance with the
respective amounts that would be payable on such shares of Series C
Non-Convertible Preferred and any such shares of other Parity Securities if all
amounts payable thereon were paid in full.
(A) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series C Non-Convertible Preferred for cash on
August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series C Non-Convertible Preferred as to the Holder
or Holders to whom the Corporation has failed to give said notice or to whom
such notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series C
Non-Convertible Preferred; and
(3) that dividends on the shares of the
Series C Non-Convertible Preferred shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the Redemption
Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series C Non-Convertible
Preferred held by such Holder to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place or places designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such shares shall be payable in
cash to the Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be canceled and
retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series C Non-Convertible Preferred shall cease to accumulate
on the Redemption Date, and all rights of the Holders shall terminate with
respect to the Series C
3
Non-Convertible Preferred on the Redemption
Date, other than the right to receive the Redemption Price, without interest;
provided, however, that if
the Redemption Notice shall have been given and the funds necessary for
redemption (including an amount in respect of all dividends that will accrue to
the Redemption Date) shall have been segregated and irrevocably deposited in
trust for the equal and ratable benefit of the Holders, then, at the close of
business on the day on which such funds are segregated and set aside, the
Holders shall cease to be stockholders of the Corporation and shall be entitled
only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
C Non-Convertible Preferred are outstanding, the Corporation may not issue any
additional shares of Series C Non-Convertible Preferred or any new class of
Parity Securities or Senior Securities (or amend the provisions of any existing
class of Capital Stock to make such class of Capital Stock Parity Securities or
Senior Securities) without the approval of Holders holding at least a majority
of the then outstanding shares of Series C Non-Convertible Preferred, voting or
consenting, as the case may be, together as one class given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting; provided, however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
C Non-Convertible Preferred or prohibit the redemption by the Corporation of
the Series C Non-Convertible Preferred pursuant to paragraph (e)(i) above, in
an amount sufficient to Refinance any series of Senior Securities, in whole or
in part, with such shares being issued no sooner than the date the Corporation
Refinances such series of Senior Securities.
(B) So long as any shares of the Series C
Non-Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series C
Non-Convertible Preferred, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of
4
any class, including Preferred Stock, shall
not require the consent of Holders and shall not be deemed to affect adversely
the rights, preferences or privileges of such Holders.
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
C Non-Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be a corporation
incorporated and existing under the laws of the United States or any State
thereof or the District of Columbia; (B) the Series C Non-Convertible Preferred
shall be converted into or exchanged for and shall become shares of such
successor, transferee or resulting Person with the same powers, preferences and
relative, participating, optional or other special rights and the
qualifications, limitations or restrictions thereon, that the Series C
Non-Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series C Non-Convertible Preferred prior to the consummation of
the proposed transaction an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer complies with
the terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the Corporation fails to
discharge the redemption obligation with respect to the Series C
Non-Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series C
Non-Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein
5
shall be the exclusive remedy at law or in
equity of the Holders for any Voting Rights Triggering Event.
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series C Non-Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series C Non-Convertible Preferred addressed to the
secretary of the Corporation shall, call a special meeting of the Holders, for
the purpose of electing the directors which the Holders are entitled to elect.
If such meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of said written request upon the
secretary of the Corporation, or within 20 days after mailing the same within
the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series C Non-Convertible Preferred may designate
in writing one of their number to call such meeting at the reasonable expense
of the Corporation, and such meeting may be called by the Holder so designated
upon the notice required for the annual meetings of stockholders of the
Corporation and shall be held at the place for holding the annual meetings of
stockholders. Any Holder of Series C Non-Convertible Preferred so designated
shall have, and the Corporation shall provide, access to the lists of
stockholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then outstanding shares of
Series C Non-Convertible Preferred shall be required to constitute a quorum of
such Series C Non-Convertible Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
6
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware, each Holder entitled to vote with
respect to such matter shall be entitled to one vote for each then outstanding
share of Series C Non-Convertible Preferred so held.
(g) Reissuance of Series C Non-Convertible
Preferred. Shares of Series C
Non-Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series C Non-Convertible Preferred must be in
compliance with the terms hereof.
(h) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(i) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(j) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
“Business Day” means any day except a Saturday, a Sunday, or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
“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, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not
a corporation, any and all partnership, membership or other equity interests of
such Person.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
7
“Commission”
means the Securities and Exchange Commission.
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Holder”
means a holder of then outstanding shares of Series C Non-Convertible Preferred
as reflected in the stock books of the Corporation.
“Issue Date”
means the date of the issuance of Series C Non-Convertible Preferred.
“Issue Price” means $10,000 per share of Series C
Non-Convertible Preferred.
“Junior Preferred Stock” means collectively, (i) Series D Convertible
Preferred, (ii) Series E-1 Convertible Preferred, (iii) Series E-2
Convertible Preferred, and (iv) Series F Non-Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to
8
whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the taking of any proposed action have been taken. Such
opinion shall also include the statements called for in the second sentence
under “Officers’ Certificate”.
“Pari Passu Preferred Stock” means collectively, the Series B Convertible
Preferred and the Series C Convertible Preferred.
“Parity Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in
paragraph (e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinancing” has the correlative meaning.
“Senior Preferred Stock” means collectively, (i) Series A-1 Convertible
Preferred, (ii) Series A-2 Preferred Stock, (iii) Series A-3 Convertible
Preferred, (iv) 14¼% Preferred, and (v) 9¾% Preferred, in each
case as defined in the Master Transaction Agreement.
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
9
“Series
C Non-Convertible Preferred” has
the meaning ascribed to it in paragraph (a) hereof.
“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, 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,
owned by such Person.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned Subsidiary” means any Subsidiary all of the outstanding
voting securities (other than directors’ qualifying shares) of which are
owned, directly or indirectly, by the Corporation.
10
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this 4th day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chief Financial
Officer
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Certificate of Designation
EXHIBIT
L to the Master Transaction Agreement
Series
D Convertible Preferred Certificate of Designation
Exhibit
L to the
Master
Transaction Agreement
Series
D Convertible Preferred Certificate of Designation
CERTIFICATE
OF DESIGNATION OF THE POWERS,
PREFERENCES
AND RELATIVE, PARTICIPATING,
OPTIONAL
AND OTHER SPECIAL RIGHTS OF
8%
SERIES D MANDATORILY CONVERTIBLE PREFERRED STOCK
AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
ION
Media Networks, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that, pursuant to the authority
conferred upon the board of directors of the Corporation (the
“Board
of Directors”)
by the Certificate of Incorporation of the Corporation, as amended (hereinafter
referred to as the “Certificate
of Incorporation”),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors, on May 3, 2007, duly approved
and adopted the following resolution:
RESOLVED,
that, pursuant to the authority vested in the Board of Directors by the
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of 8% Series D Mandatorily Convertible
Preferred Stock, par value $.001 per share, with a liquidation preference of
$10,000 per share, consisting of 39,000 shares, having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in the
Certificate of Incorporation and in this resolution as follows:
(a) Designation. There
is hereby created out of the authorized and unissued shares of Preferred Stock
of the Corporation a series of Preferred Stock designated as the “8%
Series D Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 39,000 and are referred to as the
“Series D Convertible Preferred.” The liquidation preference of the
Series D Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The
Series D Convertible Preferred shall, with respect to dividends and
distributions upon liquidation, winding up or dissolution of the Corporation,
rank (i) senior to the Junior Preferred Stock, to all classes of Common
Stock of the Corporation and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created,
the terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series D Convertible Preferred as to dividends and
distributions upon liquidation, winding up or dissolution of the
1
Corporation
(collectively referred to, together with all classes of Common Stock of the
Corporation, as “Junior
Securities”);
(ii) on a parity with any class of Capital Stock of the Corporation or series
of Preferred Stock of the Corporation hereafter created the terms of which
expressly provide that such class or series will rank on a parity with the
Series D Convertible Preferred as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to as “Parity
Securities”),
provided that any such Parity Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Parity Securities; and (iii) junior to the Senior Preferred Stock and
to each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series D Convertible
Preferred as to dividends and distributions upon liquidation, winding up or
dissolution of the Corporation (collectively referred to as “Senior
Securities”),
provided that any such Senior Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Senior Securities.
(c) Dividends.
(i) Beginning
on the Issue Date, the Holders shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available therefor,
dividends on each share of Series D Convertible Preferred at the higher of (x)
a rate per annum equal to 8% of the Issue Price and (y) the aggregate cash
dividends per share paid on the Class A Common Stock from (A) the later of the
Issue Date or the date of the last payment of a cash dividend on the Class A
Common Stock to (B) the date of such determination, multiplied by the number of
shares of Class A Common Stock into which each share of Series D Convertible
Preferred is convertible. All dividends shall accrue and be cumulative, whether
or not earned or declared, on a quarterly basis, in arrears, from the Issue
Date, but shall be payable only at such time or times as may be fixed by the
Board of Directors or as otherwise provided herein and shall not compound.
Dividends shall be payable to those Holders who are Holders on such dates as
the Board of Directors may determine with respect to such dividends. Dividends
shall cease to accrue and accumulate in respect of shares of the Series D
Convertible Preferred on the date of conversion of such shares or the date of
the redemption of such shares unless the Corporation shall have failed to pay
or make available for payment the relevant redemption price on the date fixed
for redemption.
(ii) All
dividends paid with respect to shares of the Series D Convertible Preferred
pursuant to paragraph (c)(i) shall be paid in cash pro rata to the Holders
entitled thereto.
(d) Liquidation.
(i) In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, each Holder shall be entitled to be paid, out
of the assets of the Corporation available for distribution to its stockholders
and before any distribution shall be made or any assets distributed to the
holders of any of the Junior Securities, including, without limitation, the
Common Stock of the Corporation, an
amount
in cash equal to the greater of (A) the Liquidation Preference for each
outstanding share of Series D Convertible Preferred, plus, without duplication,
an amount in cash equal to accumulated and unpaid dividends thereon to the date
fixed for such liquidation, dissolution or winding up, and (B) the amount per
share which would have been payable upon such liquidation, dissolution or
winding up to the holders of shares of Class A Common Stock or such other class
or series of stock into which the Series D Convertible Preferred is then
convertible (assuming the conversion of each share of then convertible Series D
Convertible Preferred and without deduction for the Liquidation Preference
otherwise payable pursuant to clause (A) hereof), multiplied by the number of
shares of Class A Common Stock into which such shares of Series D Convertible
Preferred are then convertible. Except as provided in the preceding sentence,
Holders of Series D Convertible Preferred shall not be entitled to any
distribution in the event of any liquidation, dissolution or winding up of the
affairs of the Corporation. If the assets of the Corporation are not sufficient
to pay in full the liquidation payments payable to the Holders and to any
holders of all other Parity Securities, then such assets shall be distributed
among the Holders and any holders of such other Parity Securities ratably in
accordance with the respective amounts that would be payable on such shares of
Series D Convertible Preferred and any such shares of other Parity Securities
if all amounts payable thereon were paid in full.
(ii) For the
purposes of this paragraph (d), neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more entities
shall be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation.
(e) Redemption.
(i) Mandatory
Redemption. The
Corporation shall redeem, in the manner provided for in paragraph (e)(ii)
hereof, and out of funds legally available therefor all of the outstanding
shares of Series D Convertible Preferred for cash on August 31, 2013 (the
“Redemption
Date”),
at a price per share equal to the Redemption Price.
(ii) Procedures
for Redemption.
(A) At
least 90 days prior to the Redemption Date, written notice (the
“Redemption
Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series D Convertible Preferred as
to the Holder or Holders to whom the Corporation has failed to give said notice
or to whom such notice was defective. The Redemption Notice shall
state:
(1) the
Redemption Price;
(2) that the
Holder is to surrender to the Corporation, in the manner, at the place or
places and at the price designated, its certificate or certificates
representing the shares of Series D Convertible Preferred; and
(3) that
dividends on the shares of the Series D Convertible Preferred shall cease to
accumulate on such Redemption Date unless the Corporation defaults in the
payment of the Redemption Price.
(B) Each
Holder shall surrender the certificate or certificates representing all shares
of Series D Convertible Preferred held by such Holder to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place or places designated in the
Redemption Notice, and on the Redemption Date the full Redemption Price for
such shares shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(C) On and
after the Redemption Date, unless the Corporation defaults in the payment in
full of the Redemption Price, dividends on the Series D Convertible Preferred
shall cease to accumulate on the Redemption Date, and all rights of the Holders
shall terminate with respect to the Series D Convertible Preferred on the
Redemption Date, other than the right to receive the Redemption Price, without
interest; provided,
however, that
if the Redemption Notice shall have been given and the funds necessary for
redemption (including an amount in respect of all dividends that will accrue to
the Redemption Date) shall have been segregated and irrevocably deposited in
trust for the equal and ratable benefit of the Holders, then, at the close of
business on the day on which such funds are segregated and set aside, the
Holders shall cease to be stockholders of the Corporation and shall be entitled
only to receive the Redemption Price.
(f) Voting
Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long
as any shares of the Series D Convertible Preferred are outstanding, the
Corporation may not issue any additional shares of Series D Convertible
Preferred or any new class of Parity Securities or Senior Securities (or amend
the provisions of any existing class of Capital Stock to make such class of
Capital Stock Parity Securities or Senior Securities) without the approval of
Holders holding at least a majority of the then outstanding shares of Series D
Convertible Preferred, voting or consenting, as the case may be, together as
one class given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided,
however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
D
Convertible
Preferred or prohibit the redemption by the Corporation of the Series D
Convertible Preferred pursuant to paragraph (e)(i) above, in an amount
sufficient to Refinance any series of Senior Securities, in whole or in part,
with such shares being issued no sooner than the date the Corporation
Refinances such series of Senior Securities.
(B) So long
as any shares of the Series D Convertible Preferred are outstanding, the
Corporation shall not amend this Certificate of Designation so as to affect
materially and adversely the rights, preferences or privileges of Holders
without the affirmative vote or consent of Holders holding at least a majority
of the then outstanding shares of Series D Convertible Preferred, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting.
(C) Except
as set forth in paragraph (f)(i)(A) above, the creation, authorization or
issuance of any shares of any Junior Securities, Parity Securities or Senior
Securities or the increase or decrease in the amount of authorized Capital
Stock of any class, including Preferred Stock, shall not require the consent of
Holders and shall not be deemed to affect adversely the rights, preferences or
privileges of such Holders.
(ii) Without
the affirmative vote or consent of Holders holding at least a majority of the
then outstanding shares of Series D Convertible Preferred, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Corporation’s assets (as an entirety or substantially as an entirety in
one transaction or series of related transactions) to, another Person (other
than a Wholly-Owned Subsidiary with, into or to another Wholly-Owned
Subsidiary) or adopt a plan of liquidation unless (A) either (I) the
Corporation is the surviving or continuing Person or (II) the Person (if other
than the Corporation) formed by such consolidation or into which the
Corporation is merged or the Person that acquires by conveyance, transfer or
lease the properties and assets of the Corporation substantially as an entirety
or, in the case of a plan of liquidation, the Person to which assets of the
Corporation have been transferred shall be organized and existing under the
laws of the United States or any State thereof or the District of Columbia; (B)
the Series D Convertible Preferred shall be converted into or exchanged for and
shall become shares of such successor, transferee or resulting Person with the
same powers, preferences and relative, participating, optional or other special
rights and the qualifications, limitations or restrictions thereon, that the
Series D Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series D Convertible Preferred prior to the consummation of the
proposed transaction an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with the
terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of
the Corporation, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.
(iii) (A) If the
Corporation fails to discharge any redemption or conversion obligation with
respect to the Series D Convertible Preferred (such failure being a
“Voting
Rights Triggering Event”),
then, subject to paragraph (f)(iii)(E) below, Holders of at least a majority of
the then outstanding shares of Series D Convertible Preferred, voting
separately and as one class, shall have the exclusive right to elect the lesser
of two directors and that number of directors constituting 25% of the members
of the Board of Directors, at a meeting called for such purpose following the
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the Holders
expire (other than as described in (f)(iii)(B) below), and the number of
directors constituting the Board of Directors shall be increased by the number
of directors so elected by the Holders. The voting rights provided herein shall
be the exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(B) The
right of the Holders voting together as a separate class to elect members of
the Board of Directors as set forth in paragraph (f)(iii)(A) above shall
continue until such time as in all other cases, the failure, breach or default
giving rise to such Voting Rights Triggering Event is remedied, cured or waived
by Holders of at least a majority of the then outstanding shares of Series D
Convertible Preferred that are entitled to vote thereon, at which time (I) the
special right of the Holders so to vote as a class for the election of
directors and (II) the term of office of the directors elected by the Holders
shall each terminate and such persons shall cease to be members of the Board of
Directors. At any time after voting power to elect directors shall have become
vested and be continuing in the Holders pursuant to paragraph (f)(iii) hereof,
or if vacancies shall exist in the offices of directors elected by such
Holders, a proper officer of the Corporation may, and upon the written request
of Holders of at least 25% of the then outstanding shares of Series D
Convertible Preferred addressed to the secretary of the Corporation shall, call
a special meeting of the Holders, for the purpose of electing the directors
which the Holders are entitled to elect. If such meeting shall not be called by
a proper officer of the Corporation within 20 days after personal service of
said written request upon the secretary of the Corporation, or within 20 days
after mailing the same within the United States by certified mail, addressed to
the secretary of the Corporation at its principal executive offices, then
Holders of at least 25% of the then outstanding shares of Series D Convertible
Preferred may designate in writing one of their number to call such meeting at
the reasonable expense of the Corporation, and such meeting may be called by
the Holder so designated upon the notice required for the annual meetings of
stockholders of the Corporation and shall be held at the place for holding the
annual meetings of stockholders. Any Holder of Series D Convertible Preferred
so designated shall have, and the Corporation shall provide, access to the
lists of stockholders to be called pursuant to the provisions
hereof.
(C) At any
meeting held for the purpose of electing directors at which the Holders shall
have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of Holders of at least a majority
of the then outstanding shares of Series D Convertible Preferred shall be
required to constitute a quorum of such Series D Convertible
Preferred.
(D) Any
vacancy occurring in the office of a director elected by the Holders may be
filled by the remaining director (if any) elected by the Holders unless and
until such vacancy shall be filled by the Holders.
(E) The
provisions of this paragraph (f)(iii) shall apply only to those Holders, if
any, that would be permitted to vote in the election of directors of the
Corporation pursuant to applicable laws and regulations of the FCC, with such
Holders together being treated as the class of Holders entitled to exercise
such rights. The determination as to whether any Holder would not be permitted
to exercise such voting rights shall be made jointly by any such Holder(s) and
the Corporation.
(iv) In any
case in which the Holders shall be entitled to vote pursuant to this paragraph
(f) or pursuant to the General Corporation Law of the State of Delaware, each
Holder entitled to vote with respect to such matter shall be entitled to one
vote for each then outstanding share of Series D Convertible Preferred so
held.
(g) Conversion.
(i) Optional
Conversion. Each
share of the Series D Convertible Preferred is convertible at the option of the
Holder thereof, at any time and from time to time, into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series D
Convertible Preferred surrendered for conversion plus accrued and unpaid
dividends thereon, divided by (B) the Conversion Price then in effect, except
that if shares of Series D Convertible Preferred are called for redemption the
conversion right will terminate at the close of business on the Redemption
Date. No fractional shares or securities representing fractional shares will be
issued upon conversion; in lieu of fractional shares the Corporation will pay a
cash adjustment based upon the Common Stock Value as of the close of business
on the first Business Day preceding the date of conversion. The Series D
Convertible Preferred shall be converted by the holder thereof by surrendering
the certificate or certificates representing the shares of Series D Convertible
Preferred to be converted, appropriately completed, to the transfer agent for
the Common Stock. The transfer agent shall issue one or more certificates
representing the Conversion Shares in the name or names requested by such
Holder. The transfer agent will deliver to such Holder a new certificate
representing the shares of Series D Convertible Preferred in excess of those
being surrendered for conversion. The conversion rights stated herein are
subject to compliance by the Holder with all applicable laws and regulations,
including, without limitation, the Communications Act, and as a condition
precedent to the Corporation’s obligation to issue Conversion Shares to a
Holder or its designee(s), the Corporation may require that such Holder deliver
to the Corporation an opinion of legal counsel reasonably acceptable to the
Corporation to the
effect
that the issuance of Conversion Shares to such Holder or its designee(s) upon
conversion will not violate or conflict with the Communications
Act.
(ii) Mandatory
Conversion. At any
time following the first anniversary of the Issue Date, upon the occurrence of
a Mandatory Conversion Event, including a Mandatory Conversion Event that
occurs after the Redemption Date to the extent any share of Series D
Convertible Preferred remains outstanding after the Redemption Date, unless
previously converted at the option of Holders in accordance with the provisions
hereof, each outstanding share of Series D Convertible Preferred shall, without
notice to Holders, convert automatically (the “Mandatory
Conversion”)
into (A) a number of Conversion Shares equal to the Issue Price of the shares
of Series D Convertible Preferred so converted plus accrued and unpaid
dividends thereon, divided by the (B) Conversion Price then in effect. No
fractional shares or securities representing fractional shares will be issued
upon conversion; in lieu of fractional shares the Corporation will pay a cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of the occurrence of such Mandatory
Conversion Event. Promptly following a Mandatory Conversion Event, written
notice (the “Mandatory
Conversion Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice or any deficiency therein shall affect the validity of the
procedures for the Mandatory Conversion as to the Holder or Holders to whom the
Corporation has failed to give said notice or to whom such notice was effected.
Each Holder shall surrender the certificate or certificates representing all
shares of Series D Convertible Preferred held by such Holder to the
Corporation, duly endorsed (or otherwise in proper form for transfer, as
determined by the Corporation) and the Corporation shall issue to such Holder
that number of shares of Class A Common Stock to which such Holder is entitled,
as calculated in accordance with this paragraph; provided,
however, that
if a Holder shall notify the Corporation within five (5) Business Days of
receipt of the Mandatory Conversion Notice that it wishes to receive Class C
Common Stock in accordance with this paragraph, the Corporation shall issue
such Holder an equal number of shares of Class C Common Stock to which such
Holder is entitled as calculated in accordance with this
paragraph.
(iii) (A) In
case the Corporation shall (I) pay a dividend or distribution in shares of
Class A Common Stock on its shares of Class A Common Stock, (II) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares,
(III) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or (IV) issue, by reclassification of its shares of Class A
Common Stock, any shares of its Capital Stock (each such transaction being
called a “Stock
Transaction”),
then and in each such case, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of a share of Series D Convertible
Preferred surrendered for conversion after the record date fixing stockholders
to be affected by such Stock Transaction shall be entitled to receive upon
conversion the number of Conversion Shares which such Holder would have been
entitled to receive after the happening of such event had such share of Series
D Convertible Preferred been converted immediately prior to such record date.
Such adjustment shall be made
whenever
any Stock Transaction occurs, but shall also be effective retroactively as to
shares of Series D Convertible Preferred converted between such record date and
the date of the happening of any such Stock Transaction.
(B) If the
Corporation shall, at any time or from time to time while any shares of Series
D Convertible Preferred are outstanding, issue or sell any right or warrant to
purchase, acquire or subscribe for shares of Class A Common Stock (including a
right or warrant with respect to any security convertible into or exchangeable
for shares of Class A Common Stock) generally to holders of its Common Stock
(including by way of a reclassification of shares or a recapitalization of the
Corporation), for a consideration on the date of such issuance or sale less
than the Common Stock Value of the shares of Class A Common Stock underlying
such rights or warrants on the date of such issuance or sale, then and in each
such case, the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which shall be the sum of (I)
the Common Stock Value per share of Class A Common Stock on the first Business
Day after the date of the public announcement of the actual terms (including
the price terms) of such issuance or sale multiplied by the number of shares of
Class A Common Stock outstanding immediately prior to such issuance or sale
plus (II) the aggregate Fair Market Value of the consideration to be received
by the Corporation in connection with the issuance or sale of the rights or
warrants plus the aggregate consideration to be received in respect of the
purchase of the shares of Class A Common Stock underlying such rights or
warrants, and the denominator of which shall be the Common Stock Value per
share of Class A Common Stock on the Business Day immediately preceding the
public announcement of the actual terms (including the price terms) of such
issuance or sale multiplied by the aggregate number of shares of Class A Common
Stock (I) outstanding immediately prior to such issuance or sale plus (II)
underlying such rights or warrants at the time of such issuance or sale. For
the purposes of the preceding sentence, the aggregate consideration receivable
by the Corporation in connection with the issuance or sale of any such right or
warrant shall be deemed to be equal to the sum of the aggregate offering price
(before deduction of reasonable underwriting discounts or commissions and
expenses) of all such rights or warrants. No adjustment to the Conversion Price
pursuant to this paragraph (B) shall be made if, in conjunction with any such
issuance or sale by the Corporation generally to holders of its Common Stock,
the Corporation issues or offers to sell to the Holders such rights or warrants
on the same basis as the Holders would have received had their shares of Series
D Convertible Preferred been converted into shares of Class A Common Stock (or
Class C Common Stock, as the case may be) immediately prior to the such
issuance or sale. Upon the expiration or termination of any such rights or
warrants without the exercise of such rights or warrants, the Conversion Price
then in effect shall be adjusted immediately to the Conversion Price which
would have been in effect at the time of such expiration or termination had
such rights or warrants, to the extent outstanding immediately prior to such
expiration or termination, never been issued, although such adjustment shall
not effect previously converted shares.
(C) In the
event the Corporation shall at any time or from time to time while any shares
of Series D Convertible Preferred are outstanding declare, order, pay or make a
dividend or other distribution generally to holders of its Common Stock in
stock or other securities or rights or warrants to subscribe for securities of
the Corporation or
any of
its subsidiaries or evidences of Indebtedness of the Corporation or any other
person or pay any Extraordinary Cash Dividend (other than any dividend or
distribution on the Class A Common Stock (I) referred to in paragraphs (A) or
(B) above or (II) if in conjunction therewith the Corporation declares and pays
or makes a dividend or distribution on each share of Series D Convertible
Preferred which is the same as the dividend or distribution that would have
been made or paid with respect to such share of Series D Convertible Preferred
had such share been converted into shares of Class A Common Stock immediately
prior to the record date for any such dividend or distribution on the Class A
Common Stock), then, and in each such case, an appropriate adjustment to the
Conversion Price shall be made so that the Holder of each share of Series D
Convertible Preferred shall be entitled to receive, upon the conversion
thereof, the number of shares of Class A Common Stock determined by multiplying
(x) the number of shares of Class A Common Stock into which such share was
convertible on the day immediately prior to the record date fixed for the
determination of stockholders entitled to receive such dividend or distribution
by (y) a fraction, the numerator of which shall be the Common Stock Value per
share of Class A Common Stock as of such record date, and the denominator of
which shall be such Common Stock Value per share of Class A Common Stock less
the Fair Market Value per share of Class A Common Stock of such dividend or
distribution (as determined in good faith by the Board of Directors, as
evidenced by a Board Resolution mailed to each holder of Series D Convertible
Preferred). An adjustment made pursuant to this paragraph (C) shall be made
upon the opening of business on the next Business Day following the date on
which any such dividend or distribution is made and shall be effective
retroactively to the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution.
(D) In the
event the Company shall, at any time or from time to time while any shares of
Series D Convertible Preferred are outstanding, repurchase (a
“Repurchase”)
any portion of the Class A Common Stock from holders generally at a premium
over the Common Stock Value thereof on the next trading day immediately
preceding the consummation of such Repurchase, then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding immediately before such Repurchase multiplied by (y) the Common
Stock Value per share of Class A Common Stock on the next trading day
immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class A Common Stock outstanding
immediately before such Repurchase minus the number of shares of Class A Common
Stock Repurchased by the Company multiplied by (y) the Common Stock Value per
share of Class A Common Stock on the next trading day immediately following the
consummation of such Repurchase. Such adjustment shall be made whenever any
such Repurchase occurs, but shall also be effective retroactively as to shares
of Series D Convertible Preferred converted between such record date and the
date of the happening of any such Repurchase.
(iv) No
adjustment in the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% or more of the Conversion Price, but
any such adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(v) In the
event of any capital reorganization (other than a capital reorganization
covered by paragraph (ii)(C) above) or reclassification of outstanding shares
of Common Stock of the Corporation (other than a reclassification covered by
paragraph (ii)(A) above), or in case of any merger, consolidation or other
corporate combination of the Corporation with or into another corporation, or
in case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Transaction”),
each share of Series D Convertible Preferred shall continue to remain
outstanding if the Corporation is the Surviving Person (as defined below) of
such Transaction, and shall be subject to all the provisions hereof, as in
effect prior to such Transaction, or if the Corporation is not the Surviving
Person, each share of Series D Convertible Preferred shall be exchanged in such
Transaction for a new series of convertible preferred stock of the Surviving
Person, or in the case of a Surviving Person other than a corporation,
comparable securities of such Surviving Person, in either case having economic
terms as nearly equivalent as possible to, and with the same voting and other
rights as, the Series D Convertible Preferred, including entitling the holder
thereof to receive, upon presentation of the certificate therefor to the
Surviving Person subsequent to the consummation of such Transaction, the kind
and amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares of Class A Common Stock into which one share of Series D
Convertible Preferred was convertible immediately prior to such Transaction. In
case securities or property other than Common Stock shall be issuable or
deliverable upon conversion as aforesaid, then all references in this paragraph
(v) shall be deemed to apply, so far as appropriate and as nearly as may be, to
such other securities or property. If the holders of Class A Common Stock have
the opportunity to elect the form of consideration to be received by them in
such Transaction, then from and after the effective date of such Transaction,
the Series D Convertible Preferred shall be convertible into the consideration
that a majority of the holders of the Class A Common Stock who made such
election received in such Transaction.
Notwithstanding
anything contained herein to the contrary, the Corporation will not effect any
Transaction unless, prior to the consummation thereof, proper provision is made
to ensure that the holders of shares of Series D Convertible Preferred will be
entitled to receive the benefits afforded by this paragraph (v).
For
purposes of this paragraph (v), “Surviving
Person”
shall mean the continuing or surviving Person of a merger, consolidation or
other corporate combination, the Person receiving a transfer of all or
substantially all of the properties and assets of the Corporation, or the
Person consolidating with or merging into the Corporation in a merger,
consolidation or other corporate combination in which the Corporation is the
continuing or surviving Person, but in connection with which the Series D
Convertible
Preferred
or Common Stock of the Corporation is exchanged, converted or reclassified into
the securities of any other Person or cash or any other property.
(vi) The
conversion price shall initially equal $0.75 per share, and shall increase from
and after the Issue Date at a rate equal to the dividend rate on the Series D
Convertible Preferred as set forth in paragraph (c)(i) (the “Conversion
Price”).
The Conversion Price shall be subject to adjustment as provided in this
paragraph (g).
(vii) From and
after an Initial Public Offering, the Corporation shall cause the shares of
Class A Common Stock issuable upon conversion of the Series D Convertible
Preferred (or in the case of a Holder’s election to convert into Class C
Common Stock, upon conversion of such Class C Common Stock) to be approved for
listing on the principal securities exchange on which the Class A Common Stock
may at the time be listed for trading, subject to official notification of
issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class A Common Stock issuable upon
conversion of the Series D Convertible Preferred on the principal securities
exchange on which the Class A Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding
anything to the contrary contained in this paragraph (g), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional shares of Series D Convertible Preferred or any other securities
that are or may be or become issued or issuable in connection with the
transactions contemplated by the Master Transaction Agreement.
(h) Reissuance
of Series D Convertible Preferred. Shares
of Series D Convertible Preferred that have been issued and reacquired in any
manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the General Corporation Law of the
State of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided that
any issuance of such shares as Series D Convertible Preferred must be in
compliance with the terms hereof.
(i) Business
Day. If any
payment or redemption shall be required by the terms hereof to be made on a day
that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board
of Directors”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Board
Resolution”
means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors and to be in
full force and effect.
“Business
Day”
means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other
governmental action to be closed.
“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, including each class of common stock and preferred stock of such Person
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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 capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
“Certificate
of Incorporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Class
A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Corporation.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Common
Stock Value”
on any date means, with respect to the Class A Common Stock or the Class D
Common Stock, the last sale price for the Class A Common Stock or the Class D
Common Stock, regular way, or, in case no such sale takes place on such date,
the average of the closing bid and asked prices, regular way, for the Class A
Common Stock or the Class D Common Stock, in either case as reported in the
principal consolidated transaction reporting system with respect to the
principal national securities exchange on which the Class A Common Stock or the
Class D Common Stock is listed or admitted to trading or, if neither the Class
A Common Stock nor the Class D Common Stock is listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use or, if neither the Class A Common Stock nor the Class D Common Stock
is quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock or the Class D Common Stock selected by the Board of Directors
or, in the event that no trading price is available for the Class A Common
Stock or the Class D Common Stock, the fair market value of the Class A Common
Stock, as determined in good faith by the Board of Directors.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984 and the Cable
Television Consumer Protection and Competition Act of 1992) and all rules and
regulations of the FCC, in each case as from time to time in
effect.
“Consolidated
EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
broadcast program licenses for such period on a consolidated basis, minus (b)
scheduled payments relating to broadcast program license liabilities, except
that with respect to the Corporation each of the foregoing items shall be
determined on a consolidated basis with respect to the Corporation and its
Subsidiaries only; provided,
however, that,
for purposes of calculating Consolidated EBITDA during
any
fiscal quarter, cash income from a particular Investment of such Person shall
be included only if cash income has been received by such Person as a result of
the operation of the business in which such Investment has been made in the
ordinary course without giving effect to any extraordinary, unusual and
non-recurring gains.
“Consolidated
Interest Expense”
means, with respect to any Person, for any period, the aggregate amount of
interest which, in conformity with GAAP, would be set forth opposite the
caption “interest expense” or any like caption on an income statement
for such Person and its Subsidiaries on a consolidated basis, including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing, the net costs associated with
hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense (other than
interest amortized to cost of sales) plus, without duplication, all net
capitalized interest for such period and all interest incurred or paid under
any guarantee of indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, and all time brokerage fees relating to
financing of television stations which the Corporation has an agreement or
option to acquire.
“Consolidated
Net Income”
means, with respect to any Person, for any period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity entitlements granted to employees of the
Corporation and its Subsidiaries) increasing and decreasing Consolidated Net
Income and not otherwise included in the definition of Consolidated EBITDA
shall be excluded.
“Conversion
Price”
has the meaning ascribed to it in paragraph (g)(vi) hereof.
“Conversion
Shares”
means (i) the number of shares of Class A Common Stock or (ii) with respect to
any Holder, if such Holder determines, after consultation with its outside
legal counsel, that such Holder is prevented under the Communications Act from
holding shares of Class A Common Stock issuable upon conversion of such
Holder’s shares of Series D Convertible Preferred, an equal number of
shares of Class C Common Stock of the Corporation (such Class C Common Stock
shall, (1) upon disposition by such Holder to any other Person that such Holder
determines is not prevented under the Communications Act from holding shares of
Class A Common Stock or (2) upon the determination by such Holder that the
Communications Act no longer prohibits such Holder from holding shares of Class
A Common Stock, in either case, after consultation by such Person with outside
legal counsel and, if required by the Corporation, delivery by such Person to
the Corporation an Opinion of Counsel reasonably acceptable to the Corporation
to the effect that the Conversion of such Class C Common Stock to Class A
Common Stock will not violate or conflict with the Communications Act,
automatically be converted into an equal number of shares of Class A Common
Stock), into which the Series D Convertible Preferred is from time to time
convertible.
“Corporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Designated
Investment Bank”
means an investment bank selected by the Purchasing Party from a list of three
internationally recognized investment banks provided to the Purchasing Party by
the Company pursuant to Section 2.07 of the Master Transaction
Agreement.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Consolidated EBITDA of the
Corporation and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s-length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors or a committee thereof.
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the Issue Date.
“GAAP”
means generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series D Convertible Preferred as
reflected in the stock books of the Corporation.
“Initial
Public Offering”
means the initial underwritten sale of equity securities of the Corporation
occurring after the Issue Date pursuant to an effective registration statement
under the Securities Act.
“Issue
Date”
means the date of the issuance of Series D Convertible Preferred.
“Issue
Price”
means $10,000 per share of Series D Convertible Preferred.
“Junior
Preferred Stock”
means, collectively, (i) Series E-1 Convertible Preferred, (ii) Series E-2
Convertible Preferred and (iii) Series F Non-Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Junior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Liquidation
Preference”
has the meaning ascribed to it in paragraph (a) hereof.
“Mandatory
Conversion”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Event”
means the earlier to occur of: (i) the date on which the last sale price for
the Class A Common Stock or Class D Common Stock, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for the Class A Common Stock or Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or Class D Common Stock is listed or admitted to trading,
or, if neither Class A Common Stock nor Class D Common Stock is listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and other expenses of
sale) of not less than $75,000,000, provided that if such issuance is made to a
Purchasing Party, the Designated Investment Bank shall have provided an opinion
in customary form to the Company to the effect that the
issue
price per share of Common Stock is at or higher than the fair market value of a
share of Common Stock.
“Mandatory
Conversion Notice”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Trigger Price”
means (A) in the event the Mandatory Conversion Event occurs on or after the
first anniversary but prior to the second anniversary of the Issue Date, 102%
of the Conversion Price, (B) in the event the Mandatory Conversion Event occurs
on or after the second anniversary but prior to the third anniversary of the
Issue Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master
Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, or otherwise relating to, any
Indebtedness.
“Officers’
Certificate”
means a certificate signed by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the Corporation which
certificate shall include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. In addition, such certificate shall
include (i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion
of Counsel”
means an opinion of counsel that, in such counsel’s opinion, all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. Such opinion shall also include the
statements called for in the second sentence under “Officers’
Certificate”.
“Parity
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“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
redemption or upon liquidation.
“Purchasing
Party”
means CIG Media LLC, NBC Universal, Inc. and their respective Affiliates.
“Redemption
Date”
has the meaning ascribed to it in paragraph (e)(i) hereof.
“Redemption
Notice”
has the meaning ascribed to it in paragraph (e)(ii) hereof.
“Redemption
Price”
means the Issue Price plus (as applicable) all accrued and unpaid dividends
through and including the date of redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Preferred Stock”
means collectively, (i) Series A-1 Convertible Preferred, (ii) Series A-2
Preferred Stock, (iii) Series A-3 Convertible Preferred, (iv) 14¼%
Preferred, (v) 9¾% Preferred, (vi) Series B Convertible Preferred, (vii)
Series C Preferred Stock and (viii) Series C Convertible Preferred, in each
case as defined in the Master Transaction Agreement.
“Senior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Series
D Convertible Preferred”
has the meaning ascribed to it in paragraph (a) hereof.
“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, 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, owned by such Person.
“Stock
Transaction”
has the meaning ascribed to it in paragraph (g)(iii) hereof.
“Surviving
Person”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Transaction”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Voting
Rights Triggering Event”
has the meaning ascribed to it in paragraph (f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary”
means any Subsidiary all of the outstanding voting securities (other than
directors’ qualifying shares) of which are owned, directly or indirectly,
by the Corporation.
IN
WITNESS WHEREOF, said ION Media Networks, Inc. has caused this Certificate to
be signed by its duly authorized officer this 4th day of May,
2007.
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ION MEDIA NETWORKS,
INC. |
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By: |
/s/ Xxxxxxx
Xxxxxx |
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Name: Xxxxxxx
Xxxxxx
Title: Chief Financial Officer |
Certificate
of Designation
EXHIBIT
M to the Master Transaction Agreement
Series
E-1 Convertible Preferred Certificate of Designation
Exhibit
M to the
Master
Transaction Agreement
Series
E-1 Convertible Preferred Certificate of Designation
CERTIFICATE
OF DESIGNATION OF THE POWERS,
PREFERENCES
AND RELATIVE, PARTICIPATING,
OPTIONAL
AND OTHER SPECIAL RIGHTS OF
SERIES
E-1 MANDATORILY CONVERTIBLE PREFERRED STOCK
AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
ION
Media Networks, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that, pursuant to the authority
conferred upon the board of directors of the Corporation (the
“Board
of Directors”)
by the Certificate of Incorporation of the Corporation, as amended (hereinafter
referred to as the “Certificate
of Incorporation”),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors, on May 3, 2007, duly approved
and adopted the following resolution:
RESOLVED,
that, pursuant to the authority vested in the Board of Directors by the
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of Series E-1 Mandatorily Convertible
Preferred Stock, par value $.001 per share, with a liquidation preference of
$10,000 per share, consisting of 4,500 shares, having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in the
Certificate of Incorporation and in this resolution as follows:
(a) Designation. There
is hereby created out of the authorized and unissued shares of Preferred Stock
of the Corporation a series of Preferred Stock designated as the “Series
E-1 Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 4,500 and are referred to as the “Series
E-1 Convertible Preferred.” The liquidation preference of the Series E-1
Convertible Preferred shall be $10,000.00 per share (the “Liquidation
Preference”).
(b) Rank. The
Series E-1 Convertible Preferred shall, with respect to distributions upon
liquidation, winding up or dissolution of the Corporation, rank (i) senior
to the Junior Preferred Stock, to all classes of Common Stock of the
Corporation and to each other class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series E-1 Convertible Preferred as to distributions upon liquidation,
winding up or dissolution of the Corporation
1
(collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior
Securities”);
(ii) on a parity with the Pari Passu Preferred Stock and with any class of
Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank on a parity with the Series E-1 Convertible Preferred
as to distributions upon liquidation, winding up or dissolution of the
Corporation (collectively referred to as “Parity
Securities”),
provided that any such Parity Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Parity Securities; and (iii) junior to the Senior Preferred Stock and
to each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series E-1 Convertible
Preferred as to distributions upon liquidation, winding up or dissolution of
the Corporation (collectively referred to as “Senior
Securities”),
provided that any such Senior Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Senior Securities.
(c) Dividends. The
Holders shall not be entitled to receive dividends.
(d) Liquidation.
(i) In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, each Holder shall be entitled to be paid, out
of the assets of the Corporation available for distribution to its stockholders
and before any distribution shall be made or any assets distributed to the
holders of any of the Junior Securities, including, without limitation, the
Common Stock of the Corporation, an amount in cash equal to the greater of (A)
the Liquidation Preference for each outstanding share of Series E-1 Convertible
Preferred and (B) the amount per share which would have been payable upon such
liquidation, dissolution or winding up to the holders of shares of Class A
Common Stock or such other class or series of stock into which the Series E-1
Convertible Preferred is then convertible (assuming the conversion of each
share of then convertible Series E-1 Convertible Preferred and without
deduction for the Liquidation Preference otherwise payable pursuant to clause
(A) hereof), multiplied by the number of shares of Class A Common Stock into
which such shares of Series E-1 Convertible Preferred are then convertible.
Except as provided in the preceding sentence, Holders of Series E-1 Convertible
Preferred shall not be entitled to any distribution in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation. If
the assets of the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders and to any holders of all other Parity
Securities, then such assets shall be distributed among the Holders and any
holders of such other Parity Securities ratably in accordance with the
respective amounts that would be payable on such shares of Series E-1
Convertible Preferred and any such shares of other Parity Securities if all
amounts payable thereon were paid in full.
(ii) For the
purposes of this paragraph (d), neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor
the
consolidation or merger of the Corporation with or into one or more entities
shall be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation.
(e) Redemption.
(i) Mandatory
Redemption. The
Corporation shall redeem, in the manner provided for in paragraph (e)(ii)
hereof, and out of funds legally available therefor all of the outstanding
shares of Series E-1 Convertible Preferred for cash on August 31, 2013 (the
“Redemption
Date”),
at a price per share equal to the Redemption Price.
(ii) Procedures
for Redemption.
(A) At
least 90 days prior to the Redemption Date, written notice (the
“Redemption
Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series E-1 Convertible Preferred
as to the Holder or Holders to whom the Corporation has failed to give said
notice or to whom such notice was defective. The Redemption Notice shall
state:
(1) the
Redemption Price; and
(2) that the
Holder is to surrender to the Corporation, in the manner, at the place or
places and at the price designated, its certificate or certificates
representing the shares of Series E-1 Convertible Preferred.
(B) Each
Holder shall surrender the certificate or certificates representing all shares
of Series E-1 Convertible Preferred held by such Holder to the Corporation,
duly endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place or places designated in the
Redemption Notice, and on the Redemption Date the full Redemption Price for
such shares shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(C) On and
after the Redemption Date, unless the Corporation defaults in the payment in
full of the Redemption Price, all rights of the Holders shall terminate with
respect to the Series E-1 Convertible Preferred on the Redemption Date, other
than the right to receive the Redemption Price, without interest; provided,
however, that
if the Redemption Notice shall have been given and the funds necessary for
redemption shall have been segregated and irrevocably deposited in trust for
the equal and ratable benefit of the Holders, then, at the close of business on
the day on which such funds are segregated and set aside, the Holders shall
cease to be stockholders of the Corporation and shall be entitled only to
receive the Redemption Price.
(f) Voting
Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long
as any shares of the Series E-1 Convertible Preferred are outstanding, the
Corporation may not issue any additional shares of Series E-1 Convertible
Preferred or any new class of Parity Securities or Senior Securities (or amend
the provisions of any existing class of Capital Stock to make such class of
Capital Stock Parity Securities or Senior Securities) without the approval of
Holders holding at least a majority of the then outstanding shares of Series
E-1 Convertible Preferred, voting or consenting, as the case may be, together
as one class given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided,
however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
E-1 Convertible Preferred or prohibit the redemption by the Corporation of the
Series E-1 Convertible Preferred pursuant to paragraph (e)(i) above, in an
amount sufficient to Refinance any series of Senior Securities, in whole or in
part, with such shares being issued no sooner than the date the Corporation
Refinances such series of Senior Securities.
(B) So long
as any shares of the Series E-1 Convertible Preferred are outstanding, the
Corporation shall not amend this Certificate of Designation so as to affect
materially and adversely the rights, preferences or privileges of Holders
without the affirmative vote or consent of Holders holding at least a majority
of the then outstanding shares of Series E-1 Convertible Preferred, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting.
