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Exhibit 10.26
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
STC BROADCASTING, INC.
AND
THE CHASE MANHATTAN CORPORATION,
CREDIT SUISSE FIRST BOSTON CORPORATION
AND
SALOMON BROTHERS HOLDING COMPANY INC.
AS PURCHASERS
AND
CHASE SECURITIES, INC.,
AS ARRANGER
DATED AS OF FEBRUARY 5, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions................................................................................1
Section 1.02. Interpretation............................................................................13
Section 1.03. Business Day Adjustment...................................................................13
ARTICLE II
USE OF PROCEEDS
Section 2.01. Use of Proceeds...........................................................................13
ARTICLE III
ISSUE OF SECURITIES; PURCHASE AND SALE OF
SECURITIES; RIGHTS OF HOLDERS OF SECURITIES
Section 3.01. Issue of Preferred Stock, Series B........................................................14
Section 3.02. Purchase and Sale of the Preferred Stock, Series B........................................14
Section 3.03. Closing Fee...............................................................................14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations, Warranties and Agreements of the Company.................................15
Section 4.02. Representations and Warranties of the Purchasers..........................................20
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.01. Conditions Precedent to the Initial Closing of the Purchasers.............................21
Section 5.02. Conditions Precedent to the Subsequent Closing of the Purchasers..........................23
Section 5.03. Conditions Precedent to Obligations of the Company........................................24
ARTICLE VI
COVENANTS
Section 6.01. Notices of Material Events................................................................25
Section 6.02. Compliance with Laws......................................................................25
Section 6.03. Use of Proceeds...........................................................................25
Section 6.04. Limitation on Restricted Payments.........................................................25
Section 6.05. Corporate Existence.......................................................................28
Section 6.06. Payment of Taxes and Other Claims.........................................................28
Section 6.07. Maintenance of Properties and Insurance...................................................29
Section 6.08. Compliance with Laws......................................................................29
Section 6.09. Reports...................................................................................29
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Section 6.10. Limitations on Transactions with Affiliates...............................................29
Section 6.11. Limitation on Incurrence of Additional Indebtedness and
Issuance of Disqualified Capital Stock.................................................30
Section 6.12. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.................................................................30
Section 6.13. Limitation on Asset Sales.................................................................31
Section 6.14. Limitation on Asset Swaps.................................................................31
Section 6.15. FCC Compliance............................................................................31
Section 6.16. Merger, Consolidation and Sale of Assets..................................................31
Section 6.17. Successor Corporation Substituted.........................................................32
Section 6.18. Interest Rate Agreements..................................................................32
Section 6.19. Preferred Stock, Series B.................................................................32
ARTICLE VII
EVENTS OF DEFAULTS
Section 7.01. Actions after Default.....................................................................33
Section 7.02. Events of Default.........................................................................33
Section 7.03. Notice of Events..........................................................................33
ARTICLE VIII
INDEMNITY
Section 8.01. Indemnity.................................................................................34
Section 8.02. Contribution..............................................................................35
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices...................................................................................35
Section 9.02. Expenses..................................................................................36
Section 9.03. Governing Law; Submission to Jurisdiction: Venue..........................................36
Section 9.04. Judgment..................................................................................37
Section 9.05. Benefit of Agreement......................................................................37
Section 9.06 Assignments...............................................................................37
Section 9.07. Amendment.................................................................................38
Section 9.08. Counterparts; Integration.................................................................38
Section 9.09. Remedies and Waivers......................................................................38
Section 9.10. Severability..............................................................................38
Section 9.11. WAIVER OF JURY TRIAL......................................................................38
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of February 5, 1999
(the "Agreement"), by and among STC BROADCASTING, INC., a Delaware corporation
("STC" or the "Company"), THE CHASE MANHATTAN CORPORATION, a Delaware
corporation, CREDIT SUISSE FIRST BOSTON CORPORATION and SALOMON BROTHERS
HOLDING COMPANY INC. (collectively, the "Purchasers" and individually, each a
"Purchaser") and CHASE SECURITIES, INC., as Arranger (in such capacity, the
"Arranger").
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Wherever used in this Agreement,
unless the context otherwise requires, the following terms have the meanings
indicated (such meanings to be equally applicable to both the singular and the
plural form of the terms defined):
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a
Subsidiary of the Company or at the time it merges or consolidates
with the Company or any of its Subsidiaries or assumed in connection
with the acquisition of assets from such Person and not incurred by
such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Subsidiary of the Company or such
acquisition, merger or consolidation.
"Acquisition Agreements" means, collectively, the Elcom
Acquisition Agreement and the Xxxxxxxx Acquisition Agreement.
"Affiliate" means a Person who, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Company. The term "control" means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Transaction" has the meaning provided therefor in
Section 6.10.