(C) Except
as set forth in paragraph (f)(i)(A) above, the creation, authorization or
issuance of any shares of any Junior Securities, Parity Securities or Senior
Securities or the increase or decrease in the amount of authorized Capital
Stock of any class, including Preferred Stock, shall not require the consent of
Holders and shall not be deemed to affect adversely the rights, preferences or
privileges of such Holders.
(ii) Without
the affirmative vote or consent of Holders holding at least a majority of the
then outstanding shares of Series E-1 Convertible Preferred, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Corporation’s assets (as an entirety or substantially as an entirety in
one transaction or series of related transactions) to, another Person (other
than a Wholly-Owned Subsidiary with, into or to another Wholly-Owned
Subsidiary) or adopt a plan of liquidation unless (A) either (I) the
Corporation is the surviving or continuing Person or (II) the Person (if other
than the Corporation) formed by such consolidation or into which the
Corporation is merged or the Person that acquires by conveyance, transfer or
lease the
properties
and assets of the Corporation substantially as an entirety or, in the case of a
plan of liquidation, the Person to which assets of the Corporation have been
transferred shall be organized and existing under the laws of the United States
or any State thereof or the District of Columbia; (B) the Series E-1
Convertible Preferred shall be converted into or exchanged for and shall become
shares of such successor, transferee or resulting Person with the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereon, that the Series E-1
Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series E-1 Convertible Preferred prior to the consummation of the
proposed transaction an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with the
terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the
Corporation fails to discharge any redemption or conversion obligation with
respect to the Series E-1 Convertible Preferred (such failure being a
“Voting
Rights Triggering Event”),
then, subject to paragraph (f)(iii)(E) below, Holders of at least a majority of
the then outstanding shares of Series E-1 Convertible Preferred, voting
separately and as one class, shall have the exclusive right to elect the lesser
of two directors and that number of directors constituting 25% of the members
of the Board of Directors, at a meeting called for such purpose following the
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the Holders
expire (other than as described in (f)(iii)(B) below), and the number of
directors constituting the Board of Directors shall be increased by the number
of directors so elected by the Holders. The voting rights provided herein shall
be the exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(B) The
right of the Holders voting together as a separate class to elect members of
the Board of Directors as set forth in paragraph (f)(iii)(A) above shall
continue until such time as in all other cases, the failure, breach or default
giving rise to such Voting Rights Triggering Event is remedied, cured or waived
by Holders of at least a majority of the then outstanding shares of Series E-1
Convertible Preferred that are entitled to vote thereon, at which time (I) the
special right of the Holders so to vote as a class for the election of
directors and (II) the term of office of the directors elected by the Holders
shall each terminate and such persons shall cease to be members of the Board of
Directors. At any time after voting power to elect directors shall have become
vested and be continuing in the Holders pursuant to paragraph (f)(iii) hereof,
or if vacancies shall exist in the offices of directors elected by such
Holders, a proper officer of the Corporation may, and upon the written request
of Holders of at least 25% of the then
outstanding
shares of Series E-1 Convertible Preferred addressed to the secretary of the
Corporation shall, call a special meeting of the Holders, for the purpose of
electing the directors which the Holders are entitled to elect. If such meeting
shall not be called by a proper officer of the Corporation within 20 days after
personal service of said written request upon the secretary of the Corporation,
or within 20 days after mailing the same within the United States by certified
mail, addressed to the secretary of the Corporation at its principal executive
offices, then Holders of at least 25% of the then outstanding shares of Series
E-1 Convertible Preferred may designate in writing one of their number to call
such meeting at the reasonable expense of the Corporation, and such meeting may
be called by the Holder so designated upon the notice required for the annual
meetings of stockholders of the Corporation and shall be held at the place for
holding the annual meetings of stockholders. Any Holder of Series E-1
Convertible Preferred so designated shall have, and the Corporation shall
provide, access to the lists of stockholders to be called pursuant to the
provisions hereof.
(C) At any
meeting held for the purpose of electing directors at which the Holders shall
have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of Holders of at least a majority
of the then outstanding shares of Series E-1 Convertible Preferred shall be
required to constitute a quorum of such Series E-1 Convertible
Preferred.
(D) Any
vacancy occurring in the office of a director elected by the Holders may be
filled by the remaining director (if any) elected by the Holders unless and
until such vacancy shall be filled by the Holders.
(E) The
provisions of this paragraph (f)(iii) shall apply only to those Holders, if
any, that would be permitted to vote in the election of directors of the
Corporation pursuant to applicable laws and regulations of the FCC, with such
Holders together being treated as the class of Holders entitled to exercise
such rights. The determination as to whether any Holder would not be permitted
to exercise such voting rights shall be made jointly by any such Holder(s) and
the Corporation.
(iv) In any
case in which the Holders shall be entitled to vote pursuant to this paragraph
(f) or pursuant to the General Corporation Law of the State of Delaware, each
Holder entitled to vote with respect to such matter shall be entitled to one
vote for each then outstanding share of Series E-1 Convertible Preferred so
held.
(g) Conversion.
(i) Optional
Conversion. Each
share of the Series E-1 Convertible Preferred is convertible at the option of
the Holder thereof, at any time and from time to time, into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series E-1
Convertible Preferred surrendered for conversion, divided by (B) the Conversion
Price then in effect, except that if shares of Series E-1 Convertible Preferred
are called for redemption the conversion right will terminate at the close of
business on the Redemption Date. No fractional shares or securities
representing fractional shares will be issued upon conversion; in lieu of
fractional shares the Corporation will pay a
cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of conversion. The Series E-1 Convertible
Preferred shall be converted by the holder thereof by surrendering the
certificate or certificates representing the shares of Series E-1 Convertible
Preferred to be converted, appropriately completed, to the transfer agent for
the Common Stock. The transfer agent shall issue one or more certificates
representing the Conversion Shares in the name or names requested by such
Holder. The transfer agent will deliver to such Holder a new certificate
representing the shares of Series E-1 Convertible Preferred in excess of those
being surrendered for conversion. The conversion rights stated herein are
subject to compliance by the Holder with all applicable laws and regulations,
including, without limitation, the Communications Act, and as a condition
precedent to the Corporation’s obligation to issue Conversion Shares to a
Holder or its designee(s), the Corporation may require that such Holder deliver
to the Corporation an opinion of legal counsel reasonably acceptable to the
Corporation to the effect that the issuance of Conversion Shares to such Holder
or its designee(s) upon conversion will not violate or conflict with the
Communications Act.
(ii) Mandatory
Conversion. At any
time following the first anniversary of the Issue Date, upon the occurrence of
a Mandatory Conversion Event, including a Mandatory Conversion Event that
occurs after the Redemption Date to the extent any share of Series E-1
Convertible Preferred remains outstanding after the Redemption Date, unless
previously converted at the option of Holders in accordance with the provisions
hereof, each outstanding share of Series E-1 Convertible Preferred shall,
without notice to Holders, convert automatically (the “Mandatory
Conversion”)
into (A) a number of Conversion Shares equal to the Issue Price of the shares
of Series E-1 Convertible Preferred so converted, divided by the (B) Conversion
Price then in effect. No fractional shares or securities representing
fractional shares will be issued upon conversion; in lieu of fractional shares
the Corporation will pay a cash adjustment based upon the Common Stock Value as
of the close of business on the first Business Day preceding the date of the
occurrence of such Mandatory Conversion Event. Promptly following a Mandatory
Conversion Event, written notice (the “Mandatory
Conversion Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice or any deficiency therein shall affect the validity of the
procedures for the Mandatory Conversion as to the Holder or Holders to whom the
Corporation has failed to give said notice or to whom such notice was effected.
Each Holder shall surrender the certificate or certificates representing all
shares of Series E-1 Convertible Preferred held by such Holder to the
Corporation, duly endorsed (or otherwise in proper form for transfer, as
determined by the Corporation) and the Corporation shall issue to such Holder
that number of shares of Class A Common Stock to which such Holder is entitled,
as calculated in accordance with this paragraph; provided,
however, that
if a Holder shall notify the Corporation within five (5) Business Days of
receipt of the Mandatory Conversion Notice that it wishes to receive Class C
Common Stock in accordance with this paragraph, the Corporation shall issue
such Holder an equal number of shares of Class C Common Stock to which such
Holder is entitled as calculated in accordance with this
paragraph.
(iii) (A) In
case the Corporation shall (I) pay a dividend or distribution in shares of
Class A Common Stock on its shares of Class A Common Stock, (II) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares,
(III) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or (IV) issue, by reclassification of its shares of Class A
Common Stock, any shares of its Capital Stock (each such transaction being
called a “Stock
Transaction”),
then and in each such case, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of a share of Series E-1
Convertible Preferred surrendered for conversion after the record date fixing
stockholders to be affected by such Stock Transaction shall be entitled to
receive upon conversion the number of Conversion Shares which such Holder would
have been entitled to receive after the happening of such event had such share
of Series E-1 Convertible Preferred been converted immediately prior to such
record date. Such adjustment shall be made whenever any Stock Transaction
occurs, but shall also be effective retroactively as to shares of Series E-1
Convertible Preferred converted between such record date and the date of the
happening of any such Stock Transaction.
(B) If the
Corporation shall, at any time or from time to time while any shares of Series
E-1 Convertible Preferred are outstanding, issue or sell any right or warrant
to purchase, acquire or subscribe for shares of Class A Common Stock (including
a right or warrant with respect to any security convertible into or
exchangeable for shares of Class A Common Stock) generally to holders of its
Common Stock (including by way of a reclassification of shares or a
recapitalization of the Corporation), for a consideration on the date of such
issuance or sale less than the Common Stock Value of the shares of Class A
Common Stock underlying such rights or warrants on the date of such issuance or
sale, then and in each such case, the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction, the numerator of which shall
be the sum of (I) the Common Stock Value per share of Class A Common Stock on
the first Business Day after the date of the public announcement of the actual
terms (including the price terms) of such issuance or sale multiplied by the
number of shares of Class A Common Stock outstanding immediately prior to such
issuance or sale plus (II) the aggregate Fair Market Value of the consideration
to be received by the Corporation in connection with the issuance or sale of
the rights or warrants plus the aggregate consideration to be received in
respect of the purchase of the shares of Class A Common Stock underlying such
rights or warrants, and the denominator of which shall be the Common Stock
Value per share of Class A Common Stock on the Business Day immediately
preceding the public announcement of the actual terms (including the price
terms) of such issuance or sale multiplied by the aggregate number of shares of
Class A Common Stock (I) outstanding immediately prior to such issuance or sale
plus (II) underlying such rights or warrants at the time of such issuance or
sale. For the purposes of the preceding sentence, the aggregate consideration
receivable by the Corporation in connection with the issuance or sale of any
such right or warrant shall be deemed to be equal to the sum of the aggregate
offering price (before deduction of reasonable underwriting discounts or
commissions and expenses) of all such rights or warrants. No adjustment to the
Conversion Price pursuant to this paragraph (B) shall be made if, in
conjunction with any such issuance or sale by the Corporation generally to
holders of its Common Stock, the Corporation issues or offers to sell to the
Holders such rights or warrants on the same basis as the Holders
would
have received had their shares of Series E-1 Convertible Preferred been
converted into shares of Class A Common Stock (or Class C Common Stock, as the
case may be) immediately prior to the such issuance or sale. Upon the
expiration or termination of any such rights or warrants without the exercise
of such rights or warrants, the Conversion Price then in effect shall be
adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such rights or warrants, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, although such adjustment shall not effect previously converted
shares.
(C) In the
event the Corporation shall at any time or from time to time while any shares
of Series E-1 Convertible Preferred are outstanding declare, order, pay or make
a dividend or other distribution generally to holders of its Common Stock in
stock or other securities or rights or warrants to subscribe for securities of
the Corporation or any of its subsidiaries or evidences of Indebtedness of the
Corporation or any other person or pay any Extraordinary Cash Dividend (other
than any dividend or distribution on the Class A Common Stock (I) referred to
in paragraphs (A) or (B) above or (II) if in conjunction therewith the
Corporation declares and pays or makes a distribution on each share of Series
E-1 Convertible Preferred which is the same as the distribution that would have
been made or paid with respect to such share of Series E-1 Convertible
Preferred had such share been converted into shares of Class A Common Stock
immediately prior to the record date for any such dividend or distribution on
the Class A Common Stock), then, and in each such case, an appropriate
adjustment to the Conversion Price shall be made so that the Holder of each
share of Series E-1 Convertible Preferred shall be entitled to receive, upon
the conversion thereof, the number of shares of Class A Common Stock determined
by multiplying (x) the number of shares of Class A Common Stock into which such
share was convertible on the day immediately prior to the record date fixed for
the determination of stockholders entitled to receive such distribution by (y)
a fraction, the numerator of which shall be the Common Stock Value per share of
Class A Common Stock as of such record date, and the denominator of which shall
be such Common Stock Value per share of Class A Common Stock less the Fair
Market Value per share of Class A Common Stock of such dividend or distribution
(as determined in good faith by the Board of Directors, as evidenced by a Board
Resolution mailed to each holder of Series E-1 Convertible Preferred). An
adjustment made pursuant to this paragraph (C) shall be made upon the opening
of business on the next Business Day following the date on which any such
dividend or distribution is made and shall be effective retroactively to the
close of business on the record date fixed for the determination of
stockholders entitled to receive such dividend or distribution.
(D) In the
event the Company shall, at any time or from time to time while any shares of
Series E-1 Convertible Preferred are outstanding, repurchase (a
“Repurchase”)
any portion of the Class A Common Stock from holders generally at a premium
over the Common Stock Value thereof on the next trading day immediately
preceding the consummation of such Repurchase, then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding immediately before such Repurchase multiplied by (y) the Common
Stock Value per share of Class A Common Stock on the next trading day
immediately following the consummation of such Repurchase minus (II) the
aggregate purchase price of the Repurchase and the denominator of which shall
be the product of (x) the number of shares of Class A Common Stock outstanding
immediately
before
such Repurchase minus the number of shares of Class A Common Stock Repurchased
by the Company multiplied by (y) the Common Stock Value per share of Class A
Common Stock on the next trading day immediately following the consummation of
such Repurchase. Such adjustment shall be made whenever any such Repurchase
occurs, but shall also be effective retroactively as to shares of Series E-1
Convertible Preferred converted between such record date and the date of the
happening of any such Repurchase.
(iv) No
adjustment in the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% or more of the Conversion Price, but
any such adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(v) In the
event of any capital reorganization (other than a capital reorganization
covered by paragraph (ii)(C) above) or reclassification of outstanding shares
of Common Stock of the Corporation (other than a reclassification covered by
paragraph (ii)(A) above), or in case of any merger, consolidation or other
corporate combination of the Corporation with or into another corporation, or
in case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Transaction”),
each share of Series E-1 Convertible Preferred shall continue to remain
outstanding if the Corporation is the Surviving Person (as defined below) of
such Transaction, and shall be subject to all the provisions hereof, as in
effect prior to such Transaction, or if the Corporation is not the Surviving
Person, each share of Series E-1 Convertible Preferred shall be exchanged in
such Transaction for a new series of convertible preferred stock of the
Surviving Person, or in the case of a Surviving Person other than a
corporation, comparable securities of such Surviving Person, in either case
having economic terms as nearly equivalent as possible to, and with the same
voting and other rights as, the Series E-1 Convertible Preferred, including
entitling the holder thereof to receive, upon presentation of the certificate
therefor to the Surviving Person subsequent to the consummation of such
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Transaction
by a holder of that number of shares of Class A Common Stock into which one
share of Series E-1 Convertible Preferred was convertible immediately prior to
such Transaction. In case securities or property other than Common Stock shall
be issuable or deliverable upon conversion as aforesaid, then all references in
this paragraph (v) shall be deemed to apply, so far as appropriate and as
nearly as may be, to such other securities or property. If the holders of Class
A Common Stock have the opportunity to elect the form of consideration to be
received by them in such Transaction, then from and after the effective date of
such Transaction, the Series E-1 Convertible Preferred shall be convertible
into the consideration that a majority of the holders of the Class A Common
Stock who made such election received in such Transaction.
Notwithstanding
anything contained herein to the contrary, the Corporation will not effect any
Transaction unless, prior to the consummation thereof, proper provision is made
to ensure that the holders of shares of Series E-1 Convertible Preferred will
be entitled to receive the benefits afforded by this paragraph
(v).
For
purposes of this paragraph (v), “Surviving
Person”
shall mean the continuing or surviving Person of a merger, consolidation or
other corporate combination, the Person receiving a transfer of all or
substantially all of the properties and assets of the Corporation, or the
Person consolidating with or merging into the Corporation in a merger,
consolidation or other corporate combination in which the Corporation is the
continuing or surviving Person, but in connection with which the Series E-1
Convertible Preferred or Common Stock of the Corporation is exchanged,
converted or reclassified into the securities of any other Person or cash or
any other property.
(vi) The
conversion price shall initially equal $0.75 per share (the “Conversion
Price”).
The Conversion Price shall be subject to adjustment as provided in this
paragraph (g).
(vii) From and
after an Initial Public Offering, the Corporation shall cause the shares of
Class A Common Stock issuable upon conversion of the Series E-1 Convertible
Preferred (or in the case of a Holder’s election to convert into Class C
Common Stock, upon conversion of such Class C Common Stock) to be approved for
listing on the principal securities exchange on which the Class A Common Stock
may at the time be listed for trading, subject to official notification of
issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class A Common Stock issuable upon
conversion of the Series E-1 Convertible Preferred on the principal securities
exchange on which the Class A Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding
anything to the contrary contained in this paragraph (g), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional shares of Series E-1 Convertible Preferred or any other securities
that are or may be or become issued or issuable in connection with the
transactions contemplated by the Master Transaction Agreement.
(h) Reissuance
of Series E-1 Convertible Preferred. Shares
of Series E-1 Convertible Preferred that have been issued and reacquired in any
manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the General Corporation Law of the
State of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided that
any issuance of such shares as Series E-1 Convertible Preferred must be in
compliance with the terms hereof.
(i) Business
Day. If any
payment or redemption shall be required by the terms hereof to be made on a day
that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board
of Directors”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Board
Resolution”
means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors and to be in
full force and effect.
“Business
Day”
means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other
governmental action to be closed.
“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, including each class of common stock and preferred stock of such Person
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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 capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
“Certificate
of Incorporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Class
A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Corporation.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Common
Stock Value”
on any date means, with respect to the Class A Common Stock or the Class D
Common Stock, the last sale price for the Class A Common Stock or the Class D
Common Stock, regular way, or, in case no such sale takes place on such date,
the average of the closing bid and asked prices, regular way, for the Class A
Common Stock or the Class D Common Stock, in either case as reported in the
principal consolidated transaction reporting system with respect to the
principal national securities exchange on which the Class A Common Stock or the
Class D Common Stock is listed or admitted to trading or, if neither the Class
A Common Stock nor the Class D Common Stock is listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use or, if neither the Class A Common Stock nor the Class D Common Stock
is quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock or the Class D Common Stock selected by the Board of Directors
or, in the event that no trading price is available for the Class A Common
Stock or the Class D Common Stock, the fair market value of the Class A Common
Stock, as determined in good faith by the Board of Directors.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984 and the Cable
Television Consumer Protection and Competition Act of 1992) and all rules and
regulations of the FCC, in each case as from time to time in
effect.
“Consolidated
EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
13
broadcast program licenses for such period on a consolidated basis, minus (b)
scheduled payments relating to broadcast program license liabilities, except
that with respect to the Corporation each of the foregoing items shall be
determined on a consolidated basis with respect to the Corporation and its
Subsidiaries only; provided,
however, that,
for purposes of calculating Consolidated EBITDA during any fiscal quarter, cash
income from a particular Investment of such Person shall be included only if
cash income has been received by such Person as a result of the operation of
the business in which such Investment has been made in the ordinary course
without giving effect to any extraordinary, unusual and non-recurring
gains.
“Consolidated
Interest Expense”
means, with respect to any Person, for any period, the aggregate amount of
interest which, in conformity with GAAP, would be set forth opposite the
caption “interest expense” or any like caption on an income statement
for such Person and its Subsidiaries on a consolidated basis, including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing, the net costs associated with
hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense (other than
interest amortized to cost of sales) plus, without duplication, all net
capitalized interest for such period and all interest incurred or paid under
any guarantee of indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, and all time brokerage fees relating to
financing of television stations which the Corporation has an agreement or
option to acquire.
“Consolidated
Net Income”
means, with respect to any Person, for any period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity
14
entitlements
granted to employees of the Corporation and its Subsidiaries) increasing and
decreasing Consolidated Net Income and not otherwise included in the definition
of Consolidated EBITDA shall be excluded.
“Conversion
Price”
has the meaning ascribed to it in paragraph (g)(vi) hereof.
“Conversion
Shares”
means (i) the number of shares of Class A Common Stock or (ii) with respect to
any Holder, if such Holder determines, after consultation with its outside
legal counsel, that such Holder is prevented under the Communications Act from
holding shares of Class A Common Stock issuable upon conversion of such
Holder’s shares of Series E-1 Convertible Preferred, an equal number of
shares of Class C Common Stock of the Corporation (such Class C Common Stock
shall, (1) upon disposition by such Holder to any other Person that such Holder
determines is not prevented under the Communications Act from holding shares of
Class A Common Stock or (2) upon the determination by such Holder that the
Communications Act no longer prohibits such Holder from holding shares of Class
A Common Stock, in either case, after consultation by such Person with outside
legal counsel and, if required by the Corporation, delivery by such Person to
the Corporation an Opinion of Counsel reasonably acceptable to the Corporation
to the effect that the Conversion of such Class C Common Stock to Class A
Common Stock will not violate or conflict with the Communications Act,
automatically be converted into an equal number of shares of Class A Common
Stock), into which the Series E-1 Convertible Preferred is from time to time
convertible.
“Corporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Designated
Investment Bank”
means an investment bank selected by the Purchasing Party from a list of three
internationally recognized investment banks provided to the Purchasing Party by
the Company pursuant to Section 2.07 of the Master Transaction
Agreement.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Consolidated EBITDA of the
Corporation and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s-length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors or a committee thereof.
15
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the Issue Date.
“GAAP”
means generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series E-1 Convertible Preferred
as reflected in the stock books of the Corporation.
“Initial
Public Offering”
means the initial underwritten sale of equity securities of the Corporation
occurring after the Issue Date pursuant to an effective registration statement
under the Securities Act.
“Issue
Date”
means the date of the issuance of Series E-1 Convertible
Preferred.
“Issue
Price”
means $10,000 per share of Series E-1 Convertible Preferred.
“Junior
Preferred Stock”
means Series F Non-Convertible Preferred as defined in the Master Transaction
Agreement.
“Junior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Liquidation
Preference”
has the meaning ascribed to it in paragraph (a) hereof.
“Mandatory
Conversion”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Event”
means the earlier to occur of: (i) the date on which the last sale price for
the Class A Common Stock or Class D Common Stock, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for the Class A Common Stock or Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or Class D Common Stock is listed or admitted to trading,
or, if neither Class A Common Stock nor Class D Common Stock is listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and
16
other
expenses of sale) of not less than $75,000,000, provided that if such issuance
is made to a Purchasing Party, the Designated Investment Bank shall have
provided an opinion in customary form to the Company to the effect that the
issue price per share of Common Stock is at or higher than the fair market
value of a share of Common Stock.
“Mandatory
Conversion Notice”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Trigger Price”
means (A) in the event the Mandatory Conversion Event occurs on or after the
first anniversary but prior to the second anniversary of the Issue Date, 102%
of the Conversion Price, (B) in the event the Mandatory Conversion Event occurs
on or after the second anniversary but prior to the third anniversary of the
Issue Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master
Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, or otherwise relating to, any
Indebtedness.
“Officers’
Certificate”
means a certificate signed by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the Corporation which
certificate shall include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. In addition, such certificate shall
include (i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion
of Counsel”
means an opinion of counsel that, in such counsel’s opinion, all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. Such opinion shall also include the
statements called for in the second sentence under “Officers’
Certificate”.
“Pari
Passu Preferred Stock”
means the Series E-2 Convertible Preferred as defined in the Master Transaction
Agreement.
17
“Parity
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing
Party”
means CIG Media LLC, NBC Universal, Inc. and their respective Affiliates.
“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
redemption or upon liquidation.
“Redemption
Date”
has the meaning ascribed to it in paragraph (e)(i) hereof.
“Redemption
Notice”
has the meaning ascribed to it in paragraph (e)(ii) hereof.
“Redemption
Price”
means the Issue Price.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Preferred Stock”
means collectively, (i) Series A-1 Convertible Preferred, (ii) Series A-2
Preferred Stock, (iii) Series A-3 Convertible Preferred, (iv) 14¼%
Preferred, (v) 9¾% Preferred, (vi) Series B Convertible Preferred, (vii)
Series C Preferred Stock, (viii) Series C Convertible Preferred and (ix) Series
D Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Senior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
18
“Series
E-1 Convertible Preferred”
has the meaning ascribed to it in paragraph (a) hereof.
“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, 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, owned by such Person.
“Stock
Transaction”
has the meaning ascribed to it in paragraph (g)(iii) hereof.
“Surviving
Person”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Transaction”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Voting
Rights Triggering Event”
has the meaning ascribed to it in paragraph (f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary”
means any Subsidiary all of the outstanding voting securities (other than
directors’ qualifying shares) of which are owned, directly or indirectly,
by the Corporation.
19
IN
WITNESS WHEREOF, said ION Media Networks, Inc. has caused this Certificate to
be signed by its duly authorized officer this 4th day of May,
2007.
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ION
MEDIA NETWORKS, INC. |
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By: |
/s/ Xxxxxxx Xxxxxx |
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Name:
Xxxxxxx Xxxxxx |
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Title:
Chief Financial Officer |
Certificate
of Designation
EXHIBIT
N to the Master Transaction Agreement
Series
E-2 Convertible Preferred Certificate of Designation
Exhibit
N to the
Master
Transaction Agreement
Series
E-2 Convertible Preferred Certificate of Designation
CERTIFICATE
OF DESIGNATION OF THE POWERS,
PREFERENCES
AND RELATIVE, PARTICIPATING,
OPTIONAL
AND OTHER SPECIAL RIGHTS OF
SERIES
E-2 MANDATORILY CONVERTIBLE PREFERRED STOCK
AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
ION
Media Networks, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that, pursuant to the authority
conferred upon the board of directors of the Corporation (the
“Board
of Directors”)
by the Certificate of Incorporation of the Corporation, as amended (hereinafter
referred to as the “Certificate
of Incorporation”),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors, on May 3, 2007, duly approved
and adopted the following resolution:
RESOLVED,
that, pursuant to the authority vested in the Board of Directors by the
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of Series E-2 Mandatorily Convertible
Preferred Stock, par value $.001 per share, with a liquidation preference of
$10,000 per share, consisting of 21,000 shares, having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in the
Certificate of Incorporation and in this resolution as follows:
(a) Designation. There
is hereby created out of the authorized and unissued shares of Preferred Stock
of the Corporation a series of Preferred Stock designated as the “Series
E-2 Mandatorily Convertible Preferred Stock.” The number of shares
constituting such series shall be 21,000 and are referred to as the
“Series E-2 Convertible Preferred.” The liquidation preference of the
Series E-2 Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The
Series E-2 Convertible Preferred shall, with respect to distributions upon
liquidation, winding up or dissolution of the Corporation, rank (i) senior
to the Junior Preferred Stock, to all classes of Common Stock of the
Corporation and to each other class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation hereafter created, the terms of
which do not expressly provide that it ranks senior to, or on a parity with,
the Series E-2 Convertible Preferred as to distributions upon liquidation,
winding up or dissolution of the Corporation
1
(collectively
referred to, together with all classes of Common Stock of the Corporation, as
“Junior
Securities”);
(ii) on a parity with the Pari Passu Preferred Stock and with any class of
Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank on a parity with the Series E-2 Convertible Preferred
as to distributions upon liquidation, winding up or dissolution of the
Corporation (collectively referred to as “Parity
Securities”),
provided that any such Parity Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Parity Securities; and (iii) junior to the Senior Preferred Stock and
to each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series E-2 Convertible
Preferred as to distributions upon liquidation, winding up or dissolution of
the Corporation (collectively referred to as “Senior
Securities”),
provided that any such Senior Securities not issued in accordance with the
requirements of paragraph (f)(i) hereof shall be deemed to be Junior Securities
and not Senior Securities.
(c) Dividends. The
Holders shall not be entitled to receive dividends.
(d) Liquidation.
(i) In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, each Holder shall be entitled to be paid, out
of the assets of the Corporation available for distribution to its stockholders
and before any distribution shall be made or any assets distributed to the
holders of any of the Junior Securities, including, without limitation, the
Common Stock of the Corporation, an amount in cash equal to the greater of (A)
the Liquidation Preference for each outstanding share of Series E-2 Convertible
Preferred and (B) the amount per share which would have been payable upon such
liquidation, dissolution or winding up to the holders of shares of Class A
Common Stock or such other class or series of stock into which the Series E-2
Convertible Preferred is then convertible (assuming the conversion of each
share of then convertible Series E-2 Convertible Preferred and without
deduction for the Liquidation Preference otherwise payable pursuant to clause
(A) hereof), multiplied by the number of shares of Class A Common Stock into
which such shares of Series E-2 Convertible Preferred are then convertible.
Except as provided in the preceding sentence, Holders of Series E-2 Convertible
Preferred shall not be entitled to any distribution in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation. If
the assets of the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders and to any holders of all other Parity
Securities, then such assets shall be distributed among the Holders and any
holders of such other Parity Securities ratably in accordance with the
respective amounts that would be payable on such shares of Series E-2
Convertible Preferred and any such shares of other Parity Securities if all
amounts payable thereon were paid in full.
(ii) For the
purposes of this paragraph (d), neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation
nor
2
the
consolidation or merger of the Corporation with or into one or more entities
shall be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation.
(e) Redemption.
(i) Mandatory
Redemption. The
Corporation shall redeem, in the manner provided for in paragraph (e)(ii)
hereof, and out of funds legally available therefor all of the outstanding
shares of Series E-2 Convertible Preferred for cash on August 31, 2013 (the
“Redemption
Date”),
at a price per share equal to the Redemption Price.
(ii) Procedures
for Redemption.
(A) At
least 90 days prior to the Redemption Date, written notice (the
“Redemption
Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series E-2 Convertible Preferred
as to the Holder or Holders to whom the Corporation has failed to give said
notice or to whom such notice was defective. The Redemption Notice shall
state:
(1) the
Redemption Price; and
(2) that the
Holder is to surrender to the Corporation, in the manner, at the place or
places and at the price designated, its certificate or certificates
representing the shares of Series E-2 Convertible Preferred.
(B) Each
Holder shall surrender the certificate or certificates representing all shares
of Series E-2 Convertible Preferred held by such Holder to the Corporation,
duly endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place or places designated in the
Redemption Notice, and on the Redemption Date the full Redemption Price for
such shares shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(C) On and
after the Redemption Date, unless the Corporation defaults in the payment in
full of the Redemption Price, all rights of the Holders shall terminate with
respect to the Series E-2 Convertible Preferred on the Redemption Date, other
than the right to receive the Redemption Price, without interest; provided,
however, that
if the Redemption Notice shall have been given and the funds necessary for
redemption shall have been segregated and irrevocably deposited in trust for
the equal and ratable benefit of the Holders, then, at the close of business on
the day on which such funds are segregated and set aside, the Holders shall
cease to be stockholders of the Corporation and shall be entitled only to
receive the Redemption Price.
(f) Voting
Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
3
(i) (A) So long
as any shares of the Series E-2 Convertible Preferred are outstanding, the
Corporation may not issue any additional shares of Series E-2 Convertible
Preferred or any new class of Parity Securities or Senior Securities (or amend
the provisions of any existing class of Capital Stock to make such class of
Capital Stock Parity Securities or Senior Securities) without the approval of
Holders holding at least a majority of the then outstanding shares of Series
E-2 Convertible Preferred, voting or consenting, as the case may be, together
as one class given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided,
however, that
the Corporation may, without the approval of such Holders issue additional
shares of Parity Securities or Senior Securities (including shares issued in
payment of dividends thereon in accordance with their respective certificates
of designation) and which Senior Securities or Parity Securities do not require
the Corporation to pay dividends thereon on a current basis in cash, or require
cash dividends to be paid at a rate not in excess of three percentage points
greater than the dividend rate borne by any series of Senior Securities and
which do not prohibit the payment of dividends other than in cash on the Series
E-2 Convertible Preferred or prohibit the redemption by the Corporation of the
Series E-2 Convertible Preferred pursuant to paragraph (e)(i) above, in an
amount sufficient to Refinance any series of Senior Securities, in whole or in
part, with such shares being issued no sooner than the date the Corporation
Refinances such series of Senior Securities.
(B) So long
as any shares of the Series E-2 Convertible Preferred are outstanding, the
Corporation shall not amend this Certificate of Designation so as to affect
materially and adversely the rights, preferences or privileges of Holders
without the affirmative vote or consent of Holders holding at least a majority
of the then outstanding shares of Series E-2 Convertible Preferred, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting.
(C) Except
as set forth in paragraph (f)(i)(A) above, the creation, authorization or
issuance of any shares of any Junior Securities, Parity Securities or Senior
Securities or the increase or decrease in the amount of authorized Capital
Stock of any class, including Preferred Stock, shall not require the consent of
Holders and shall not be deemed to affect adversely the rights, preferences or
privileges of such Holders.
(ii) Without
the affirmative vote or consent of Holders holding at least a majority of the
then outstanding shares of Series E-2 Convertible Preferred, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Corporation’s assets (as an entirety or substantially as an entirety in
one transaction or series of related transactions) to, another Person (other
than a Wholly-Owned Subsidiary with, into or to another Wholly-Owned
Subsidiary) or adopt a plan of liquidation unless (A) either (I) the
Corporation is the surviving or continuing Person or (II) the Person (if other
than the Corporation) formed by such consolidation or into which the
Corporation is merged or the Person that acquires by conveyance, transfer or
lease the
4
properties
and assets of the Corporation substantially as an entirety or, in the case of a
plan of liquidation, the Person to which assets of the Corporation have been
transferred shall be organized and existing under the laws of the United States
or any State thereof or the District of Columbia; (B) the Series E-2
Convertible Preferred shall be converted into or exchanged for and shall become
shares of such successor, transferee or resulting Person with the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereon, that the Series E-2
Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series E-2 Convertible Preferred prior to the consummation of the
proposed transaction an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with the
terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the
Corporation fails to discharge any redemption or conversion obligation with
respect to the Series E-2 Convertible Preferred (such failure being a
“Voting
Rights Triggering Event”),
then, subject to paragraph (f)(iii)(E) below, Holders of at least a majority of
the then outstanding shares of Series E-2 Convertible Preferred, voting
separately and as one class, shall have the exclusive right to elect the lesser
of two directors and that number of directors constituting 25% of the members
of the Board of Directors, at a meeting called for such purpose following the
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the Holders
expire (other than as described in (f)(iii)(B) below), and the number of
directors constituting the Board of Directors shall be increased by the number
of directors so elected by the Holders. The voting rights provided herein shall
be the exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(B) The
right of the Holders voting together as a separate class to elect members of
the Board of Directors as set forth in paragraph (f)(iii)(A) above shall
continue until such time as in all other cases, the failure, breach or default
giving rise to such Voting Rights Triggering Event is remedied, cured or waived
by Holders of at least a majority of the then outstanding shares of Series E-2
Convertible Preferred that are entitled to vote thereon, at which time (I) the
special right of the Holders so to vote as a class for the election of
directors and (II) the term of office of the directors elected by the Holders
shall each terminate and such persons shall cease to be members of the Board of
Directors. At any time after voting power to elect directors shall have become
vested and be continuing in the Holders pursuant to paragraph (f)(iii) hereof,
or if vacancies shall exist in the offices of directors elected by such
Holders, a proper officer of the Corporation may, and upon the written request
of Holders of at least 25% of the then
5
outstanding
shares of Series E-2 Convertible Preferred addressed to the secretary of the
Corporation shall, call a special meeting of the Holders, for the purpose of
electing the directors which the Holders are entitled to elect. If such meeting
shall not be called by a proper officer of the Corporation within 20 days after
personal service of said written request upon the secretary of the Corporation,
or within 20 days after mailing the same within the United States by certified
mail, addressed to the secretary of the Corporation at its principal executive
offices, then Holders of at least 25% of the then outstanding shares of Series
E-2 Convertible Preferred may designate in writing one of their number to call
such meeting at the reasonable expense of the Corporation, and such meeting may
be called by the Holder so designated upon the notice required for the annual
meetings of stockholders of the Corporation and shall be held at the place for
holding the annual meetings of stockholders. Any Holder of Series E-2
Convertible Preferred so designated shall have, and the Corporation shall
provide, access to the lists of stockholders to be called pursuant to the
provisions hereof.
(C) At any
meeting held for the purpose of electing directors at which the Holders shall
have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of Holders of at least a majority
of the then outstanding shares of Series E-2 Convertible Preferred shall be
required to constitute a quorum of such Series E-2 Convertible
Preferred.
(D) Any
vacancy occurring in the office of a director elected by the Holders may be
filled by the remaining director (if any) elected by the Holders unless and
until such vacancy shall be filled by the Holders.
(E) The
provisions of this paragraph (f)(iii) shall apply only to those Holders, if
any, that would be permitted to vote in the election of directors of the
Corporation pursuant to applicable laws and regulations of the FCC, with such
Holders together being treated as the class of Holders entitled to exercise
such rights. The determination as to whether any Holder would not be permitted
to exercise such voting rights shall be made jointly by any such Holder(s) and
the Corporation.
(iv) In any
case in which the Holders shall be entitled to vote pursuant to this paragraph
(f) or pursuant to the General Corporation Law of the State of Delaware, each
Holder entitled to vote with respect to such matter shall be entitled to one
vote for each then outstanding share of Series E-2 Convertible Preferred so
held.
(g) Conversion.
(i) Optional
Conversion. Each
share of the Series E-2 Convertible Preferred is convertible at the option of
the Holder thereof, at any time and from time to time, into (A) a number of
Conversion Shares equal to the Issue Price of the shares of Series E-2
Convertible Preferred surrendered for conversion, divided by (B) the Conversion
Price then in effect, except that if shares of Series E-2 Convertible Preferred
are called for redemption the conversion right will terminate at the close of
business on the Redemption Date. No fractional shares or securities
representing fractional shares will be issued upon conversion; in lieu of
fractional shares the Corporation will pay a
6
cash
adjustment based upon the Common Stock Value as of the close of business on the
first Business Day preceding the date of conversion. The Series E-2 Convertible
Preferred shall be converted by the holder thereof by surrendering the
certificate or certificates representing the shares of Series E-2 Convertible
Preferred to be converted, appropriately completed, to the transfer agent for
the Common Stock. The transfer agent shall issue one or more certificates
representing the Conversion Shares in the name or names requested by such
Holder. The transfer agent will deliver to such Holder a new certificate
representing the shares of Series E-2 Convertible Preferred in excess of those
being surrendered for conversion. The conversion rights stated herein are
subject to compliance by the Holder with all applicable laws and regulations,
including, without limitation, the Communications Act, and as a condition
precedent to the Corporation’s obligation to issue Conversion Shares to a
Holder or its designee(s), the Corporation may require that such Holder deliver
to the Corporation an opinion of legal counsel reasonably acceptable to the
Corporation to the effect that the issuance of Conversion Shares to such Holder
or its designee(s) upon conversion will not violate or conflict with the
Communications Act.
(ii) Mandatory
Conversion. At any
time following the first anniversary of the Issue Date, upon the occurrence of
a Mandatory Conversion Event, including a Mandatory Conversion Event that
occurs after the Redemption Date to the extent any share of Series E-2
Convertible Preferred remains outstanding after the Redemption Date, unless
previously converted at the option of Holders in accordance with the provisions
hereof, each outstanding share of Series E-2 Convertible Preferred shall,
without notice to Holders, convert automatically (the “Mandatory
Conversion”)
into (A) a number of Conversion Shares equal to the Issue Price of the shares
of Series E-2 Convertible Preferred so converted, divided by the (B) Conversion
Price then in effect. No fractional shares or securities representing
fractional shares will be issued upon conversion; in lieu of fractional shares
the Corporation will pay a cash adjustment based upon the Common Stock Value as
of the close of business on the first Business Day preceding the date of the
occurrence of such Mandatory Conversion Event. Promptly following a Mandatory
Conversion Event, written notice (the “Mandatory
Conversion Notice”)
shall be given by first class mail, postage prepaid, to each Holder who is a
Holder on the date such notice is given at such Holder’s address as it
appears on the stock books of the Corporation, provided that no failure to give
such notice or any deficiency therein shall affect the validity of the
procedures for the Mandatory Conversion as to the Holder or Holders to whom the
Corporation has failed to give said notice or to whom such notice was effected.
Each Holder shall surrender the certificate or certificates representing all
shares of Series E-2 Convertible Preferred held by such Holder to the
Corporation, duly endorsed (or otherwise in proper form for transfer, as
determined by the Corporation) and the Corporation shall issue to such Holder
that number of shares of Class A Common Stock to which such Holder is entitled,
as calculated in accordance with this paragraph; provided,
however, that
if a Holder shall notify the Corporation within five (5) Business Days of
receipt of the Mandatory Conversion Notice that it wishes to receive Class C
Common Stock in accordance with this paragraph, the Corporation shall issue
such Holder an equal number of shares of Class C Common Stock to which such
Holder is entitled as calculated in accordance with this
paragraph.
7
(iii) (A) In
case the Corporation shall (I) pay a dividend or distribution in shares of
Class A Common Stock on its shares of Class A Common Stock, (II) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares,
(III) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or (IV) issue, by reclassification of its shares of Class A
Common Stock, any shares of its Capital Stock (each such transaction being
called a “Stock
Transaction”),
then and in each such case, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of a share of Series E-2
Convertible Preferred surrendered for conversion after the record date fixing
stockholders to be affected by such Stock Transaction shall be entitled to
receive upon conversion the number of Conversion Shares which such Holder would
have been entitled to receive after the happening of such event had such share
of Series E-2 Convertible Preferred been converted immediately prior to such
record date. Such adjustment shall be made whenever any Stock Transaction
occurs, but shall also be effective retroactively as to shares of Series E-2
Convertible Preferred converted between such record date and the date of the
happening of any such Stock Transaction.
(B) If the
Corporation shall, at any time or from time to time while any shares of Series
E-2 Convertible Preferred are outstanding, issue or sell any right or warrant
to purchase, acquire or subscribe for shares of Class A Common Stock (including
a right or warrant with respect to any security convertible into or
exchangeable for shares of Class A Common Stock) generally to holders of its
Common Stock (including by way of a reclassification of shares or a
recapitalization of the Corporation), for a consideration on the date of such
issuance or sale less than the Common Stock Value of the shares of Class A
Common Stock underlying such rights or warrants on the date of such issuance or
sale, then and in each such case, the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction, the numerator of which shall
be the sum of (I) the Common Stock Value per share of Class A Common Stock on
the first Business Day after the date of the public announcement of the actual
terms (including the price terms) of such issuance or sale multiplied by the
number of shares of Class A Common Stock outstanding immediately prior to such
issuance or sale plus (II) the aggregate Fair Market Value of the consideration
to be received by the Corporation in connection with the issuance or sale of
the rights or warrants plus the aggregate consideration to be received in
respect of the purchase of the shares of Class A Common Stock underlying such
rights or warrants, and the denominator of which shall be the Common Stock
Value per share of Class A Common Stock on the Business Day immediately
preceding the public announcement of the actual terms (including the price
terms) of such issuance or sale multiplied by the aggregate number of shares of
Class A Common Stock (I) outstanding immediately prior to such issuance or sale
plus (II) underlying such rights or warrants at the time of such issuance or
sale. For the purposes of the preceding sentence, the aggregate consideration
receivable by the Corporation in connection with the issuance or sale of any
such right or warrant shall be deemed to be equal to the sum of the aggregate
offering price (before deduction of reasonable underwriting discounts or
commissions and expenses) of all such rights or warrants. No adjustment to the
Conversion Price pursuant to this paragraph (B) shall be made if, in
conjunction with any such issuance or sale by the Corporation generally to
holders of its Common Stock, the Corporation issues or offers to sell to the
Holders such rights or warrants on the same basis as the Holders
would
have received had their shares of Series E-2 Convertible Preferred been
converted into shares of Class A Common Stock (or Class C Common Stock, as the
case may be) immediately prior to the such issuance or sale. Upon the
expiration or termination of any such rights or warrants without the exercise
of such rights or warrants, the Conversion Price then in effect shall be
adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such rights or warrants, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, although such adjustment shall not effect previously converted
shares.
(C) In the
event the Corporation shall at any time or from time to time while any shares
of Series E-2 Convertible Preferred are outstanding declare, order, pay or make
a dividend or other distribution generally to holders of its Common Stock in
stock or other securities or rights or warrants to subscribe for securities of
the Corporation or any of its subsidiaries or evidences of Indebtedness of the
Corporation or any other person or pay any Extraordinary Cash Dividend (other
than any dividend or distribution on the Class A Common Stock (I) referred to
in paragraphs (A) or (B) above or (II) if in conjunction therewith the
Corporation declares and pays or makes a distribution on each share of Series
E-2 Convertible Preferred which is the same as the distribution that would have
been made or paid with respect to such share of Series E-2 Convertible
Preferred had such share been converted into shares of Class A Common Stock
immediately prior to the record date for any such dividend or distribution on
the Class A Common Stock), then, and in each such case, an appropriate
adjustment to the Conversion Price shall be made so that the Holder of each
share of Series E-2 Convertible Preferred shall be entitled to receive, upon
the conversion thereof, the number of shares of Class A Common Stock determined
by multiplying (x) the number of shares of Class A Common Stock into which such
share was convertible on the day immediately prior to the record date fixed for
the determination of stockholders entitled to receive such distribution by (y)
a fraction, the numerator of which shall be the Common Stock Value per share of
Class A Common Stock as of such record date, and the denominator of which shall
be such Common Stock Value per share of Class A Common Stock less the Fair
Market Value per share of Class A Common Stock of such dividend or distribution
(as determined in good faith by the Board of Directors, as evidenced by a Board
Resolution mailed to each holder of Series E-2 Convertible Preferred). An
adjustment made pursuant to this paragraph (C) shall be made upon the opening
of business on the next Business Day following the date on which any such
dividend or distribution is made and shall be effective retroactively to the
close of business on the record date fixed for the determination of
stockholders entitled to receive such dividend or distribution.
(D) In the
event the Company shall, at any time or from time to time while any shares of
Series E-2 Convertible Preferred are outstanding, repurchase (a
“Repurchase”)
any portion of the Class A Common Stock from holders generally at a premium
over the Common Stock Value thereof on the next trading day immediately
preceding the consummation of such Repurchase, then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding immediately
9
before
such Repurchase multiplied by (y) the Common Stock Value per share of Class A
Common Stock on the next trading day immediately following the consummation of
such Repurchase minus (II) the aggregate purchase price of the Repurchase and
the denominator of which shall be the product of (x) the number of shares of
Class A Common Stock outstanding immediately before such Repurchase minus the
number of shares of Class A Common Stock Repurchased by the Company multiplied
by (y) the Common Stock Value per share of Class A Common Stock on the next
trading day immediately following the consummation of such Repurchase. Such
adjustment shall be made whenever any such Repurchase occurs, but shall also be
effective retroactively as to shares of Series E-2 Convertible Preferred
converted between such record date and the date of the happening of any such
Repurchase.
(iv) No
adjustment in the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% or more of the Conversion Price, but
any such adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(v) In the
event of any capital reorganization (other than a capital reorganization
covered by paragraph (ii)(C) above) or reclassification of outstanding shares
of Common Stock of the Corporation (other than a reclassification covered by
paragraph (ii)(A) above), or in case of any merger, consolidation or other
corporate combination of the Corporation with or into another corporation, or
in case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Transaction”),
each share of Series E-2 Convertible Preferred shall continue to remain
outstanding if the Corporation is the Surviving Person (as defined below) of
such Transaction, and shall be subject to all the provisions hereof, as in
effect prior to such Transaction, or if the Corporation is not the Surviving
Person, each share of Series E-2 Convertible Preferred shall be exchanged in
such Transaction for a new series of convertible preferred stock of the
Surviving Person, or in the case of a Surviving Person other than a
corporation, comparable securities of such Surviving Person, in either case
having economic terms as nearly equivalent as possible to, and with the same
voting and other rights as, the Series E-2 Convertible Preferred, including
entitling the holder thereof to receive, upon presentation of the certificate
therefor to the Surviving Person subsequent to the consummation of such
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Transaction
by a holder of that number of shares of Class A Common Stock into which one
share of Series E-2 Convertible Preferred was convertible immediately prior to
such Transaction. In case securities or property other than Common Stock shall
be issuable or deliverable upon conversion as aforesaid, then all references in
this paragraph (v) shall be deemed to apply, so far as appropriate and as
nearly as may be, to such other securities or property. If the holders of Class
A Common Stock have the opportunity to elect the form of consideration to be
received by them in such Transaction, then from and after the effective date of
such Transaction, the Series E-2 Convertible Preferred shall be convertible
into the consideration that a majority of the holders of the Class A Common
Stock who made such election received in such Transaction.
10
Notwithstanding
anything contained herein to the contrary, the Corporation will not effect any
Transaction unless, prior to the consummation thereof, proper provision is made
to ensure that the holders of shares of Series E-2 Convertible Preferred will
be entitled to receive the benefits afforded by this paragraph
(v).
For
purposes of this paragraph (v), “Surviving
Person”
shall mean the continuing or surviving Person of a merger, consolidation or
other corporate combination, the Person receiving a transfer of all or
substantially all of the properties and assets of the Corporation, or the
Person consolidating with or merging into the Corporation in a merger,
consolidation or other corporate combination in which the Corporation is the
continuing or surviving Person, but in connection with which the Series E-2
Convertible Preferred or Common Stock of the Corporation is exchanged,
converted or reclassified into the securities of any other Person or cash or
any other property.
(vi) The
conversion price shall initially equal $0.89 per share (the “Conversion
Price”).
The Conversion Price shall be subject to adjustment as provided in this
paragraph (g).
(vii) From and
after an Initial Public Offering, the Corporation shall cause the shares of
Class A Common Stock issuable upon conversion of the Series E-2 Convertible
Preferred (or in the case of a Holder’s election to convert into Class C
Common Stock, upon conversion of such Class C Common Stock) to be approved for
listing on the principal securities exchange on which the Class A Common Stock
may at the time be listed for trading, subject to official notification of
issuance, prior to the date of issuance thereof. Notwithstanding anything in
this Certificate of Designation to the contrary, no Holders shall be entitled
to exercise the conversion rights set forth in this paragraph (g) until such
time as any conditions for listing the Class A Common Stock issuable upon
conversion of the Series E-2 Convertible Preferred on the principal securities
exchange on which the Class A Common Stock may be listed for trading, if any
and if applicable, have been satisfied.
(viii) Notwithstanding
anything to the contrary contained in this paragraph (g), there shall be no
adjustment to the Conversion Price in connection with any issuance of
additional shares of Series E-2 Convertible Preferred or any other securities
that are or may be or become issued or issuable in connection with the
transactions contemplated by the Master Transaction Agreement.
(h) Reissuance
of Series E-2 Convertible Preferred. Shares
of Series E-2 Convertible Preferred that have been issued and reacquired in any
manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the General Corporation Law of the
State of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided that
any issuance of such shares as Series E-2 Convertible Preferred must be in
compliance with the terms hereof.
11
(i) Business
Day. If any
payment or redemption shall be required by the terms hereof to be made on a day
that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(j) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(k) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board
of Directors”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Board
Resolution”
means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors and to be in
full force and effect.
“Business
Day”
means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other
governmental action to be closed.
“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, including each class of common stock and preferred stock of such Person
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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 capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
“Certificate
of Incorporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Class
A Common Stock”
means the Class A Common Stock, par value $.001 per share, of the
Corporation.
“Class
C Common Stock”
means the Class C Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
12
“Class
D Common Stock”
means the Class D Non-Voting Common Stock, par value $.001 per share, of the
Corporation.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of,
such Person’s common stock, whether outstanding on the Issue Date or
issued after the Issue Date, and includes, without limitation, all series and
classes of such common stock.
“Common
Stock Value”
on any date means, with respect to the Class A Common Stock or the Class D
Common Stock, the last sale price for the Class A Common Stock or the Class D
Common Stock, regular way, or, in case no such sale takes place on such date,
the average of the closing bid and asked prices, regular way, for the Class A
Common Stock or the Class D Common Stock, in either case as reported in the
principal consolidated transaction reporting system with respect to the
principal national securities exchange on which the Class A Common Stock or the
Class D Common Stock is listed or admitted to trading or, if neither the Class
A Common Stock nor the Class D Common Stock is listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the principal automated quotation system that may then
be in use or, if neither the Class A Common Stock nor the Class D Common Stock
is quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock or the Class D Common Stock selected by the Board of Directors
or, in the event that no trading price is available for the Class A Common
Stock or the Class D Common Stock, the fair market value of the Class A Common
Stock, as determined in good faith by the Board of Directors.
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984 and the Cable
Television Consumer Protection and Competition Act of 1992) and all rules and
regulations of the FCC, in each case as from time to time in
effect.
“Consolidated
EBITDA”
means, for any Person, for any period, an amount equal to (a) the sum of
Consolidated Net Income for such period, plus, to the extent deducted from the
revenues of such Person in determining Consolidated Net Income, (i) the
provision for taxes for such period based on income or profits and any
provision for taxes utilized in computing a loss in Consolidated Net Income
above, plus (ii) Consolidated Interest Expense, net of interest income earned
on cash or cash equivalents for such period (including, for this purpose,
dividends on preferred stock only to the extent that such dividends were
deducted in determining Consolidated Net Income), plus (iii) depreciation for
such period on a consolidated basis, plus (iv) amortization of intangibles and
13
broadcast
program
licenses for such period on a consolidated basis, minus (b) scheduled payments
relating to broadcast program license liabilities, except that with respect to
the Corporation each of the foregoing items shall be determined on a
consolidated basis with respect to the Corporation and its Subsidiaries only;
provided,
however, that,
for purposes of calculating Consolidated EBITDA during any fiscal quarter, cash
income from a particular Investment of such Person shall be included only if
cash income has been received by such Person as a result of the operation of
the business in which such Investment has been made in the ordinary course
without giving effect to any extraordinary, unusual and non-recurring
gains.
“Consolidated
Interest Expense”
means, with respect to any Person, for any period, the aggregate amount of
interest which, in conformity with GAAP, would be set forth opposite the
caption “interest expense” or any like caption on an income statement
for such Person and its Subsidiaries on a consolidated basis, including, but
not limited to, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing, the net costs associated with
hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount
or premium, if any, and all other non-cash interest expense (other than
interest amortized to cost of sales) plus, without duplication, all net
capitalized interest for such period and all interest incurred or paid under
any guarantee of indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, and all time brokerage fees relating to
financing of television stations which the Corporation has an agreement or
option to acquire.
“Consolidated
Net Income”
means, with respect to any Person, for any period, the aggregate of the 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
(a) the net income of any Person (the “other Person”) in which the
Person in question or any of its Subsidiaries has less than a 100% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or to the Subsidiary, (b) the net
income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation, (c) (i) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain (but not loss) resulting from an asset sale by the Person in
question or any of its Subsidiaries other than in the ordinary course of
business shall be excluded, (d) extraordinary, unusual and non-recurring gains
and losses shall be excluded, (e) losses associated with discontinued and
terminated operations in an amount not to exceed $1,000,000 per annum shall be
excluded and (f) all non-cash items (including, without limitation, cumulative
effects of changes in GAAP and equity
14
entitlements
granted to employees of the Corporation and its Subsidiaries) increasing and
decreasing Consolidated Net Income and not otherwise included in the definition
of Consolidated EBITDA shall be excluded.
“Conversion
Price”
has the meaning ascribed to it in paragraph (g)(vi) hereof.
“Conversion
Shares”
means (i) the number of shares of Class A Common Stock or (ii) with respect to
any Holder, if such Holder determines, after consultation with its outside
legal counsel, that such Holder is prevented under the Communications Act from
holding shares of Class A Common Stock issuable upon conversion of such
Holder’s shares of Series E-2 Convertible Preferred, an equal number of
shares of Class C Common Stock of the Corporation (such Class C Common Stock
shall, (1) upon disposition by such Holder to any other Person that such Holder
determines is not prevented under the Communications Act from holding shares of
Class A Common Stock or (2) upon the determination by such Holder that the
Communications Act no longer prohibits such Holder from holding shares of Class
A Common Stock, in either case, after consultation by such Person with outside
legal counsel and, if required by the Corporation, delivery by such Person to
the Corporation an Opinion of Counsel reasonably acceptable to the Corporation
to the effect that the Conversion of such Class C Common Stock to Class A
Common Stock will not violate or conflict with the Communications Act,
automatically be converted into an equal number of shares of Class A Common
Stock), into which the Series E-2 Convertible Preferred is from time to time
convertible.
“Corporation”
has the meaning ascribed to it in the first paragraph of this Certificate of
Designation.
“Designated
Investment Bank”
means an investment bank selected by the Purchasing Party from a list of three
internationally recognized investment banks provided to the Purchasing Party by
the Company pursuant to Section 2.07 of the Master Transaction
Agreement.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Consolidated EBITDA of the
Corporation and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s-length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors or a committee thereof.
15
“FCC”
means the Federal Communications Commission and any successor governmental
entity performing functions similar to those performed by the Federal
Communications Commission on the Issue Date.
“GAAP”
means generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
“Holder”
means a holder of then outstanding shares of Series E-2 Convertible Preferred
as reflected in the stock books of the Corporation.
“Initial
Public Offering”
means the initial underwritten sale of equity securities of the Corporation
occurring after the Issue Date pursuant to an effective registration statement
under the Securities Act.
“Issue
Date”
means the date of the issuance of Series E-2 Convertible
Preferred.
“Issue
Price”
means $10,000 per share of Series E-2 Convertible Preferred.
“Junior
Preferred Stock”
means Series F Non-Convertible Preferred as defined in the Master Transaction
Agreement.
“Junior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Liquidation
Preference”
has the meaning ascribed to it in paragraph (a) hereof.
“Mandatory
Conversion”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Event”
means the earlier to occur of: (i) the date on which the last sale price for
the Class A Common Stock or Class D Common Stock, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for the Class A Common Stock or Class D Common Stock, in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal national securities exchange on which the
Class A Common Stock or Class D Common Stock is listed or admitted to trading,
or, if neither Class A Common Stock nor Class D Common Stock is listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the principal automated quotation
system that may then be in use, for the Class A Common Stock or Class D Common
Stock for fifteen (15) consecutive trading days is equal to or greater than the
Mandatory Conversion Trigger Price as then in effect; and (ii) the issuance by
the Corporation of Common Stock at an issue price per share not less than the
Mandatory Conversion Trigger Price as then in effect for aggregate gross
proceeds (before deduction of underwriting commissions and
16
other
expenses of sale) of not less than $75,000,000, provided that if such issuance
is made to a Purchasing Party, the Designated Investment Bank shall have
provided an opinion in customary form to the Company to the effect that the
issue price per share of Common Stock is at or higher than the fair market
value of a share of Common Stock.
“Mandatory
Conversion Notice”
has the meaning ascribed to it in paragraph (g)(ii) hereof.
“Mandatory
Conversion Trigger Price”
means (A) in the event the Mandatory Conversion Event occurs on or after the
first anniversary but prior to the second anniversary of the Issue Date, 102%
of the Conversion Price, (B) in the event the Mandatory Conversion Event occurs
on or after the second anniversary but prior to the third anniversary of the
Issue Date, 101% of the Conversion Price, or (C) in the event the Mandatory
Conversion Event occurs on or after the third anniversary of the Issue Date,
the Conversion Price.
“Master
Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, or otherwise relating to, any
Indebtedness.
“Officers’
Certificate”
means a certificate signed by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the Corporation which
certificate shall include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. In addition, such certificate shall
include (i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion
of Counsel”
means an opinion of counsel that, in such counsel’s opinion, all
conditions precedent to be performed by the Corporation prior to the taking of
any proposed action have been taken. Such opinion shall also include the
statements called for in the second sentence under “Officers’
Certificate”.
“Pari
Passu Preferred Stock”
means the Series E-1 Convertible Preferred as defined in the Master Transaction
Agreement.
17
“Parity
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“Purchasing
Party”
means CIG Media LLC, NBC Universal, Inc. and their respective Affiliates.
“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
redemption or upon liquidation.
“Redemption
Date”
has the meaning ascribed to it in paragraph (e)(i) hereof.
“Redemption
Notice”
has the meaning ascribed to it in paragraph (e)(ii) hereof.
“Redemption
Price”
means the Issue Price.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinanced” and “Refinancing” has the
correlative meaning.
“Repurchase”
has the meaning ascribed to it in paragraph (g)(iii)(D) hereof.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Senior
Preferred Stock”
means collectively, (i) Series A-1 Convertible Preferred, (ii) Series A-2
Preferred Stock, (iii) Series A-3 Convertible Preferred, (iv) 14¼%
Preferred, (v) 9¾% Preferred, (vi) Series B Convertible Preferred, (vii)
Series C Preferred Stock, (viii) Series C Convertible Preferred and (ix) Series
D Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Senior
Securities”
has the meaning ascribed to it in paragraph (b) hereof.
18
“Series
E-2 Convertible Preferred”
has the meaning ascribed to it in paragraph (a) hereof.
“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, 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, owned by such Person.
“Stock
Transaction”
has the meaning ascribed to it in paragraph (g)(iii) hereof.
“Surviving
Person”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Transaction”
has the meaning ascribed to it in paragraph (g)(v) hereof.
“Voting
Rights Triggering Event”
has the meaning ascribed to it in paragraph (f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary”
means any Subsidiary all of the outstanding voting securities (other than
directors’ qualifying shares) of which are owned, directly or indirectly,
by the Corporation.
19
IN
WITNESS WHEREOF, said ION Media Networks, Inc. has caused this Certificate to
be signed by its duly authorized officer this 4th day of May,
2007.
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ION
MEDIA NETWORKS, INC. |
|
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By: |
/s/ Xxxxxxx Xxxxxx |
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Name: Xxxxxxx Xxxxxx |
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Title Chief
Financial Officer |
Certificate
of Designation
EXHIBIT
O to the Master Transaction Agreement
Series
F Non-Convertible Preferred Certificate of
Designation
Exhibit O
to the Master Transaction
Agreement
Series F Non-Convertible Preferred
Certificate of Designation
CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
8% SERIES F NON-CONVERTIBLE PREFERRED
STOCK
AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
ION Media Networks, Inc. (the
“Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to the authority conferred upon the board of directors of the
Corporation (the “Board of
Directors”) by the Certificate of
Incorporation of the Corporation, as amended (hereinafter referred to as the
“Certificate of
Incorporation”), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, on May 3, 2007, duly approved and adopted the
following resolution:
RESOLVED, that, pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors does hereby create, authorize and provide for the issuance of 8%
Series F Non-Convertible Preferred Stock, par value $.001 per share, with a
liquidation preference of $10,000 per share, consisting of 22,000 shares,
having the designations, preferences, relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
resolution as follows:
(a) Designation.
There is hereby created out of the authorized and unissued shares of Preferred
Stock of the Corporation a series of Preferred Stock designated as the “8%
Series F Non-Convertible Preferred Stock.” The number of shares
constituting such series shall be 22,000 and are referred to as the
“Series F Non-Convertible Preferred.” The liquidation preference of
the Series F Non-Convertible Preferred shall be $10,000.00 per share (the
“Liquidation
Preference”).
(b) Rank. The Series
F Non-Convertible Preferred shall, with respect to dividends and distributions
upon liquidation, winding up or dissolution of the Corporation, rank
(i) senior to all classes of Common Stock of the Corporation and to each
other class of Capital Stock of the Corporation or series of Preferred Stock of
the Corporation hereafter created, the terms of which do not expressly provide
that it ranks senior to, or on a parity with, the Series F Non-Convertible
Preferred as to dividends and distributions upon liquidation, winding up or
dissolution of the Corporation (collectively referred to, together with all
classes of Common Stock of the Corporation, as “Junior Securities”); (ii) on a parity with any class of Capital
Stock of the Corporation or series of Preferred Stock of the Corporation
hereafter created the terms of which expressly provide that such class or
series will rank on a parity with the Series F Non-Convertible Preferred
as to dividends and distributions upon
liquidation, winding up or dissolution of the Corporation (collectively
referred to as “Parity
Securities”), provided that any
such Parity Securities not issued in accordance with the requirements of
paragraph (f)(i) hereof shall be deemed to be Junior Securities and not Parity
Securities; and (iii) junior to the Senior Preferred Stock and to each other
class of Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank senior to the Series F Non-Convertible Preferred as
to dividends and distributions upon liquidation, winding up or dissolution of
the Corporation (collectively referred to as “Senior Securities”), provided that any such Senior Securities not
issued in accordance with the requirements of paragraph (f)(i) hereof shall be
deemed to be Junior Securities and not Senior Securities.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
Series F Non-Convertible Preferred at a rate per annum equal to 8% of the Issue
Price. All dividends shall accrue and be cumulative, whether or not earned or
declared, on a quarterly basis, in arrears, from the Issue Date, but shall be
payable only at such time or times as may be fixed by the Board of Directors or
as otherwise provided herein and shall not compound. Dividends shall be payable
to those Holders who are Holders on such dates as the Board of Directors may
determine with respect to such dividends. Dividends shall cease to accrue and
accumulate in respect of shares of the Series F Non-Convertible Preferred on
the date of the redemption of such shares unless the Corporation shall have
failed to pay or make available for payment the relevant redemption price on
the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Series F Non-Convertible Preferred pursuant to paragraph (c)(i)
shall be paid in cash pro rata to the Holders entitled thereto.
(d) Liquidation.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, each Holder shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders and before any
distribution shall be made or any assets distributed to the holders of any of
the Junior Securities, including, without limitation, the Common Stock of the
Corporation, an amount in cash equal to the Liquidation Preference for each
outstanding share of Series F Non-Convertible Preferred, plus, without
duplication, an amount in cash equal to accumulated and unpaid dividends
thereon to the date fixed for such liquidation, dissolution or winding up.
Except as provided in the preceding sentence, Holders of Series F
Non-Convertible Preferred shall not be entitled to any distribution in the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to the Holders and to any holders of all other
Parity Securities, then such assets shall be distributed among the Holders and
any holders of such other Parity Securities ratably in
2
accordance with the respective amounts that
would be payable on such shares of Series F Non-Convertible Preferred and any
such shares of other Parity Securities if all amounts payable thereon were paid
in full.
(A) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Mandatory Redemption. The Corporation shall redeem, in the manner provided
for in paragraph (e)(ii) hereof, and out of funds legally available therefor
all of the outstanding shares of Series F Non-Convertible Preferred for cash on
August 31, 2013 (the “Redemption
Date”), at a price per share equal
to the Redemption Price.
(ii) Procedures for Redemption. (A) At least 90 days prior to the Redemption Date,
written notice (the “Redemption
Notice”) shall be given by first
class mail, postage prepaid, to each Holder who is a Holder on the date such
notice is given at such Holder’s address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series F Non-Convertible Preferred as to the Holder
or Holders to whom the Corporation has failed to give said notice or to whom
such notice was defective. The Redemption Notice shall state:
(1) the Redemption Price;
(2) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
its certificate or certificates representing the shares of Series F
Non-Convertible Preferred; and
(3) that dividends on the shares of the
Series F Non-Convertible Preferred shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the Redemption
Price.
(B) Each Holder shall surrender the
certificate or certificates representing all shares of Series F Non-Convertible
Preferred held by such Holder to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place or places designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such shares shall be payable in
cash to the Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be canceled and
retired.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the Redemption Price,
dividends on the Series F Non-Convertible Preferred shall cease to accumulate
on the Redemption Date, and all rights of
3
the Holders shall terminate with respect to
the Series F Non-Convertible Preferred on the Redemption Date, other than the
right to receive the Redemption Price, without interest; provided,
however, that if the Redemption Notice shall have been given
and the funds necessary for redemption (including an amount in respect of all
dividends that will accrue to the Redemption Date) shall have been segregated
and irrevocably deposited in trust for the equal and ratable benefit of the
Holders, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Redemption Price.
(f) Voting Rights.
Holders shall have no voting rights, except as required by the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designation.
(i) (A) So long as any shares of the Series
F Non-Convertible Preferred are outstanding, the Corporation may not issue any
additional shares of Series F Non-Convertible Preferred or any new class of
Parity Securities or Senior Securities (or amend the provisions of any existing
class of Capital Stock to make such class of Capital Stock Parity Securities or
Senior Securities) without the approval of Holders holding at least a majority
of the then outstanding shares of Series F Non-Convertible Preferred, voting or
consenting, as the case may be, together as one class given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting; provided, however, that
the Corporation may, without the approval of such Holders issue additional
shares of Senior Preferred Stock, Parity Securities or Senior Securities
(including shares issued in payment of dividends thereon in accordance with
their respective certificates of designation), which Senior Securities are
pari passu with the Senior Preferred Stock, and which Senior
Securities or Parity Securities do not require the Corporation to pay dividends
thereon on a current basis in cash, or require cash dividends to be paid at a
rate not in excess of three percentage points greater than the dividend rate
borne by any series of the Senior Preferred Stock (as existing on the Issue
Date) and which do not prohibit the payment of dividends other than in cash on
the Series F Non-Convertible Preferred or prohibit the redemption by the
Corporation of the Series F Non-Convertible Preferred pursuant to paragraph
(e)(i) above, in an amount sufficient to Refinance any series of the Senior
Preferred Stock, in whole or in part, with such shares being issued no sooner
than the date the Corporation Refinances such series of the Senior Preferred
Stock.
(B) So long as any shares of the Series F
Non-Convertible Preferred are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect materially and adversely the rights,
preferences or privileges of Holders without the affirmative vote or consent of
Holders holding at least a majority of the then outstanding shares of Series F
Non-Convertible Preferred, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(C) Except as set forth in paragraph
(f)(i)(A) above, the creation, authorization or issuance of any shares of any
Junior Securities, Parity Securities or Senior Securities or the increase or
decrease in the amount of authorized Capital Stock of
4
any class, including Preferred Stock, shall
not require the consent of Holders and shall not be deemed to affect adversely
the rights, preferences or privileges of such Holders.
(ii) Without the affirmative vote or consent
of Holders holding at least a majority of the then outstanding shares of Series
F Non-Convertible Preferred, voting or consenting, as the case may be, as a
separate class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, the Corporation shall not, in a single
transaction or series of related transactions, consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Corporation’s assets (as an entirety or
substantially as an entirety in one transaction or series of related
transactions) to, another Person (other than a Wholly-Owned Subsidiary with,
into or to another Wholly-Owned Subsidiary) or adopt a plan of liquidation
unless (A) either (I) the Corporation is the surviving or continuing Person or
(II) the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Corporation substantially as
an entirety or, in the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred shall be a corporation
incorporated and existing under the laws of the United States or any State
thereof or the District of Columbia; (B) the Series F Non-Convertible Preferred
shall be converted into or exchanged for and shall become shares of such
successor, transferee or resulting Person with the same powers, preferences and
relative, participating, optional or other special rights and the
qualifications, limitations or restrictions thereon, that the Series F
Non-Convertible Preferred had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or shall have occurred after the Issue
Date and be continuing; and (D) the Corporation has delivered to the transfer
agent for the Series F Non-Convertible Preferred prior to the consummation of
the proposed transaction an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer complies with
the terms hereof and that all conditions precedent herein relating to such
transaction have been satisfied. For purposes of the foregoing, 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 of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.
(iii) (A) If the Corporation fails to
discharge the redemption obligation with respect to the Series F
Non-Convertible Preferred (such failure being a “Voting Rights Triggering Event”), then, subject to paragraph (f)(iii)(E) below,
Holders of at least a majority of the then outstanding shares of Series F
Non-Convertible Preferred, voting separately and as one class, shall have the
exclusive right to elect the lesser of two directors and that number of
directors constituting 25% of the members of the Board of Directors, at a
meeting called for such purpose following the occurrence of such Voting Rights
Triggering Event, and at every subsequent meeting at which the terms of office
of the directors so elected by the Holders expire (other than as described in
(f)(iii)(B) below), and the number of directors constituting the Board of
Directors shall be increased by the number of directors so elected by the
Holders. The voting rights provided herein
5
shall be the exclusive remedy at law or in
equity of the Holders for any Voting Rights Triggering Event.
(B) The right of the Holders voting together
as a separate class to elect members of the Board of Directors as set forth in
paragraph (f)(iii)(A) above shall continue until such time as in all other
cases, the failure, breach or default giving rise to such Voting Rights
Triggering Event is remedied, cured or waived by Holders of at least a majority
of the then outstanding shares of Series F Non-Convertible Preferred that are
entitled to vote thereon, at which time (I) the special right of the Holders so
to vote as a class for the election of directors and (II) the term of office of
the directors elected by the Holders shall each terminate and such persons
shall cease to be members of the Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing in the
Holders pursuant to paragraph (f)(iii) hereof, or if vacancies shall exist in
the offices of directors elected by such Holders, a proper officer of the
Corporation may, and upon the written request of Holders of at least 25% of the
then outstanding shares of Series F Non-Convertible Preferred addressed to the
secretary of the Corporation shall, call a special meeting of the Holders, for
the purpose of electing the directors which the Holders are entitled to elect.
If such meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of said written request upon the
secretary of the Corporation, or within 20 days after mailing the same within
the United States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then Holders of at least 25% of
the then outstanding shares of Series F Non-Convertible Preferred may designate
in writing one of their number to call such meeting at the reasonable expense
of the Corporation, and such meeting may be called by the Holder so designated
upon the notice required for the annual meetings of stockholders of the
Corporation and shall be held at the place for holding the annual meetings of
stockholders. Any Holder of Series F Non-Convertible Preferred so designated
shall have, and the Corporation shall provide, access to the lists of
stockholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of
electing directors at which the Holders shall have the right, voting together
as a separate class, to elect directors as aforesaid, the presence in person or
by proxy of Holders of at least a majority of the then outstanding shares of
Series F Non-Convertible Preferred shall be required to constitute a quorum of
such Series F Non-Convertible Preferred.
(D) Any vacancy occurring in the office of a
director elected by the Holders may be filled by the remaining director (if
any) elected by the Holders unless and until such vacancy shall be filled by
the Holders.
(E) The provisions of this paragraph
(f)(iii) shall apply only to those Holders, if any, that would be permitted to
vote in the election of directors of the Corporation pursuant to applicable
laws and regulations of the FCC, with such Holders together being treated as
the class of Holders entitled to exercise such rights. The determination as to
whether any Holder would not be permitted to exercise such voting rights shall
be made jointly by any such Holder(s) and the Corporation.
6
(iv) In any case in which the Holders shall
be entitled to vote pursuant to this paragraph (f) or pursuant to the General
Corporation Law of the State of Delaware, each Holder entitled to vote with
respect to such matter shall be entitled to one vote for each then outstanding
share of Series F Non-Convertible Preferred so held.
(g) Reissuance of Series F Non-Convertible
Preferred. Shares of Series F
Non-Convertible Preferred that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance
with any applicable provisions of the General Corporation Law of the State of
Delaware) have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided that
any issuance of such shares as Series F Non-Convertible Preferred must be in
compliance with the terms hereof.
(h) Business Day. If
any payment or redemption shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment or redemption shall be made on the
immediately succeeding Business Day.
(i) Reports. If the
Corporation is no longer required to file annual or quarterly reports with the
Commission pursuant to the Exchange Act, the Corporation will provide to the
Holders such annual and quarterly financial statements as the Corporation would
have been required to file with the Commission pursuant to Sections 13 and
15(d) of the Exchange Act had it been so subject without cost to the
Holders.
(j) Definitions. As
used in this Certificate of Designation, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context otherwise
requires:
“Board of Directors” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Board Resolution” means a copy of a resolution certified pursuant
to an Officers’ Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect.
“Business Day” means any day
except a Saturday, a Sunday, or any day on which banking institutions in New
York, New York are required or authorized by law or other governmental action
to be closed.
“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,
including each class of common stock and preferred stock of such Person and
(ii) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
“Certificate of Incorporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
7
“Commission”
means the Securities and Exchange Commission.
“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
“Corporation” has the meaning ascribed to it in the first
paragraph of this Certificate of Designation.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Holder”
means a holder of then outstanding shares of Series F Non-Convertible Preferred
as reflected in the stock books of the Corporation.
“Issue Date”
means the date of the issuance of Series F
Non-Convertible Preferred.
“Issue Price” means $10,000 per share of Series F
Non-Convertible Preferred.
“Junior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Liquidation Preference” has the meaning ascribed to it in paragraph (a)
hereof.
“Master Transaction Agreement” means the Master Transaction Agreement dated as
of May 3, 2007 among the Corporation, NBC Universal, Inc., NBC Palm Beach
Investment I, Inc., NBC Palm Beach Investment II, Inc., and CIG Media LLC, as
may be amended, modified or restated from time to time.
“Officers’ Certificate” means a certificate signed by two officers or by
an officer and either an Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement that, in the opinion of
such signers all conditions precedent to be performed by the Corporation prior
to the taking of any proposed action have been taken. In addition, such
certificate shall include (i) a statement that the signatories have read the
relevant covenant or condition, (ii) a brief statement of the nature and scope
of such examination or investigation upon which the statements are based, (iii)
a statement that, in the opinion of such signatories, they have made such
examination or investigation as is reasonably necessary to express an informed
opinion and (iv) a statement as to whether or not, in the opinion of the
signatories, such relevant conditions or covenants have been complied
with.
“Opinion of Counsel” means an opinion of counsel that, in such
counsel’s opinion, all conditions precedent to be performed by the
Corporation prior to the
8
taking of any proposed action have been
taken. Such opinion shall also include the statements called for in the second
sentence under “Officers’ Certificate”.
“Parity Securities” has the meaning ascribed to it in
paragraph (b) hereof.
“Person”
means an individual, partnership, limited liability company, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
“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 redemption or upon liquidation.
“Redemption Date” has the meaning ascribed to it in
paragraph (e)(i) hereof.
“Redemption Notice” has the meaning ascribed to it in paragraph
(e)(ii) hereof.
“Redemption Price” means the Issue Price plus (as applicable) all
accrued and unpaid dividends through and including the date of
redemption.
“Refinance”
means, in respect of any security, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue a security in exchange or
replacement for, or to amend the terms of, such security, in whole or in part,
for any amount up to and including the greater of the redemption price of such
security pursuant to the terms of such security or the face value of such
security on the date of any such Refinancing, plus (without duplication) the
amount of any accrued dividends on such security, the amount of any premium
required to be paid under the terms of such security and the amount of
reasonable expenses incurred by the Corporation in connection with such
Refinancing. “Refinancing” has the correlative meaning.
“Senior Preferred Stock” means collectively, (i) Series A-1 Convertible
Preferred, (ii) Series A-2 Preferred Stock, (iii) Series A-3 Convertible
Preferred, (iv) 14¼% Preferred, (v) 9¾% Preferred, (vi) Series B
Convertible Preferred, (vii) Series C Preferred Stock, (viii) Series C
Convertible Preferred, (ix) Series D Convertible Preferred, (x) Series E-1
Convertible Preferred and (xi) Series E-2 Convertible Preferred, in each case
as defined in the Master Transaction Agreement.
“Senior Securities” has the meaning ascribed to it in paragraph (b)
hereof.
“Series
F Non-Convertible Preferred” has
the meaning ascribed to it in paragraph (a) hereof.
“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
9
owned, directly or indirectly, 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,
owned by such Person.
“Voting Rights Triggering Event” has the meaning ascribed to it in paragraph
(f)(iii)(A) hereof.
“Wholly-Owned
Subsidiary” means any Subsidiary
all of the outstanding voting securities (other than directors’ qualifying
shares) of which are owned, directly or indirectly, by the Corporation.
10
IN WITNESS WHEREOF, said ION Media Networks,
Inc. has caused this Certificate to be signed by its duly authorized officer
this 4th day of May, 2007.
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ION MEDIA NETWORKS, INC.
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By:
|
/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chief Financial
Officer
|
Certificate of Designation
EXHIBIT
P to the Master Transaction Agreement
New
Stockholders’ Agreement
Exhibit
P to the
Master
Transaction Agreement
New
Stockholders’ Agreement
STOCKHOLDERS’
AGREEMENT
by and
among
ION
MEDIA NETWORKS, INC.,
CIG
MEDIA LLC
and
NBC
UNIVERSAL, INC.
Dated as
of May 4, 2007
TABLE
OF CONTENTS
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Page
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Section
1. |
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Definitions
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1
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Section
2. |
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Methodology
for Calculations; Effective Date |
11
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Section
3. |
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Corporate
Governance |
11
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3.1.
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Board of
Directors |
11
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3.2.
|
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Committees
|
13
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3.3.
|
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Vacancies;
Resignation; Removal |
14
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3.4.
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Cooperation
|
15
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3.5.
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Expenses
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15
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3.6.
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Directors’
Indemnification |
15
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Section
4. |
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Right of
First Offer and Last Offer |
15
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Section
5. |
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Approval
of Certain Matters |
16
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Section
6. |
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Other
Company Covenants |
18
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Section
7. |
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Financial
Statements and Other Reports |
21
|
|
7.1
|
|
Delivery
of Financial Statements and Other Reports: |
21
|
|
7.2
|
|
Provision
of Information |
24
|
|
Section
8. |
|
Transactions
with Affiliates |
24
|
|
Section
9. |
|
NBCU
Right of First Refusal |
24
|
|
Section
10. |
|
Company
Equity Issuances |
25
|
|
Section
11. |
|
Legend
|
26
|
|
Section
12. |
|
Representations
and Warranties |
27
|
|
Section
13. |
|
Competitive
Opportunities |
28
|
|
Section
14. |
|
Duration
of Agreement |
28
|
|
Section
15. |
|
Further
Assurances |
28
|
|
Section
16. |
|
Amendment
and Waiver |
29
|
|
Section
17. |
|
Entire
Agreement |
29
|
|
Section
18. |
|
Successors
and Assigns |
29
|
|
Section
19. |
|
Severability
|
29
|
|
Section
20. |
|
Remedies
|
30
|
|
Section
21. |
|
Notices
|
30
|
|
Section
22. |
|
Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial |
32
|
|
Section
23. |
|
Construction
|
32
|
|
Section
24. |
|
Survival
of Representations and Warranties |
32
|
|
Section
25. |
|
Conflicting
Agreements |
32
|
|
Section
26. |
|
Counterparts
|
33
|
i
STOCKHOLDERS’
AGREEMENT
This
STOCKHOLDERS’ AGREEMENT (this “Agreement”)
is made as of May 4, 2007 by and among ION
Media Networks, Inc., a Delaware corporation (“the “Company”),
CIG Media LLC, a Delaware limited liability company (“CIG
Media”),
and NBC Universal, Inc., a Delaware corporation (“NBCU”).
RECITALS
WHEREAS,
the Company, CIG Media, NBC Palm Beach Investment I, Inc., NBC Palm Beach
Investment II, Inc. and NBCU entered into a Master Transaction Agreement, dated
as of May 3, 2007 (as such agreement may be amended, modified, supplemented or
restated from time to time, the “Master
Agreement”),
pursuant to which the parties agreed to undertake various transactions to
restructure the Company’s ownership and capital structure (the
“Transactions”);
and
WHEREAS,
as an integral part of the Transactions, the parties hereto deem it to be in
their best interests and in the best interests of the Company to enter into an
agreement establishing and setting forth their agreement with respect to
certain rights and obligations associated with ownership of shares of capital
stock of the Company and the governance and operation of the
Company.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
obligations hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section
1. Definitions. As
used herein, the following terms shall have the following
meanings:
“Acceptance
Notice”
has the meaning ascribed to such term in Section 10(a).
“Accepted
Shares”
has the meaning ascribed to such term in Section 10(a).
“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. As used in this definition, “control” (including its
correlative meanings, “controlled by” and “under common control
with”) means the possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided,
however, that,
for purposes hereof, neither the Company nor any Person controlled by the
Company shall be deemed to be an Affiliate of any Stockholder.
“Agreement”
means this Stockholders’ Agreement, as amended, modified, supplemented or
restated from time to time.
“Approval
Stockholder”
has the meaning ascribed to such term in Section 5.
“Asset
Sale”
means the Sale (other than to the Company or any of its Subsidiaries) in any
single transaction or series of related transactions involving assets with a
fair market value in excess of $2,000,000 of (i) any capital stock of or other
equity interest in any Subsidiary of the Company, (ii) the assets of the
Company or of any Subsidiary of the Company, (iii) real property, (iv) the
assets of any media property or part thereof owned by the Company or any
Subsidiary of the Company, or a division, line of business or comparable
business segment of the Company or any Subsidiary of the Company or (v) any
transaction involving the assignment of an FCC license or transfer of control
of an FCC licensee for a Company Station; provided, that
“Asset
Sales”
shall not include Sales to the Company or to a wholly-owned Subsidiary of the
Company or to any other Person if after giving effect to such Sale, such other
Person becomes a wholly-owned Subsidiary of the Company.
“Board”
means the board of directors of the Company as constituted from time to
time.
“Budget”
means for any fiscal year, the annual operating budget for the Company,
including the Network (but specifically excluding all Company Station
operations and programming, except for Same Market Stations), which shall
include Network programming items (including capital expenditures, general
corporate overhead expenses and other operating expenses), prepared by the
Company; provided, that
if the Company, the CIG Media Parties and the NBCU Parties fail to agree on an
annual operating budget for any fiscal year, the Budget shall be the Budget for
the previous year.
“Business
Day”
means any day, other than a Saturday, Sunday or a day on which commercial banks
in New York, New York are authorized or obligated by law to close.
“Call
Shares”
means the 15,455,062 shares of Class A Common Stock and the 8,311,639 shares of
Class B Common Stock to be acquired by CIG Media pursuant to the Master
Agreement and the Call Agreement, dated November 7, 2005, among Xx. Xxxxxx X.
Xxxxxx, Second Xxxxxxx Xxxxxxx Limited Partnership, Xxxxxx Enterprises, Inc.
and NBC Palm Beach Investment II, Inc.
“CIG
Media”
has the meaning ascribed to such term in the Preamble.
“CIG
Media Directors”
has the meaning ascribed to such term in Section 3.1(b)(i).
“CIG
Media Observers”
has the meaning ascribed to such term in Section 3.1(b)(iii).
“CIG
Media Parties”
means CIG Media and any of its Affiliates that owns any Stock.
“Class A
Common Stock”
means Class A common stock, par value $0.001 per share, of the Company.
“Class B
Common Stock”
means Class B common stock, par value $0.001 per share, of the Company.
“Class C
Common Stock”
means Class C non-voting common stock, par value $0.001 per share, of the
Company.
“Class D
Common Stock”
means Class D non-voting common stock, par value $0.001 per share, of the
Company.
“Closing
Date”
has the meaning ascribed to such term in Section 1.01 of the Master
Agreement.
“CM
Selling Stockholder”
has the meaning ascribed to such term in Section 4.
“Code”
means
the United States Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated and rulings issued thereunder.
“Common
Stock”
means the Class A Common Stock, the Class B Common Stock, the Class C Common
Stock, the Class D Common Stock, any other class of common stock of the Company
hereafter created and any other securities of the Company into which such
Common Stock may be reclassified, exchanged or converted pursuant to a merger,
consolidation, stock split, stock dividend, restructuring or recapitalization
of the Company or otherwise.
“Common
Stock Equivalents”
means, with respect to any Person, securities issued by such Person which are
convertible into, or exchangeable or exercisable for, shares of capital stock
or other Equity Securities of such Person (including any option, warrant, or
other right to subscribe for, purchase or otherwise acquire, or any note or
debt security convertible into or exchangeable for, shares of capital stock or
other Equity Securities of such Person).
“Communications
Act”
means the Communications Act of 1934, as amended (including, without
limitation, the Cable Communications Policy Act of 1984, the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996), and all rules and regulations of the FCC, in each case as from time
to time in effect.
“Company”
has the meaning ascribed to such term in the Preamble.
“Company
Benefit Plan”
means each “employee benefit plan” within the meaning of Section 3(3)
of ERISA, other than Multiemployer Plans, and each other stock purchase, stock
option, restricted stock, severance, retention, employment, consulting,
change-of-control, collective bargaining, bonus, incentive, deferred
compensation, employee loan, fringe benefit and other benefit plan, agreement,
program, policy, commitment or other arrangement, whether or not subject to
ERISA (including any related funding mechanism now in effect or required in the
future), whether formal or informal, oral or written, in each case under which
any past or present director, officer, employee, consultant or independent
contractor of the Company or any of its Subsidiaries has any present or future
right to benefits.
“Company
Stations”
means, collectively, each full-power television, low-power television and
television translator station owned and operated by the Company or any
Subsidiary of the Company.
“Competitive
Opportunity”
means an investment or business opportunity or prospective economic or
competitive advantage in which the Company or any of its Subsidiaries could
have an interest or expectancy.
“DMA”
means a designated market area as determined by Xxxxxxx Media Research or such
successor designation of television markets that may in the future be
recognized by the FCC for determining television markets.
“Effective
Date”
means the earlier of the date on which (i) the aggregate number of shares of
Class A Common Stock owned by the CIG Media Parties (including the shares of
Class A Common Stock owned by the CIG Media Parties prior to the Commencement
Date and the shares of Class A Common Stock accepted for payment by CIG Media
in the Tender Offer) represents a majority of the shares of Class A Common
Stock outstanding or (ii) Xx. Xxxxxx X. Xxxxxx and his Affiliates no longer
beneficially own any Call Shares; provided,
however, that
in the event the Effective Date is as described in clause (i) of this
definition, Sections 3, 5, 9 and 10 shall not become effective until the Call
Closing (as defined in the Master Agreement).
“Environmental
Laws”
means all applicable federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now or hereafter in
effect, in each case as amended from time to time, and any applicable judicial
or administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation).
“Environmental
Liabilities”
means, with respect to any Person, all liabilities, obligations,
responsibilities, response, remedial and removal costs, investigation and
feasibility study costs, capital costs, operation and maintenance costs,
losses, damages, punitive damages, property damages, natural resource damages,
consequential damages, treble damages, costs and expenses (including all fees,
disbursements and expenses of counsel, experts and consultants), fines,
penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any Person, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law, including any arising under or related
to any Environmental Laws, Environmental Permits, or in connection with any
Release or threatened Release or presence of a Hazardous Material whether on,
at, in, under, from or about or in the vicinity of any real or personal
property.
“Environmental
Permits”
means all permits, licenses, authorizations, certificates, approvals or
registrations required by any Governmental Entity under any Environmental
Laws.
“Equity
Securities”
means, with respect to any Person, any capital stock or other equity security
of such Person, including any Common Stock Equivalents of such
Person.
“ERISA”
means the Employee Retirement Income Security Act of 1974 (and any
sections of the Code), as amended, and all rules and regulations
promulgated and rulings issued thereunder.
“ERISA
Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Company, any Subsidiary of the Company, or which, together with the
Company or such Subsidiary of the Company, is treated as a single employer
within the meaning of Sections 414(b), (c), (m) or (o) of the
Code.
“ERISA
Event”
means (i) the occurrence of any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan; (ii) the
requirement that notice be provided pursuant to Section 4043(b) of ERISA; (iii)
the application for a minimum funding waiver with respect to a Title IV Plan;
(iv) the cessation of operations at a facility of the Company or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (v) the
conditions for imposition of a Lien under Section 302(f) of ERISA have been met
with respect to any Title IV Plan; (vi) the adoption of an amendment to a Title
IV Plan requiring the provision of security thereto pursuant to Section 307 of
ERISA; (vii) the
withdrawal of the Company, any Subsidiary of the Company or any ERISA Affiliate
from a Title IV Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (viii) the complete or partial withdrawal of the Company, any
Subsidiary of the Company or any ERISA Affiliate from any Multiemployer Plan;
(ix) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of
ERISA; (x) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (xi) the failure by the Company, any
Subsidiary of the Company or any ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within 30 days; (xii) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of liability under
Section 4069 or 4212(c) of ERISA; (xiii) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 of ERISA;
(xiv) the loss of a Qualified Plan’s qualification or tax-exempt
status; or (xv) the termination of a Company Benefit Plan described in
Section 4064 of ERISA.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Excluded
Securities”
means (i) options issued by the Company pursuant to any Company Benefit
Plan (and any Equity Securities issuable upon exercise thereof or thereunder)
and any Equity Securities issued by the Company to any employee of the Company
or any of its Subsidiaries or to any member of the Board pursuant to any
Company Benefit Plan, in each case as approved by the Board in connection with,
or after, the consummation of the Transactions; (ii) any Equity Securities
of the Company or any of its Subsidiaries (and any Common Stock issuable
thereunder) issued by the Company in connection with any transaction determined
by the Board to be a strategic transaction; provided, that
none of any of the CIG Media Parties or the NBCU Parties is acquiring such
Equity Securities of the Company or any of its Subsidiaries in any such
transaction and that such transaction has been approved by the CIG Media
Parties and the NBCU Parties prior to the issuance of such Equity Securities;
(iii) shares of Common Stock issued in connection with an IPO and (iv) any
shares of Common Stock issued upon conversion of any Convertible Securities (as
defined in the Master Agreement).
“FCC”
means the Federal Communications Commission or any successor Governmental
Entity performing functions similar to those performed by the Federal
Communications Commission on the date hereof.
“Hazardous
Material”
means any substance, material or waste which is regulated by, or forms the
basis of liability now or hereafter under, any Environmental Laws, including
any material or substance which is (i) defined as a “solid waste,”
“hazardous waste,” “hazardous material,” “hazardous
substance,” “extremely hazardous waste,” “restricted
hazardous waste,” “pollutant,” “contaminant,”
hazardous constituent,” “special waste,” toxic substance”
or other similar term or phrase under any Environmental Laws or (ii) petroleum
or any fraction or by product thereof, asbestos, polychlorinated biphenyls
(PCBs), or any radioactive substance.
“GAAP”
means generally accepted accounting principles in the United States of America
in effect from time to time.
“Governmental
Entity”
means any federal, national, supranational, state, provincial, local or other
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.
“Group”
has the meaning ascribed to such term in subsection 13(d)(3) of the Exchange
Act.
“HSR
Act”
means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
“IPO”
means the initial underwritten offering pursuant to which the Common Stock
becomes registered under Section 12 of the Exchange Act.
“Issuance
Period”
has the meaning ascribed to such term in Section 10(b).
“Issuance
Stock”
has the meaning ascribed to such term in Section 10.
“Lien”
means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement or any financing lease having substantially the same effect as any of
the foregoing).
“Material
Adverse Effect”
means any event, change, circumstance or effect that, individually or when
taken together with all other such events, changes, circumstances or effects,
is or is reasonably expected to (i) with respect to the Company, be materially
adverse to the business, assets, liabilities, results of operations or
financial condition of the Company and its Subsidiaries, taken as a whole or
(ii) with respect to any party to any Transaction Agreement, have a
material adverse effect on the ability of such party to perform its obligations
under such Transaction Agreement to which it is a party.
“Master
Agreement”
has the meaning ascribed to such term in the Recitals.
“Minimum
Investment”
means 10% of the outstanding Voting Shares.
“Multiemployer
Plan”
means a “multiemployer
plan”
as defined in Section 4001(a)(3) of ERISA and to which the Company, any
Subsidiary of the Company or any ERISA Affiliate is making (i) is obligated to
make, or has made or been obligated to make, contributions on behalf of
participants who are or were employed by any of them or (ii) could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been
or were to be terminated.
“National
Coverage”
means, with respect to any television network, the percentage of national
television households that receive such network’s broadcast as listed in
the Xxxxxxx Television Index or such successor measure of coverage equivalent
thereto generally adopted by the television industry.
“NBCU”
has the meaning ascribed to such term in the Preamble.
“NBCU
Directors”
has the meaning ascribed to such term in Section 3.1(b)(ii).
“NBCU
Option I”
means the option granted to NBC Palm Beach Investment II, Inc. to purchase all
of the Call Shares from CIG Media pursuant to the Option I Call
Agreement.
“NBCU
Option II”
means the option granted to NBC Palm Beach Investment I, Inc. to purchase
26,688,361 shares of Class B Common Stock from the Company pursuant to the
Option II Call Agreement.
“NBCU
Parties”
means NBCU and any if its Affiliates that own any Stock.
“NBCU
Observers”
has the meaning ascribed to such term in Section 3.1(b)(iii).
“Network”
means any television broadcast network owned by the Company.
“Observers”
has the meaning ascribed to such term in Section 3.1(b)(iii).
“Option
I Call Agreement”
means the Call Agreement, dated May 4, 2007, between the CIG Media and NBC Palm
Beach Investment II, Inc., as such agreement may be amended, modified,
supplemented or restated from time to time.
“Option
II Call Agreement”
means the Call Agreement, dated May 4, 2007, among the Company and NBC Palm
Beach Investment I, Inc., as such agreement may be amended, modified,
supplemented or restated from time to time.
“PBGC”
means the Pension Benefit Guaranty Corporation or any successor
thereto.
“Permitted
Liens”
means (i) mechanics’, carriers’, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, (ii) Liens arising
under original purchase price conditioned sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent
with past practice, (iii) statutory Liens for Taxes not yet due and payable,
(iv) Liens securing the indebtedness included as “long-term debt” on
the financial statements of the Company or securing any indebtedness that
replaces or refinances any
of such
indebtedness and (v) other encumbrances or restrictions or imperfections of
title which do not materially impair the continued use and operation of the
assets to which they relate.
“Person”
means an individual, corporation, unincorporated association, partnership,
Group, trust, joint stock company, joint venture, business trust or
unincorporated organization, limited liability company, Governmental Entity or
any other entity of whatever nature.
“Plan
Options”
means options, restricted stock and any other stock-based compensation awards
issued or issuable under any stock-based compensation plan approved by the
Board or any employment, consulting or similar agreements in effect as of the
date hereof or entered into after the date hereof and approved by the Board.
“Preemptive
Acceptance Period”
has the meaning ascribed to such term in Section 10(a).
“Preemptive
Offer”
has the meaning ascribed to such term in Section 10(a).
“Preemptive
Offer Notice”
has the meaning ascribed to such term in Section 10(a).
“Preemptive
Percentage”
means, as to each Preemptive Stockholder, the quotient obtained (expressed as a
percentage) by dividing (i) the number of shares of Stock owned by the
Preemptive Stockholder on the date of the Preemptive Offer (assuming for this
purpose that all Common Stock Equivalents of the Company then owned by such
Preemptive Stockholder are fully exercised, converted or exchanged for shares
of Common Stock) by (ii) the total number of shares of Stock owned by all
Preemptive Stockholders on the date of the Preemptive Offer (assuming for this
purpose that all Common Stock Equivalents of the Company then outstanding are
fully exercised, converted or exchanged for shares of Common Stock). For
purposes of calculating the Preemptive Percentage of any Preemptive
Stockholder, no Preemptive Stockholder shall be treated as owning the shares of
Common Stock held by Affiliates of such Preemptive Stockholder but rather such
Affiliates shall be treated as owning such shares of Common Stock.
“Preemptive
Stockholders”
has the meaning ascribed to such term in Section 10(a).
“Prior
Stockholder Agreement”
means the Stockholder Agreement, dated November 7, 2005, among Xx. Xxxxxx X.
Xxxxxx, certain of his Affiliates, the Company and NBCU.
“Public
Sale”
means a Sale of Stock pursuant to a bona fide underwritten public offering
pursuant to an effective registration statement filed under the Securities Act
or pursuant to Rule 144 under the Securities Act (other than in a privately
negotiated Sale).
“Qualified
Plan”
means a Company Benefit Plan which is intended to be tax-qualified under
Section 401(a) of the Code.
“Release”
means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Material in the indoor
or outdoor environment, including the movement of Hazardous Material through or
in the air, soil, surface water, ground water or property.
“Same
Market Station”
means any Company Station (i) in which any Person that holds the Minimum
Investment would be permitted to have an attributable interest under the
ownership rules adopted by the FCC, as such rules may be amended from time to
time, and (ii) which, even if such Person were deemed to have an attributable
interest therein, would not increase such Person’s national broadcast
coverage as calculated under the FCC’s national ownership rules because
such Person has an attributable interest in a television station in the same
DMA.
“SEC”
means the Securities and Exchange Commission or such other federal agency which
at such time administers the Securities Act.
“Securities
Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Sell”
means (i) for purposes of this Agreement other than Section 10, to sell,
transfer, lease, convey, assign, distribute, pledge, encumber or otherwise
dispose of (but excluding any Sale to an Affiliate), either directly or
indirectly, voluntarily or involuntarily, or by merger, sale, consolidation or
otherwise, and (ii) for purposes of Section 10, to issue or directly or
indirectly sell or exchange, or agree to issue, sell or exchange; and the terms
“Sale”
and “Sold”
shall have meanings correlative to the foregoing.
“Senior
Preferred Stock”
means the
13¼% Cumulative Junior Exchangeable Preferred Stock, par value $0.001
per share (currently accruing dividends at the rate of 14¼%), of the
Company, with a liquidation preference of $10,000 per share and the 9¾%
Series A Convertible Preferred Stock, par value $0.001 per share, of the
Company, with a liquidation preference of $10,000 per share, in each case as
may be amended, modified, supplemented or restated from time to
time.
“Series
B Preferred Stock”
means the 11% Series B Convertible Exchangeable Preferred Stock, par value
$0.001 per share, of the Company, with a liquidation preference of $10,000 per
share, as it may be amended, modified, supplemented or restated from time to
time.
“Station
Offer Notice”
has the meaning ascribed to such term in Section 9.1(a).
“Station
Offer Price”
has the meaning ascribed to such term in Section 9.1(a).
“Station
Third Party”
has the meaning ascribed to such term in Section 9.1(a).
“Station
Transfer”
has the meaning ascribed to such term in Section 5(f).
“Stock”
(including references to “shares
of Stock”)
means (i) any shares of Common Stock and (ii) any Common Stock
Equivalents of the Company, in each case, whether outstanding on the date
hereof or created hereafter.
“Stockholders”
means the CIG Media Parties, the NBCU Parties and any other holder of Stock who
acquires shares of Stock from the NBCU Parties or the CIG Media Parties and as
a condition precedent to the consummation of such acquisition, executes and
delivers to the Company a joinder agreement, in the form attached hereto as
Exhibit A.
“Subsidiary”
means, with respect to the Company, a corporation, partnership, limited
liability company, joint venture or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, directly or indirectly, through one or more intermediaries (including,
without limitation, other Subsidiaries), or both, by the Company.
“Tax”
means, with respect to any Person, all taxes, assessments and other
governmental charges, duties, impositions and liabilities (including any tax on
or based upon net income, gross income, or income as specially defined, or
earnings, profits, or selected items of income, earnings or profits) and all
alternative or add-on minimum tax, profits or excess profits tax, franchise
tax, gross income, gross receipts tax, license, employment related tax, real or
personal property tax or ad valorem tax, sales, social service, goods and
services or use tax, customs, excise tax, stamp tax, land transfer tax, any
withholding or backup withholding tax, value added tax, customs duties, capital
stock, severance tax, prohibited transaction tax, premiums tax, environmental,
windfall profits, occupation tax, capital tax, together with any interest and
any penalty, additions to tax or additional amount imposed by any Governmental
Entity on such person and any obligations under any legally binding agreements
or arrangements with any other person with respect to such amounts and
including any liability for the aforementioned taxes of a predecessor
entity.
“Title
IV Plan”
means an employee pension benefit plan, as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan), which is covered by Title IV of ERISA, and
which the Company, any Subsidiary of the Company or any ERISA Affiliate (i)
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them or (ii) could have had
liability under Section 4069 of ERISA in the event such plan has been or were
to be terminated.
“Transactions”
has the meaning ascribed to such term in the Recitals.
“Transaction
Agreements”
has the meaning ascribed to such term in Section 1.01 of the Master
Agreement.
“Unapproved
Items”
has the meaning ascribed to such term in Section 5(c).
“Voting
Shares”
means the shares of Class A Common Stock, Class B Common Stock and any other
Stock of the Company having the ordinary power to vote in the election of
members of the Board.
Section
2. Methodology
for Calculations;
Effective Date.
(a) Except
as otherwise expressly provided in this Agreement, for purposes of calculating
(i) the number of Voting Shares as of any particular date and
(ii) the number of outstanding Voting Shares owned by a Person hereunder
(and the percentage of the Voting Shares owned by a Person), such number of
Voting Shares shall be calculated as though each Common Stock Equivalent of the
Company had been on such date converted into, or exchanged or exercised for,
the number of Voting Shares which such Common Stock Equivalent would be
entitled to be converted into or exchanged or exercised for. In the event of
any stock split, stock dividend, reverse stock split, any combination of Voting
Shares or any similar event, with respect to all references in this Agreement
to a Stockholder or Stockholders holding a number of Voting Shares, the
applicable number shall be appropriately adjusted to give effect to such stock
split, stock dividend, reverse stock split, any combination of Voting Shares or
any similar event). For purposes of calculating any Person’s outstanding
voting power of the Company pursuant to Sections 3.1(b)(i) and 3.1(b)(ii), at
any time prior to the exercise of the NBCU Option II pursuant to the Option II
Call Agreement, the NBCU Option II shall not be deemed as converted into, or
exchanged or exercised for, the number of Voting Shares which such NBCU Option
II would be entitled to be converted, exchanged or exercised.
(b) As of
the Effective Date, this Agreement shall become effective and the Investment
Agreement, dated November 7, 2005, between the Company and NBCU shall terminate
in its entirety and shall have no further force or effect. As of the date on
which Xx. Xxxxxx X. Xxxxxx and his Affiliates no longer beneficially own any
Call Shares, the Prior Stockholder Agreement shall terminate in its entirety
and shall have no further force or effect. In the event the Effective Date
occurs prior to the termination of the Prior Stockholder Agreement, to the
extent that any of the terms hereof are inconsistent with the rights of the
NBCU Parties or the obligations of the Company under the Prior Stockholder
Agreement but do not otherwise adversely affect the rights of Xx. Xxxxxx X.
Xxxxxx and his Affiliates under the Prior Stockholder Agreement, this Agreement
shall govern.
Section
3. Corporate
Governance
3.1. Board
of Directors
(a) The
Company shall cause its by-laws to be duly amended to provide that the Board
shall be comprised of 13 directors or such other number of directors as may
from time to time be determined by the Board and approved in accordance with
Section 5(k). Until the date the shares of Class A Common Stock are delisted
from the American Stock Exchange and deregistered with the SEC, each of the
Company, the CIG Media Parties and the NBCU Parties shall use its reasonable
best efforts to ensure that the composition of the Board and of each committee
of the Board satisfies the listing requirements of the American Stock
Exchange.
(b) Without
limiting the generality of Section 3.1(a), and subject to any restrictions
imposed by applicable law, including the Communications Act:
(i) for so
long as the CIG Media Parties hold greater than 50% of the outstanding
voting
power of the Company, the CIG Media Parties shall have the
right to
designate seven members of the Board; provided,
that if at
such time at which the CIG Media Parties hold less than 50% of the outstanding
voting power of the Company but more than 20% of the number of outstanding
Voting Shares, the CIG Media Parties shall have the right to designate two
members of the Board (the
persons from time to time designated by the CIG Media Parties in accordance
with this Section 3.1(b)(i) being referred to herein as the “CIG
Media Directors”).
(ii) if at
any time, the NBCU Parties hold a number of outstanding Voting Shares that is
more than 20% of the number of outstanding Voting Shares, the NBCU Parties
shall have the right to nominate two members of the Board; provided, that
if at such time the NBCU Parties hold greater than 50% of the outstanding
voting power of the Company, the NBCU Parties shall have the right to nominate
seven members of the Board (the persons from time to time nominated by the NBCU
Parties in accordance with this Section 3.1(b)(ii) and elected to the Board
being referred to herein as the “NBCU
Directors”).
For the avoidance of doubt, until such time as NBCU determines, in its
reasonable discretion, that the Communications Act permits the NBCU Parties to
nominate an employee of NBCU or any of its Affiliates to be an NBCU Director,
no individual nominated by the NBCU Parties to be an NBCU Director shall be an
employee of NBCU or any of its Affiliates.
(iii) if at
any time, for any reason, no CIG Media Directors serve as members of the Board,
the CIG Media Parties may appoint two representatives (the “CIG
Media Observers”),
and if at any time, for any reason, no NBCU Directors serve as members of the
Board, the NBCU Parties may appoint two representatives (the “NBCU
Observers”
and, together with CIG Media Observers, the “Observers”);
provided, that
the right to appoint the Observers in accordance with this Section 3.1(b)(iii)
shall terminate with respect to the CIG Media Parties or the NBCU Parties, as
the case may be, if such Person holds less than 10% of the number of
outstanding Voting Shares. Each of the Observers shall be entitled to receive
notice of and have the right to attend any and all meetings of the Board and
any of its standing committees in an observer capacity, and the Company shall
provide each Observer with copies of all notices, minutes, consents and other
material at the same time as such materials are distributed to members of the
Board and shall be entitled to participate in discussions and consult with, and
make proposals and furnish advice to, the Board; provided, that
(A) the CIG Media Parties and the NBCU Parties, as applicable, shall cause
their respective Observers to agree to hold in confidence and trust and to act
in a fiduciary manner with respect to all information provided to him pursuant
hereto and (B) the Company and the Board shall have the right to withhold any
information and to exclude any Observer from any meeting or portion thereof (1)
if doing so is, in the Board’s reasonable discretion, advisable or
necessary to protect the attorney-client privilege between the Company and its
counsel or (2) if the Board determines in good faith that fiduciary
requirements under applicable law would prohibit attendance by such Observer.
The Observers shall have no right to vote on any matters presented to the
Board.
(iv) for so
long as Xx. Xxxxxxx Xxxxxxx is entitled to be a director of the Company under
the terms of his employment agreement with the Company, he shall be designated
to serve as a member of the Board. At such time as Xx. Xxxxxxx shall no
longer serve as chief executive officer of the Company, any subsequent chief
executive officer of the Company shall, subject to the prior written consent of
the NBCU Parties and the CIG Media Parties, be designated to serve as a member
of the Board.
(c) Subject
to Sections 3.3(b) and 3.3(d), at any regular or special meeting of
stockholders of the Company called for the purpose of electing members to serve
on the Board, or, to the extent permitted by the certificate of incorporation
of the Company, in any written consent electing members to serve on the Board
executed in lieu of such a meeting, each of the Stockholders agrees to vote all
Voting Shares held by them, and to take all other necessary action, to cause
the individuals designated by the CIG Media Parties in accordance with
Section 3.1(b)(i) to be directors of the Company.
(d) Except
as required by applicable law and subject to Section 5, the business and
affairs of the Company shall be managed by or under the direction of the Board.
At all meetings of the Board, a quorum shall consist of not less than a
majority of the total number of the members of the Board then holding office.
All actions of the Board shall require the affirmative vote of at least a
majority of the members of the Board present at a meeting at which a quorum is
present. Subject to applicable law, any action that may be taken at a meeting
of the Board may also be taken by written consent of all of the members of the
Board in lieu of a meeting.
3.2. Committees
(a) The
Board shall appoint and maintain an executive committee, an audit committee, a
compensation committee and such other committees as may be approved by the
Board.
(b) Subject
to Sections 3.1(b) and 3.3(d) and any restrictions imposed by applicable law,
the Company shall, (i) if requested by the CIG Media Parties, take all actions
necessary to cause each CIG Media Director to be appointed to any committee of
the Board or to any committee of the board of directors or other similar
managing body of any Subsidiary of the Company on which the CIG Media Parties
request that such appointment be made and (ii) if requested by the NBCU
Parties, take all actions necessary to cause each NBCU Director to be appointed
to any committee of the Board or to any committee of the board of directors or
other similar managing body of any Subsidiary of the Company on which the NBCU
Parties request that such appointment be made; provided, that
in no event shall the percentage of the CIG Media Directors and the NBCU
Directors, as the case may be, serving on each such committee exceed the
percentage of the CIG Media Directors and the NBCU Directors, as the case may
be, serving on the Board at such time.
(c) Subject
to Sections 3.1(b) and 3.3(d) and any restrictions imposed by applicable law,
the Company shall, (i) if requested by the CIG Media Parties, take all actions
necessary to cause each CIG Media Director to be appointed to the board of
directors or other
similar
managing body of any Subsidiary of the Company on which the CIG Media Parties
request that such appointment be made and (ii) if requested by the NBCU
Parties, take all actions necessary to cause each NBCU Director to be appointed
to the board of directors or other similar managing body of any Subsidiary of
the Company on which the NBCU Parties request that such appointment be
made.
3.3. Vacancies;
Resignation; Removal
(a) Subject
to Sections 3.3(d) and 3.3(e), each director shall hold his office until
the annual meeting of the stockholders of the Company for the year in which his
term expires and until his successor shall be duly elected and qualified,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
(b) If any
CIG Media Director shall cease for any reason to serve as a director of the
Company for any reason, the vacancy resulting thereby shall be filled by
another individual selected by the CIG Media Parties to replace such director.
If any CIG Media Director serving on any committee of the Board or on any board
of directors or other similar managing body (and any committee thereof) of any
Subsidiary of the Company shall cease for any reason to serve as a member of
any such committee, board of directors, or other similar managing body, as the
case may be, he shall be succeeded by another CIG Media Director selected by
the CIG Media Parties if the CIG Media Parties are then entitled to designate a
CIG Media Director to replace such director.
(c) If any
NBCU Director shall cease for any reason to serve as a director of the Company
for any reason, the vacancy resulting thereby shall be filled by another
individual selected by the NBCU Parties to replace such director. If any NBCU
Director serving on any committee of the Board or on any board of directors or
other similar managing body (and any committee thereof) of any Subsidiary of
the Company shall cease for any reason to serve as a member of any such
committee, board of directors, or other similar managing body, as the case may
be, he shall be succeeded by another NBCU Director selected by the NBCU Parties
if the NBCU Parties are then entitled to designate an NBCU Director to replace
such director.
(d) In the
event that the CIG Media Parties or the NBCU Parties, as the case may be, lose
their right to designate one or more directors pursuant to Section 3.1(b)
as a result of ceasing to hold the requisite percentage ownership of Voting
Shares or as a result of any restrictions imposed by applicable law, including
the Communications Act, the CIG Media Parties or the NBCU Parties, as the case
may be, shall cause one or more of such their designees to resign from the
Board (and any committee thereof) and from any board of directors or other
similar managing body (and any committee thereof) of any Subsidiary of the
Company; provided, that
if the CIG Media Parties or the NBCU Parties, as the case may be, retain the
right to designate any directors pursuant to Section 3.1(b), such parties
shall have the right to select which of their designee or designees shall
resign pursuant to this Section 3.3(d) and which of their designee or
designees will continue to serve on the Board.
(e) Subject
to Section 3.3(d), the removal from the Board of any CIG Media Director or
the NBCU Director, as the case may be, shall be only at the written request of
the CIG Media Parties or the NBCU Parties, as the case may be. Upon receipt of
any such written
request
by the Board, the Board and the Stockholders shall promptly take all such
action necessary or desirable to cause the removal of such director from
office.
3.4. Cooperation
Each
Stockholder shall vote all of its Voting Shares and shall take all other
necessary or desirable actions within its control (including attending all
meetings in person or by proxy for purposes of obtaining a quorum and executing
all written consents in lieu of meetings, as applicable) and the Company shall
take all necessary and desirable actions within its control (including
providing therefor in its organizational documents and calling special Board
and stockholder meetings) to effectuate the provisions of Section 3.
3.5. Expenses
The
Company shall pay and reimburse all reasonable out-of-pocket expenses incurred
by each member of the Board in connection with performing his duties as a
member of the Board, including reasonable out-of-pocket expenses incurred by
such person for attending meetings of the Board, and meetings of any committee
of the Board and any board of directors or other similar managing body
(including any committee thereof) of any Subsidiary of the Company of which
such individual is a member.
3.6. Directors’
Indemnification
(a) The
certificate of incorporation, bylaws and other organizational documents of the
Company and each of its Subsidiaries shall at all times, to the fullest extent
permitted by law, provide for indemnification of, advancement of expenses to,
and limitation of the personal liability of, the members of the Board and the
members of the boards of directors or other similar managing bodies of each of
the Company’s Subsidiaries and such other persons, if any, who, pursuant
to a provision of such certificate of incorporation, bylaws or other
organizational documents, exercise or perform any of the powers or duties
otherwise conferred or imposed upon members of the Board or the boards of
directors or other similar managing bodies of each of the Company’s
Subsidiaries. Such provisions may not be amended, repealed or otherwise
modified in any manner adverse to any member of the Board or any member of the
boards of directors or other similar managing bodies of any of the
Company’s Subsidiaries, until at least six years following the date that
neither the CIG Media Parties nor the NBCU Parties are not entitled to
designate any director pursuant to this Agreement and, with respect to any
director, until at least six years following the date such director ceases to
serve as a director of the Company or any of the Company’s Subsidiaries
(including following the Sale of the Company).
(b) Each
member of the Board is intended to be a third-party beneficiary of the
obligations of the Company pursuant to this Section 3.6, and the
obligations of the Company pursuant to this Section 3.6 shall be
enforceable by each member of the Board, the CIG Media Parties and the NBCU
Parties.
Section
4. [Intentionally
Omitted]
Section
5. Approval
of Certain Matters
The
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, take any of the following actions without the prior written
approval of both the CIG Media Parties and the NBCU Parties (for purposes of
this Section 5 and Section 14, all of the CIG Media Parties are deemed to be
one Stockholder and all of the NBCU Parties are deemed to be one Stockholder);
provided that in
the event the CIG Media Parties or the NBCU Parties, as the case may be, hold
less than 25% of the number of outstanding Voting Shares, such
Stockholder’s prior written approval pursuant to this Section 5 shall not
be required (a Stockholder whose prior written approval is required pursuant to
this Section 5 being an “Approval
Stockholder”):
(a) adopt
any shareholders rights plan or enter into any agreement that is material to
the Company and its Subsidiaries taken as a whole, the provisions of which,
upon the acquisition of Stock by the CIG Media Parties or the NBCU Parties: (i)
would be violated or breached, would require a consent or approval thereunder,
or would result in a default thereof (or an event which, with notice or lapse
of time or both, would constitute a default), (ii) would result in the
termination thereof or accelerate the performance required thereby, or result
in a right of termination or acceleration thereunder, (iii) would result in the
creation of any Lien (except Permitted Liens) upon any of the properties or
assets of the Company or any Subsidiary of the Company thereunder, (iv) would
disadvantage the CIG Media Parties or the NBCU Parties relative to other
stockholders of the Company on the basis of the size of their shareholdings, or
(v) would otherwise restrict or impede the ability of the CIG Media Parties or
the NBCU Parties to acquire additional shares of Stock, or Sell Stock, in any
manner permitted by the Transaction Agreements; provided, that
the Company may (A) enter into senior loan agreements that contain customary
provisions permitting acceleration of the related indebtedness upon a change of
control or (B) issue debt securities or preferred stock that contain customary
change of control provisions permitting the holders of such debt securities or
preferred stock to demand repurchase of their debt securities or preferred
stock upon a change of control of the Company;
(b) take any
action that would cause any ownership interest in any of the following to be
attributable to the CIG Media Parties (only if at the time of such action, the
CIG Media Parties do not have any attributable interest in the Company but such
action would otherwise cause the CIG Media Parties to have an attributable
interest in the Company) or the NBCU Parties for purposes of FCC regulations:
(i) a U.S. broadcast radio or television station (other than the Same Market
Stations), (ii) a U.S. cable television system, (iii) a U.S. “daily
newspaper” (as such term is defined in Section 73.3555 of the rules and
regulations of the FCC), (iv) any U.S. communications facility operated
pursuant to a license granted by the FCC and subject to the provisions of
Section 310(b) of the Communications Act, or (v) any other business which is
subject to FCC regulations under which the ownership of a Person may be subject
to limitation or restriction as a result of the interest in such business being
attributed to such Person.
(c) approve
(such approval not to be unreasonably withheld) (i) a Budget, (ii) any
expenditures that materially exceed budgeted amounts or (iii) any amendments to
a Budget; provided,
however, that
any Approval Stockholder may withhold its approval of any proposed Budget by
identifying those items of the proposed Budget which are not approved (the
“Unapproved
Items”)
and providing in writing to the Company such party’s basis for
withholding
such approval and, in such event, the portions of such proposed Budget which
are not identified as unapproved, shall be deemed to be approved under this
Section 5; provided,
further, that
if the Approval Stockholders fail to approve any Unapproved Item within 30 days
(during which period the Approval Stockholders shall negotiate in good faith
with respect to such Unapproved Item) after an Approval Stockholder identifies
an Unapproved Item, such Unapproved Item shall (notwithstanding such failure to
be approved) be deemed to be approved in the amount reflected in the Budget for
the previous year;
(d) enter
into any agreement or arrangement relating to the digital spectrum of all or
any of the Company Stations, except for any agreement which (i) has a term of
not more than 14 months or (ii) is terminable on not more than 14 months notice
without payment of any material penalty or any other material adverse
consequence suffered by the Company;
(e) amend
the Company’s certificate of incorporation or by-laws in any material
respect, except as may be necessary in connection with (i) the Transactions
contemplated by the Transaction Agreements or (ii) issuances of Stock permitted
under this Agreement and any other Transaction Agreements to which the Company
is a party;
(f) other
than any low-power television stations that do not expand the coverage and
cable carriage of any Company Station, Sell (i) more than 50% of the stock of
any Subsidiary of the Company that owns the primary operating assets of, or a
FCC license of, a Company Station or (ii) the primary operating assets of, or
any FCC license of, a Company Station (each, a “Station
Transfer”),
in each case, if such Company Station is located in any of the 50 largest DMAs
as of the date of such disposition;
(g) except
for any transactions permitted pursuant to Section 5(f), (i) Sell assets
involving, together with all other Sales of assets during any 12-month period,
assets with a fair market value greater than 20% of the book value of the
Company’s consolidated assets reflected on the most recent balance sheet
provided pursuant to Section 7.1(b), (ii) acquire assets, including pursuant to
a merger, consolidation or other business combination, if the consideration
payable for such assets in any single transaction exceeds 5% of the book value
of the Company’s consolidated assets reflected on the most recent balance
sheet provided pursuant to Section 7.1(b) or if the aggregate consideration
payable for such transaction, together with the consideration paid for all such
acquisitions in any 12-month period, exceeds 10% of the book value of the
Company’s consolidated assets reflected on the most recent balance sheet
provided pursuant to Section 7.1(b) (excluding, in each case, transactions
involving issuances of Stock that have been approved pursuant to this Section
5) or (iii) engage in any merger or business combination transaction where the
Company is not the surviving entity or where there is a change of control of
the Company (other than as contemplated by the Transaction
Agreements);
(h) create,
designate, authorize, issue, Sell or grant, or enter into any agreement
providing for the issuance (contingent or otherwise) of, any Stock except for
Stock issued (i) upon the conversion, exchange or exercise of any Plan Option,
(ii) upon conversion of the Senior Preferred Stock and the Series B Preferred
Stock (iii) pursuant to the Transaction Agreements; provided, that
the number of shares of Stock issued or issuable pursuant to clause (i) of this
Section 5(h) shall not exceed 52,000,000 shares (comprised of 24,436,363 shares
in respect of the Company Stock Plans (as defined in Master Agreement) and
24,563,637 shares in respect of any stock-based compensation plan entered into
after the date hereof and approved by the Board); provided,
further, the
approval of the NBCU Parties shall not be required for the issuance of any
Stock that results in a Mandatory
Conversion
Event (as defined in the Certificate of Designation or Indenture, as
applicable) for all of the Convertible Securities (as defined in the Master
Agreement);
(i) split,
combine or reclassify any of its Stock in any manner adverse to the CIG Media
Parties or the NBCU Parties, as applicable;
(j) except
as provided in the Transaction Agreements, enter into any employment,
compensation or other agreement with an employee or director of the Company or
any of its Subsidiaries (other than station managers) that (i) provides for
cash compensation (excluding bonus) reasonably expected to be in excess of
$400,000 per year or (ii) has longer than a three-year term;
(k) increase
the size of the Board other than any increases as a result of a Voting Rights
Triggering Event (as defined in the certificates of designation relating to the
Senior Preferred Stock);
(l) file any
voluntary bankruptcy, wind up of the Company or file for protection under Title
11, U.S. Code or any similar federal or state law for the relief of debtors;
or
(m) enter
into any joint sales, joint services, time brokerage, local marketing or
similar agreement or arrangement (other than agreements or arrangements that
may be terminated at no cost to the Company upon six-months’ notice), but
only if after entering into such agreement or arrangement, Company Stations
representing 20% or more of the Company’s National Coverage would be
subject to such agreements or arrangements.
Section
6. Other
Company Covenants
(a) Maintenance
of Existence and Property; FCC Licenses.
The
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and its rights and franchises
material to its business. The Company and each Subsidiary of the Company shall
maintain in good repair, working order and condition all of the properties that
are material to the Company and its Subsidiaries taken as a whole, used or
useful in the business of such Person and from time to time shall make or cause
to be made all appropriate (as reasonably determined by such Person) repairs,
renewals and replacements thereof. The Company shall, and shall cause each
Subsidiary of the Company to, use its best efforts to keep in full force and
effect all of its material FCC licenses and shall provide the CIG Media Parties
and the NBCU Parties with a copy of any (or, in the event of any notice based
on knowledge of such Person, a brief description of such default and the basis
of such knowledge) notice from the FCC of any violation with respect to any
material FCC license received by it (or with respect to which such Person may
have any knowledge).
(b) Payment
of Obligations.
Except
as disclosed in the Company’s SEC filings prior to the date hereof, the
Company shall pay and discharge or cause to be paid and discharged before any
penalty accrues
thereon
all material Taxes payable by it or any of its Subsidiaries. Notwithstanding
the foreging, the Company and each Subsidiary of the Company may in good faith
contest, by appropriate proceedings, the validity or amount of any Taxes
described in this Section 6(b); provided, that
(i) adequate reserves with respect to such contest are maintained on the books
of such Person, in accordance with GAAP and (ii) such Person shall promptly pay
or discharge such contested Taxes and all additional charges, interest,
penalties and expenses, if any, if such contest is terminated or discontinued
adversely to such Person or the conditions set forth in this Section 6(b) are
no longer met.
(c) Books
and Records.
The
Company shall, and shall cause each Subsidiary of the Company to, keep adequate
books and records with respect to its business activities in which proper
entries, reflecting all financial transactions, are made in accordance with
GAAP and any applicable law and on a basis consistent with the Company’s
audited financial statements for the twelve-month period ended December 31,
2006.
(d) Insurance.
The
Company shall, and shall cause each Subsidiary of the Company to, maintain or
cause to be maintained, with financially sound and reputable insurers,
insurance with respect to its business and properties, including business
interruption insurance, insurance on fixed assets and directors and
officers’ liability insurance, against loss or damage of the kinds
customarily carried or maintained under similar circumstances by entities of
established reputation engaged in similar businesses.
(e) Compliance
with Laws, Etc.
The
Company shall, and shall cause each Subsidiary of the Company to, comply in all
material respects with all (i) federal, state, local and foreign laws and
regulations applicable to it, including those relating to the Communications
Act, ERISA and labor matters and Environmental Laws and Environmental Permits,
and (ii) provisions of all FCC licenses, certifications and permits,
franchises, or other permits and authorizations relating to the operation of
the Company’s business and all other material agreements, licenses or
leases to which it is a party or of which it is a beneficiary and suffer no
loss or forfeiture thereof or thereunder.
(f) Environmental
Matters.
The
Company shall, and shall cause each Subsidiary of the Company to, and shall
cause each Person within its control to: (i) conduct its operations and
keep and maintain its real estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (ii) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to comply with Environmental Laws and Environmental Permits
pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or Release of any Hazardous Material on, at, in, under, above,
to, from or about any of its real estate, except as could not reasonably be
expected to have a Material Adverse Effect; (iii) notify the CIG
Media
Parties and the NBCU Parties promptly after such Person becomes aware of any
material violation of Environmental Laws or Environmental Permits or any
Release on, at, in, under, above, to, from or about any of its real estate
which is reasonably likely to have a Material Adverse Effect; and (iv) promptly
forward to the CIG Media Parties and the NBCU Parties a copy of any order,
notice, request for information or any communication or report received by such
Person in connection with any such violation, Release or any other matter
relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to have a Material Adverse Effect, in each case whether
or not the Environmental Protection Agency or any Governmental Entity has taken
or threatened any action in connection with any such violation, Release or
other matter. The Company shall not, and shall not cause or permit any of its
Subsidiaries to, cause or permit a Release of any Hazardous Material on, at,
in, under, above, to, from or about any of its real estate where such Release
would violate in any material respect, or form the basis for any material
Environmental Liabilities under, any Environmental Laws or Environmental
Permits.
(g) Material
Adverse Effect.
The
Company shall not make any changes in any of its business objectives, purposes
or operations which could reasonably be expected to have or result in a
Material Adverse Effect on the Company’s ability to perform its
obligations under this Agreement or any other Transaction Agreements to which
the Company is a party.
(h) ERISA.
The
Company shall not, and shall not cause or permit any ERISA Affiliate to, cause
or permit to occur an event which could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or cause or
permit to occur an ERISA Event to the extent such ERISA Event could reasonably
be expected to have a Material Adverse Effect.
(i) No
Impairment of Intercompany Transfers.
Except
in connection with any transaction contemplated in any of the Transaction
Agreements, the Company shall not permit any of its Subsidiaries to directly or
indirectly enter into or become bound by any agreement, instrument, indenture
or other obligation which could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by any of its
Subsidiaries to another Subsidiary of the Company or the Company.
(j) Limitation
on Certain Asset Sales.
The
Company shall not, and shall not permit any Subsidiary of the Company to,
consummate an Asset Sale unless (i) the Company or such Subsidiary of the
Company, as the case may be, receives consideration at the time of such sale or
other disposition at least equal to the fair market value thereof on the date
the Company or the Subsidiary of the Company (as applicable) entered into the
agreement to consummate such Asset Sale (as determined in good faith by the
Board, and evidenced by a resolution of the Board); (ii) not less than 75% of
the consideration received by the Company or such Subsidiary of the Company, as
the case may be, is in the form of cash or cash equivalents other than in the
case where the Company is
exchanging
all or substantially all of the assets of one or more media properties operated
by the Company (including by way of the transfer of capital stock) for all or
substantially all of the assets (including by way of transfer of capital stock)
constituting one or more media properties operated by another Person,
provided that at
least 75% of the consideration received by the Company in such exchange, other
than the media properties, is in the form of cash or cash equivalents; and
(iii) the proceeds of such Asset Sale received by the Company or such
Subsidiary of the Company are applied first, to the extent the Company elects
or is required, to prepay, repay or purchase debt under any then existing
indebtedness of the Company or any Subsidiary of the Company within 180 days
following the receipt of the proceeds of such Asset Sale and second, to the
extent of the balance of the proceeds of such Asset Sale after application as
described above, to the extent the Company elects, to make an investment in
assets (including capital stock or other securities purchased in connection
with the acquisition of capital stock or property of another Person) used or
useful in businesses similar or ancillary to the business of the Company or any
Subsidiary of the Company as conducted at the time of such Asset Sale,
provided that
such investment occurs or the Company or any Subsidiary of the Company enters
into contractual commitments to make such investment, subject only to customary
conditions (other than the obtaining of financing), on or prior to the 181st
day following receipt of the proceeds of such Asset Sale and the proceeds of
such Asset Sale contractually committed are so applied within 360 days
following the receipt of the proceeds of such Asset Sale.
Section
7. Financial Statements and Other Reports
7.1
Delivery
of Financial Statements and Other Reports. The
Company shall deliver, or cause to be delivered, to each
Stockholder:
(a)
Monthly
Financials: as
soon as practicable and in any event within 30 days after the end of each
calendar month of the Company, copies of all monthly financial reports prepared
for the chief executive officer or the chief operating officer of the Company
with respect to the Company and its consolidated Subsidiaries for and as of the
end of such month, including, without limitation, a monthly balance sheet and
income statement and a comparison of the income statement to the
budget;
(b)
Quarterly
Financials: as
soon as practicable and in any event within five days after it files them with
the SEC (to the extent applicable), a consolidated balance sheet of the Company
and its consolidated Subsidiaries as at the end of such period, and the related
unaudited consolidated statements of income and of cash flows, as contained in
the Form 10-Q for such fiscal quarter provided by the Company to the SEC, and
if such Form 10-Q is not required to be so provided by the Company, then the
Company shall provide each Stockholder, within 45 days after the end of each
fiscal quarter of the Company, with comparable financial statements, certified
by the chief financial officer of the Company that they fairly present the
financial position and results of operations of the Company and its
consolidated Subsidiaries, as appropriate, as at the end of such periods and
for such periods, subject to changes resulting from audit and normal year-end
adjustments;
(c)
Year-End
Financials: as
soon as practicable and in any event within five days after it files them with
the SEC (to the extent applicable), or if the Company is not required to file
such statements with the SEC, within 90 days after the end of each fiscal year
of the
Company,
the audited consolidated balance sheet of the Company and its consolidated
Subsidiaries, as at the end of such year, and the related consolidated
statements of income, shareholders’ equity and cash flows of the Company
and its consolidated Subsidiaries for such fiscal year, (i) accompanied by a
report thereon of independent certified public accountants selected by the
Company, which report shall state that the examination by such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards without any limitations being imposed on
the scope of such examination and (ii) certified by the chief financial officer
of the Company that they fairly present the financial position and results of
operations of the Company and its consolidated Subsidiaries, as at the dates
and for the periods indicated, as appropriate;
(d)
Reconciliation
Statement: if, as
a result of any change in accounting principles and policies from those used in
the preparation of the financial statements, the financial statements of the
Company and its consolidated Subsidiaries delivered pursuant to subsections
(b), (c) or (f) of this Section 7.1 differ in any material respect from the
financial statements that would have been delivered pursuant to such
subsections had no such change in accounting principles and policies been made,
then, together with the first delivery of financial statements pursuant to
subsection (b), (c) or (f) following such change, financial statements of the
Company and its consolidated Subsidiaries prepared on a pro forma basis, for
(i) the current year to the effective date of such change and (ii) the one full
fiscal year immediately preceding the fiscal year in which such change is made,
as if such change had been in effect during such period;
(e)
Accountants’
Certification: so
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to this Section 7.1 shall be accompanied by a written
statement of the Company’s independent certified public accountants that
in making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to believe
that the Company is not in compliance with the terms of the instruments
governing its outstanding debt or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly for any failure to
obtain knowledge of any such violation;
(f)
Accountants’
Reports:
promptly upon receipt thereof (unless restricted by applicable professional
standards), copies of all significant reports submitted to the Company by
independent public accountants in connection with each annual, interim or
special audit of the financial statements of the Company made by such
accountants, including, without limitation, the comment letter submitted by
such accountants to management in connection with their annual
audit;
(g)
Reports
and Filings: within
five days after the same are sent, copies of all financial statements and
reports which the Company sends to its stockholders, and within five days after
the same are filed, copies of all financials statements and reports which the
Company may make to, or file with, the SEC;
(h)
Events
of Default etc.:
promptly upon, but in any event no later than five Business Days after, any
executive officer of the Company obtaining knowledge (i) of any
condition
or event that constitutes a violation or default, or becoming aware that any
lender has given any notice or taken any other action with respect to a claimed
violation or default under the instruments governing then outstanding debt and
preferred stock, (ii) that any Person has given any notice to the Company or
any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition that would be required to be disclosed in a
Current Report on Form 8-K filed by the Company with the SEC or (iii) of any
condition or event which has had or could reasonably be expected to have a
Material Adverse Effect, an officer’s certificate specifying the nature
and period of existence of such condition or event, or specifying the notice
given or action taken by such holder or Person and the nature of such claimed
violation, default, event or condition, and what action the Company has taken,
is taking and proposes to take with respect thereto;
(i)
Litigation:
promptly upon any executive officer of the Company obtaining knowledge of (i)
the institution of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Company or any Subsidiary of the Company
not previously disclosed by the Company to the Stockholders or (ii) any
material adverse development in any such action, suit, proceeding, governmental
investigation or arbitration that, in each case involves claims in excess of
$5,000,000 in the aggregate or would reasonably be expected to cause a Material
Adverse Effect, the Company shall promptly give notice thereof to each
Stockholder and provide such other information as may be reasonably available
to the Company or its Subsidiaries to enable the Stockholders and their
respective counsel to evaluate such matters; provided that
the Company shall not be required to provide any information or documents to
the extent they are protected by the attorney-client privilege;
(j)
ERISA
Events: (i)
promptly upon (and in any event within 10 days after) becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, with a written
notice specifying the nature thereof, what action the Company or any ERISA
Affiliate has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto and (ii) within two
Business Days after receipt of any notice from the PBGC stating the PBCG’s
intent to terminate a Title IV Plan or to have a trustee appointed to
administer a Title IV Plan, a copy of such notice;
(k)
ERISA
Notices: with
reasonable promptness, copies of (i) all notices, records, documents and other
information received by the Company or any of its ERISA Affiliates from the
PBGC relating to an ERISA Event, (ii) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by the Company or any of its
ERISA Affiliates with the Internal Revenue Service with respect to each Title
IV Plan, if any, (iii) within 10 days after receipt, all notices received by
the Company or any of its ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event and (iv) each notice of the amount of liability
incurred or may be incurred by the Company or an ERISA Affiliate upon an event
set forth in (iii) of this Section 7.1(k);
(l)
Financial
Plans: as
soon as practicable after delivered to the Board, any budget and financial
forecast for the Company and its Subsidiaries, including (i) a forecasted
operating cash flows statement of the Company and its Subsidiaries for the next
succeeding
fiscal
year and (ii) forecasted operating cash flows statement of the Company and its
Subsidiaries for each fiscal quarter of the next succeeding fiscal year;
and
(m)
Other
Information: with
reasonable promptness, such other information and data with respect to the
Company or any of its Subsidiaries or Affiliates as from time to time may be
reasonably requested by the CIG Media Parties or the NBCU Parties.
Notwithstanding
the foregoing, the Company shall not be required to provide any information or
document pursuant to subsections (h) through (k) of this Section 7.1 to the
extent such information or document is included in a Current Report on Form 8-K
filed by the Company with the SEC and the Company delivers such 8-K to the
Stockholders, including by means of email transmission, within one Business Day
following such filing.
7.2
Provision of Information
Each
Stockholder shall provide the Company with such information regarding itself
and its Affiliates, directors, partners, officers and employees as the Company
may from time to time reasonably request in connection with filings to be made
or information to be provided to accrediting bodies and regulatory
bodies.
Section
8. Transactions with Affiliates
Except
for transactions and agreements contemplated by this Agreement or any of the
Transaction Agreements, the Company shall not, nor shall it permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction or
agreement with one or more of (A) the Company’s directors or officers or
with any Person in which one or more of the Company’s directors or
officers are directors or officers or have a financial or other interest, (B)
the Company’s Affiliates or the directors, officers and Affiliates of such
Persons or (C) the Stockholders or their respective directors, officers and
Affiliates, unless such transaction or agreement has been approved by the Board
in accordance with the laws of the State of Delaware applicable to such
transaction and agreement.
Section
9. NBCU Right of First Offer
(a)
So long
as the NBCU Parties own the Minimum Investment, if the Company or any of its
Subsidiaries at any time intends to effect a Station Transfer to any Person
other than a wholly-owned Subsidiary of the Company (a “Station
Third Party”),
the Company shall first give written notice (a “Station
Offer Notice”)
to the NBCU Parties, stating the Company’s intention to make such a
Station Transfer, the assets or securities proposed to be transferred, the
proposed consideration sought for such assets or securities (the
“Station
Offer Price”)
and in reasonable detail all other material terms and conditions upon which
such Station Transfer is proposed. Notwithstanding the foregoing, the NBCU
Parties shall not be entitled to a right of first offer with respect to the
assets or securities of any Company Station that is not located in one of the
fifty largest DMAs.
(b)
Upon
receipt of the Station Offer Notice, the NBCU Parties shall have an option to
purchase all of the assets or securities proposed to be transferred at the
Station Offer Price and on the other material terms and condition set forth in
the Station Offer Notice, which
option
may be exercised by written notice to the Company given within 45 days of the
NBCU Parties’ receipt of the Station Offer Notice.
(c)
If the
NBCU Parties exercise its option pursuant to Section 9.1(b), the closing of
such purchase shall take place within 45 days of the date the NBCU Parties give
notice of such exercise, except to the extent FCC approval is required or
reasonably advisable for the transaction, in which case the closing shall take
place as soon as practicable after receipt of final, non-appealable approval
from the FCC.
(d)
If the
NBCU Parties determine not to exercise its option, then for a period of 45 days
from the earlier of (i) the expiration of the offer to the NBCU Parties and
(ii) the receipt of written notice from the NBCU Parties stating that the NBCU
Parties do not intend to exercise its option, or for such longer period
required or reasonably advisable for FCC approval, the Company shall be free to
sell the proposed assets or securities to the Station Third Party at a price
equal to or greater than the Station Offer Price and on substantially the same
terms as set forth in the Station Offer Notice.
Section
10. Company Equity Issuances
In the
event the Approval Stockholders approve a Sale of Stock by the Company pursuant
to Section 5(h), the Company shall Sell such Stock (other than Excluded
Securities) (“Issuance
Stock”)
only in accordance with the following procedures and any purported Sale of
Issuance Stock by the Company in violation of this Section 10 shall be null and
void:
(a) The
Company shall deliver to the CIG Media Parties and the NBCU Parties
(collectively, the “Preemptive
Stockholders”)
a written notice (a “Preemptive
Offer Notice”)
which shall (i) state the Company’s intention to Sell shares of Issuance
Stock to one or more Persons, the amount and type of Issuance Stock to be Sold,
the purchase price therefor and all other material terms of the proposed Sale
and (ii) offer (the “Preemptive
Offer”)
each of the Preemptive Stockholders the option to acquire all or any part of
Issuance Stock; provided that
the Company need not deliver a Preemptive Offer Notice or make a Preemptive
Offer in connection with a Sale of Issuance Stock if each of the CIG Media
Parties and the NBCU Parties notifies the Company that it will not elect to
purchase any portion of its Preemptive Percentage of Issuance Stock pursuant to
such Preemptive Offer. The Preemptive Offer shall remain open and irrevocable
for a period of 20 days after receipt of the Preemptive Offer Notice by
each Preemptive Stockholder (the “Preemptive
Acceptance Period”)
(and, to the extent the Preemptive Offer is accepted during the Preemptive
Acceptance Period, until the consummation of the Sale contemplated by the
Preemptive Offer). Each Preemptive Stockholder shall have the right and option
to accept the Preemptive Offer for all or any portion of its Preemptive
Percentage of Issuance Stock at the price and on the terms and subject to the
conditions set forth in the Preemptive Offer Notice, by delivering to the
Company within the Preemptive Acceptance Period a written notice (the
“Acceptance
Notice”)
specifying its Preemptive Percentage and the number of shares of Issuance Stock
such Preemptive Stockholder will purchase (the “Accepted
Shares”).
(b) In the
event the Company does not receive the Acceptance Notices from the Preemptive
Stockholders during the Preemptive Acceptance period with respect to all of
Issuance
Stock offered for Sale pursuant to the Preemptive Offer Notice, the Company may
Sell all or any portion of such Issuance Stock so offered for Sale and not so
accepted, at a price not less than the price and on terms not more favorable to
the purchaser thereof than the terms, in each case as set forth in the
Preemptive Offer Notice, at any time within 90 days after the expiration
of the Preemptive Acceptance Period (the “Issuance
Period”);
provided that,
in connection with and as a condition to such Sale, each purchaser or recipient
of such Issuance Stock who is not then a Stockholder shall execute and deliver
to the Company (which the Company shall then deliver to all of the
Stockholders) a joinder agreement in the form attached hereto as Exhibit A. In
the event that all of Issuance Stock is not so Sold by the Company during the
Issuance Period, the right of the Company to Sell such unsold Issuance Stock
shall expire and the obligations of this Section 10 shall be reinstated
and such Issuance Stock shall not be Sold unless first reoffered to the
Stockholders in accordance with this Section 10.
(c) All
Sales of
Issuance Stock to the Preemptive Stockholders subject
to any Preemptive Offer Notice shall be consummated contemporaneously at the
offices of the Company on the later of (i) a mutually satisfactory
Business Day within 15 days after the expiration of the Preemptive
Acceptance Period or (ii) the fifth Business Day following the expiration
or termination of all waiting periods under the HSR Act and receipt of all
necessary FCC and other regulatory approvals applicable to such Sale, or at
such other time or place as the Company and the Preemptive Stockholders may
mutually agree. The delivery by the Company to the Preemptive Stockholders of
certificates or other instruments evidencing such Issuance Stock shall be made
on such date upon receipt of payment of the purchase price for such Issuance
Stock by the Company from such Preemptive Stockholders.
Section
11. Legend. Each
Stockholder and the Company shall take all such action necessary (including
surrendering to the Company certificates representing shares of Stock issued
prior to the date hereof) to cause each certificate representing outstanding
shares of Stock owned by a Stockholder to bear a legend containing the
following words:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS.”
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER, VOTING AND THE OTHER TERMS SET FORTH IN THE STOCKHOLDERS’
AGREEMENT DATED AS OF MAY 4, 2007 AMONG THE COMPANY, CIG MEDIA LLC AND NBC
UNIVERSAL, INC., THE PUT/CALL AGREEMENT DATED AS OF MAY 4, 2007 BETWEEN CIG
MEDIA LLC AND NBC UNIVERSAL, INC., THE CALL AGREEMENT DATED MAY 4, 2007 BETWEEN
CIG MEDIA LLC AND NBC PALM
BEACH
INVESTMENT II, INC., AND THE CALL AGREEMENT DATED MAY 4, 2007 BETWEEN THE
COMPANY AND NBC PALM BEACH INVESTMENT I, INC., IN EACH CASE, AS THE SAME MAY BE
AMENDED OR AMENDED AND RESTATED FROM TIME TO TIME, COPIES OF WHICH ARE ON FILE
IN THE OFFICE OF THE COMPANY.”
The
requirement that the above securities legend be placed upon certificates
evidencing shares of Stock owned by a Stockholder shall cease and terminate
upon the earliest of the following events: (i) when such shares are Sold
in a Public Sale, (ii) when such shares are Sold pursuant to Rule 144
under the Securities Act or (iii) when such shares are Sold in any other
transaction if such Stockholder delivers to the Company an opinion of its
counsel, which counsel and opinion shall be reasonably satisfactory to the
Company, or a “no-action” letter from the staff of the SEC, in either
case to the effect that such legend is no longer necessary in order to protect
the Company against a violation by it of the Securities Act upon any Sale of
such shares without registration thereunder. Upon the occurrence of any of the
foregoing events, the Company, upon the surrender by such Stockholder of
certificates containing such legend, shall, at its own expense, promptly
deliver to such Stockholder of any such shares as to which the requirement for
such legend shall have terminated, one or more new certificates evidencing such
shares not bearing such legend.
Section
12. Representations and Warranties. Each
party hereto represents and warrants to the other parties hereto as
follows:
(a) Such
party has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite power
and authority to carry on its business as presently conducted and proposed to
be conducted.
(b) Such
party has full power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
(c) This
Agreement has been duly and validly authorized, executed and delivered by such
party, and constitutes a valid and binding obligation of such party,
enforceable against such party in accordance with its terms.
(d) The
execution, delivery and performance of this Agreement by such party does not
and will not (A) violate, conflict with, or constitute a breach of or default
under such party’s organizational documents or (B) violate any law,
regulation, order, writ, judgment, injunction or decree applicable to such
party.
(e) The
execution, delivery and performance of this Agreement by it does not and will
not (A) require it to obtain any consent, approval, authorization or other
order of, or to make any filing, registration or qualification with any court,
regulatory body, administrative agency or other governmental body (except such
as may have previously been obtained or is permitted to be, and will be, filed
or made promptly following the date hereof) or (B) violate, conflict with
(subject to Section 2(b)), constitute a breach or default under, or result in
the
imposition
of a Lien on any of such party’s material properties pursuant to, any
agreement, arrangement, commitment or undertaking to which such party is a
party or by which such party is bound and which would adversely affect such
party’s ability to perform its obligations hereunder.
(f) Except
as provided in Section 12(e), such party is not a party to any agreement which
is inconsistent with the rights of any party hereunder or otherwise conflicts
with the provisions hereof.
Section
13. Competitive Opportunities. The
Company and each of the Stockholders agrees and acknowledges that each of the
CIG Media Parties, the NBCU Parties and any of their respective Affiliates,
directors, officers or employees may at any time possess or acquire knowledge
of a potential transaction or matter which may be a Competitive Opportunity and
may exploit a Competitive Opportunity or engage in, or hold interests in, one
or more businesses that may compete with a business of the Company or any of
its Subsidiaries. The Company and each of the Stockholders agree and
acknowledge that neither the Company nor any of its Subsidiaries shall have an
interest in, or expectation that, such Competitive Opportunity be offered to
it, any such interest or expectation being hereby renounced so that each of the
CIG Media Parties, the NBCU Parties, and their respective Affiliates,
directors, officers and employees (i) shall have no duty to communicate or
present such Competitive Opportunity to the Company or any of its Subsidiaries,
(ii) shall have the right to hold any such Competitive Opportunity for its
own account, or to recommend, assign or otherwise transfer such Competitive
Opportunity to Persons other than the Company and its Subsidiaries and
(iii) shall not be liable to the Company or any of its Subsidiaries or
their respective stockholders by reason of the fact that it pursues or acquires
such Competitive Opportunity for itself, directs or Sells such Competitive
Opportunity to another Person, does not communicate information regarding such
Competitive Opportunity to the Company or any of its Subsidiaries, engages in,
or holds any interest in, any business that competes with any business of the
Company or any of its Subsidiaries.
Section
14. Duration of Agreement. Other
than Section 3.6, the rights and obligations of a Stockholder under this
Agreement shall terminate at such time as such Stockholder no longer owns any
shares of Stock; provided, that
the termination of the rights and obligations of a Stockholder shall not
relieve such Stockholder of any liability arising out of or resulting from any
knowing, willful or intentional breach of this Agreement by such Stockholder
prior to the termination.
Section
15. Further Assurances. The
parties shall cooperate with each other, and at the request of any other party,
execute and deliver any further instruments or documents and use reasonable
best efforts to take or cause to be taken all appropriate action as the other
party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby and to otherwise carry out
the intent of the parties hereunder. Without limiting the generality of the
foregoing, the Company shall make and shall cause its Subsidiaries to make, as
promptly as practicable following the reasonable request of the NBCU Parties,
all filings required to be made by the Company or its Subsidiaries under
applicable law, including the Communications Act and the HSR Act, with respect
to the exercise of NBCU Option I, and shall take all reasonable steps within
its control (including providing information to the relevant Governmental
Entity) and reasonably cooperate with the NBCU Parties in seeking to
obtain
any required consents or approvals as promptly as practicable.
Section
16. Amendment and Waiver.
This
Agreement may be amended or modified, and any provision hereof may be waived,
but in each case only if set forth in an instrument in writing signed by the
party against whom such amendment, modification or waiver is sought to be
enforced; provided,
however, that
the provisions of Section 6 may be modified, amended or waived only if set
forth in an instrument in writing signed by the Company, the CIG Media Parties
and the NBCU Parties. The failure of any party to enforce any of the provisions
of this Agreement shall in no way be construed as a waiver of such provisions
and shall not affect the right of such party thereafter to enforce any
provision hereof in accordance with its terms.
Section
17. Entire Agreement. This
Agreement, the other Transaction Agreements and the other writings referred to
herein or therein or delivered pursuant hereto or thereto which form a part
hereof or thereof contain the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof or thereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, with respect to the subject matter
hereof or thereof.
Section
18. Successors and Assigns. Other
than Section 3.6 which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons, this Agreement shall inure solely
to the benefit of and be solely enforceable by the Company, each Stockholder
and its respective successors and permitted assignees. This Agreement shall not
be assigned by any party hereto or any Stockholder without the express prior
written consent of all of the parties hereto, except that the CIG Media Parties
and the NBCU Parties may each assign all or any of their rights and obligations
hereunder to their Affiliates or to any Stockholder to whom the CIG Media
Parties or the NBCU Parties, as the case may be, have transferred Stock in
accordance with this Agreement; provided, that
no rights under Sections 4, 5 or 9 may be assigned; provided,
further, that
no such assignment shall relieve the CIG Media Parties and the NBCU Parties, as
the case may be, of their respective obligations hereunder with respect to any
assignment to their respective Affiliates, with respect to any Stock not
transferred or not otherwise transferred in accordance with this Agreement, and
with respect to any breach of this Agreement prior to such assignment. For the
avoidance of doubt, in the event either the CIG Media Parties or the NBCU
Parties, as the case may be, assign all or any of their rights under Section
3.1(b) to one or more Stockholders pursuant to this Section 18, the aggregate
number of directors to be designated or nominated, as applicable, by the CIG
Media Parties or the NBCU Parties, as the case may be, and such Stockholders
shall not exceed the number of directors the CIG Media Parties or the NBCU
Parties, as the case may be, are entitled to designate or nominate pursuant to
Section 3.1(b) immediately prior to such assignment.
Section
19. Severability.
Whenever possible, each term and provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
If any term or provision hereof is invalid, illegal or incapable of being
enforced by law or public policy, all other terms and provisions hereof shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as
possible
in a mutually acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
Section
20. Remedies. The
parties agree and acknowledge that money damages may not be an adequate remedy
for any breach of the terms and provisions of this Agreement and that each
party hereto, each Stockholder and, with respect to Section 3.6, each Person
covered thereby, may in its sole discretion apply to any court of law or equity
of competent jurisdiction for specific performance and injunctive relief in
order to enforce, or prevent any violation of, the provisions hereof, in
addition to any other remedy at law or equity.
Section
21. Notices. All
notices, requests, consents and other communications hereunder to any party
hereto or any Stockholder shall be deemed to be sufficient if contained in a
written instrument delivered in person, by telecopy, by overnight courier or by
first class registered or certified mail (return receipt requested, postage
prepaid) to such party at the address set forth below (or at such other address
or to the attention of such other Person as shall be specified by such party in
a notice given in accordance with this Section 21) and to any Stockholder at
such address as indicated by the Company’s records (or at such address or
to the attention of such other Person as shall be specified by such Stockholder
in a notice given in accordance with this Section 21):
(i) if to
the Company, to:
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to (which shall not constitute notice):
Holland
& Knight LLP
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
Xxxxx X. Xxxxx
Tel:
000-000-0000
Fax:
000-000-0000
and
Dow,
Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
(ii) if to
the CIG Media Parties, to:
CIG
Media LLC
000 X.
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to (which shall not constitute notice):
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
Attention:
Xxxxxx
X. Xxxxxxxxx
Xxxxxx
X. Xxxxxxxx
(iii) if to
the NBCU Parties, to:
NBC
Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to (which shall not constitute notice):
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
All such
notices, requests, consents and other communications will be deemed to have
been given hereunder when received.
Section
22. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any New York state or
federal court sitting in the Borough of Manhattan of The City of New York. The
parties hereto hereby (a) submit to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan of The City of New York for
the purpose of any action or proceeding arising out of or relating to this
Agreement brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such action or
proceeding, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that the action or proceeding is brought in an inconvenient
forum, that the venue of the action or proceeding is improper, or that this
Agreement or the transactions contemplated hereby may not be enforced in or by
any of the above-named courts. Each of the parties hereto hereby waives to the
fullest extent permitted by applicable law any right it may have to a trial by
jury with respect to any litigation directly or indirectly arising out of,
under or in connection with this Agreement or the transactions contemplated
hereby. Each of the parties hereto (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other hereto have been
induced to enter into this Agreement and the transactions contemplated hereby
by, among other things, the mutual waivers and certifications in this Section
22.
Section
23. Construction. Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it relates.
The language used in this Agreement shall be deemed to be the language chosen
by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
Section
24. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made in writing
by any party in connection herewith shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
regardless of any investigation made by, or on behalf of, any
Stockholder.
Section
25. Conflicting Agreements. Each
Stockholder represents and warrants that such Stockholder (a) has not granted
and is not a party to any proxy, voting trust or
other
agreement which conflicts with any provision of this Agreement and (b) shall
not grant any proxy or become party to any voting trust or other agreement
which conflicts with any provision of this Agreement.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
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ION
MEDIA NETWORKS, INC. |
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By: |
/s/ Xxxxxxx Xxxxxx |
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Name:
Xxxxxxx Xxxxxx
Title:
Chief Financial Officer |
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CIG
MEDIA LLC |
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By: |
Citadel Limited Partnership, its Portfolio
Manager |
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By: |
Citadel Investment Group, L.L.C., its General
Partner |
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/s/ Xxxxxxx Xxxxxxxxx |
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Name:
Xxxxxxx Xxxxxxxxx
Title:
Managing Director and Depute General Counsel |
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx
Title:
Executive Vice President and Chief Financial Officer |
[Signature
Page to Stockholders’ Agreement]
EXHIBIT
A
JOINDER
AGREEMENT
By
execution of this Joinder Agreement, the undersigned agrees to be bound by the
terms of that certain Stockholders’ Agreement dated as of May 4, 2007,
among ION Media Networks, Inc., a Delaware corporation, CIG Media LLC, a
Delaware limited liability company, and NBC Universal, Inc., a Delaware
corporation (as such agreement may be amended, modified, supplemented or
restated from time to time, the “Stockholders’
Agreement”).
The undersigned shall have all the rights, observe all the obligations and make
all representations and warranties, in each case applicable to a Stockholder
(as defined in the Stockholders’ Agreement) assigned to such Person in
accordance with the Stockholders’ Agreement and agree to be bound by
Section 22 of the Stockholders’ Agreement as if it were a party
thereto.
Stockholder
Name: ______________
| Address
for Notices: |
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with
copies to: |
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EXHIBIT
Q to the Master Transaction Agreement
Assignment
Agreement
Exhibit
Q to the
Master
Transaction Agreement
Assignment
Agreement
ASSIGNMENT
AND ASSUMPTION AGREEMENT
THIS
ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”)
is entered into on May 4, 2007 by and among NBC Universal, Inc., a Delaware
corporation (“NBCU”),
NBC Palm Beach Investment II, Inc., a California corporation
(“NBC
Palm Beach II,”
and together with NBCU, the “Assignors”),
and CIG Media LLC, a Delaware limited liability company (“CIG”
or the “Assignee”).
WHEREAS,
NBCU, NBC Palm Beach II, NBC Palm Beach Investment I, Inc., a California
corporation, CIG, and ION Media Networks, Inc., a Delaware corporation (the
“Company”),
have entered into that certain Master Transaction Agreement, dated May 3, 2007
(the “Master
Transaction Agreement”;
unless otherwise defined herein, capitalized terms shall be used herein as
defined in the Master Transaction Agreement);
WHEREAS,
Section 2.02 of the Master Transaction Agreement provides that on the
Commencement Date, (i) NBC Palm Beach II shall assign all of its rights and
obligations under the Call Agreement, and (ii) NBCU shall assign all of its
rights and obligations arising under the Escrow Agreement and the Noncompete
Agreements (the Call Agreement, the Escrow Agreement and the Noncompete
Agreements, collectively, the “Assigned
Agreements”),
in each case, to CIG by executing and delivering to CIG this
Agreement;
NOW,
THEREFORE, in consideration of the promises and mutual agreements set forth
herein and in the Master Transaction Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Assignors do hereby agree as follows:
1.
Assignment. Effective as of the Commencement Date, the Assignors hereby
assign and transfer to the Assignee all of the rights and obligations of the
Assignors under the Assigned Agreements and the Assignee hereby accepts such
assignment and transfer of all of the rights and obligations of the Assignors
under the Assigned Agreements.
2.
Assumption. The Assignee hereby assumes all of the rights and
obligations of the Assignors under the Assigned Agreements. The Assignee shall
be bound by all of the terms and conditions of the Assigned Agreements in the
same way such terms obligate the Assignors. The Assignee agrees that, following
the Commencement Date, the Assignors shall not have any obligations to Assignee
under the Assigned Agreements other than the indemnity obligations set forth in
Section 10.21 of the Master Transaction Agreement.
3.
Further Assurances. The Assignors hereby covenant and agree, at any time
and from time to time after the date of this Agreement, at the Assignee’s
reasonable request, to do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, any and all further acts,
transfers, assignments, and assurances as may be necessary to assign or
transfer to the Assignee all of the rights and obligations of the Assignors
under the Assigned Agreements.
4. No
Assignment Without Consent. This Agreement may not be assigned by operation
of law or otherwise without the express written consent of the Assignors and
the
Assignee
(which consent may be granted or withheld in the sole discretion of the
Assignors and the Assignee).
5.
Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the parties hereto.
6.
Waiver. Any extension or waiver of this Agreement shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby. The failure of any party hereto to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
7. No
Third Party Beneficiaries. This Agreement shall be binding upon and inure
solely to the benefit of the Assignee and its permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other
Person (other than the Xxxxxx Stockholders), any legal or equitable right,
benefit or remedy of any nature whatsoever, under or by reason of this
Agreement.
8.
Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to either the Assignors or the Assignee. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the assignment and transfer contemplated by
this Agreement are consummated as originally contemplated to the greatest
extent possible.
9.
Governing Law. This Agreement shall be governed by the laws of the State
of New York.
2
IN
WITNESS WHEREOF, this Agreement has been executed by the Assignors as of the
date first above written.
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NBC
Universal, Inc. |
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx
Title:
Executive Vice President and Chief Financial Officer |
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NBC Palm
Beach Investment II, Inc. |
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name:
Xxxx X. Xxxxxxxx
Title:
Vice President and Treasurer |
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By: |
Citadel
Investment Group, L.L.C.,
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By: |
Citadel
Limited Partnership,
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By: |
/s/ Xxxxxxx Xxxxxxxxx |
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Name:
Xxxxxxx Xxxxxxxxx
Title:
Managing Director and Deputy General Counsel |
3
EXHIBIT
R to the Master Transaction Agreement
Call
Right Exercise Notice
Exhibit
R to the
Master
Transaction Agreement
Call
Right Exercise Notice
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CIG MEDIA LLC
c/o Citadel Investment Group,
L.L.C.
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx
00000 |
May 4, 0000
Xxxxxx X. Xxxxxx,
Xxxxxx Enterprises
and
Second
Xxxxxxx Xxxxxxx Limited Partnership
c/o Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxx
Xxxxx, 00X
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Tel: 000-000-0000
Fax:
000-000-0000
Re: Call
Notice
Dear Xx.
Xxxxxx:
Reference is hereby made to the
Call Agreement, dated as of November 7, 2005 (the “Call
Agreement”), by and among Xxxxxx X. Xxxxxx, Second Xxxxxxx Xxxxxxx
Limited Partnership, a Nevada limited partnership, Xxxxxx Enterprises, Inc., a
Nevada corporation (collectively, the “Call Stockholders”),
and NBC Palm Beach Investment II, Inc., a California corporation. All
capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Call Agreement.
In accordance with Sections
2.1(b) and 2.2(a) of the Call Agreement, we, in our capacity as a Permitted
Transferee, hereby exercise the Call Right and notify you of our intention to
purchase from the Call Stockholders all the Call Shares for an aggregate
purchase price of $6,274,140.81.
Please note that the Call Closing
will take place at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
LLP, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. within three
Business Days after the conditions set forth in Section 2.3(a) of the Call
Agreement have been satisfied or waived in accordance with the Call Agreement,
subject as required by Section 2.3(b) of the Call Agreement.
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Very truly yours, |
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CIG MEDIA LLC |
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By: |
Citadel Investment Group, L.L.C., |
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its General Partner |
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By: |
Citadel Limited Partnership, |
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its Manager |
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By: |
/s/ Xxxxxxx
Xxxxxxxxx |
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Name: Xxxxxxx Xxxxxxxxx |
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Title: Managing Director and Deputy General Counsel |
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Xxxxx Xxxx LLP
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx
00000
Tel: 000-0-0000
Fax: 000-000-0000 |
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ION Media Networks, Inc.
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: General
Counsel
Tel: 000-000-0000
Fax: 000-000-0000 |
EXHIBIT
S to the Master Transaction Agreement
Form
of Restated Certificate of Incorporation
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| Exhibit S |
| to the Master Transaction Agreement
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Form
of Restated Certificate of Incorporation
ION MEDIA
NETWORKS, INC.
Proposed
Resolutions
of the Board of Directors
Authorizing A Reverse Stock
Split
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WHEREAS, a special meeting of the
Board of Directors of Ion Media Networks, Inc., (the “Corporation”)
was held on _______________ ___, 2007 (the “Meeting”);
and |
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WHEREAS, for the reasons
discussed at the Meeting, the Board of Directors deems it advisable and in the
best interests of the Corporation to approve and declare advisable an amendment
to the Certificate of Incorporation of the Corporation in order effect a
reverse split of the issued and outstanding shares of the Corporation’s
Class A Common Stock, par value $0.001 per share (the “Class A
Common”), and Class B Common Stock, par value $0.001 per share (the
“Class B Common”) by combining the Corporation’s outstanding
shares of Class A Common and Class B Common into a lesser number of
shares. |
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NOW, THEREFORE, BE IT RESOLVED,
that the Board of Directors of the Corporation hereby approves and declares it
advisable that the Certificate of Incorporation of the Corporation be amended
by adding to the end of Article Fourth of the Certificate of Incorporation the
paragraphs set forth in the Certificate of Amendment of Certificate of
Incorporation attached hereto as Exhibit A. |
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RESOLVED, that the
above-described amendment be submitted for approval by stockholders of the
Corporation, which approval the Board of Directors hereby recommends; and it is
further |
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RESOLVED, that the Board of
Directors of the Corporation may abandon such proposed amendment, before or
after stockholder approval thereof, without further action by the stockholders
at any time prior to the effectiveness of the Certificate of Amendment of
Certificate of Incorporation setting forth the above described amendment; and
it is further |
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RESOLVED, that upon the approval
of the stockholders, the officers of the Corporation be, and each of them
hereby is, |
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authorized, empowered and directed, for and on behalf of the Corporation, to
execute and file, or cause to be filed, a Certificate of Amendment of
Certificate of Incorporation of the Corporation, setting forth the above
described amendment, with the Secretary of State of the State of Delaware; and
it is further |
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RESOLVED, that each of the
officers of the Corporation is hereby authorized and directed, to take all such
further action and to prepare, execute, acknowledge, file, deliver and record
all such further documents and instruments by and on behalf of the Corporation,
and in the name of the Corporation, or otherwise, as in his or her judgment
shall be necessary, appropriate or advisable in order to fully carry out the
intent and to accomplish the execution of the purposes of the foregoing
resolutions. |
2
CERTIFICATE OF
AMENDMENT
OF
CERTIFICATE OF
INCORPORATION
OF
ION MEDIA NETWORKS,
INC.
(Pursuant to Section
242 of the General Corporation Law of the State of Delaware)
ION Media Networks, Inc., a
corporation duly organized and existing under the General Corporation Law of
the State of Delaware (the “Corporation”), does hereby certify
that:
FIRST: The
Certificate of Incorporation of the Corporation is hereby amended by adding the
following paragraphs at the end of Article Fourth:
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“Upon the Certificate of
Amendment of Certificate of Incorporation of the Corporation containing this
paragraph becoming effective pursuant to the General Corporation Law of the
State of Delaware (the “Effective Time”), (i) each share of Class A
Common issued and outstanding immediately prior to the Effective Time shall be
automatically reclassified as and combined into [___] of a share (the
“Reverse Stock Split Ratio”) of Class A Common1
and (ii) each share of Class B Common issued and |
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__________________________ |
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1
The Reverse Stock Split Ratio will be fixed following the completion of the
Tender Offer for shares of Class A Common of the Corporation to be made by CIG
Media LLC, a Delaware limited liability company (“CIG”), pursuant to
the Master Transaction Agreement by and among the Corporation, NBC Universal,
Inc., a Delaware corporation (“NBCU”), NBC Palm Beach Investment I,
Inc., a California corporation (“NBC Palm Beach I”), NBC Palm Beach
Investment II, Inc., a California corporation (“NBC Palm Beach II,”
and together with NBCU and NBC Palm Beach I, the “NBCU Entities”),
and CIG, and will be fixed by the Board (with the concurrence of NBCU and CIG)
at the lowest number such that all holders of Class A Common other than CIG
will be eligible to receive, in respect of all such shares held by such holder,
less than a whole share of Class A Common upon effectuation of the reverse
stock split, and if CIG does not own the
greatest number of shares of Class A Common immediately prior to the Effective
Time, the Reverse Stock Split Ratio shall be fixed at the lowest number such
that all holders of Class A Common would be entitled to receive, in respect of
all shares held by each such holder, less than a whole share of Class A Common
upon effectuation of the Reverse Stock Split.
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outstanding immediately prior to the Effective Time, shall be
automatically reclassified as and combined into a fractional number of fully
paid and nonassessable shares of Class B Common at the Reverse Stock Split
Ratio. |
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Any stock certificate that,
immediately prior to the Effective Time, represented shares of Class A Common
or Class B Common will, from and after the Effective Time, automatically and
without the necessity of presenting the same for exchange, represent the number
of shares of Class A Common or Class B Common, respectively, as equals the
product obtained by multiplying the number of shares of Class A Common or Class
B Common Stock, respectively, represented by such certificate immediately prior
to the Effective Time by the Reverse Stock Split Ratio. No fractional shares of
Class A Common shall be issued as a result of such reclassification and
combination. In lieu of any fractional shares to which the holders of Class A
Common would otherwise be entitled, the Corporation shall, upon proper
surrender of any certificates formerly representing shares of Class A Common,
pay cash determined by multiplying the number of shares represented by such
certificate prior to the Reverse Stock Split by $1.45. Fractional shares of
Class B Common as a result of the Reverse Stock Split shall remain outstanding,
and certificates or scrip for such fractional shares of Class B Common shall be
issued. |
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Notwithstanding the foregoing,
the shares of Class A Common held by the Corporation as treasury stock or held
by any subsidiary of the Corporation shall be cancelled.” |
SECOND: The foregoing
amendment was duly adopted in accordance with the provisions of Sections 242
and 228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, ION Media
Networks, Inc. has caused this Certificate to be executed by its duly
authorized officer, this ____ day of ______ 2007.
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ION MEDIA NETWORKS, INC. |
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By:___________________________ |
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Name: |
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Office: |
4
EXHIBIT
T to the Master Transaction Agreement
Form
of Certificate of Amendment
Exhibit T
to the Master Transaction Agreement
Form
of Certificate of Amendment
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ION MEDIA NETWORKS, INC.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
ION Media Networks, Inc., a corporation duly
organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), does hereby certify that:
FIRST: The Certificate of Incorporation of
the Corporation is hereby amended by amending in its entirety the Certificate
of Designation of the Powers, Preferences and Relative, Participating, Optional
and Other Special Rights of the 9 ¾% Series A Convertible Preferred
Stock and Qualifications, Limitations and Restrictions Thereof to read as
attached hereto as Exhibit
A.
SECOND: The foregoing amendment was duly
adopted in accordance with the provisions of Sections 242 and 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, ION Media Networks, Inc.
has caused this Certificate to be executed by its duly authorized officer, this
____ day of ______ 2007.
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ION MEDIA NETWORKS,
INC.
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By:
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Name:
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Office:
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Exhibit A
AMENDED CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF 9 3/4%
SERIES A
CONVERTIBLE PREFERRED STOCK AND
QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
(a) Designation. There is hereby created out
of the authorized and unissued shares of Preferred Stock of the Corporation a
class of Preferred Stock designated as the “9 3/4% Series A Convertible
Preferred Stock”. The number of shares constituting such class shall be
17,500 and are referred to as the “Convertible Preferred Stock.” The
liquidation preference of the Convertible Preferred Stock shall be $10,000.00
per share.
(b) Rank. The Convertible Preferred Stock
shall, with respect to dividends and distributions upon liquidation, winding-up
or dissolution of the Corporation, rank (i) senior to all classes of Common
Stock of the Corporation and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created
the terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Convertible Preferred Stock as to dividends and distributions
upon liquidation, winding-up or dissolution of the Corporation, including the
Junior Preferred Stock (collectively referred to, together with all classes of
Common Stock of the Corporation, as “Junior Securities”); (ii) on a
parity with any class of Capital Stock of the Corporation or series of
Preferred Stock of the Corporation hereafter created the terms of which
expressly provide that such class or series will rank on a parity with the
Convertible Preferred Stock as to dividends and distributions upon liquidation,
winding-up or dissolution (collectively referred to as “Parity
Securities”); and (iii) junior to the NBCU Series B Preferred Stock and to
the 13 ¼% Cumulative Junior Preferred Stock, with a liquidation value of
$10,000 per share, to the Senior Preferred Stock and to each other class of
Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly provide that such
class or series will rank senior to the Convertible Preferred Stock as to
dividends and distributions upon liquidation, winding-up or dissolution of the
Corporation (collectively referred to as “Senior Securities”).
(c) Dividends.
(i) Beginning on the Issue Date, the Holders
of the outstanding shares of Convertible Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends on each share of Convertible Preferred
Stock, at a rate per annum equal to 9 3/4% of the liquidation preference per
share of
the Convertible Preferred Stock, payable
quarterly. All dividends shall be cumulative, whether or not earned or
declared, on a daily basis from the Issue Date and shall be payable quarterly
in arrears on each Dividend Payment Date, commencing September 30, 1998.
Dividends may be paid, at the Corporation’s option, on any Dividend
Payment Date either in cash or by the issuance of additional shares of
Convertible Preferred Stock (including fractional shares) having an aggregate
liquidation preference equal to the amount of such dividends or by the issuance
of shares of Class A Common Stock (and payment of cash in lieu of fractional
shares) having a value, based upon the average Common Stock Trading Price as of
the consecutive five trading days ending two Business Days prior to the
Dividend Payment Date equal to the amount of such dividends. In the event that
dividends are declared and paid through the issuance of additional shares of
Convertible Preferred Stock or Class A Common Stock, as herein provided, such
dividends shall be deemed paid in full and will not accumulate. Each dividend
shall be payable to the Holders of record as they appear on the stock books of
the Corporation on the Dividend Record Date immediately preceding the related
Dividend Payment Date. Dividends shall cease to accumulate in respect of shares
of the Convertible Preferred Stock on the date of the redemption of such shares
unless the Corporation shall have failed to pay the relevant Redemption Price
on the date fixed for redemption.
(ii) All dividends paid with respect to
shares of the Convertible Preferred Stock pursuant to paragraph (c)(i) shall be
paid pro rata to the Holders entitled thereto.
(iii) Unpaid dividends accumulating on the
Convertible Preferred Stock for any past dividend period and dividends in
connection with any Redemption may be declared and paid at any time, without
references to any regular Dividend Payment Date, to holders of record on such
date, not more than forty-five (45) days prior to the payment thereof, as may
be fixed by the Board of Directors.
(iv) Dividends payable on the Convertible
Preferred Stock for any period less than a year shall be computed on the basis
of a 360-day year of twelve 30-day months and the actual number of days elapsed
in the period for which payable.
(v) Notwithstanding paragraph (c)(i) above,
if the Company elects to pay dividends on any Dividend Payment Date in shares
of Class A Common Stock and such shares are not freely tradable without volume
or manner of sale limitations under the Securities Act by any Holder which is
not an Affiliate of the Corporation, the dividend rate for the Quarterly Period
for which the dividend is being paid shall be increased to 12 1/4% per annum.
For purposes of the prior sentence, the shares of Class A Common Stock shall be
deemed not freely tradable, unless the certificates evidencing such shares are
delivered to the Holders without any restrictive legend appearing thereon and
are accompanied by a copy of an Opinion of Counsel addressed to the Corporation
to the effect that such shares of Class A Common Stock are freely tradable
without volume or manner of sale limitations under the Securities Act by a
Holder who is not an Affiliate of the Corporation.
(d) Liquidation Preference.
(i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the Holders of shares of Convertible Preferred Stock then
outstanding shall be entitled to be paid, out of the assets of the Corporation
available for distribution to its stockholders, an amount in cash equal to the
liquidation preference for each share outstanding, plus without duplication, an
amount in cash equal to accumulated and unpaid dividends thereon to the date
fixed for liquidation, dissolution or winding up (including an amount equal to
a prorated dividend for the period from the last Dividend Payment Date to the
date fixed for liquidation, dissolution or winding up) before any distribution
shall be made or any assets distributed to the holders of any of the Junior
Securities including, without limitation, the Common Stock of the Corporation.
Except as provided in the preceding sentence, Holders of Convertible Preferred
Stock shall not be entitled to any distribution in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation. If
the assets of the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders of outstanding shares of the Convertible
Preferred Stock and all Parity Securities, then the holders of all such shares
shall share equally and ratably in such distribution of assets first in
proportion to the full liquidation preference to which each is entitled until
such preferences are paid in full, and then in proportion to their respective
amounts of accumulated but unpaid dividends.
(ii) For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Redemption. (A) The Corporation may, at
the option of the Board of Directors, redeem at any time, in whole or in part,
in the manner provided for in paragraph (e)(ii) hereof, any or all of the
shares of the Convertible Preferred Stock, at the redemption price per share
equal to the sum of (x) $10,000 and (y) an amount equal to all accumulated and
unpaid dividends per share (including an amount in cash equal to a prorated
dividend for the period from the Dividend Payment Date immediately prior to the
Redemption Date to the Redemption Date) (the “Redemption Price”).
(B) In the event of a redemption pursuant to
paragraph (e)(i)(A) hereof of only a portion of the then outstanding shares of
the Convertible Preferred Stock, the Corporation shall effect such redemption
on a pro rata basis according to the number of shares held by each Holder of
the Convertible Preferred Stock, except that the Corporation may redeem all
shares held by any Holders of fewer than one share (or shares held by Holders
who would hold less than one share as a result of such redemption), as may be
determined by the Corporation, provided, that no Redemption shall be authorized
or made unless prior thereto full accumulated and unpaid dividends are declared
and paid in full in cash, or declared and a sum in cash set apart sufficient
for such payment, on the Convertible Preferred Stock for all Dividend Periods
terminating on or prior to the Redemption Date.
(ii) Procedures for Redemption. (A) At least
thirty (30) days and not more than sixty (60) days prior to the date fixed for
redemption of the Convertible Preferred Stock, written notice (the
“Redemption Notice”) shall be given by first class mail, postage
prepaid, to each Holder of record on the record date fixed for such redemption
of the Convertible Preferred Stock at such Holder’s address as it appears
on the stock books of the Corporation, provided that no failure to give such
notice nor any deficiency therein shall affect the validity of the procedure
for the redemption of any shares of Convertible Preferred Stock to be redeemed
except as to the Holder or Holders to whom the Corporation has failed to give
said notice or to whom such notice was defective. The Redemption Notice shall
state:
(1) that the redemption is pursuant to
paragraph (e)(i)(A) hereof;
(2) the Redemption Price;
(3) whether all or less than all the
outstanding shares of the Convertible Preferred Stock are to be redeemed and
the total number of shares of the Convertible Preferred Stock being
redeemed;
(4) the date fixed for redemption;
(5) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
his certificate or certificates representing the shares of Convertible
Preferred Stock to be redeemed; and
(6) that dividends on the shares of the
Convertible Preferred Stock to be redeemed shall cease to accumulate on such
Redemption Date unless the Corporation defaults in the payment of the
Redemption Price.
(B) Each Holder of Convertible Preferred
Stock shall surrender the certificate or certificates representing such shares
of Convertible Preferred Stock to the Corporation, duly endorsed (or otherwise
in proper form for transfer, as determined by the Corporation), in the manner
and at the place designated in the Redemption Notice, and on the Redemption
Date the full Redemption Price for such shares shall be payable in cash to the
Person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be canceled and retired. In the
event that less than all of the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the applicable Redemption
Price, dividends on the Convertible Preferred Stock called for redemption shall
cease to accumulate on the Redemption Date, and all rights of the Holders of
redeemed shares shall terminate with respect thereto on the Redemption Date,
other than the right to receive the Redemption Price, without interest;
provided, however, that if a notice of redemption shall have been given as
provided in paragraph (ii)(A) above and the
funds necessary for redemption (including an amount in respect of all dividends
that will accrue to the Redemption Date) shall have been segregated and
irrevocably deposited in trust for the equal and ratable benefit of the Holders
of the shares to be redeemed, then, at the close of business on the day on
which such funds are segregated and set aside, the Holders of the shares to be
redeemed shall cease to be stockholders of the Corporation and shall be
entitled only to receive the Redemption Price.
(f) Voting Rights.
Except as otherwise provided by law, the
Holders of Convertible Preferred Stock shall not be entitled to vote on any
matters submitted for a vote to the holders of the Corporation’s common
stock. Upon the filing of the Certificate of Amendment of the Certificate of
Incorporation containing this sentence (the “Amendment”), the term of
any director elected by the Holders of Convertible Preferred Stock prior to the
filing of such Certificate of Amendment of the Certificate of Incorporation
shall automatically end and such director shall immediately cease to be a
member of the Board of Directors.
(g) Conversion.
(i) Shares of the Convertible Preferred
Stock will be convertible at the option of the Holder thereof, at any time and
from time to time, into a number of shares of Class A Common Stock equal to the
aggregate liquidation preference amount of the shares of Convertible Preferred
Stock surrendered for conversion divided by the Conversion Price as then in
effect, except that, if shares of Convertible Preferred Stock are called for
redemption, the conversion right will terminate at the close of business on the
Redemption Date. No fractional shares or securities representing fractional
shares of Class A Common Stock will be issued upon conversion; in lieu of
fractional shares of Class A Common Stock, the Company will, at its option,
either round up the number of shares to be issued to the nearest whole share or
pay a cash adjustment based upon the current market price of the Class A Common
Stock at the close of business on the first Business Day preceding the date of
conversion. The Convertible Preferred Stock shall be converted by the holder
thereof by surrendering the certificate or certificates representing the shares
of Convertible Preferred Stock to be converted, appropriately completed, to the
transfer agent for the Class A Common Stock. The transfer agent shall issue one
or more certificates representing the Class A Common Stock to be issued in the
conversion in the name of names requested by the Holder. The transfer agent
will deliver to the Holder a new certificate representing the shares of
Convertible Preferred Stock in excess of those being surrendered for
conversion. Effective as of the filing of the Amendment, the Conversion Price
shall be $16.00 (the “Conversion Price”). Such Conversion Price shall
be adjusted as hereinafter provided.
(ii) (A) In case the Company shall (I) pay a
dividend or distribution in shares of its Class A Common Stock on its shares of
Class A Common Stock, (II) subdivide its outstanding shares of Class A Common
Stock into a greater number of shares, (III) combine its outstanding shares of
Class A Common Stock into a smaller number of shares, or (IV) issue, by
reclassification of its shares of Class A Common Stock, any shares of its
capital stock (each such
transaction being called a “Stock
Transaction”), then and in each such case, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of a share of
Convertible Preferred Stock surrendered for conversion after the record date
fixing stockholders to be affected by such Stock Transaction shall be entitled
to receive upon conversion the number of such shares of Class A Common Stock
which such Holder would have been entitled to receive after the happening of
such event had such share of Convertible Preferred Stock been converted
immediately prior to such record date. Such adjustment shall be made whenever
any of such events shall happen, but shall also be effective retroactively as
to shares of Convertible Preferred Stock converted between such record date and
the date of the happening of any such event.
(B) In the event the Company shall, at any
time or from time to time while any shares of Convertible Preferred Stock are
outstanding, issue, sell or distribute any right or warrant to purchase,
acquire or subscribe for shares of Class A Common Stock (including a right or
warrant with respect to any security convertible into or exchangeable for
shares of Class A Common Stock) generally to holders of Common Stock (including
by way of a reclassification of shares or a recapitalization of the Company),
for a consideration on the date of such issuance, sale or exchange less than
the Common Stock Trading Price of the shares of Class A Common Stock underlying
such rights or warrants on the date of such issuance, sale or distribution,
then and in each case, the Conversion Price shall be adjusted by multiplying
such Conversion Price by a fraction the numerator of which shall be the sum of
(I) the Common Stock Trading Price per share of Common Stock on the first
trading date after the date of the public announcement of the actual terms
(including the price terms) of such issuance, sale or distribution multiplied
by the number of shares of Class A Common Stock outstanding immediately prior
to such issuance, sale or exchange plus (II) the aggregate Fair Market Value of
the consideration to be received by the Company in respect of such issuance,
sale or distribution of the shares of Class A Common Stock underlying such
right or warrant, and the denominator of which shall be the Common Stock
Trading Price per share of Class A Common Stock on the trading day immediately
preceding the public announcement of the actual terms (including the pricing
terms) of such issuance, sale or exchange multiplied by the aggregate number of
shares of Class A Common Stock (I) outstanding immediately prior to such
issuance, sale or distribution plus (II) underlying such rights or warrants at
the time of such issuance. For the purposes of the preceding sentence, the
aggregate consideration receivable by the Company in connection with the
issuance, sale or exchange of any such right or warrant shall be deemed to be
equal to the sum of the aggregate offering price (before deduction of
reasonable underwriting discounts or commissions and expenses) of all such
rights or warrants.
(C) In the event the Company shall, at any
time or from time to time while any shares of Convertible Preferred Stock are
outstanding, repurchase or redeem any portion of the Class A Common Stock from
holders generally at a premium over the Common Stock Trading Price thereof on
the next trading day immediately preceding the consummation of such repurchase
or redemption (a “Repurchase”), then and in the case of each
Repurchase the Conversion Price in effect immediately prior thereto shall be
adjusted by multiplying such conversion price by the fraction the numerator of
which is (I) the product of (x) the number of shares of Class A Common Stock
outstanding
immediately before such repurchase or
redemption multiplied by (y) the Common Stock Trading Price per share of Class
A Common Stock on the next trading day immediately following the consummation
of such Repurchase minus (II) the aggregate purchase price of the Repurchase
and the denominator of which shall be the product of (x) the number of shares
of Class A Common Stock outstanding immediately before such Repurchase minus
the number of shares of Class A Common Stock repurchased or redeemed by the
Company multiplied by (y) the Common Stock Trading Price per share of Class A
Common Stock on the next trading day immediately following the consummation of
such Repurchase. Such adjustment shall be made whenever any such events shall
happen, but shall also be effective retroactively as to shares of Convertible
Preferred Stock converted between such record date and the date of the
happening of any such event.
(D) In the event the Company shall at any
time or from time to time while any shares of Convertible Preferred Stock are
outstanding declare, order, pay or make a dividend or other distribution
generally to holders of Common Stock in stock or other securities or rights or
warrants to subscribe for securities of the Company or any of its subsidiaries
or evidences of indebtedness of the Company or any other person on its Class A
Common Stock or pay any Extraordinary Cash Dividend, (other than any dividend
or distribution on the Class A Common Stock (I) referred to in paragraphs (A),
(B) or (C) above or (II) if in conjunction therewith the Company declares and
pays or makes a dividend or distribution on each share of Convertible Preferred
Stock which is the same as the dividend or distribution that would have been
made or paid with respect to such share of Convertible Preferred Stock had such
share been converted into shares of Class A Common Stock immediately prior to
the record date for any such dividend or distribution on the Class A Common
Stock), then, and in each such case, an appropriate adjustment to the
Conversion Price shall be made so that the Holder of each share of Convertible
Preferred Stock shall be entitled to receive, upon the conversion thereof, the
number of shares of Class A Common Stock determined by multiplying (x) the
number of shares of Class A Common Stock into which such share was convertible
on the day immediately prior to the record date fixed for the determination of
stockholders entitled to receive such dividend or distribution by (y) a
fraction, the numerator of which shall be the Common Stock Trading Price per
share of Class A Common Stock as of such record date, and the denominator of
which shall be such Common Stock Trading Price per share of Class A Common
Stock less the Fair Market Value per share of Class A Common Stock of such
dividend or distribution (as determined in good faith by the Board of
Directors, as evidenced by a Board Resolution mailed to each holder of shares
of Convertible Preferred Stock). An adjustment made pursuant to this paragraph
(D) shall be made upon the opening of business on the next business day
following the date on which any such dividend or distribution is made and shall
be effective retroactively immediately after the close of business on the
record date fixed for the determination of stockholders entitled to receive
such dividend or distribution.
(iii) No adjustment in the Conversion Price
will be required to be made in any case until cumulative adjustments amount to
1% or more of the Conversion Price, but any such adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. The Company may, to the extent permitted
by law,
make such reductions in the Conversion Price
in addition to those described in paragraph (ii) above as it, in its sole
discretion, shall determine to be advisable in order that certain stock related
distributions hereafter made by the Company to its stockholders shall not be
taxable to such stockholders.
(iv) Holders of shares of Convertible
Preferred Stock at the close of business on a Dividend Record Date shall be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the conversion thereof following such
Dividend Record Date and on or prior to such Dividend Payment Date. However,
shares of Convertible Preferred Stock surrendered for conversion during the
period between the opening of business on any Dividend Record Date and the
close of business on the corresponding Dividend Payment Date (except shares of
Convertible Preferred Stock called for redemption on a Redemption Date during
such period) must be accompanied by payment of an amount equal to the dividend
payment with respect to such shares of Convertible Preferred Stock presented
for conversion on such Dividend Payment Date; provided, however, that no such
payment need be made if, at the time of conversion, dividends payable on the
shares of Convertible Preferred Stock outstanding are in arrears for more than
30 days beyond the previous Dividend Payment Date. The dividend payment with
respect to shares of Convertible Preferred Stock called for redemption on a
Redemption Date during the period between the opening of business on a Dividend
Record Date and the close of business on the corresponding Dividend Payment
Date shall be payable on that Dividend Payment Date to the Holder of such
shares at the close of business on the Dividend Record Date notwithstanding the
conversion of such shares after the opening of business on such Dividend Record
Date and on or prior to the close of business on such Dividend Payment Date,
and the holder of such shares need not make a payment equal to the dividend
payment amount upon surrender of such shares for conversion. A holder of shares
of Convertible Preferred Stock on a Dividend Record Date who converts such
shares on or after the corresponding Dividend Payment Date will receive the
dividend payable by the Company on such shares of Convertible Preferred Stock
on such date and need not include payment in the amount of such dividend upon
surrender of such shares of Convertible Preferred Stock for conversion. Except
as provided above, the Company shall make no payments or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the shares of Class A Common Stock issued upon such conversion. The Company
will not issue fractional shares of Class A Common Stock upon conversion of
shares of Convertible Preferred Stock and, in lieu thereof, will at its option,
either round up the number of shares to be issued to the nearest whole share or
pay a cash adjustment based upon the Common Stock Trading Price of the Class A
Common Stock (determined as set forth in the Certificate of Designation) on the
last business day prior to the date of conversion.
(v) In the event of any capital
reorganization (other than a capital reorganization covered by paragraph (ii)
(D) above) or reclassification of outstanding shares of Class A Common Stock
(other than a reclassification covered by paragraph (ii) (A) above), or in case
of any merger, consolidation or other corporate combination of the Company with
or into another corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety (each of the foregoing being referred to as a
“Transaction”), each share of Convertible Preferred Stock shall
continue to remain outstanding if the Company is the Surviving Person (as
defined below) of such Transaction, and
shall be subject to all the provisions, as
in effect prior to such Transaction, or if the Company is not the Surviving
Person, each share of Convertible Preferred Stock shall be exchanged for a new
series of convertible preferred stock of the Surviving Person, or in the case
of a Surviving Person other than a corporation, comparable securities of such
Surviving Person, in either case having economic terms as nearly equivalent as
possible to, and with the same voting and other rights as, the Convertible
Preferred Stock including entitling the holder thereof to receive, upon
presentation of the certificate therefor to the Surviving Person subsequent to
the consummation of such Transaction, the kind and amount of shares of stock
and other securities and property receivable (including cash) upon the
consummation of such Transaction by a holder of that number of shares of Class
A Common Stock into which one share of Convertible Preferred Stock was
convertible immediately prior to such Transaction. In case securities or
property other than Common stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this paragraph (v) shall be
deemed to apply, so far as appropriate and as nearly as may be, to such other
securities or property.
Notwithstanding anything contained herein to
the contrary, the Company will not effect any Transaction unless, prior to the
consummation thereof, (A) proper provision is made to ensure that the holders
of shares of Convertible Preferred Stock will be entitled to receive the
benefits afforded by this paragraph (v), and (B) if, following the Change in
Control, one or more entitles other than the Company shall be required to
deliver securities or other property upon the conversion of the Convertible
Preferred Stock, such entity or entities shall assume, by written instrument
delivered to each holder of shares of Convertible Preferred Stock the
obligation to deliver to such holder the amount in cash to which, in accordance
with the foregoing provisions, such holder is entitled.
For purposes of this paragraph (v), the
following terms shall have the meanings ascribed to them below:
“Surviving Person” shall mean the
continuing or surviving Person of a merger, consolidation or other corporate
combination, the Person receiving a transfer of all or a substantial part of
the properties and assets of the Company, or the Person consolidating with or
merging into the Company in a merger, consolidation or other corporate
combination in which the Company is the continuing or surviving Person, but in
connection with which the Convertible Preferred Stock or Common Stock of the
Company is exchanged, converted or reclassified into the securities of any
other Person or cash or any other property.
(A) At the time of the Exchange, the
Corporation shall deliver Debentures which may be resold by the holder thereof
to the public without delivering a prospectus under the Securities Act.
(h) Conversion or Exchange. Other than as
set forth in paragraph (g) above, the Holders of shares of Convertible
Preferred Stock shall not have any rights hereunder to
convert such shares into or exchange such
shares for shares of any other class or classes or of any other series of any
class or classes of Capital Stock of the Corporation.
(i) Reissuance of Convertible Preferred
Stock. Shares of Convertible Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed, shall (upon
compliance with any applicable provisions of the laws of Delaware) have the
status of authorized and unissued shares of Preferred Stock undesignated as to
series and may be redesignated and reissued as part of any series of Preferred
Stock; provided that any issuance of such shares as Convertible Preferred Stock
must be in compliance with the terms hereof.
(j) Business Day. If any payment or
redemption shall be required by the terms hereof to be made on a day that is
not a Business Day, such payment or redemption shall be made on the immediately
succeeding Business Day.
(k) Definitions. As used in this Certificate
of Designation, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
“Affiliate” means, for any Person,
a Person who, directly or indirectly, through one or more intermediaries
controls, or is controlled by, or is under common control with, such other
Person. 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.
“Board of Directors” means the
Board of Directors of the Corporation.
“Board Resolution” means a copy of
a resolution certified pursuant to an Officers’ Certificate to have been
duly adopted by the Board of Directors of the Corporation and to be in full
force and effect, and delivered to the Holders.
“Business Day” means any day
except a Saturday, a Sunday, or any day on which banking institutions in New
York, New York are required or authorized by law or other governmental action
to be closed.
“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,
including each class of common stock and preferred 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.
“Certificate of Incorporation”
means the Certificate of Incorporation of the Corporation as filed with the
Secretary of State of the State of Delaware, as amended.
“Class A Common Stock” means the
Class A Common Stock, par value $.001 per share, of the Corporation.
“Common Stock” of any Person means
any and all shares, interests or other participations in, and other equivalents
(however designated and whether voting or non-voting) of, such Person’s
common stock, whether outstanding on the Issue Date or issued after the Issue
Date, and includes, without limitation, all series and classes of such common
stock.
“Common Stock Trading Price” on
any date means, with respect to the Class A Common Stock, the Closing Price for
the Class A Common Stock on such date. The “Closing Price” on any
date shall mean the last sale price for the Class A Common Stock, regular way,
or, in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, for the Class A Common Stock in either case
as reported in the principal consolidated transaction reporting system with
respect to the principal national securities exchange on which the Class A
Common Stock is listed or admitted to trading or, if the Class A Common Stock
is not listed or admitted to trading on any national securities exchange, the
last quoted price, or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the principal
automated quotation system that may then be in use or, if the Class A Common
Stock is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Class A Common Stock selected by the Board of Directors or, in the event
that no trading price is available for the Class A Common Stock, the fair
market value of the Class A Common Stock, as determined in good faith by the
Board of Directors.
“Conversion Price” shall have the
meaning ascribed to it in paragraph (g) (i) hereof.
“Convertible Preferred Stock”
shall have the meaning ascribed to it in paragraph (a) hereof.
“Corporation” means ION Media
Networks, Inc. a Delaware corporation.
“Dividend Payment Date” means
March 31, June 30, September 30 and December 31 of each year.
“Dividend Period” means the
Initial Dividend Period and, thereafter, each Quarterly Dividend Period.
“Dividend Record Date” means March
15, June 15, September 15 and December 15 of each year.
“Extraordinary Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Adjusted EBITDA of the
Company and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend.
“Fair Market Value” of any
consideration other than cash or of any securities shall mean the amount which
a willing buyer would pay to a willing seller in an arm’s length
transaction as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors or a
committee thereof.
“Holder” means a holder of shares
of Convertible Preferred Stock as reflected in the stock books of the
Corporation.
“Initial Dividend Period” means
the dividend period commencing on the Issue Date and ending on September 30,
1998.
“Issue Date” means the date of
original issuance of the Convertible Preferred Stock.
“Junior Preferred Stock” means,
collectively, (i) Series B Convertible Preferred, (ii) Series C Preferred
Stock, (iii) Series D Convertible Preferred, (iv) Series E-1 Convertible
Preferred, (v) Series E-2 Convertible Preferred, and (vi) Series F
Non-Convertible Preferred, in each case as defined in the Master Transaction
Agreement.
“Junior Securities” shall have the
meaning ascribed to it in paragraph (b) hereof.
“Master Transaction Agreement”
means the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“NBCU Series B Preferred” means
11% Series B Convertible Exchangeable Preferred Stock, par value $0.001 per
share, of the Corporation, with a liquidation preference of $10,000 per share,
as it may be modified or amended from time to time.
“Officers’ Certificate” means
a certificate signed by two officers or by an officer and either an Assistant
Treasurer or an Assistant Secretary of the Corporation which certificate shall
include a statement that, in the opinion of such signers all conditions
precedent to be performed by the Corporation prior to the taking of any
proposed action have been taken. In addition, such certificate shall include
(i) a statement that the signatories have read the relevant covenant or
condition, (ii) a brief statement of the nature and scope of such examination
or investigation upon which the statements are based, (iii) a statement that,
in the opinion of such signatories, they have made such examination or
investigation as is reasonably necessary to express an informed opinion and
(iv) a statement as to whether or not, in the opinion of the signatories, such
relevant conditions or covenants have been complied with.
“Opinion of Counsel” means an
opinion of counsel that, in such counsel’s opinion, all conditions
precedent to be performed by the Corporation prior to the taking of any
proposed action have been taken. Such opinion shall also include the statements
called for in the second sentence under “Officers’
Certificate”.
“Parity Securities” shall have the
meaning ascribed to it in paragraph (b) hereof.
“Person” means an individual,
partnership, corporation, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision thereof.
“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 redemption or
upon liquidation.
“Quarterly Dividend Period” shall
mean the quarterly period commencing on each March 31, June 30, September 30
and December 31 and ending on the next succeeding Dividend Payment Date,
respectively.
“Redemption Date”, with respect to
any shares of Convertible Preferred Stock, means the date on which such shares
of Convertible Preferred Stock are redeemed by the Corporation.
“Redemption Notice” shall have the
meaning ascribed to it in paragraph (e)(iii) hereof.
“Redemption Price” shall have the
meaning ascribed to it in paragraph (e)(i) hereof.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Senior Preferred Stock” means
collectively, (i) 14.75% Preferred, (ii) Series A-1 Convertible Preferred,
(iii) Series A-2 Preferred Stock, (iv) Series A-3 Convertible Preferred, and
(v) Series C Convertible Preferred, in each case as defined in the Master
Transaction Agreement.
“Senior Securities” shall have the
meaning ascribed to it in paragraph (b) hereof.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ION MEDIA NETWORKS, INC.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
ION Media Networks, Inc., a corporation duly
organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), does hereby certify that:
FIRST: The Certificate of Incorporation of
the Corporation is hereby amended by amending in its entirety the Certificate
of Designation of the Powers, Preferences and Relative, Participating, Optional
and Other Special Rights of the 13 ¼% Cumulative Junior Exchangeable
Preferred Stock and Qualifications, Limitations and Restrictions Thereof to
read as attached hereto as Exhibit
A.
SECOND: The foregoing amendment was duly
adopted in accordance with the provisions of Sections 242 and 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, ION Media Networks, Inc.
has caused this Certificate to be executed by its duly authorized officer, this
____ day of ______ 2007.
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ION MEDIA NETWORKS,
INC.
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By:
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Name:
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Office:
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Exhibit A
AMENDED CERTIFICATE OF DESIGNATION OF THE
POWERS,
PREFERENCES AND RELATIVE,
PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF 13 1/4%
CUMULATIVE
JUNIOR EXCHANGEABLE PREFERRED STOCK AND
QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of
Delaware
I. DESIGNATION. There is hereby created out
of the authorized and unissued shares of Preferred Stock of the Corporation a
class of Preferred Stock designated as the “13 1/4% Cumulative Junior
Preferred Stock”. The number of shares constituting such class shall be
72,000 and are referred to as the “Junior Preferred Stock.” The
liquidation preference of the Junior Preferred Stock shall be $10,000.00 per
share.
II. RANK. The Junior Preferred Stock shall,
with respect to dividends and distributions upon liquidation, winding-up or
dissolution of the Corporation, rank (i) senior to the Convertible Preferred
Stock, to all classes of Common Stock of the Corporation and to each other
class of Capital Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which do not expressly provide that
it ranks senior to, or on a parity with, the Junior Preferred Stock as to
dividends and distributions upon liquidation, winding-up or dissolution of the
Corporation (collectively referred to, together with all classes of Common
Stock of the Corporation and the Convertible Preferred Stock, as “Junior
Securities”); (ii) on a parity with any class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter created
the terms of which expressly provide that such class or series will rank on a
parity with the Junior Preferred Stock as to dividends and distributions upon
liquidation, winding-up or dissolution, including the Series C Convertible
Preferred Stock (collectively referred to as “Parity Securities”);
and (iii) junior to the NBCU Series B Preferred, the Senior Preferred Stock and
to each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created the terms of which expressly provide
that such class or series will rank senior to the Junior Preferred Stock as to
dividends and distributions upon liquidation, winding-up or dissolution of the
Corporation (collectively referred to as “Senior Securities”).
III. DIVIDENDS.
A. Beginning on the Issue Date, the Holders
of the outstanding shares of Junior Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends on each share of Junior Preferred Stock,
at a rate per annum equal to 13 1/4% of the liquidation preference per share of
the Junior Preferred Stock, payable semi-annually. All dividends shall be
cumulative, whether or not earned or declared, on a daily basis from the Issue
Date and shall be payable semi-annually in arrears on each Dividend Payment
Date, commencing November 15, 1998. Dividends may be paid, at the
Corporation’s option, on any Dividend
Payment Date either in cash or by the issuance of additional shares of Junior
Preferred Stock (including fractional shares) having an aggregate liquidation
preference equal to the amount of such dividends. In the event that dividends
are declared and paid through the issuance of additional shares of Junior
Preferred Stock, as herein provided, such dividends shall be deemed paid in
full and will not accumulate. If any dividend payable on any Dividend Payment
Date subsequent to May 15, 2003 is not paid in full in cash, the per annum
dividend rate will be increased by 1.00% per annum for such dividend payment
period. After the date of which such dividend is paid in cash, the dividend
rate will revert to the rate originally borne by the Junior Preferred Stock.
Each dividend shall be payable to the Holders of record as they appear on the
stock books of the Corporation on the Dividend Record Date immediately
preceding the related Dividend Payment Date. Dividends shall cease to
accumulate in respect of shares of the Junior Preferred Stock on the date of
the earlier redemption of such shares unless the Corporation shall have failed
to pay the relevant redemption price on the date fixed for redemption.
B. All dividends paid with respect to shares
of the Junior Preferred Stock pursuant to paragraph (c)(i) shall be paid PRO
RATA to the Holders entitled thereto.
C. Unpaid dividends accumulating on the
Junior Preferred Stock for any past Dividend Period and dividends in connection
with any optional redemption may be declared and paid at any time, without
references to any regular Dividend Payment Date, to holders of record on such
date, not more than forty-five (45) days prior to the payment thereof, as may
be fixed by the Board of Directors.
D. Dividends payable on the Junior Preferred
Stock for any period less than a year shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of days elapsed in
the period for which payable.
IV. LIQUIDATION PREFERENCE.
A. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the Holders of shares of Junior Preferred Stock then outstanding
shall initially be entitled to be paid, out of the assets of the Corporation
available for distribution to its stockholders, an amount in cash equal to the
liquidation preference for each share outstanding, plus without duplication, an
amount in cash equal to accumulated and unpaid dividends thereon to the date
fixed for liquidation, dissolution or winding up (including an amount equal to
a prorated dividend for the period from the last Dividend Payment Date to the
date fixed for liquidation, dissolution or winding up) before any distribution
shall be made or any assets distributed to the holders of any of the Junior
Securities including, without limitation, the Convertible Preferred Stock and
Common Stock of the Corporation. Except as provided in the preceding sentence,
Holders of Junior Preferred Stock shall not be entitled to any distribution in
the event of any liquidation, dissolution or winding up of the affairs of the
Corporation. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to the Holders of outstanding shares of the
Junior Preferred Stock and all Parity Securities, then the holders of all such
shares shall share equally and ratably in such distribution of assets first in
proportion to the full liquidation preference to which each is entitled until
such preferences are
paid in full, and then in proportion to
their respective amounts of accumulated but unpaid dividends.
B. For the purposes of this paragraph (d),
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
V. REDEMPTION.
A. (A)The Corporation may, at the option of
the Board of Directors, redeem at any time, in whole or in part, in the manner
provided for in paragraph (e)(iii) hereof, any or all of the shares of the
Junior Preferred Stock, at the redemption price per share equal to the sum of
(x) $10,000 and (y) an amount equal to all accumulated and unpaid dividends per
share (including an amount in cash equal to a prorated dividend for the period
from the Dividend Payment Date immediately prior to the Redemption Date to the
Redemption Date) (the “ Redemption Price”).
(B) [Intentionally Omitted]
(C) In the event of a redemption pursuant to
paragraph (e)(i)(A) hereof of only a portion of the then outstanding shares of
the Junior Preferred Stock, the Corporation shall effect such redemption on a
PRO RATA basis according to the number of shares held by each Holder of the
Junior Preferred Stock, except that the Corporation may redeem all shares held
by any Holders of fewer than one share (or shares held by Holders who would
hold less than one share as a result of such redemption), as may be determined
by the Corporation, PROVIDED that no redemption shall be authorized or made
unless prior thereto full accumulated and unpaid dividends are declared and
paid in full, or declared and a sum in cash set apart sufficient for such
payment, on the Junior Preferred Stock for all Dividend Periods terminating on
or prior to the Redemption Date.
B. [Intentionally Omitted]
C. PROCEDURES FOR REDEMPTION. (A) At least
thirty (30) days and not more than sixty (60) days prior to the date fixed for
any redemption of the Junior Preferred Stock, written notice (the
“Redemption Notice”) shall be given by first class mail, postage
prepaid, to each Holder of record on the record date fixed for such redemption
of the Junior Preferred Stock at such Holder’s address as it appears on
the stock books of the Corporation, PROVIDED that no failure to give such
notice nor any deficiency therein shall affect the validity of the procedure
for the redemption of any shares of Junior Preferred Stock to be redeemed
except as to the Holder or Holders to whom the Corporation has failed to give
said notice or to whom such notice was defective. The Redemption Notice shall
state:
a. that the redemption is pursuant to
paragraph (e)(i)(A) hereof;
b. the Redemption Price;
c. whether all or less than all the
outstanding shares of the Junior Preferred Stock are to be redeemed and the
total number of shares of the Junior Preferred Stock being redeemed;
d. the date fixed for redemption;
e. that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at the price designated,
his certificate or certificates representing the shares of Junior Preferred
Stock to be redeemed; and
f. that dividends on the shares of the
Junior Preferred Stock to be redeemed shall cease to accumulate on such
Redemption Date unless the Corporation defaults in the payment of the
Redemption Price.
(B) Each Holder of Junior Preferred Stock
shall surrender the certificate or certificates representing such shares of
Junior Preferred Stock to the Corporation, duly endorsed (or otherwise in
proper form for transfer, as determined by the Corporation), in the manner and
at the place designated in the Redemption Notice, and on the Redemption Date
the full Redemption Price for such shares shall be payable in cash to the
Person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be canceled and retired. In the
event that less than all of the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.
(C) On and after the Redemption Date, unless
the Corporation defaults in the payment in full of the applicable redemption
price, dividends on the Junior Preferred Stock called for redemption shall
cease to accumulate on the Redemption Date, and all rights of the Holders of
redeemed shares shall terminate with respect thereto on the Redemption Date,
other than the right to receive the Redemption Price, without interest;
PROVIDED, HOWEVER, that if a notice of redemption shall have been given as
provided in paragraph (iii)(A) above and the funds necessary for redemption
(including an amount in respect of all dividends that will accrue to the
Redemption Date) shall have been segregated and irrevocably deposited in trust
for the equal and ratable benefit of the Holders of the shares to be redeemed,
then, at the close of business on the day on which such funds are segregated
and set aside, the Holders of the shares to be redeemed shall cease to be
stockholders of the Corporation and shall be entitled only to receive the
Optional Redemption Price, without interest.
VI. VOTING RIGHTS.
Except as otherwise provided by law, the
Holders of Junior Preferred Stock shall not be entitled to vote on any matters
submitted for a vote to the holders of the Corporation’s common stock.
Upon the filing of the Certificate of Amendment to the Certificate of
Incorporation adding this sentence, the term of any director elected by the
Holders of Junior Preferred Stock prior to the filing of such Certificate of
Amendment of the Certificate of Incorporation shall automatically end and such
director shall immediately cease to be a member of the Board of Directors.
VII. [INTENTIONALLY OMITTED].
VIII. CONVERSION OR EXCHANGE. The Holders of
shares of Junior Preferred Stock shall not have any rights hereunder to convert
such shares into or exchange such shares for shares of any other class or
classes or of any other series of any class or classes of Capital Stock of the
Corporation.
IX. REISSUANCE OF JUNIOR PREFERRED STOCK.
Shares of Junior Preferred Stock that have been issued and reacquired in any
manner, including shares purchased or redeemed, shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized
and unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; PROVIDED
that any issuance of such shares as Junior Preferred Stock must be in
compliance with the terms hereof.
X. BUSINESS DAY. If any payment or
redemption shall be required by the terms hereof to be made on a day that is
not a Business Day, such payment or redemption shall be made on the immediately
succeeding Business Day.
XI. DEFINITIONS. As used in this Certificate
of Designation, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
“BOARD OF DIRECTORS” means the
Board of Directors of the Corporation.
“BUSINESS DAY” means any day
except a Saturday, a Sunday, or any day on which banking institutions in New
York, New York are required or authorized by law or other governmental action
to be closed.
“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,
including each class of common stock and preferred 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.
“CERTIFICATE OF INCORPORATION”
means the Certificate of Incorporation of the Corporation as filed with the
Secretary of State of the State of Delaware, as amended.
“COMMON STOCK” of any Person means
any and all shares, interests or other participations in, and other equivalents
(however designated and whether voting or non-voting) of, such Person’s
common stock, whether outstanding on the Issue Date or issued after the Issue
Date, and includes, without limitation, all series and classes of such common
stock.
“CONVERTIBLE PREFERRED STOCK”
shall mean, collectively, (i) Series B Convertible Preferred, (ii) Series C
Preferred Stock, (iii) Series D Convertible Preferred, (iv) Series E-1
Convertible Preferred, (v) Series E-2 Convertible Preferred, (vi) Series F
Non-Convertible Preferred, and (vii) 9.75% Preferred in each case as defined in
the Master Transaction Agreement.
“CORPORATION” means ION Media
Networks, Inc., a Delaware corporation.
“DIVIDEND PAYMENT DATE” means May
15 and November 15 of each year commencing November 15, 1998.
“DIVIDEND PERIOD” means the
Initial Dividend Period and, thereafter, each Semi-annual Dividend Period.
“DIVIDEND RECORD DATE” means May 1
and November 1 of each year.
“HOLDER” means a holder of shares
of Junior Preferred Stock as reflected in the stock books of the
Corporation.
“INITIAL DIVIDEND PERIOD” means
the dividend period commencing on the Issue Date and ending on November 15,
1998.
“ISSUE DATE” means the date of the
original issuance of the Junior Preferred Stock.
“JUNIOR PREFERRED STOCK” shall
have the meaning ascribed to it in paragraph (a) hereof.
“JUNIOR SECURITIES” shall have the
meaning ascribed to it in paragraph (b) hereof.
“MASTER TRANSACTION AGREEMENT”
shall mean the Master Transaction Agreement dated as of May 3, 2007 among the
Corporation, NBC Universal, Inc., NBC Palm Beach Investment I, Inc., NBC Palm
Beach Investment II, Inc., and CIG Media LLC, as may be amended, modified or
restated from time to time.
“NBCU SERIES B PREFERRED” means
11% Series B Convertible Exchangeable Preferred Stock, par value $0.001 per
share, of the Corporation, with a liquidation preference of $10,000 per share,
as it may be modified or amended from time to time.
“PARITY SECURITIES” shall have the
meaning ascribed to it in paragraph (b) hereof.
“PERSON” means an individual,
partnership, corporation, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision thereof.
“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 redemption or
upon liquidation.
“REDEMPTION DATE”, with respect to
any shares of Junior Preferred Stock, means the date on which such shares of
Junior Preferred Stock are redeemed by the Corporation.
“REDEMPTION NOTICE” shall have the
meaning ascribed to it in paragraph (e)(iii) hereof.
“REDEMPTION PRICE” shall have the
meaning ascribed to it in paragraph (e)(i) hereof.
“SEMI-ANNUAL DIVIDEND PERIOD”
shall mean the semi-annual period commencing on each May 15 and November 15 and
ending on the next succeeding Dividend Payment Date, respectively.
“SENIOR PREFERRED STOCK” shall
mean collectively, (i) Series A-1 Convertible Preferred, (ii) Series A-2
Preferred Stock, and (iii) Series A-3 Convertible Preferred, in each case as
defined in the Master Transaction Agreement.
“SENIOR SECURITIES” shall have the
meaning ascribed to it in paragraph (b) hereof.
“SERIES C CONVERTIBLE PREFERRED
STOCK” shall mean the Series C Convertible Preferred Stock, as such term
is defined in the Master transaction Agreement.
EXHIBIT
U to the Master Transaction Agreement
Warrant
Exhibit U
to the Master Transaction Agreement
WARRANT
THIS
WARRANT AND THE SHARES OF COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NO SALE, ASSIGNMENT,
TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED EXCEPT PURSUANT TO (1) AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, PROVIDED
THAT THE COMPANY RECEIVES AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, OR (2) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
STOCKHOLDERS’ AGREEMENT, DATED AS OF May 4, 2007 (THE
“STOCKHOLDERS’ AGREEMENT”), AMONG ION MEDIA NETWORKS, INC., CIG
MEDIA LLC AND NBC UNIVERSAL, INC., AS THE SAME MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR MODIFIED FROM TIME TO TIME. UPON WRITTEN REQUEST, A COPY OF THE
STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY
TO THE HOLDER HEREOF.
Class A
Common Stock Purchase Warrant
Date of
Issuance: May 4, 2007
Warrant
No. 2007-1
ION
MEDIA NETWORKS, INC.
Warrant
Certificate
ION
Media Networks, Inc. (the “Company”),
for value received, hereby certifies that CIG Media LLC, a Delaware limited
liability company (“CIG
Media”),
or registered assigns (the “Holder”),
is entitled, subject to the terms of this Warrant (the “Warrant”)
as set forth below, to purchase from the Company, during the Exercise Period
(as defined in Section 1(a)), a maximum of 100,000,000 shares (the
“Warrant
Shares”)
of Class A Common Stock of the Company, par value $0.001 per share (the
“Class
A Common Stock”)
at a price per share equal to the Exercise Price (as defined in Section 1(c)).
The number of Warrant Shares and the Exercise Price are subject to adjustment
from time to time as hereinafter provided.
The
Warrant is issued under and in accordance with that certain Master Transaction
Agreement (as amended, restated, supplemented or otherwise modified from time
to time, the “Master
Agreement”)
made and entered into as of May 3, 2007, by and among the Company, NBC
Universal, Inc., a Delaware corporation (“NBCU”),
NBC Palm Beach Investment I, Inc., a California corporation, NBC Palm Beach
Investment II, Inc., a California corporation, and CIG Media. The Warrant and
the Warrant Shares are entitled to the benefits of that certain Registration
Rights Agreement, dated May 4, 2007, among the Company, CIG Media and NBCU (as
amended, restated, supplemented or otherwise modified from time to time,
the
“Registration
Rights Agreement”).
Copies of the Master Agreement, the Stockholders’ Agreement and the
Registration Rights Agreement may be obtained for inspection by the Holder at
the principal office of the Company upon prior written request to the
Company.
Section
1. Exercise.
(a) Subject
to the terms hereof, the Holder shall have the right, which may be exercised at
any time and from time to time during the period (the “Exercise
Period”)
commencing as of the Exchange Offer Closing (as defined in the Master
Agreement) and continuing until 5:00 p.m., New York City time, on the seventh
anniversary of the Exchange Offer Closing (the “Expiration
Date”),
to purchase from the Company the number of fully paid and nonassessable Warrant
Shares which the Holder may at the time be entitled to receive on exercise of
the Warrant and payment of the Exercise Price then in effect for such Warrant
Shares. Notwithstanding the foregoing, if in the written opinion of counsel to
the Company reasonably acceptable to the Holder approval of the Federal
Communications Commission (the “FCC”)
is required before the Company may issue Warrant Shares upon the exercise of
the Warrant, the Company may defer the issuance of such Warrant Shares until
such time as approval of the FCC is obtained or is no longer required. The
Company shall promptly notify the Holder in writing of any event which requires
it to suspend exercise of the Warrant pursuant to the preceding sentence and of
the termination of any such suspension. To the extent the Warrant is not
exercised prior to the Expiration Date, it shall become void and all rights
hereunder shall cease as of such time.
(b) Procedures;
Limitations on Exercise.
(i) The
Warrant may be exercised, in whole or in part, at the election of the Holder,
upon surrender at the principal office of the Company of the certificate or
certificates evidencing the Warrant with the form of election to purchase
attached as Exhibit
A duly
completed and signed (“Purchase
Form”),
and upon payment to the Company of the Exercise Price, as it may be adjusted as
herein provided, for the number of Warrant Shares in respect of which the
Warrant is then exercised; provided that this Warrant shall be exercisable in
part only for a minimum of 5,000,000 Warrant Shares per exercise, or if less,
the entire number of Warrant Shares which the Holder is entitled to purchase
hereunder. Payment of the aggregate Exercise Price shall be made by wire
transfer of immediately available funds to such account as the Company may
specify.
(ii) Subject
to the provisions of Section 4 hereof, upon surrender of the Warrant and
payment of the Exercise Price, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Holder a certificate or certificates for the number of Warrant Shares issuable
upon the exercise of the Warrant together with cash as provided in Section 10.
Such certificate or certificates shall be deemed to have been issued and the
Holder shall be deemed to have become a holder of record of such Warrant Shares
as of the date of the surrender of the Warrant and payment of the Exercise
Price.
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(iii) In the
event that this Warrant is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the Expiration
Date, a new certificate evidencing the remaining Warrant or Warrants will be
issued, and the Company shall countersign and deliver the required new Warrant
Certificate or Certificates. When surrendered upon exercise of the Warrant,
this Warrant Certificate shall be cancelled and disposed of by the
Company.
(c) Exercise
Price. The
“Exercise
Price”
on any date means the price of $0.75 per share (as such price may be adjusted
from time to time hereunder). The Exercise Price shall be subject to adjustment
as provided in Section 9.
Section
2. Registration. The
Company shall number and register the Warrant Certificate on the books of the
Company maintained at its principal office. Warrant Certificates shall be
manually countersigned by the Company by a duly authorized officer and shall
not be valid for any purpose unless so countersigned.
Section
3. Transfer
and Exchange of Warrants.
(a) THIS
WARRANT IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY SET FORTH IN SECTION 4 OF
THE STOCKHOLDERS’ AGREEMENT, AND MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE PROVISIONS THEREOF. Subject to the foregoing and the limitations of
Section 4 hereof, the Company shall from time to time register the transfer of
the Warrant upon the records to be maintained by it for that purpose, upon
surrender of this Warrant Certificate duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
satisfactory to it, duly executed by the registered Holder or by the duly
appointed legal representative thereof or by a duly authorized attorney;
provided that this Warrant may be transferred in part only for a minimum of
5,000,000 Warrant Shares per transfer, or if less, the entire number of Warrant
Shares which the Holder is entitled to purchase hereunder. Subject to the terms
hereof, this Certificate may be exchanged for another certificate or
certificates entitling the Holder to purchase a like aggregate number of
Warrant Shares as the Certificate surrendered then entitles the Holder to
purchase; provided that each such new Certificate shall be in minimum
denominations of 5,000,000 Warrant Shares. A Holder desiring to exchange this
Certificate shall make such request in writing delivered to the Company, and
shall surrender, duly endorsed or accompanied (if so required by the Company)
by a written instrument or instruments of transfer in form satisfactory to the
Company, this Warrant Certificate to be so exchanged.
(b) Upon
registration of transfer, the Company shall issue to the transferees and
countersign a new Warrant Certificate or Certificates and deliver by certified
mail such new Warrant Certificate or Certificates to the persons entitled
thereto. No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of
transfer.
Section
4. Registration
of Transfers and Exchanges.
Subject to Section 3
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hereof,
when Warrants represented by this Certificate are presented to the Company with
a request to register the transfer of the Warrants, or to exchange such
Warrants for an equal number of Warrants, the Company shall register the
transfer or make the exchange as requested if the requirements set forth in
Section 3 and the following requirements are satisfied:
(a) the
Certificate shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company, duly executed by the Holder or
his attorney duly authorized in writing; and
(b) if the
offer and sale of the Warrants have not been registered pursuant to an
effective Registration Statement under the Securities Act of 1933, the
Certificate shall be accompanied by the following additional information and
documents, as applicable:
(i) if such
Warrants are being delivered to the Company by a Holder for registration in the
name of such Holder, without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit
B
hereto); or
(ii) if such
Warrants are being transferred pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S, in each case, under the Securities
Act, a certification to that effect (in substantially the form of Exhibit
B
hereto); or
(iii) if such
Warrants are being transferred to an institutional “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act (an “Institutional
Accredited Investor”)),
delivery of a certification to that effect (in substantially the form of
Exhibit
B hereto)
and a Transferee Certificate for Institutional Accredited Investors in
substantially the form of Exhibit
C hereto
and an opinion of counsel and/or other information satisfactory to the Company
to the effect that such transfer is in compliance with the Securities Act;
or
(iv) if such
Warrants are being transferred in reliance on another exemption from the
registration requirements of the Securities Act, a certification to that effect
(in substantially the form of Exhibit
B hereto)
and an opinion of counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act.
Section
5. Payment
of Taxes. The
Company will pay all documentary stamp taxes attributable to the initial
issuance of Warrant Shares upon the exercise of the Warrant; provided,
however, that
the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in the issuance of any Warrant Certificates
or any certificates for Warrant Shares in a name other than that of the
registered holder of a Warrant Certificate surrendered upon the exercise of a
Warrant, and the Company shall not be required to issue or deliver such Warrant
Certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been
paid.
Section
6. Mutilated
or Missing Warrant Certificate. In
case this Warrant Certificate shall be mutilated, lost, stolen or destroyed,
the Company will issue and countersign, in exchange and substitution for and
upon cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of the Warrant Certificate and an indemnification
agreement satisfactory to the Company with respect to such loss, theft or
destruction. Applicants for such substitute Warrant Certificate(s) shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section
7. Reservation
of Warrant Shares.
(a) The
Company will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Class A Common
Stock or its authorized and issued Class A Common Stock held in its treasury,
for the purpose of enabling it to satisfy any obligation to issue Warrant
Shares upon exercise of the Warrant, the maximum number of shares of Class A
Common Stock which may then be deliverable upon the exercise of the
Warrant.
(b) The
Company or, if appointed, the transfer agent for the Class A Common Stock (the
“Transfer
Agent”)
and every subsequent transfer agent for any shares of the Company’s
capital stock issuable upon the exercise of the Warrant will be irrevocably
authorized and directed at all times to reserve such number of authorized
shares as shall be required for such purpose. The Company will keep a copy of
this Warrant Certificate on file with the Transfer Agent and with every
subsequent transfer agent for any shares of the Company’s capital stock
issuable upon the exercise of the Warrant. The Company will supply such
Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided
in Section 10. The Company will furnish such Transfer Agent a copy of all
notices of adjustments and certificates related thereto transmitted to each
holder pursuant to Section 11 hereof.
(c) The
Company covenants that all Warrant Shares which may be issued upon exercise of
the Warrant in accordance with the terms of the Warrant Certificate will, upon
payment of the Exercise Price therefor and issuance, be validly authorized and
issued, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issuance
thereof. The Company will take no action to increase the par value of the Class
A Common Stock to an amount in excess of the Exercise Price, and the Company
will not enter into any agreements inconsistent with the rights of the Holder
hereunder. The Company will use its reasonable best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations hereunder. The Company shall not take any action reasonably within
its control, including the hiring of a broker to solicit exercises, which would
render unavailable an exemption from registration under the Securities Act
which might otherwise be available with respect to the issuance of Warrant
Shares upon exercise of the Warrant.
Section
8. Obtaining
Stock Exchange Listings. The
Company will from time to time take all action which may be necessary so that
the Warrant Shares, immediately upon their issuance upon the exercise of the
Warrant, will be listed on the principal securities exchanges and markets
within the United States of America on which other shares of Class A Common
Stock are then listed. In the event that, at any time during the period in
which the Warrant is exercisable, the Class A Common Stock is not listed on any
principal securities exchanges or markets within the United States of America,
the Company will use its reasonable best efforts to permit the Warrant Shares
to be designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the Private Offering, Resales and Trading through Automated Linkages
market.
Section
9. Adjustment
of Number of Warrant Shares Issuable and Exercise Price. The
number of shares of Class A Common Stock issuable upon the exercise of the
Warrant (the “Exercise
Rate”)
and the Exercise Price are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 9.
(a) Adjustment
for Change in Capital Stock. If the
Company (i) pays a dividend or makes a distribution on its Class A Common Stock
in shares of its Class A Common Stock; (ii) subdivides its outstanding shares
of Class A Common Stock into a greater number of shares; (iii) combines its
outstanding shares of Class A Common Stock into a smaller number of shares; or
(iv) issues, by reclassification of its shares of Class A Common Stock, any
shares of its capital stock; then and in each such case the Exercise Rate in
effect immediately prior to such action shall be adjusted so that the holder of
any Warrant thereafter exercised shall be entitled to receive, upon exercise of
the Warrant, the number of shares of Class A Common Stock or other securities
of the Company which such holder would have owned immediately following such
action if the Warrant had been exercised immediately prior to such action;
provided, however, that notwithstanding the foregoing, upon the occurrence of
an event described in clause (i) above which otherwise would have given rise to
an adjustment, no adjustment shall be made if the Company includes the Holder
in such distribution pro rata according to the number of shares of Common Stock
issued and outstanding as if the Warrant Shares were issued and outstanding at
the time of the occurrence of an event described in clause (i) above. Any
adjustment hereunder shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur. If after an adjustment, the Holder upon exercise of the Warrant may
receive shares of two or more classes or series of capital stock of the
Company, the Board of Directors of the Company shall determine the allocation
of the adjusted Exercise Price and Exercise Rate between the classes or series
of capital stock. After such allocation, the Exercise Price and Exercise Rate
of each class or series of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to the Class A Common Stock
in this Section.
(b) Adjustment
for Certain Issuances of Class A Common Stock. If the
Company shall, at any time or from time to time while any shares of Class A
Common Stock are outstanding, issue or sell any shares of Class A Common Stock
or any right or warrant to purchase, acquire or subscribe for shares of Class A
Common Stock (including a right or warrant with respect to any security
convertible into or exchangeable for shares of Class A Common Stock) generally
to holders of its Class A Common Stock (including by way of a reclassification
of
shares or a recapitalization of the Company), for a consideration payable on
the date of such issuance or sale less than the Common Stock Trading Price of
the shares of Class A Common Stock on the date of such issuance or sale, then
and in each such case, the Exercise Rate shall be adjusted by multiplying such
Exercise Rate by a fraction, the numerator of which shall be the sum of (i) the
Common Stock Trading Price per share of Class A Common Stock on the first
Business Day after the date of the public announcement of the actual terms
(including the price terms) of such issuance or sale multiplied by the number
of shares of Class A Common Stock outstanding immediately prior to such
issuance or sale plus (ii) the aggregate Fair Market Value of the consideration
to be received by the Company in connection with the issuance or sale of Class
A Common Stock or the rights or warrants, as the case may be, plus the
aggregate consideration to be received on exercise of the right to purchase the
shares of Class A Common Stock underlying such rights or warrants, and the
denominator of which shall be the Common Stock Trading Price per share of Class
A Common Stock on the Business Day immediately preceding the public
announcement of the actual terms (including the price terms) of such issuance
or sale multiplied by the aggregate number of shares of Class A Common Stock
(A) outstanding immediately prior to such issuance or sale plus (B) underlying
such rights or warrants at the time of such issuance. For the purposes of the
preceding sentence, the aggregate consideration receivable by the Company in
connection with the issuance or sale of any such right or warrant shall be
deemed to be equal to the sum of the aggregate offering price (before deduction
of reasonable underwriting discounts or commissions and expenses) of all such
rights or warrants. If such rights or warrants expire unexercised, the
adjustment provided in this Section 9 (b) shall be recomputed without the
inclusion of the aggregate consideration that would have been received by the
Company on the exercise of any such right or warrant.
(c) Adjustment
for Distributions. If the
Company distributes to all holders of its Class A Common Stock (i) any
securities of the Company or rights, options or warrants to purchase or
subscribe for securities of the Company, (ii) any evidences of indebtedness of
the Company or any other person, or (iii) any Extraordinary Cash Dividend, the
Exercise Rate shall be adjusted in accordance with the formula:
where:
|
E’
|
=
|
the
adjusted Exercise Rate. |
| |
|
|
|
E
|
=
|
the
current Exercise Rate on the record date mentioned below. |
| |
|
|
|
M
|
=
|
the
Common Stock Trading Price per share of Class A Common Stock on the record date
mentioned below. |
| |
|
|
|
F
|
=
|
the fair
market value on the record date mentioned below of the indebtedness, assets
(including the Extraordinary Cash Dividend), rights, options or warrants
distributable with respect to one share of Class A Common Stock.
|
The
adjustment shall be made successively whenever any such distribution is made
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
Notwithstanding the foregoing provisions of this Section 9(c), an event which
would otherwise give rise to an adjustment pursuant to this Section 9(c) shall
not give rise to such an adjustment if the Company includes the Holder in such
distribution pro rata to the number of shares of Class A Common Stock issued
and outstanding after giving effect to the Warrant Shares as if they were
issued and outstanding.
(d) Adjustment
of Exercise Price.
Whenever the number of Warrant Shares purchasable upon the exercise of the
Warrant is adjusted, as herein provided, the Exercise Price per Warrant Share
payable upon exercise of the Warrant shall be adjusted (calculated to the
nearest $.0001) so that it shall equal the price determined by multiplying the
Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of Warrant Shares purchasable upon the
exercise of the Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of Warrant Shares so purchasable
immediately thereafter.
(e) Definitions.
The
“Closing
Price”
on any date shall mean the last sale price for the Class A Common Stock,
regular way, or, in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for the Class A Common Stock in
either case as reported in the principal consolidated transaction reporting
system with respect to the principal securities exchange on which the Class A
Common Stock is listed or admitted to trading or, if the Class A Common Stock
is not listed or admitted to trading on any securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the principal automated
quotation system that may then be in use or, if the Class A Common Stock is not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock selected by the Board of Directors of the Company or, in the
event that no trading price is available for the Class A Common Stock, the Fair
Market Value of the Class A Common Stock.
“Common
Stock Trading Price”
on any date means, with respect to the Class A Common Stock, the Closing Price
for the Class A Common Stock on such date.
“Extraordinary
Cash Dividend”
means cash dividends with respect to the Class A Common Stock the aggregate
amount of which in any fiscal year exceeds 10% of Adjusted EBITDA (as defined
in the certificate of designation for the Company’s 9¾% Series A
Convertible Preferred Stock, par value $0.001 per share, as in existence on May
4, 2007) of the Company and its subsidiaries for the fiscal year immediately
preceding the payment of such dividend.
“Fair
Market Value”
of any consideration other than cash or of any securities shall mean the amount
which a willing buyer would pay to a willing seller in an arm’s length
transaction as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property selected in
good faith by the Board of Directors of the
-8-
Company
or a committee thereof.
(f) When
De Minimis Adjustment May Be Deferred. No
adjustment in the Exercise Rate need be made unless the adjustment would
require an increase or decrease of at least 1.0% in the Exercise Rate.
Notwithstanding the foregoing, any adjustments that are not made shall be
carried forward and taken into account in any subsequent adjustment, provided
that no such adjustment shall be deferred beyond the date on which a Warrant is
exercised. All calculations under this Section 9 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(g) When
No Adjustment Required. If an
adjustment is made upon the establishment of a record date for a distribution
subject to subsections (a), (b) or (c) hereof and such distribution is
subsequently cancelled, the Exercise Rate then in effect shall be readjusted,
effective as of the date when the Board of Directors determines to cancel such
distribution, to that which would have been in effect if such record date had
not been fixed.
(h) Notice
of Adjustment.
Whenever the Exercise Rate or Exercise Price is adjusted, the Company shall
provide the notices required by Section 11 hereof.
(i) When
Issuance or Payment May Be Deferred. In any
case in which this Section 9 shall require that an adjustment in the Exercise
Rate be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event (i) issuing to the Holder
of any Warrant exercised after such record date the Warrant Shares and other
capital stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Rate prior to such
adjustment, and (ii) paying to such Holder any amount in cash in lieu of a
fractional share pursuant to Section 10; provided,
however, that
the Company shall deliver to the Holder a due xxxx or other appropriate
instrument evidencing such Holder’s right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the event
requiring such adjustment.
(j) Reorganizations. In the
event of any capital reorganization or reclassification of outstanding shares
of Class A Common Stock (other than in the cases referred to in Section 9(a)
hereof), or in case of any merger, consolidation or other corporate combination
of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Class A Common
Stock into shares of stock or other securities or property), or in case of any
sale, lease, exchange or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety (each of the
foregoing being referred to as a “Reorganization”), there shall
thereafter be deliverable upon exercise of the Warrants (in lieu of the number
of shares of Class A Common Stock theretofore deliverable) the number of shares
of stock or other securities or property to which a holder of the number of
shares of Class A Common Stock that would otherwise have been deliverable upon
the exercise of the Warrants would have been entitled upon such Reorganization
if the Warrants had been exercised in full immediately prior to such
Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company’s
Secretary
or Assistant Secretary, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of the Holder so that
the provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon exercise of the Warrants. The Company shall not effect any such
Reorganization unless prior to or simultaneously with the consummation thereof
the successor corporation (if other than the Company) resulting from such
Reorganization or the corporation purchasing or leasing such assets or other
appropriate corporation or entity shall expressly assume the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to
purchase, and all other obligations and liabilities under the Warrant. The
foregoing provisions of this Section 9(j) shall apply to successive
Reorganization transactions.
(k) Form
of Warrants.
Irrespective of any adjustments in the number or kind of shares purchasable
upon the exercise of the Warrant, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated
in this Warrant as initially issued.
(l) Miscellaneous. For
purposes of this Section 9 the term “Class
A Common Stock”
shall mean (i) the shares of stock designated as the Class A Common Stock, par
value $.001 per share, of the Company as of the date of this Warrant, and (ii)
shares of any other class or series of stock resulting from successive changes
or reclassification of such shares consisting solely of changes in par value,
or from par value to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 9, the Holder shall become entitled to purchase any securities of the
Company other than, or in addition to, shares of Class A Common Stock,
thereafter the number or amount of such other securities so purchasable upon
exercise of the Warrants shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in this Section 9 and the provisions of
Sections 1, 5, 7 and 10 with respect to the Warrant Shares or the Class A
Common Stock shall apply on like terms to any such other securities.
(n) Certain
Events. If any
change in the outstanding Common Stock of the Company or any other event occurs
as to which the provisions of this Section 9 are not strictly applicable or, if
strictly applicable, would not fairly protect the purchase rights of the Holder
in accordance with such provisions, then the Board of Directors of the Company
shall make such adjustments to the Exercise Rate, the Exercise Price or the
application of such provisions as may be necessary to protect such purchase
rights as aforesaid and to assure that the Holder, upon exercise for the same
aggregate Exercise Price, shall receive the total number, class and kind of
shares as it would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event
requiring adjustment.
Section
10. Fractional
Interests. The
Company shall not be required to issue fractional Warrant Shares on the
exercise of the Warrant. If more than one Warrant Certificate shall be
presented for exercise in full at the same time by the same Holder, the number
of full Warrant Shares which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of the Warrant so presented. If any fraction of a Warrant Share
would, except for the provisions of this Section 10, be issuable
on the
exercise of any Warrants (or specified portion thereof), the Company shall pay
an amount in cash equal to the Common Stock Trading Price on the trading day
immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
Section
11. Notices
to Holder.
(a) Upon any
adjustment pursuant to Section 9 hereof, the Company shall give prompt written
notice of such adjustment to the Holder at its address appearing on the records
of the Company within ten days after such adjustment, by first class mail,
postage prepaid, and shall deliver to the Holder a certificate of the Chief
Financial Officer of the Company, accompanied by the report thereon by a firm
of independent public accountants selected by the Board of Directors of the
Company (who may be the regular accountants for the Company), setting forth in
reasonable detail (i) the number of Warrant Shares purchasable upon the
exercise of the Warrant and the Exercise Price of the Warrant after such
adjustment(s), (ii) a brief statement of the facts requiring such adjustment(s)
and (iii) the computation by which such adjustment(s) was made. Where
appropriate, such notice may be given in advance and included as a part of the
notice required under the other provisions of this Section 11.
(i) the
Company proposes to take any action that would require an adjustment to the
Exercise Rate or the Exercise Price pursuant to Section 9 hereof;
or
(ii) of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the sale, lease,
exchange, conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Class A
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or a tender offer or exchange
offer for shares of Class A Common Stock; or
(iii) of the
voluntary or involuntary dissolution, liquidation or winding up of the
Company;
then the
Company shall give prompt written notice to the Holder at its address appearing
on the records of the Company, at least 20 days (or 10 days in any case
specified in clause (a) above) prior to the applicable record date hereinafter
specified, or the date of the event in the case of events for which there is no
record date, by first-class mail, postage prepaid, stating (i) the date as of
which the holders of record of shares of Class A Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer
or exchange offer for shares of Class A Common Stock, or (iii) the date on
which any such consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or be consummated,
and the date as of which it is expected that holders of record of shares of
Class A Common Stock shall be entitled to exchange such shares for securities
or other property, if any, deliverable upon such reclassification,
consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up. The
failure by the Company to give such notice or any defect therein shall not
affect the legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
(c) The
Company shall give prompt written notice to the Holder of any determination to
make a distribution or dividend to the holders of its Class A Common Stock of
any assets (including cash), debt securities, preferred stock, or any rights or
warrants to purchase debt securities, preferred stock, assets or other
securities (other than Class A Common Stock, or rights, options, or warrants to
purchase Class A Common Stock) of the Company, which notice shall state the
nature and amount of such planned dividend or distribution and the record date
therefor, such written notice to be delivered at least 20 days prior to such
record date therefor.
(d) Nothing
contained in this Warrant Certificate shall be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of Directors of the
Company or any other matter, or any rights whatsoever as shareholders of the
Company.
Section
12. Notices
to the Company. Any
notice or demand to be given or made by the Holder to or on the Company shall
be sufficiently given or made when received at the office of the Company
expressly designated by the Company as its office for purposes of this
Certificate, as follows:
ION
Media Networks, Inc.
000
Xxxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention:
General Counsel
Section
13. Supplements
and Amendments. The
Warrant may not be supplemented or amended without the written approval of both
the Holder and the Company.
Section
14. Successors. All
the covenants and provisions of this Certificate by or for the benefit of the
Company or the Holder shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section
15. Termination. This
Warrant Certificate and the Warrants represented hereby shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Certificate will terminate
on any earlier date if all Warrants have been exercised pursuant
hereto.
Section
16. Governing
Law. This
Warrant Certificate shall be deemed to be a contract made under the laws of the
State of Delaware.
Section
17. Benefits
of This Certificate.
Nothing in this Certificate shall be construed to give to any person or
corporation other than the Company and the registered Holder any legal or
equitable right, remedy or claim hereunder; but this Certificate shall be for
the sole and exclusive benefit of the Company and the registered
Holder.
IN
WITNESS WHEREOF, ION Media Networks, Inc. has caused this Warrant Certificate
to be duly executed by the undersigned.
Dated:
May 4, 2007
ION
MEDIA NETWORKS, INC.
| By: |
/s/ Xxxxxxx Xxxxxx |
|
|
|
| |
Name:
Xxxxxxx Xxxxxx
Title:
Chief Financial Officer |
|
|
|
| By: |
/s/ Xxxx
Xxxxxxxxx |
|
|
|
| |
Name:
Xxxx Xxxxxxxxx
Title:
Secretary |
|
|
|
EXHIBIT
A
[Form of
Election to Purchase]
(To Be
Executed upon Exercise of Warrant)
The
undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase _____ shares of Class A Common Stock and
herewith tenders payment for such shares to the order of ION Media Networks,
Inc. in the amount of $________ in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered in the
name of ______________, whose address is __________ and that such shares be
delivered to _________ whose address is ______________. If said number of
shares is less than all of the shares of Class A Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of
_____________, whose address is ________, and that such Warrant Certificate be
delivered to ___________, whose address is ________________.
In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Class A Common Stock to be issued upon exercise thereof are being
acquired solely for the account of the undersigned and not as a nominee for any
other party, and for investment, and that the undersigned will not offer, sell
or otherwise dispose of any such shares of Class A Common Stock except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any applicable state securities laws.
Signature:
Date:
Signature
Guaranteed:
EXHIBIT
B
CERTIFICATE
TO BE DELIVERED UPON EXCHANGE
OR
REGISTRATION OF TRANSFER OF WARRANTS
| Re: |
Warrants
to purchase Class A |
Common
Stock (the “Securities”)
of ION
Media Networks, Inc.
This
Certificate relates to _______ Securities held by ______ (the
“Transferor”).
The
Transferor has requested that the Company by written order exchange or register
the transfer of Warrants.
In
connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with the Warrant
Certificate relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Sections 3 and 4 of such Warrant Certificate,
and that the transfer of these Securities does not require registration under
the Securities Act of 1933, as amended (the “ Securities Act”)
because*:
[
] Such
Securities are being acquired for the Transferor’s own account, without
transfer.
[
] Such
Securities are being transferred pursuant to an exemption from registration
under the Securities Act in accordance with Rule 144 or Regulation S
promulgated under the Securities Act.
[
] Such
Securities are being transferred to an institutional “accredited
investor” (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act).
[
] Such
Securities are being transferred in reliance on and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144 or Regulation S under the Securities Act. An opinion of counsel to the
effect that such transfer does not require registration under the Securities
Act accompanies this certificate.
[INSERT NAME OF TRANSFEROR] |
|
|
|
| |
|
|
|
|
| By: |
|
|
|
|
| |
[Authorized
Signatory]
Date:
|
|
|
|
* Check
applicable box.
EXHIBIT
C
Form of
Certificate To Be
Delivered
in Connection with
Transfers
to Institutional Accredited Investors
___________,
____
[First
Union National Bank,
Charlotte,
North Carolina
0000
Xxxx X.X. Xxxxxx Xxxx.
Xxxxxxxx
0X0
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000
Attention:
Corporate Trust Administration]
| |
Re: |
ION
Media Networks, Inc. |
(the
“Company”),
Warrants to Purchase
Class A
Common Stock (the “Securities”)
Ladies
and Gentlemen:
In
connection with our proposed purchase of the Securities, we confirm
that:
1. We
understand that the Securities have not been registered under the Securities
Act of 1933, as amended (the “Securities
Act”)
and, unless so registered, may not be sold except as permitted in the following
sentence. We agree to offer, sell or otherwise transfer such Securities while
the offer and sale thereof have not been registered under the Securities Act
only (a) to the Company or any of its subsidiaries, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) pursuant to an exemption from registration under Rule 144 under the
Securities Act; (d) pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (e) to an
institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) that is purchasing
for his own account or for the account of such an institutional
“accredited investor,” or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act. The
foregoing restrictions on resale shall apply so long as transfer of a Security
is not permitted without registration under the Securities Act. We understand
that the Securities purchased by us will bear a legend to the foregoing
effect.
2. We are
an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and we are acquiring
the Securities for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act
and we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment for an indefinite
period.
3. We are
acquiring the Securities purchased by us for our own account.
4. You and
your counsel are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
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Very truly
yours, |
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(Name of
Purchaser) |
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By: |
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Date:
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Upon
transfer the Securities would be registered in the name of the new beneficial
owner as follows:
Name:
Address:
Taxpayer
ID Number:
EXHIBIT
V to the Master Transaction Agreement
Put/Call
Agreement
Exhibit
V to the
Master
Transaction Agreement
Put/Call
Agreement
PUT/CALL
AGREEMENT
PUT/CALL
AGREEMENT (this “Agreement”)
made and entered into as of May 4, 2007 by and between CIG Media LLC, a
Delaware limited liability company (“CIG”),
and NBC Universal, Inc., a Delaware corporation (“NBCU”).
W I T N E S S E T H
WHEREAS,
on May 3, 2007, ION Media Networks, Inc., a Delaware corporation (the
“Company”),
NBCU, NBC Palm Beach Investment I, Inc., a California corporation
(“NBC
Palm Beach I”),
NBC Palm Beach Investment II, Inc., a California corporation
(“NBC
Palm Beach II”),
and CIG entered into a Master Transaction Agreement (the “Master
Agreement”)
which provides for the restructuring of the Company’s ownership and
capital structure;
WHEREAS,
on the date hereof, NBC Palm Beach II and CIG have entered into a call
agreement pursuant to which CIG has granted NBC Palm Beach II the right to
acquire the Call Shares (as defined in the Master Agreement)
(“NBCU
Option I”);
WHEREAS,
on the date hereof, the Company, NBC Palm Beach I and NBC Palm Beach II have
entered into a call agreement pursuant to which the Company has granted NBC
Palm Beach II the right to acquire 26,688,361 shares of Class B Common Stock,
par value $0.001 per share, of the Company (“NBCU
Option II”);
and
WHEREAS,
NBCU wishes to grant to CIG a put option and CIG wishes to grant to NBCU a call
option on the Subject Securities (as defined below) on the terms and conditions
specified herein.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION
1. Definitions. Terms
not otherwise defined herein shall have the meaning set forth in the Master
Agreement.
(a) As used
herein, the following terms shall have the following meanings:
“Call
Purchase Price”
means an amount equal to the greater of (i) the accreted value of the Subject
Securities including any accrued but unpaid dividends, plus the conversion
price attributed to any Common Stock received by CIG and its Affiliates upon
conversion, exchange or exercise of the Subject Securities (with no value
attributed to any other shares of Common Stock owned by CIG and its Affiliates
or the Warrant), and (ii) the Fair Market Value of the Subject Securities, in
each case as of the date of delivery of the Call Exercise Notice.
“Fair
Market Value”
of the Subject Securities means the cash price that an unaffiliated third party
would pay for the Subject Securities in an arm’s length transaction, based
on the value of the Company as a going concern without taking into account any
control premium or minority discount.
“FCC
Application”
means the application to be filed with the FCC if such application is required
to be filed under the Communications Act, in connection with the exercise of
the Call Right or the Put Right, as the case may be.
“LIBOR”
means the London Interbank Offered Rate.
“Lien”
means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement or any financing lease having substantially the same effect as any of
the foregoing).
“Maximum
Amount”
means the sum of (i) the number of shares of Class A Common Stock owned by CIG
and its Affiliates on the date of the Call Closing, excluding the Call Shares,
and (ii) the number of shares of Class A Common Stock and Class D Common Stock
into or for which the Subject Securities owned by CIG and its Affiliates on the
earlier of the Call Closing or the Call Deadline (as defined in the Call
Agreement) would be entitled to be converted, or exchanged or
exercised.
“NBCU
Securities”
means, collectively, the following securities held from time to time by NBCU
and its Affiliates: (i) Series B Convertible Subordinated Debt, (ii) Series A-3
Convertible Preferred, (iii) Series C Convertible Preferred, (iv) Series D
Convertible Preferred, (v) Series E-1 Convertible Preferred, (vi) NBCU Option
I, (vii) NBCU Option II, (viii) Common Stock issued upon conversion or exercise
of any of the securities described in clauses (i) through (vii) or owned by
NBCU or its Affiliates, and (ix) securities received in respect of any of the
securities described in clauses (i) through (viii), whether by dividend,
merger, capitalization, reorganization or otherwise.
“Permitted
Liens”
means (i) mechanics’, carriers’, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, (ii) Liens arising
under original purchase price conditioned sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent
with past practice, (iii) statutory Liens for Taxes not yet due and payable,
(iv) Liens arising under federal or state securities laws and (v) Liens arising
under the New Stockholders’ Agreement.
“Put
Purchase Price”
means an amount equal to the Fair Market Value of the Subject Securities as of
the date of delivery of the Put Exercise Notice.
“Sell”
means to sell, transfer, convey, assign or otherwise dispose of (but excluding
any Sale to an Affiliate), either directly or indirectly, voluntarily or
involuntarily, or by merger, sale, consolidation or otherwise; and the terms
“Sale” and “Sold” shall have meanings correlative to the
foregoing.
“Subject
Securities”
means, subject to Sections 5 and 9 hereof, the following securities in the
amounts and to the extent owned by CIG and its Affiliates on the date of the
exercise of the Put Right or the Call Right, as applicable, (i) Series A
Convertible Subordinated Debt, (ii) Series B Convertible Subordinated Debt,
(iii) Series A-1 Convertible Preferred, (iv) Series A-3 Convertible Preferred,
(iv) Series B Convertible Preferred, (v) Series C Convertible Preferred, (vi)
Series E-2 Convertible Preferred, (vii) the Warrant, (viii) Common Stock issued
upon conversion or exercise of any of the securities described in clauses (i)
through (vii) or owned by CIG, excluding the Call Shares, and (ix) securities
received in respect of any of the securities described in clauses (i) through
(viii), whether by dividend, merger, capitalization, reorganization or
otherwise; provided,
however, that
the aggregate number of shares of Class A Common Stock and Class D Common Stock
included in the Subject Securities, including shares of Class A Common Stock
and Class D Common Stock into or for which the Subject Securities would be
entitled to be converted, or exchanged or exercised, shall not exceed the
Maximum Amount.
“Trigger
Event”
means the acquisition of securities of the Company representing
more than 50% of the voting power of the Company outstanding at such time
by (i)
NBCU or any of its Affiliates, (ii) a group (as such term defined in Rule 13d-3
under the Exchange Act) comprised of NBCU or any of its Affiliates and any
holder or holders of NBCU Option I, NBCU Option II, or other securities of the
Company transferred by NBCU or any of its Affiliates or (iii) any other Person
(other than CIG and its Affiliates) that has purchased, acquired or received
securities of the Company from NBCU or any of its Affiliates, directly or
indirectly, by merger, consolidation, sale, exchange or otherwise.
(b) The
following terms have the meanings set forth in the Sections set forth
below:
|
Definition
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Section
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“Agreement”
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Preamble
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“Call
Exercise Notice”
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2.2(b)
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“Call
Exercise Period”
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2.2(a)
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“Call
Right”
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2.2(a)
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“Call
Right Closing”
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3(b)(i)
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“CIG”
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Preamble
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“CIG
Acceptance Period”
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4(a)
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“CIG
First Offer”
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5(a)
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| Definition |
|
Section |
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“CIG
First Offer Notice”
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5(a)
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“CIG Last
Acceptance Period”
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4(b)
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“CIG Last
Look Notice”
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5(b)
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“CIG Last
Offer”
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5(b)
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“Company”
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Recitals
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“De
Minimis Acceptance Period”
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5(c)(i)
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“De
Minimis First Offer”
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5(c)(i)
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“De
Minimis First Offer Notice”
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5(c)(i)
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“Master
Agreement”
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Recitals
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“NBCU
Acceptance Period”
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5(a)
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“NBCU
Designee”
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5(a)
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“NBCU
First Offer”
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4(a)
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“NBCU
First Offer Notice”
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4(a)
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“NBCU
Last Acceptance Period”
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5(b)
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“NBCU
Last Look Notice”
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4(b)
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“NBCU
Last Offer”
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4(b)
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“NBC Palm
Beach I”
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Recitals
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“NBC Palm
Beach II”
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Recitals
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“NBCU
Option I”
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Recitals
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“NBCU
Option II”
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Recitals
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“NBCU”
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Preamble
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“Put
Exercise Notice”
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2.1(b)
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“Put
Exercise Period”
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2.1(a)
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“Put
Right”
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2.1(a)
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“Put
Right Closing”
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3(a)(i)
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“Renewed
Call Exercise Period”
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2.3
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“Renewed
Put Exercise Period”
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2.3
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“Transferee”
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8
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SECTION
2. Put/Call
Right.
2.1 Put
Right of CIG. (a)
For a period of thirty days following the occurrence of the Trigger Event (the
“Put
Exercise Period”),
CIG shall have the right, upon the terms and subject to the conditions set
forth in this Agreement, to require NBCU (or such Affiliates of NBCU as NBCU
may designate) to purchase all but not less than all of the Subject Securities
(the “Put
Right”).
(b) CIG may
exercise the Put Right at any time during the Put Exercise Period by delivery
to NBCU of a written notice given in the manner specified in Section 8 hereof
(the “Put
Exercise Notice”)
stating that CIG intends to exercise the Put Right. The Put Exercise Notice
shall specify the Put Purchase Price as calculated by CIG.
(c) If NBCU
disagrees with CIG’s calculation of the Put Purchase Price, NBCU shall
deliver a written notice given in the manner specified in Section 8
hereof
to CIG stating that it disagrees with CIG’s calculation of the Put
Purchase Price in the Put Exercise Notice and setting forth in reasonable
detail the basis of its disagreement with CIG’s calculation of the Put
Purchase Price within 10 Business Days of NBCU’s receipt of the Put
Exercise Notice, and CIG and NBCU shall in good faith seek to agree on the Put
Purchase Price; provided,
however, that
if an agreement cannot be reached between CIG and NBCU with respect to the Put
Purchase Price within 20 Business Days of receipt by CIG of NBCU’s notice
of its disagreement with respect to CIG’s calculation of the Put Purchase
Price, an independent, nationally recognized investment bank shall be appointed
by CIG and NBCU (or in the event the parties cannot agree, chosen by the
American Arbitration Association) to determine the Put Purchase Price and such
determination shall be final and binding on CIG and NBCU.
(d) NBCU
shall notify CIG of the occurrence of the Trigger Event by delivery to CIG of a
written notice given in the manner specified in Section 8 hereof within three
Business Days after the occurrence of the Trigger Event; provided, that
in the event NBCU fails to deliver a notice pursuant to this Section 2.1(d),
the Put Exercise Period shall not commence until the date that NBCU delivers
such notice. The written notice with respect to the occurrence of the Trigger
Event shall contain supporting detail reasonably necessary to evidence the
occurrence of the Trigger Event.
2.2 Call
Right of NBCU. (a) If
CIG does not exercise the Put Right during the Put Exercise Period, for a
period of thirty days following the expiration of the Put Exercise Period (the
“Call
Exercise Period”),
NBCU shall have the right, upon the terms and subject to the conditions set
forth in this Agreement, to require CIG and its Affiliates to sell to NBCU (or
such Affiliates of NBCU as NBCU may designate) all but not less than all of the
Subject Securities (the “Call
Right”).
(b) NBCU may
exercise the Call Right at any time during the Call Exercise Period by delivery
to CIG of a written notice (the “Call
Exercise Notice”)
given in the manner specified in Section 8 hereof stating that NBCU intends to
exercise the Call Right. The Call Exercise Notice shall specify the Call
Purchase Price as calculated by NBCU.
(c) If CIG
disagrees with NBCU’s calculation of the Call Purchase Price provided in
the Call Exercise Notice, CIG shall deliver a written notice given in the
manner specified in Section 8 hereof to NBCU stating that it disagrees with
NBCU’s calculation of the Call Purchase Price in the Call Exercise Notice
and setting forth in reasonable detail the basis of its disagreement with
NBCU’s calculation of the Call Purchase Price within 10 Business Days of
CIG’s receipt of the Call Exercise Notice, and CIG and NBCU shall in good
faith seek to agree on the Call Purchase Price; provided,
however, that
if an agreement cannot be reached between CIG and NBCU with respect to the Call
Purchase Price within 20 Business Days of the receipt by NBCU of CIG’s
notice of its disagreement with respect to NBCU’s calculation of the Call
Purchase Price, an independent, nationally recognized investment bank shall be
appointed by CIG and NBCU (or in the event the parties cannot agree, chosen by
the American Arbitration Association) to determine the Call Purchase Price and
such determination shall be final and binding on CIG and NBCU.
2.3 Renewal
of Put/Call Right. If,
after the occurrence of the Trigger Event, CIG does not exercise the Put Right
during the Put Exercise Period and NBCU does not exercise the Call Right during
the Call Exercise Period, CIG may exercise the Put Right upon the terms and
subject to the conditions set forth in the Agreement for a period of thirty
days commencing on each of the first five anniversaries of the Trigger Event
(each, a “Renewed
Put Exercise Period”).
If CIG does not exercise the Put Right during a Renewed Put Exercise Period,
NBCU may exercise the Call Right upon the terms and subject to the conditions
set forth in this Agreement for a period of thirty days commencing on the
expiration of such Renewed Put Exercise Period (each, a “Renewed
Call Exercise Period”).
SECTION
3. Closing.
(a) Put
Right Closing. (i)
The closing of the exercise of the Put Right (the “Put
Right Closing”)
shall take place no later than the fifth Business Day following the later of
(x) the receipt of any required consent, approval, authorization or other order
of, action by, or any required filing with or notification to, any Governmental
Authority applicable to the purchase of the Subject Securities by NBCU or its
designated Affiliate, including (A) the expiration or termination of any
waiting period (and any extension thereof) under the HSR Act, and (B) approval
by the FCC of the FCC Application, which approval shall have become a Final
Order, subject to the last sentence of this Section 3(a)(i), and (y) the final
determination of the Put Purchase Price pursuant to Section 2.1(c) hereof. The
Put Right Closing shall occur at the place designated in the Put Exercise
Notice. The requirement for a Final Order may be waived by NBCU in its sole
discretion.
(ii) At
the Put Right Closing, (x) CIG shall deliver to NBCU or its designated
Affiliate certificates representing all of the Subject Securities, duly
endorsed in blank or accompanied by stock or similar powers duly executed in
blank, with all necessary stock transfer stamps or similar instruments, as
applicable, affixed thereto, free and clear of all Liens other than Permitted
Liens, and (y) NBCU shall pay by wire transfer in immediately available funds
to the account or accounts specified by CIG (A) the Put Purchase Price, plus
(B) accrued interest at a rate per annum equal to LIBOR (on the delivery date
of the Put Exercise Notice) plus 100 basis points on the Put Purchase Price for
the period from the date of the delivery of the Put Exercise Notice through the
date of the Put Right Closing, minus (C) the value of dividends and other
distributions that are paid in cash or in property, if any, and received by CIG
and its Affiliates after the date of the delivery of the Put Exercise Notice
with respect to the Subject Securities, plus accrued interest at a rate per
annum equal to LIBOR (on the delivery date of the Put Exercise Notice) plus 100
basis points on the value of such received dividends and distributions for the
period from the date of the distribution through the date of the Put Right
Closing. CIG shall furnish necessary account information to NBCU in writing at
least two Business Days prior to the date of the Put Right
Closing.
(b) Call
Right Closing. (i)
The closing of exercise of the Call Right (the “Call
Right Closing”)
shall take place no later than the fifth Business Day following the later of
(x) the receipt of any required consent, approval, authorization or other order
of, action by, or any required filing with or notification to, any Governmental
Authority
applicable
to the purchase of the Subject Securities by NBCU or its designated Affiliate,
including, (A) the expiration or termination of any waiting period (and any
extension thereof) under the HSR Act, and (B) approval by the FCC of the FCC
Application, which approval shall have become a Final Order, subject to the
last sentence of this Section 3(b)(i), and (y) the final determination of the
Call Purchase Price pursuant to Section 2.2(c) hereof. The Call Right Closing
shall occur at the place designated in the Call Exercise Notice. The
requirement for a Final Order may be waived by NBCU in its sole
discretion.
(ii) At the
Call Right Closing (x) CIG shall deliver to NBCU or its designated Affiliate
certificates representing all of the Subject Securities, duly endorsed in blank
or accompanied by stock or similar powers duly executed in blank, with all
necessary stock transfer stamps or similar instruments, as applicable, affixed
thereto, free and clear of all Liens other than Permitted Liens, and (y) NBCU
shall pay by wire transfer in immediately available funds to the account or
accounts specified by CIG (A) the Call Purchase Price, plus (B) accrued
interest at a rate per annum equal to LIBOR (on the delivery date of the Call
Exercise Notice) plus 100 basis points on the Call Purchase Price for the
period from the date of the delivery of the Call Exercise Notice through the
date of the Call Right Closing, minus (C) the value of dividends and other
distributions that are paid in cash or in property, if any, and received by CIG
and its Affiliates after the date of the delivery of the Call Exercise Notice
with respect to the Subject Securities, plus accrued interest at a rate per
annum equal to LIBOR (on the delivery date of the Call Exercise Notice) plus
100 basis points on the value of such received dividends and distributions for
the period from the date of the distribution through the date of the Call Right
Closing. CIG shall furnish necessary account information in writing to NBCU at
least two Business Days prior to the date of the Call Right
Closing.
SECTION
4. Right
of First Offer and Last Offer of CIG.
Any
proposed Sale or series of related Sales by NBCU or its Affiliates of NBCU
Securities representing more than 50% of the voting power of the Company on a
fully-diluted basis as of the date of such proposed Sale shall be consummated
only in accordance with the following procedures:
(a) NBCU
shall first deliver to CIG a written notice (a “NBCU
First Offer Notice”),
which shall (i) state NBCU’s intention to Sell such NBCU Securities, the
amount and type of the NBCU Securities to be Sold, the proposed Sale price
therefor and all other material terms of the proposed Sale and (ii) offer (the
“NBCU
First Offer”)
CIG the option to acquire all but not less than all of such NBCU Securities
upon the terms and subject to the conditions of the proposed Sale as set forth
in the NBCU First Offer Notice. The NBCU First Offer shall remain open and
irrevocable for a period of 20 days after receipt of the NBCU First Offer
Notice by CIG (the “CIG
Acceptance Period”)
(and, to the extent the NBCU First Offer is accepted during the CIG Acceptance
Period, until the consummation of the Sale contemplated by the NBCU First
Offer). CIG shall have the right and option to accept the NBCU First Offer for
all (and not part) of such NBCU Securities at the price and on the terms and
subject to the conditions set forth in the NBCU First Offer Notice, by
delivering a written notice to NBCU within the CIG
Acceptance
Period. In the event CIG accepts the NBCU First Offer during the CIG Acceptance
Period, it shall have 30 days to consummate the acquisition of such NBCU
Securities
following the expiration or termination of all waiting periods under the HSR
Act and receipt of all necessary FCC and other regulatory approvals applicable
to such acquisition.
(b) If CIG
shall fail during the CIG Acceptance Period to accept all of the NBCU
Securities offered for Sale pursuant to, or shall reject in writing, the NBCU
First Offer, NBCU may Sell such NBCU Securities to any Person or Persons at a
price not less than the price and on terms not more favorable to the purchaser
thereof than the terms, in each case as set forth in the NBCU First Offer
Notice, at any time within 180 days (plus a sufficient number of days to allow
for the expiration or termination of all waiting periods under the HSR Act and
receipt of all necessary FCC and other regulatory approvals applicable to such
Sale) after the expiration of the CIG Acceptance Period; provided, that
NBCU shall, upon receipt of a bona fide offer (the “NBCU
Last Offer”)
from any Person or Persons with respect to such NBCU Securities, promptly
deliver to CIG a written notice (a “NBCU
Last Look Notice”),
which shall identify the Person or Persons making the NBCU Last Offer and state
the proposed offer price thereof, the amount and type of the NBCU Securities
proposed to be acquired, the form of consideration proposed to be paid and all
other material terms and conditions of the NBCU Last Offer, and CIG shall have
the right and option, for a period of 10 Business Days upon receipt of the NBCU
Last Look Notice by NBCU (the “CIG
Last Acceptance Period”),
to offer to acquire such NBCU Securities at the proposed offer price and upon
the terms and subject to the conditions set forth in the NBCU Last Offer. In
the event the CIG accepts the NBCU Last Offer during the CIG Last Acceptance
Period, it shall have 30 days to consummate the acquisition of such NBCU
Securities following the expiration or termination of all waiting periods under
the HSR Act and receipt of all necessary FCC and other regulatory approvals
applicable to such acquisition; provided, that
such Person shall have 30 days to consummate the acquisition of such NBCU
Securities following the expiration or termination of all waiting periods under
the HSR Act and receipt of all necessary regulatory approvals (other than FCC
approvals) applicable to such acquisition in the event that the Person or
Persons making the NBCU Last Offer are not required to obtain any FCC approval
in order to acquire the NBCU Securities.
(c) Sections
4(a) and 4(b) hereof shall terminate upon the earlier of (i) the second
anniversary of the date hereof and (ii) the mandatory conversion of each and
every class and series of Convertible Securities pursuant to the terms thereof.
For the avoidance of doubt, NBCU or its Affiliates may pledge the NBCU
Securities without being subject to Section 4(a) or 4(b) hereof so long as such
rights shall apply to any Sale of such pledged NBCU Securities by the pledgee
thereof. Any purported Sale of the NBCU Securities by NBCU and its Affiliates
in violation of this Section 4 shall be null and void.
SECTION
5. Right
of First Offer and Last Offer of NBCU.
Except
as set forth in Sections 5(c) and 5(d) hereof, any proposed Sale of any Subject
Securities by CIG or its Affiliates shall be consummated only in accordance
with the following procedures:
(a) CIG
shall first deliver to NBCU a written notice (a “CIG
First Offer Notice”),
which shall (i) state CIG’s intention to Sell such Subject Securities, the
amount and type of the Subject Securities to be Sold, the proposed Sale price
therefor and all other material terms of the proposed Sale and (ii) offer (the
“CIG
First Offer”)
NBCU or a third party designated by NBCU (an “NBCU
Designee”)
the option to acquire all but not less than all of such Subject Securities upon
the terms and subject to the conditions of the proposed Sale as set forth in
the CIG First Offer Notice. The CIG First Offer shall remain open and
irrevocable for a period of 20 days after receipt of the CIG First Offer Notice
by NBCU (the “NBCU
Acceptance Period”)
(and, to the extent the CIG First Offer is accepted during the NBCU Acceptance
Period, until the consummation of the Sale contemplated by the CIG First
Offer). NBCU or an NBCU Designee, as the case may be, shall have the right and
option to accept the CIG First Offer for all (and not part) of such Subject
Securities at the price and on the terms and subject to the conditions set
forth in the CIG First Offer Notice, by delivering a written notice to CIG
within the NBCU Acceptance Period. In the event NBCU or an NBCU Designee, as
the case may be, accepts the CIG First Offer during the NBCU Acceptance Period,
such Person shall have 30 days to consummate the acquisition of such Subject
Securities following the expiration or termination of all waiting periods under
the HSR Act and receipt of all necessary FCC and other regulatory approvals
applicable to such acquisition.
(b) If NBCU
or an NBCU Designee, as the case may be, shall fail during the NBCU Acceptance
Period to accept all of the Subject Securities offered for Sale pursuant to, or
shall reject in writing, the CIG First Offer, CIG may Sell such Subject
Securities to any Person or Persons at a price not less than the price and on
terms not more favorable to the purchaser thereof than the terms, in each case
as set forth in the CIG First Offer Notice, at any time within 180 days (plus a
sufficient number of days to allow for the expiration or termination of all
waiting periods under the HSR Act and receipt of all necessary FCC and other
regulatory approvals applicable to such Sale) after the expiration of the NBCU
Acceptance Period; provided, that
CIG shall, upon receipt of a bona fide offer (the “CIG
Last Offer”)
from any Person or Persons with respect to such Subject Securities, promptly
deliver to NBCU a written notice (a “CIG
Last Look Notice”),
which shall identify the Person or Persons making the CIG Last Offer and state
the proposed offer price thereof, the amount and type of the Subject Securities
proposed to be acquired, the form of consideration proposed to be paid and all
other material terms and conditions of the CIG Last Offer, and NBCU or an NBCU
Designee, as the case may be, shall have the right and option, for a period of
10 Business Days upon receipt of the CIG Last Look Notice by NBCU (the
“NBCU
Last Acceptance Period”),
to offer to acquire such Subject Securities at the proposed offer price and
upon the terms and subject to the conditions set forth in the CIG Last Offer.
In the event NBCU or an NBCU Designee, as the case may be, accepts the CIG Last
Offer during the NBCU Last Acceptance Period, such Person shall have 30 days to
consummate the acquisition of such Subject Securities following the expiration
or termination of all waiting periods under the HSR Act and receipt of all
necessary FCC and other regulatory approvals
applicable
to such acquisition; provided, that
such Person shall have 30 days to consummate the acquisition of such Subject
Securities following the expiration or termination of all waiting periods under
the HSR Act and receipt of all necessary regulatory approvals (other than FCC
approvals) applicable to such acquisition in the event that the Person or
Persons making the CIG Last Offer are not required to obtain any FCC approval
in order to acquire the Subject Securities.
(c) Notwithstanding
anything to the contrary in Sections 5(a) and 5(b) hereof, for any transaction
of Subject Securities with an aggregate total value of $5,000,000 or less, but
in no event exceeding an aggregate total value of $75,000,000 in any calendar
year, in each case as the value measured by the stated liquidation preference
or principal amount of the Subject Securities and assuming a value of $0.75 per
share for Class A Common Stock, CIG and its Affiliates may seek to Sell any of
its Subject Securities at any time subject to the satisfaction of the following
conditions:
(i) CIG
shall deliver to NBCU a written notice (a “De
Minimis First Offer Notice”),
which shall (i) state CIG’s intention to Sell Subject Securities, the
amount and type of Subject Securities to be Sold, the proposed Sale price
therefor and all other material terms of the proposed Sale and (ii) offer (the
“De
Minimis First Offer”)
to NBCU or an NBCU Designee the right to acquire all but not less than all of
such Subject Securities at the proposed purchase price and upon the terms and
subject to the conditions of the proposed transfer as set forth in the De
Minimis First Offer Notice. NBCU or an NBCU Designee, as the case may be, shall
have the right and option to accept the De Minimis First Offer for all (and not
part) of such Subject Securities at the price and upon the terms and subject to
the conditions as set forth in the De Minimis First Offer, by delivering a
written notice to CIG within five Business Days after receipt of the De Minimis
First Offer Notice by NBCU (the “De
Minimis Acceptance Period”).
In the event NBCU or an NBCU Designee, as the case may be, accepts the De
Minimis First Offer during the De Minimis Acceptance Period, such Person shall
have 30 days from the acceptance of the De Minimis First Offer to consummate
the acquisition of the Subject Securities.
(ii) if NBCU
or an NBCU Designee, as the case may be, shall fail to accept during the De
Minimis Acceptance Period all of the Subject Securities offered for Sale
pursuant to, or shall reject in writing, the De Minimis First Offer, CIG and
its Affiliates may Sell such Subject Securities to any Person or Persons at a
price not less than the price and on terms not more favorable to the purchaser
thereof than the terms, in each case as set forth in the De Minimis First Offer
Notice, at any time within 90 days (plus a sufficient number of days to allow
for the expiration or termination of all waiting periods under the HSR Act and
receipt of all necessary FCC and other regulatory approvals applicable to such
Sale) after the expiration of the De Minimis Acceptance Period.
(iii) For the
avoidance of doubt, CIG shall not be obligated to provide NBCU with a CIG Last
Look Notice for the Subject Securities that are subject to a De Minimis First
Offer Notice.
(d) Sections
5(a), 5(b) and 5(c) hereof shall terminate upon the earlier of (i) the
termination or expiration of the NBCU Option I or NBCU Option II, (ii) the Sale
by NBCU and its Affiliates of the NBCU Option I or NBCU Option II to one or
more Persons, other than the Persons acting with NBCU as a Group, or (iii) the
Sale by NBCU or its Affiliates to one or more Persons, other than the Persons
acting with NBCU as a Group, of securities of the Company representing, in the
aggregate, more than 10% of the total voting power of the Company on a
fully-diluted basis as of the Call Closing, or if the Call Closing does not
occur, the later of the Exchange Offer Closing, the Exchange Offer Expiration
or the closing of the Contingent Exchange; provided, that
if NBCU and its Affiliates Sell to one or more Persons, other than the Persons
acting with NBCU as a Group, securities of the Company representing, in the
aggregate, in excess of 5%, but not more than 10%, of the total voting power of
the Company as of the Call Closing, or if the Call Closing does not occur, the
later of the Exchange Offer Closing, the Exchange Offer Expiration or the
closing of the Contingent Exchange, NBCU and its Affiliates shall not have the
right of CIG Last Offer described in Section 5(b) hereof.
(e) Sections
5(a), 5(b) and 5(c) hereof shall not bind any holder of the Subject Securities
who acquires such Subject Securities from CIG and its Affiliates in compliance
with this Section 5 and CIG and its Affiliates may pledge the Subject
Securities without being subject to Section 5(a), 5(b) and 5(c) hereof so long
as such rights shall apply to any Sale of such pledged Subject Securities by
the pledgee thereof. Any purported Sale of the Subject Securities by CIG and
its Affiliates in violation of this Section 5 shall be null and
void.
SECTION
6. Representations
and Warranties. Each
party hereto represents and warrants to the other parties hereto as
follows:
(a) Such
party has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite power
and authority to carry on its business as presently conducted and proposed to
be conducted.
(b) Such
party has full power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
(c) This
Agreement has been duly and validly authorized, executed and delivered by such
party, and constitutes a valid and binding obligation of such party,
enforceable against such party in accordance with its terms.
(d) The
execution, delivery and performance of this Agreement by such party does not
and will not (A) violate, conflict with, or constitute a breach of or default
under such party’s organizational documents or (B) violate any Law
applicable to such party.
(e) The
execution, delivery and performance of this Agreement by it does not and will
not (A) require it to obtain any consent, approval, authorization or other
order of, or to make any filing, registration or qualification with any court,
regulatory
body,
administrative agency or other governmental body (except for (i) the pre-merger
notification and waiting period requirements of the HSR Act and the approval by
the FCC of the FCC Application pursuant to Section 310(d) of the Communications
Act, in each case in connection with the exercise of the Put Right or the Call
Right, or (ii) where failure to obtain such consent, approval, authorization or
action, or to make such filing or notification, would not prevent or materially
delay the consummation by NBCU or its designated Affiliate of the transactions
contemplated by this Agreement) or (B) violate, conflict with, constitute a
breach or default under, or result in the imposition of a Lien on any of such
party’s material properties pursuant to, any agreement, arrangement,
commitment or undertaking to which such party is a party or by which such party
is bound and which would adversely affect such party’s ability to perform
its obligations hereunder.
(f) Such
party is not a party to any agreement which is inconsistent with the rights of
any party hereunder or otherwise conflicts with the provisions
hereof.
SECTION
7. Additional
Agreements
(a)
Governmental
Filings; Consents. Each
of CIG and NBCU shall use, and shall cause its respective Affiliates to use,
commercially reasonable best efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be
or become necessary for its execution and delivery of, and the performance of
its obligations pursuant to, this Agreement, including approval by the FCC of
the FCC Application pursuant to Section 310(d) of the Communications Act and
any approvals required under the HSR Act, and will cooperate fully with the
other party in promptly seeking to obtain all such authorizations, consents,
orders and approvals. As promptly as practicable but in no event later than 20
Business Days after giving the Put Exercise Notice or the Call Exercise Notice,
as applicable, to the extent required by applicable Law, the parties hereto
shall make and shall cause their respective Affiliates to make any filings
required under the Communications Act, the HSR Act and other applicable Law.
Each party hereto agrees to use its commercially reasonable best efforts to
supply as promptly as practicable to the appropriate Governmental Authorities
any additional information and documentary material that may be requested in
connection with obtaining such authorizations, consents, orders and approvals,
including the FCC Application or pursuant to the HSR Act.
(b) Inconsistent
Actions. Once
the FCC Application has been filed, and for so long as it is pending, none of
NBCU, CIG nor any of their respective Affiliates shall take any action that
could reasonably be expected to delay or hinder the grant of the FCC
Application.
(c) Distribution. NBCU
shall acquire the Subject Securities for investment purposes only and not with
a view to any distribution thereof in violation of the Securities Act, and
shall not sell any Subject Securities purchased pursuant to this Agreement
except in compliance with the Securities Act and applicable state securities or
“blue sky” laws.
(d) Legends. CIG
agrees to, and shall request the Company to cause, the imprinting, for so long
as appropriate, of substantially the following legends on certificates
representing any of the Subject Securities, as applicable:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
STOCKHOLDERS’ AGREEMENT, DATED AS OF MAY 4, 2007, AMONG ION MEDIA
NETWORKS, INC., CIG MEDIA LLC AND NBC UNIVERSAL, INC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE PUT/CALL
AGREEMENT DATED AS OF MAY 4, 2007 BETWEEN NBC UNIVERSAL, INC. AND CIG MEDIA
LLC.
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OF 1933 OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.
SECTION
8. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be given when (and shall be deemed to have been duly given
upon receipt) by delivery in person, by overnight courier, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested), to
the respective parties at the following addresses (or such other address for a
party as shall be specified in a notice given in accordance with this
Section 8):
If to
NBCU:
NBC
Universal, Inc.
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
General Counsel
Tel:
000-000-0000
Fax:
000-000-0000
With a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxx, Xx.
Tel:
000-000-0000
Fax:
000-000-0000
If to
CIG:
CIG
Media LLC
000 X.
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
with a
copy to:
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Tel:
000-000-0000
Fax:
000-000-0000
9. Transferability
of Put/Call Right. Either
party hereto may assign all or any of its rights and obligations hereunder to
its Affiliates, provided that no
such assignment shall relieve the assigning party of its obligations hereunder.
If CIG transfers any of its Subject Securities to a Person that is not an
Affiliate (a “Transferee”)
in compliance with Section 5 hereof, such Subject Securities shall cease to be
Subject Securities and no longer be subject to the Put Right or the Call Right;
provided,
however, that
if CIG transfers all or substantially all of the Subject Securities to a
Transferee, CIG may assign all of its rights, including the Put Right, and
obligations hereunder to such Transferee, provided that such Transferee
expressly agrees in writing to be bound hereby and that such transferred
Subject Securities shall remain subject to the Call Right and delivers a
written notice of such transfer to NBCU immediately following the consummation
of such transfer. Except as otherwise agreed in writing by NBCU, no Transferee
shall be permitted to put any securities of the Company other than Subject
Securities to NBCU or its Affiliates in connection with the exercise of the Put
Right. NBCU shall have the right to assign all of its rights, including the
Call Right, and obligations hereunder to any Person referred to in clauses (ii)
or (iii) of the definition of Trigger Event in connection with the Trigger
Event so long as NBCU assures the payments obligations of such Person at the
Put Right Closing or the Call Right Closing, as applicable, and such Person
expressly agrees in writing to be bound hereby and delivers a written notice to
CIG immediately following the consummation of such assignment.
10. Miscellaneous. (a)
The Transaction Agreements and the documents described therein or attached or
delivered pursuant thereto set forth the entire agreement between the parties
thereto with respect to the transactions contemplated by such agreements. Any
provision of this Agreement may be amended or modified in whole or in part at
any time only by an agreement in writing signed by all of the parties. No
failure on the part of any party to exercise, and no delay in exercising, any
right shall
operate
as a waiver thereof nor shall any single or partial exercise by any party of
any right preclude any other or future exercise thereof or the exercise of any
other right.
(b) If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by Law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
(c) This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.
(d) No
right, power or remedy conferred upon any party in this Agreement shall be
exclusive, and each such right, power or remedy shall be cumulative and in
addition to every other right, power or remedy whether conferred in this
Agreement or now or hereafter available at law or in equity or by statute or
otherwise. The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in addition to any other remedy to
which they are entitled at law or in equity.
(e) Each
party shall execute and deliver such additional instruments and other documents
and shall take such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this Agreement and
the transactions contemplated hereby.
(f) The
section headings, captions and table of contents contained in this Agreement
are for reference purposes only, are not part of this Agreement and shall not
affect the meaning or interpretation of this Agreement.
(g) This
Agreement shall be binding upon and shall inure to the benefit of NBCU and CIG,
and their respective successors and permitted assigns.
(h) All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense; provided,
however, that
any fees or expenses incurred with respect to the engagement of an investment
banker by CIG and NBCU to settle disputes with respect to the calculation of
the Put Purchase Price or the Call Purchase Price, as the case may be, shall be
shared by CIG and NBCU in proportion to the relative differences between their
respective
calculations of the Put Purchase Price or the Call Purchase Price, as the case
may be, and the amount determined by such investment banker.
(i) This
agreement shall terminate and become of no further force and effect on the
earliest to occur of (i) the Put Right Closing or the Call Right Closing, as
the case may be, (ii) the later to occur of the termination (without exercise)
of (x) NBCU Option I, and (y) NBCU Option II, (iii) the written consent of the
parties hereto, (iv) the expiration of the fifth and final Renewed Call
Exercise Period, and (v) the date when there are no Subject Securities.
(j) This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of New York applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any New York state or
federal court sitting in the Borough of Manhattan of The City of New York. The
parties hereto hereby (a) submit to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan of The City of New York for
the purpose of any Action arising out of or relating to this Agreement brought
by any party hereto, and (b) irrevocably waive, and agree not to assert by way
of motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement may not be enforced in or by any of the above-named
courts.
(k) Each of
the parties hereto hereby waives to the fullest extent permitted by applicable
Law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this
Agreement. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges that it and the other hereto have
been induced to enter into this Agreement, as applicable, by, among other
things, the mutual waivers and certifications in this Section 10(k).
[Signature
Page to Follow]
IN
WITNESS WHEREOF, NBCU and CIG have caused this Agreement to be executed by
their respective representatives on the date first above written.
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CIG MEDIA
LLC |
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By: |
/s/ Xxxxxxx Xxxxxxxxx |
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Name: Xxxxxxx Xxxxxxxxx |
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Title: Managing
Director and Deputy General Counsel |
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NBC UNIVERSAL,
INC. |
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By: |
/s/ Xxxx X. Xxxxxxxx |
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Name: Xxxx X. Xxxxxxxx |
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Title: Executive Vice
President and Chief Financial Officer |
EXHIBIT
W to the Master Transaction Agreement
Form
of Certificate of Amendment
Exhibit
W to the
Master
Transaction Agreement
Form
of Certificate of Amendment
STATE
OF DELAWARE
CERTIFICATE
OF AMENDMENT
TO
THE CERTIFICATE OF INCORPORATION
OF
ION MEDIA NETWORKS, INC.
Pursuant
to Section 242 of the General Corporation Law of the State of Delaware,
ION Media Networks, Inc., a Delaware corporation (the “Corporation”),
hereby amends its Certificate of Incorporation as follows:
1. The
Certificate of Incorporation of the Corporation is hereby amended by deleting
Article Fourth in its entirety and inserting the following in lieu
thereof:
“FOURTH. The
total authorized capital stock of this Corporation shall be 3,035,000,000
shares of Common Stock, with a par value of $0.001 per share, and 1,000,000
shares of preferred stock, with a par value of $0.001 per share.
Of the
3,035,000,000 hares of Common Stock which the Corporation is authorized to
issue:
(a)
1,000,000,000 shares (“Class A Common”) will be designated
“Class A Common Stock,”
(b)
35,000,000 shares (“Class B Common” and, together with the
Class A Common, the “Voting Common”) will be designated
“Class B Common Stock,”
(c)
1,000,000,000 shares (“Class C Common”) will be designated
“Class C Non-Voting Common Stock,” and
(d)
1,000,000,000 shares (“Class D Common”) will be designated
“Class D Non-Voting Common Stock.” The Class A Common, Class B
Common, Class C Common and Class D Common, are collectively referred to herein
as the “Common Stock.”
Except
as otherwise provided in this Article Fourth or as otherwise required by
applicable law, all shares of Class A Common, Class B Common,
Class C Common and Class D Common shall be identical in all respects and
shall entitle the holders thereof to the same rights and privileges subject to
the same qualifications, limitations and restrictions.
1.
Voting
Rights. Except
as otherwise provided in this Article Fourth or as otherwise required by
applicable law, (a) holders of Class A Common shall be entitled to
one vote per share on all matters to be voted on by the stockholders of the
Corporation and shall vote together with the holders of Class B Common as
a single class on all such matters, (b) holders of Class B Common
shall be entitled to ten votes per share on all matters to be voted on by the
stockholders of the Corporation and shall vote together with the holders of
Class A Common as a single class on all such matters, (c) holders of
Class C Common shall have no right to vote on any matter to be voted on by
the stockholders of the Corporation; provided,
however, that
the approval of the holders of a majority of the outstanding Class C
Common, voting as a separate class, shall be required for any merger or
consolidation of the Corporation with or into another entity or entities, any
sale of all or substantially all the Corporation’s assets, or any
recapitalization or reorganization, if as a result of any of the foregoing the
shares of Class C Common would be converted into the right to receive or
would be exchanged for consideration different on a per share basis than the
consideration received with respect to or in exchange for shares of Voting
Common or would otherwise be treated differently from shares of Voting Common
in connection with such transaction, except that shares of Class C Common
may, without such a separate class vote, be converted into the right to receive
or be exchanged for non-voting securities which are otherwise identical on a
per share basis in amount and form to the voting securities received with
respect to or in exchange for Voting Common so long as (i) such non-voting
securities are convertible into such voting securities on the same terms as
Class C Common is convertible into Class A Common and (ii) all
other consideration is equal on a per share basis, and (d) holders of
Class D Common shall have no right to vote on
any
matter to be voted on by the stockholders of the Corporation; provided,
however, that
the approval of the holders of a majority of the outstanding Class D
Common, voting as a separate class, shall be required for any merger or
consolidation of the Corporation with or into another entity or entities, any
sale of all or substantially all the Corporation’s assets, or any
recapitalization or reorganization, if as a result of any of the foregoing the
shares of Class D Common would be converted into the right to receive or
would be exchanged for consideration different on a per share basis than the
consideration received with respect to or in exchange for shares of Voting
Common or would otherwise be treated differently from shares of Voting Common
in connection with such transaction, except that shares of Class D Common
may, without such a separate class vote, be converted into the right to receive
or be exchanged for non-voting securities which are otherwise identical on a
per share basis in amount and form to the voting securities received with
respect to or in exchange for Voting Common so long as all other consideration
is equal on a per share basis.
2.
Dividends. As and
when dividends are declared or paid thereon, whether in cash, property or
securities of the Corporation, the holders of Class A Common, the holders
of Class B Common, the holders of Class C Common and the holders of
Class D Common shall be entitled to participate in such dividends ratably on a
per share basis; provided,
however, that
(i) if dividends are declared which are payable in shares of Class A
Common, Class B Common, Class C Common or Class D Common, then
dividends shall be declared which are payable at the same rate on all four
classes of Common Stock and the dividends payable in shares of Class A
Common shall be payable to holders of Class A Common, dividends payable in
shares of Class B Common shall be payable to holders of Class B
Common, dividends payable in shares of Class C Common shall be payable to
holders of Class C Common and dividends payable in shares of Class D
Common shall be payable to holders of Class D Common and (ii) if the
dividends consist of other voting securities of the Corporation, then the
Corporation shall pay (A) to each holder of Class C Common, dividends
consisting of non-voting securities of the Corporation which are otherwise
identical to such other voting securities and which are convertible into or
exchangeable for such voting securities on the same terms as Class C
Common is convertible into Class A Common, and (B) to each holder of
Class D Common, dividends consisting of non-voting securities of the
Corporation which are otherwise identical to such other voting securities and
which are non-convertible.
3.
Liquidation. The
holders of Class A Common, Class B Common, Class C Common and
Class D Common shall be entitled to participate ratably on a per share basis in
all distributions to the holders of Common Stock in any liquidation,
dissolution or winding up of the Corporation.
4.
Conversion.
4A.
Conversion
of Class B Common. At any
time, each holder of Class B Common shall be entitled to convert any or
all shares of Class B Common then held by such holder into the same number
of shares of Class A Common.
4B.
Conversion
of Class C Common. Upon
the occurrence of any Class C Conversion Event, each share of Class C Common
that is (x) disposed of by a holder of Class C Common in the case of paragraph
4B(i)(a) or (y) held by a holder of Class C Common in the case of paragraph
4B(i)(b), shall be automatically converted into the same number of shares of
Class A Common.
(i) For purposes of this paragraph 4B, a
“Class
C Conversion Event”
shall mean either of the following: (a) the disposition of shares of Class
C Common to any person that the holder of Class C Common determines is not
prevented under the Communications Act from holding shares of Class A Common or
(b) the holder of shares of Class C Common determines that the Communications
Act no longer prohibit such holder from holding shares of Class A Common, , in
either case, after consultation by such Person with outside legal counsel and,
if required by the Corporation, delivery by such Person to the Corporation an
opinion of legal counsel reasonably acceptable to the Corporation to the effect
that the Conversion of such Class C Common Stock to Class A Common Stock will
not violate or conflict with the Communications Act.
(ii) For
purposes of this paragraph 4B, “person”
shall include any natural person and any corporation, partnership, joint
venture, trust, unincorporated organization and any other entity or
organization.
4C.
Conversion
Procedure.
(i) Each
conversion of shares of one series of Common Stock into shares of another
series of Common Stock shall be effected by the surrender of the certificate or
certificates representing the shares to be converted at the principal office of
the Corporation at any time during normal business hours, together with a
written notice, if applicable, by the holder of such series of Common Stock
stating that such holder desires to convert the shares, or a stated number of
the shares, of such series of Common Stock represented by such certificate or
certificates into shares of the other series of Common Stock into which such
series is to be converted pursuant to the terms hereof. Each conversion shall
be deemed to have been effected as of the close of business on the date on
which such certificate or certificates have been surrendered and such notice
has been received, if applicable, and at such time the rights of the holder of
the converted Class B Common or Class C Common, as the case may be,
as such holder shall cease and the person or persons in whose name or names the
certificate or certificates for shares of Class A Common are to be issued
upon such conversion shall be deemed to have become the holder or holders of
record of the shares of Class A Common represented thereby.
(ii) Promptly
after the surrender of certificates representing the shares to be converted,
duly executed or otherwise in proper form for transfer, and the receipt of
written notice, if applicable, the Corporation shall issue and deliver in
accordance with the surrendering holder’s instructions (a) the certificate
or certificates for the Class A Common issuable upon such conversion and
(b) a certificate representing any Class B Common or Class C
Common which was represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which was not converted.
(iii) The
issuance of certificates for Class A Common upon conversion of
Class B Common or Class C Common will be made without charge to the
holders of such shares for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of Class A Common.
(iv) All
shares of Class A Common which are issuable upon the conversion of the other
series of Common Stock shall, when issued, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens (other than any lien
which existed in respect of the shares which were converted, immediately prior
to such conversion) and charges. The Corporation shall take all such actions as
may be necessary to assure that all such shares of Class A Common may be so
issued without violation of any applicable law or governmental regulation or
any requirements of any domestic securities exchange upon which shares of Class
A Common may be listed (except for official notice of issuance, which will be
immediately transmitted by the Corporation upon issuance).
(v) The
Corporation shall not close its books against the transfer of shares of Common
Stock in any manner which would interfere with the timely conversion of any
shares of Common Stock.
4D.
Stock
Splits. If the
Corporation in any manner subdivides or combines the outstanding shares of one
series of Common Stock, the outstanding shares of each other series of Common
Stock shall be proportionately subdivided or combined in a similar manner.
5.
Registration
of Transfer. The
Corporation shall keep at its principal office (or such other place as the
Corporation reasonably designates) a register for the registration of shares of
Common Stock. Upon the surrender of any certificate representing shares of any
series of Common Stock at such place, the Corporation shall, at the request of
the registered holder of such certificate, execute and deliver a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of such series represented by the surrendered certificate,
and the Corporation forthwith shall cancel such surrendered certificate. Each
such new certificate will be registered in such name and will represent such
number of shares of such series as is requested by the holder of the
surrendered certificate and will be substantially identical in form to the
surrendered certificate. The issuance of new certificates shall be made without
charge to the holders of the surrendered certificates for any issuance tax in
respect thereof or other cost incurred by the Corporation in connection with
such issuance.
6.
Replacement. Upon
receipt of evidence reasonably satisfactory to the Corporation (an affidavit of
the registered holder will be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing one or more
shares of any series of Common Stock, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided,
however, that
if the holder is a financial institution or other institutional investor its
own agreement will be satisfactory), or, in the case of any such
mutilation
upon surrender of such certificate, the Corporation shall (at its expense)
execute and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such series represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
7.
Notices. All
notices referred to herein shall be in writing, shall be delivered personally
or by first class mail, postage prepaid, and shall be deemed to have been given
when so delivered or mailed to the Corporation at its principal executive
offices and to any stockholder at such holder’s address as it appears in
the stock records of the Corporation (unless otherwise specified in a written
notice to the Corporation by such holder).
8.
Amendment
and Waiver. In
addition to any vote required by law, no amendment or waiver of any provision
of this Article Fourth shall be effective without the prior approval of the
holders of a majority of the then outstanding Class C Common voting as a
separate class.
2. Said
amendments were adopted by resolution of the Board of Directors and approved by
a majority vote of the outstanding stock entitled to vote thereon, and a
majority of each class entitled to vote thereon as a class, pursuant to
Section 228 and Section 242 of the Delaware General Corporation Law.
IN
WITNESS WHEREOF, this
Corporation has caused this Certificate to be signed by R. Xxxxxxx Xxxxxxx, its
Chief Executive Officer, this _____ day of _____, 2007.
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ION
MEDIA NETWORKS, INC. |
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By: |
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R. Xxxxxxx Xxxxxxx |
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Chief
Executive Officer |
EXHIBIT
X to the Master Transaction Agreement
Registration
Rights Agreement
for
Series B Convertible Subordinated Debt
Exhibit X
to
the Master Transaction Agreement
Registration
Rights Agreement for Series B Convertible Subordinated Debt
REGISTRATION
RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT is dated as of May 4, 2007 (the “Agreement”),
by and among ION Media Networks, Inc., a Delaware corporation (the
“Company”), on the one hand, and NBC Universal, Inc., a
Delaware corporation (“NBCU”), NBC Palm Beach Investment I,
Inc., a California corporation (“NBC Palm Beach I”), NBC Palm
Beach Investment II, Inc., a California corporation (“NBC Palm Beach
II,” and together with NBCU and NBC Palm Beach I, the “NBCU
Entities”), and CIG Media LLC, a Delaware limited liability company
(“CIG”) (“CIG” and together with the NBCU
Entities, the “Purchasers”), on the other hand.
This Agreement is entered into in
connection with the Master Transaction Agreement by and among the Company and
the Purchasers, dated as of May 3, 2007 (the “Transaction
Agreement”), which provides for, among other things, the issuance and
sale by the Company of 11% Series B Mandatorily Convertible Senior Subordinated
Notes due 2013 (the “Notes”) to the Purchasers. In order to
induce the Purchasers to enter into the Transaction Agreement and certain other
agreements, the Company has agreed to provide the registration rights set forth
in this Agreement for the sole benefit of the Purchasers and their respective
affiliates and not for the benefit of any subsequent holder or holders of the
Notes (except as set forth in Section 5(d) hereof).
In consideration of the
foregoing, the parties hereto agree as follows:
1.
Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
“Business Day”
shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain
closed.
“Company” shall
have the meaning set forth in the preamble and shall also include the
Company’s successors.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to
time.
“Holders” shall
mean (i) the Purchasers, for so long as they own any Transfer Restricted
Securities, and (ii) any subsequent holder of Transfer Restricted Securities to
the extent that such subsequent holder is entitled to the benefit of the
registration rights set forth in this Agreement pursuant to Section 5(d)
hereof.
“Indenture”
shall mean the Indenture relating to the Notes dated as of May 3, 2007
among the Company and The Bank of New York Trust Company, N.A., as trustee, and
as the same may be amended and supplemented from time to time in accordance
with the terms thereof.
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“Initial Public
Offering” shall have the meaning set forth in the Registration Rights
Agreement for New Securities.
“Inspector”
shall have the meaning set forth in Section 3(m) hereof.
“Majority
Holders” shall mean the Holders of a majority of the aggregate
principal amount of outstanding Transfer Restricted Securities; provided
that whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Securities is required hereunder, Transfer Restricted
Securities owned directly or indirectly by the Company or any of its
subsidiaries shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount.
“Notes” shall
have the meaning set forth in the preamble.
“Person” shall
mean an individual, partnership, limited partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
“Prospectus”
shall mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by the Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including any document
incorporated by reference therein.
“Purchasers”
shall have the meaning set forth in the preamble.
“Registration
Expenses” shall mean any and all expenses incident to performance of
or compliance by the Company with this Agreement, including, without
limitation, (i) all SEC, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any Transfer Restricted Securities),
(iii) all expenses of any Persons (other than counsel) in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, any underwriting agreements, securities sales agreements or other
similar agreements and any other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees and
disbursements relating to the qualification of the Indenture under applicable
securities laws, (vi) the fees and disbursements of the Trustee and its
counsel, (vii) the fees and disbursements of counsel for the Company, (viii)
the fees and disbursements of counsel for CIG and counsel for the NBC Entities
and the fees and disbursements of one counsel for the Holders (which counsel
shall be selected by the Majority Holders), in each case, not in excess of
$50,000 per single registration and (xi) the fees and disbursements of the
independent public accountants of the Company, including the expenses of any
special audits or “comfort” letters required by or incident to the
performance of and
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compliance with this
Agreement, but excluding underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Transfer Restricted
Securities by a Holder.
“Registration Rights
Agreement for New Securities” means that certain Registration Rights
Agreement, dated May 4, 2007, among the Company, NBCU and CIG, in the form
attached as Exhibit E to the Transaction Agreement.
“SEC” shall mean
the Securities and Exchange Commission.
“Securities Act”
shall mean the Securities Act of 1933, as amended from time to time.
“Shelf Effectiveness
Period” shall have the meaning set forth in Section 2(a)
hereof.
“Shelf
Registration” shall mean a registration effected pursuant to Section
2(a) hereof.
“Shelf Registration
Statement” shall mean a “shelf” registration statement of
the Company that covers all the Transfer Restricted Securities (and may cover
other securities of the Company) on an appropriate form (including, without
limitation, Form S-1 or Form S-3) under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and any document incorporated by reference therein. To the
extent the Company is eligible (i) a Shelf Registration Statement on Form S-1
may be refiled at any time on Form S-3, (ii) the Shelf Registration Statement
may be filed in the form of an “automatic shelf registration
statement” (as defined in Rule 405 under the Securities Act), and (iii)
the Shelf Registration Statement may be refiled at any time as an automatic
shelf registration statement.
“Staff” shall
mean the staff of the SEC.
“Transaction
Agreement” shall have the meaning set forth in the preamble.
“Transfer Restricted
Securities”: Each Note until the earliest of:
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the date on which such Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement; |
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(ii) |
the date on which such Note is transferred in compliance with Rule 144
(or any other similar provision then in force) under the Securities Act or
transferable pursuant to paragraph (k) of Rule 144 under the Securities Act (or
any other similar provision then in force); |
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(iii) |
the date on which such Note ceases to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or otherwise);
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(iv) |
the date on which such Note is sold, transferred or otherwise assigned
to a Person other than a Holder. |
“Trust Indenture
Act” shall mean the Trust Indenture Act of 1939, as amended from time
to time.
“Trustee” shall
mean the trustee with respect to the Notes under the Indenture.
“Underwriter”
shall have the meaning set forth in Section 3 hereof.
“Underwritten
Offering” shall mean an offering in which Transfer Restricted
Securities are sold to an Underwriter for reoffering to the public.
2.
Registration
Under the Securities Act.
(a) After the
consummation of an Initial Public Offering, upon a written demand (each,
“Shelf Demand”) of CIG (if it then is a Holder), the NBC
Entities (if it then is a Holder) or the Majority Holders, the Company shall be
required to file, on one and only one occasion, a Shelf Registration Statement
with the SEC to cover resales of the Transfer Restricted Securities. In that
case, the Company will use its commercially reasonable efforts to (i) file the
Shelf Registration Statement as promptly as practicable, but in any event no
later than the sixtieth 60th calendar day after receipt of a Shelf
Demand, (ii) cause the Shelf Registration Statement to declared effective
under the Securities Act as soon as practicable thereafter, but in any event no
later than the one hundred twentieth 120th calendar day after the
receipt of a Shelf Demand and (iii) maintain the effectiveness of the
Shelf Registration Statement during the Shelf Effectiveness Period (defined
below).
The Company agrees to use its
commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the Securities
Act and by the provisions of Section 3 hereof to the extent necessary to ensure
that (A) it is available for resales by the Holders of Transfer Restricted
Securities entitled, subject to the terms and conditions hereof, to the benefit
of this Agreement and (B) conforms with the requirements of this Agreement and
the Securities Act and the rules and regulations of the SEC promulgated
thereunder as announced from time to time, for a period (the “Shelf
Effectiveness Period”) from the date the Shelf Registration Statement
becomes effective until the date that the Notes have ceased to be Transfer
Restricted Securities.
The Company shall be deemed not
have used its commercially reasonable efforts to keep the Shelf Registration
Statement effective during the Shelf Effectiveness Period if it voluntarily
takes any action that would result in Holders of Transfer Restricted Securities
not being able to offer and sell such securities at any time during the Shelf
Effectiveness Period, unless such action is (x) required by applicable law or
otherwise undertaken by the Company in
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good faith and for
valid business reasons (not including avoidance of the Company’s
obligations hereunder), including the acquisition or divestiture of assets, or
(y) permitted by the second to the last paragraph of Section 3 hereof.
(b) The
Company shall pay all Registration Expenses in connection with the registration
pursuant to Section 2(a) hereof. Each Holder shall pay all underwriting
discounts and commissions, brokerage commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder’s Transfer Restricted
Securities pursuant to the Shelf Registration Statement.
(c) A
Shelf Registration Statement pursuant to Section 2(a) hereof will not be deemed
to have become effective unless it has been declared effective by the
SEC.
In the event that the Shelf
Registration is not declared effective by the date specified in Section 2(a)
(the “Target Registration Date”), the interest rate on the
Transfer Restricted Securities will be increased by (i) 0.25% per annum for the
first 90-day period immediately following the Target Registration Date and (ii)
an additional 0.25% per annum with respect to each subsequent 90-day period, in
each case until the Shelf Registration Statement, if required hereby, is
declared effective by the SEC or the Notes become freely tradable under the
Securities Act, at which time the interest rate on the Transfer Restricted
Securities will revert to the original interest rate borne by such Transfer
Restricted Securities.
If the Shelf Registration
Statement, if required hereby, has been declared effective and thereafter
either ceases to be effective or the Prospectus contained therein ceases to be
usable at any time during the Shelf Effectiveness Period (other than for
reasons described in clauses (x) and (y) of the last paragraph of Section 2(a)
hereof), and such failure to remain effective or usable exists for more than 60
days (whether or not consecutive) (plus any time required in connection with
updating the Shelf Registration Statement in accordance with Section 10(a)(3)
of the Securities Act) in any 12-month period, then the interest rate on the
Transfer Restricted Securities will be increased by 0.25% per annum for the
first 90-day period immediately commencing on the 61st day (whether or not
consecutive) in any 12-month period, which rate shall be increased by an
additional 0.25% per annum at the beginning of each subsequent 90-day period,
and continue thereafter, in each case until the Shelf Registration Statement
has again been declared effective or the Prospectus again becomes usable, at
which time the interest rate on the Transfer Restricted Securities will revert
to the original interest rate borne by such Transfer Restricted
Securities.
Notwithstanding the foregoing,
the maximum aggregate increase in the interest rate borne by the Transfer
Restricted Securities pursuant to this Section 2(c) shall in no event exceed
0.50% per annum. For the avoidance of doubt, in no event shall the interest
rate increase with respect to any other securities of the Company, as a result
of this Section 2(c).
(d) Without
limiting the remedies available to the Holders, the Company acknowledges that
any failure by the Company to comply with its obligations under Section 2(a)
hereof may result in material irreparable injury to the Holders for which there
is no adequate
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remedy at law, that
it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Holders may obtain such relief as
may be required to specifically enforce the Company’s obligations under
Section 2(a) hereof.
3.
Registration
Procedures. In connection with its obligations pursuant to Section 2(a)
hereof, the Company shall as expeditiously as reasonably possible:
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(a) prepare
and file with the SEC the Shelf Registration Statement on the appropriate form
under the Securities Act, which form (x) shall be selected by the Company, (y)
shall be available for the sale of the Transfer Restricted Securities by the
selling Holders thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use its commercially
reasonable efforts to cause such Registration Statement to become effective and
remain effective for the applicable period in accordance with Section 2
hereof; |
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(b) prepare
and file with the SEC such amendments, supplements and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period in accordance with
Section 2 hereof and cause each Prospectus to be supplemented by any required
prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and keep each Prospectus current during the period
described in Section 4(3) of and Rule 174 under the Securities Act that is
applicable to transactions by brokers or dealers with respect to the Transfer
Restricted Securities; |
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(c) furnish
to CIG, the NBC Entities and Holders of Transfer Restricted Securities and
their respective counsel (the counsel for Holders of Transfer Restricted
Securities shall be selected by Holders of a majority in principal amount of
Transfer Restricted Securities covered by the Shelf Registration) and to each
Underwriter of an Underwritten Offering of Transfer Restricted Securities, if
any, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto, in order to
facilitate the sale or other disposition of the Transfer Restricted Securities
thereunder; and the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each of
the selling Holders of Transfer Restricted Securities and any such Underwriters
in connection with the offering and sale of the Transfer Restricted Securities
covered by and in the manner described in such Prospectus or any amendment or
supplement thereto in accordance with applicable law; |
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(d) use
its commercially reasonable efforts to register or qualify the Transfer
Restricted Securities under all applicable state securities or blue sky laws of
such jurisdictions as any Holder of Transfer Restricted Securities covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC; cooperate
with the Holders in connection with any filings required to be made with the
National Association of Securities Dealers, |
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Inc.; and do any and all other acts and things that may be reasonably
necessary or advisable to enable each Holder to complete the disposition in
each such jurisdiction of the Transfer Restricted Securities owned by such
Holder; provided that the Company shall not be required to (i) qualify
as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where it would not otherwise be required to so qualify, (ii)
file any general consent to service of process in any such jurisdiction, (iii)
subject itself to taxation in any such jurisdiction if it is not so subject or
(iv) make any change to its certificate of incorporation or by-laws or any
agreement between it and its stockholders; |
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(e) notify
CIG, the NBC Entities and Holders of Transfer Restricted Securities and their
respective counsel (the counsel for Holders of Transfer Restricted Securities
shall be selected by Holders of a majority in principal amount of Securities
covered by the Shelf Registration) promptly and, if requested by any such
Holder or counsel, confirm such advice in writing (i) when the Shelf
Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and supplements to the
Shelf Registration Statement and Prospectus or for additional information after
the Shelf Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of the Shelf
Registration Statement and the closing of any sale of Transfer Restricted
Securities covered thereby, the representations and warranties of the Company
contained in any underwriting agreement, securities sales agreement or other
similar agreement, if any, relating to an offering of such Transfer Restricted
Securities cease to be true and correct in all material respects or if the
Company receives any notification with respect to the suspension of the
qualification of the Transfer Restricted Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
happening of any event during the period the Shelf Registration Statement is
effective that makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or that requires the making
of any changes in such Registration Statement or Prospectus in order to make
the statements therein not misleading and (vi) of any determination by the
Company that a post-effective amendment to a Registration Statement would be
appropriate; |
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(f) use
its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at the
earliest possible moment and provide immediate notice to each Holder of the
withdrawal of any such order; |
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(g) furnish
to each Holder of Transfer Restricted Securities, without charge, at least one
conformed copy of the Shelf Registration Statement and any post-effective
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amendment thereto (without any documents incorporated therein by
reference or exhibits thereto, unless requested); |
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(h) cooperate
with the selling Holders of Transfer Restricted Securities to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends and
enable such Transfer Restricted Securities to be issued in such denominations
and registered in such names (consistent with the provisions of the Indenture)
as the selling Holders may reasonably request at least one Business Day prior
to the closing of any sale of Transfer Restricted Securities; |
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(i) upon
the occurrence of any event contemplated by Section 3(e)(v) hereof, use its
commercially reasonable efforts to prepare and file with the SEC a supplement
or post-effective amendment to the Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to purchasers of the
Transfer Restricted Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and the Company shall notify the Holders of Transfer
Restricted Securities to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and such Holders hereby
agree to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or
omission; |
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(j) a
reasonable time prior to the filing of the Shelf Registration Statement, any
Prospectus, any amendment to the Shelf Registration Statement or amendment or
supplement to a Prospectus (excluding any document that is to be incorporated
by reference into the Shelf Registration Statement or a Prospectus after
initial filing of such Registration Statement), provide copies of such document
to CIG, the NBC Entities and the Majority Holders of Transfer Restricted
Securities and their counsel and make such of the representatives of the
Company as shall be reasonably requested by CIG, the NBC Entities and the
Majority Holders of Transfer Restricted Securities or their counsel available
for discussion of such document; and the Company shall not, at any time after
initial filing of the Shelf Registration Statement, file any Prospectus, any
amendment of or supplement to the Shelf Registration Statement or a Prospectus,
(excluding any document that is to be incorporated by reference into the Shelf
Registration Statement or a Prospectus), of which CIG, the NBC Entities or the
Majority Holders of Transfer Restricted Securities and their counsel shall not
have previously been advised and furnished a copy and shall give good faith
consideration to their comments thereon; |
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(k) obtain
a CUSIP number for all Transfer Restricted Securities not later than the
effective date of a Registration Statement; |
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(l) cause
the Indenture to be qualified under the Trust Indenture Act in connection with
the registration of the Transfer Restricted Securities; cooperate with the
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Trustee and the Holders to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms
of the Trust Indenture Act; and execute, and use its commercially reasonable
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely
manner; |
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(m) in the
case of an Underwritten Offering off of the Shelf Registration, make available
for inspection during normal business hours upon reasonable notice by a
representative of the Holders of the Transfer Restricted Securities (an
“Inspector”), any Underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and one firm of attorneys and
one firm of accountants designated by the Inspector, in a reasonable manner,
all pertinent financial and other records, documents and properties of the
Company, and cause the officers, directors and employees of the Company, during
normal business hours upon reasonable notice, to supply all information
reasonably requested by any such Inspector, Underwriter, attorney or accountant
in connection with an Underwritten Offering off of the Shelf Registration
Statement; provided that if any such information is identified by the
Company as being confidential or proprietary, each Person receiving such
information shall take such actions as are reasonably necessary to protect the
confidentiality of such information to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and
interests of any Inspector, Holder or Underwriter and shall sign customary
confidentiality agreements reasonably requested by the Company prior to the
receipt of such information and any Person legally compelled to disclose any
such confidential information made available for inspection shall provide the
Company with prompt written notice of such requirement so that the Company may
seek a protection order or any other appropriate remedy; |
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(n) if
reasonably requested by any Holder of Transfer Restricted Securities covered by
the Shelf Registration Statement, promptly incorporate in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be
incorporated in such filing; and |
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(o) in
the case of an Underwritten Offering off of the Shelf Registration, enter into
such customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority in principal
amount of the Transfer Restricted Securities being sold) in order to expedite
or facilitate the disposition of such Transfer Restricted Securities including,
but not limited to, an Underwritten Offering and in such connection, (i) to the
extent possible, make such representations and warranties to the Holders and
any Underwriters of such Transfer Restricted Securities with respect to the
business of the Company and its subsidiaries, the Shelf Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated
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by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (ii) obtain opinions of counsel to the
Company (which counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Holders and such Underwriters and their
respective counsel) addressed to each selling Holder and Underwriter of
Transfer Restricted Securities, covering the matters customarily covered in
opinions requested in underwritten offerings, (iii) use commercially reasonable
efforts to obtain “comfort” letters from the independent certified
public accountants of the Company (and, if necessary, any other certified
public accountant of any subsidiary of the Company, or of any business acquired
by the Company for which financial statements and financial data are or are
required to be included in the Shelf Registration Statement) addressed to each
selling Holder and Underwriter of Transfer Restricted Securities, such letters
to be in customary form and covering matters of the type customarily covered in
“comfort” letters in connection with underwritten offerings and (iv)
deliver such documents and certificates as may be reasonably requested by the
Holders of a majority in principal amount of the Transfer Restricted Securities
being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (i) above
and to evidence compliance with any customary conditions contained in an
underwriting agreement; provided, however, that in the event of
an Underwritten Offering off of the Shelf Registration for the benefit of the
Purchasers, the Purchasers shall be limited to one opinion of counsel to the
Company and one “comfort letter.” |
With respect to the Shelf
Registration Statement, the Company may require each Holder of Transfer
Restricted Securities to furnish to the Company such information regarding such
Holder (including, without limitation, a customary selling Holder
questionnaire) and the proposed disposition by such Holder of such Transfer
Restricted Securities as the Company may from time to time reasonably request
in writing.
Each Holder of Transfer
Restricted Securities agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(e)(iii) or
3(e)(v) hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement until such
Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof and, if so directed by the Company, such
Holder will deliver to the Company all copies in its possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that is current at the time of
receipt of such notice.
If the Company shall give any
such notice to suspend the disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, the Company shall extend the
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received copies of the supplemented or amended
Prospectus necessary to resume such dispositions. The Company may
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give any such notice
only twice during any 365-day period and any such suspensions shall not exceed
90 calendar days (plus any time required in connection with updating the Shelf
Registration Statement in accordance with Section 10(a)(3) of the Securities
Act) per year for all extensions.
The Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers (the “Underwriters”) that will
administer the offering will be selected by CIG and the NBC Entities with the
Company’s consent, not to be unreasonably withheld.
4.
Indemnification and Contribution.
(a) The
Company agrees to indemnify and hold harmless each Holder, their respective
affiliates, directors and officers and each Person, if any, who controls any
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all out-of-pocket losses, claims,
damages and liabilities (including, without limitation, reasonable legal fees
and other expenses incurred in connection with any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement or any Prospectus or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Holder furnished to the Company in writing
through any selling Holder expressly for use therein.
(b) Each
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company and the other selling Holders, their respective affiliates, the
directors of the Company, each officer of the Company who signed the Shelf
Registration Statement and each Person, if any, who controls the Company or any
other selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Holder furnished to the
Company in writing by such Holder expressly for use in the Shelf Registration
Statement and any Prospectus; provided, that the liability of each
Holder hereunder shall not exceed the net proceeds received by such Holder from
the sale of Transfer Restricted Securities covered by such Registration
Statement.
(c) If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such Person (the “Indemnified Person”) shall
promptly notify the Person against whom such indemnification
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may be sought (the
“Indemnifying Person”) in writing; provided that
the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 4 except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 4. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 4 that the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary; (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm (x) for any Holder, its affiliates,
directors and officers and any control Persons of such Holder shall be
designated in writing by CIG, the NBC Entities and the Majority Holders and (y)
in all other cases shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment, as required by paragraphs (a) and
(b) of this Section 4. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for the reasonable fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying Person shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by the Indemnifying Person of such request, (ii) the Indemnifying Person shall
not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement and (iii) such Indemnified Person shall
have given the Indemnifying Person at least 30 days prior written notice of its
intention to settle. No Indemnifying Person shall, without the written consent
of the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person, in form and substance reasonably
-12-
satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding.
(d) If
the indemnification provided for in paragraphs (a) and (b) above is unavailable
to an Indemnified Person or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company from
the issuance of the Notes to the Purchasers, on the one hand, and by the
Holders from receiving Notes registered under the Securities Act, on the other
hand, or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the
Company on the one hand and the Holders on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Holders on the other
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 Company or by
the Holders and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such party in connection with any such action or claim. Notwithstanding the
provisions of this Section 4, in no event shall a Holder be required to
contribute any amount in excess of the amount by which the total price at which
the Notes sold by such Holder exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The
remedies provided for in this Section 4 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any Indemnified
Person at law or in equity.
(g) The
indemnity and contribution provisions contained in this Section 4 shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Holder,
their respective affiliates or any Person controlling any Holder, or by or on
behalf of the Company, its affiliates or the
-13-
officers or directors
of or any Person controlling the Company and (iii) any sale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement.
5.
General.
(a) No
Inconsistent Agreements. The Company represents, warrants and agrees that
(i) the rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of any other
outstanding securities issued or guaranteed by the Company under any other
agreement and (ii) neither the Company has entered into, or on or after the
date of this Agreement will enter into, any agreement that is inconsistent with
the rights granted to the Holders of Transfer Restricted Securities in this
Agreement or otherwise conflicts with the provisions hereof.
(b) Amendments
and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a majority in
aggregate principal amount of the outstanding Transfer Restricted Securities
affected by such amendment, modification, supplement, waiver or consent;
provided that no amendment, modification, supplement, waiver or consent
to any departure from the provisions of Section 4 hereof shall be effective as
against any Holder of Transfer Restricted Securities unless consented to in
writing by such Holder. Any amendments, modifications, supplements, waivers or
consents pursuant to this Section 5(b) shall be by a writing executed by each
of the parties hereto.
(c) Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex,
telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder,
at the most current address given by such Holder to the Company by means of a
notice given in accordance with the provisions of this Section 5(c), which
address initially is, with respect to the Purchasers, the address set forth in
the Transaction Agreement; (ii) if to the Company, initially at the
Company’s address set forth in the Transaction Agreement and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section 5(c); and (iii) to such other persons at their respective
addresses as provided in the Transaction Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 5(c). All such notices and communications shall be deemed to have been
duly given at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery. Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee,
at the address specified in the Indenture.
(d) Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties; provided,
however, that the registration rights set forth in this Agreement are
for the sole benefit of the Purchasers and not
-14-
for the benefit of
any subsequent holder of the Notes unless and to the extent (1) such subsequent
holder shall have acquired Notes in the aggregate amount of $25.0 million or
more from one or more Holders or their respective affiliates; and (2) the
transferors shall have expressly acknowledged, in writing, with a copy to the
Company and each other Holder, that the transferee will be deemed a
“Holder” under this Agreement for as long as it shall hold Transfer
Restricted Securities. Notwithstanding anything to the contrary contained in
this Agreement, the registration rights set forth in this Agreement are for the
benefit of subsequent holders of the Notes that are affiliates of the
Purchasers.
(e) Counterparts.
This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
(f) Headings.
The headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning
hereof.
(g) Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(h) Miscellaneous.
This Agreement contains the entire agreement between the parties relating to
the subject matter hereof and supersedes all oral statements and prior writings
with respect thereto. If any term, provision, covenant or restriction contained
in this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable or against public policy, the remainder of the terms,
provisions, covenants and restrictions contained herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. The
Company and the Purchasers shall endeavor in good faith negotiations to replace
the invalid, void or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
void or unenforceable provisions.
-15-
IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first written above.
| |
By:/s/ Xxxxxxx
Xxxxxx
|
| |
Name:
Xxxxxxx Xxxxxx |
| |
Title:
Chief Financial Officer |
[Registration Rights
Agreement: 11% Series B Mandatorily Convertible Senior Subordinated
Note]
Confirmed and
accepted as of the date first above written:
NBC UNIVERSAL, INC.
By: /s/ Xxxx X.
Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
NBC PALM BEACH
INVESTMENT I, INC.
By: /s/ Xxxx X.
Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President and
Treasurer
NBC PALM BEACH
INVESTMENT II, INC.
By: /s/ Xxxx X.
Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President and
Treasurer
CIG MEDIA LLC
By:
Citadel Limited Partnership, its Manager
By: Citadel Investment Group, L.L.C., its
General Partner
By: /s/ Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director and Deputy General
Counsel:
[Registration Rights
Agreement: 11% Series B Mandatorily Convertible Senior Subordinated
Note]