"Asset Acquisition" means (i) an Investment by the Company or
any Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Subsidiary of the Company or shall be
consolidated or merged with the Company or any Subsidiary of the
Company or (ii) the acquisition by the Company or any Subsidiary of
the Company of assets of any Person comprising a division or line of
business of such Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into
in the ordinary course of business), assignment or other transfer for
value by the Company or any of its Subsidiaries (excluding any Sale
and Leaseback Transaction or any pledge of assets or stock by the
Company or any of its Subsidiaries) to any Person other than the
Company or a Wholly Owned Subsidiary of the Company of (i) any Capital
Stock of any
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Subsidiary of the Company or (ii) any other property or assets of the
Company or any Subsidiary of the Company other than in the ordinary
course of business; provided, however, that for purposes of Section
6.13, Asset Sales shall not include (a) a transaction or series of
related transactions in which the Company or its Subsidiaries receive
aggregate consideration of less than $500,000, (b) transactions
permitted under Section 6.14 or (c) transactions covered by Section
6.16.
"Asset Swap" means the execution of a definitive agreement,
subject only to FCC approval, if applicable, and other customary
closing conditions, that the Company in good faith believes will be
satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its
Subsidiaries and another Person or group of affiliated Persons;
provided that any amendment to or waiver of any closing condition that
individually or in the aggregate is material to the Asset Swap shall
be deemed to be a new Asset Swap.
"Basic Documents" means this Agreement, the Escrow Agreement
and the Put and Call Agreement and the Acquisition Agreements.
"Board of Directors" means, with respect to any Person, the
Board of Directors (or any other equivalent governing body) of such
Person or any committee of the Board of Directors of such Person duly
authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means a day when banks are open for business
in New York, New York.
"Capital Stock" means (i) with respect to any Person that is
a corporation, any and all shares, interests, participations or other
equivalents (however designated) of capital stock of such Person and
(ii) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease
to which such Person is a party that is required to be classified and
accounted for as a capital lease obligation under GAAP, and for
purposes of this definition, the amount of such obligation at any date
shall be the capitalized amount of such obligation at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within
one year from the date of acquisition thereof; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof
and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.; (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from Standard & Poor's
Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; (iv)
certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any commercial
bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of
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acquisition thereof combined capital and surplus of not less than
$200,000,000; (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market
funds that invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Certificate of Designation" means the Certificate of
Designation duly adopted by the Board of Directors of the Company
setting forth the rights, preferences and priorities of the Preferred
Stock, Series B and filed with, and accepted for filing, so as to be
effective, by the Secretary of State of the State of Delaware prior to
the Initial Closing hereunder and which is in the form of Exhibit A
hereto.
"Change of Control" means the occurrence of one or more of
the following events: (i) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company to any Person or group
of related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group") (whether or not otherwise in compliance with the
provisions of this Agreement), other than to Xxxxx Muse, any of its
Affiliates, officers and directors or Xxxxxx X. Xxxxx or any of his
Affiliates (the "Permitted Holders"); or (ii) a majority of the board
of directors of the Company or Holdings shall consist of Persons who
are not Continuing Directors; or (iii) the acquisition by any Person
or Group (other than the Permitted Holders or any direct or indirect
Subsidiary of any Permitted Holder, including without limitation
Holdings) of the power, directly or indirectly, to vote or direct the
voting of securities having more than 50% of the ordinary voting power
for the election of directors of the Company or Holdings.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commission" or "SEC" means the Securities and Exchange
Commission.
"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement entered
into by the Company or any of its Subsidiaries designed to protect the
Company or any of its Subsidiaries against fluctuations in the price
of commodities actually used in the ordinary course of business of the
Company and its Subsidiaries.
"Communications Act" has the meaning provided therefor in
Section 4.01(g).
"Consolidated Cash Flow" means, with respect to any Person,
for any period, the sum (without duplication) of (i) Consolidated Net
Income and (ii) to the extent Consolidated Net Income has been reduced
thereby, (A) all income taxes of such Person and its Subsidiaries paid
or accrued in accordance with GAAP for such period (other than income
taxes attributable to extraordinary or non-recurring gains or losses),
(B) Consolidated Interest Expense and (C) Consolidated Non-Cash
Charges, all as determined on a consolidated basis for such Person and
its Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the
interest expense of such Person and its Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP,
including, without limitation, (a) any amortization of debt discount,
(b) the net cost under Interest Swap Obligations (including any
amortization of discounts), (c) the interest portion of any deferred
payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance
financing or similar facilities, and (e) all accrued interest and (ii)
the interest component
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of Capitalized Lease Obligations paid or accrued by such Person and
its Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any
period, the aggregate net income (or loss) of such Person and its
Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided, however, that there shall be excluded
therefrom, without duplication, (a) gains and losses from Asset Sales
(without regard to the $500,000 limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related
tax effects, (b) items classified as extraordinary or non-recurring
gains and losses, and the related tax effects according to GAAP, (c)
the net income (or loss) of any Person acquired in a pooling of
interests transaction accrued prior to the date it becomes a
Subsidiary of such first-referred-to Person or is merged or
consolidated with it or any of its Subsidiaries, (d) the net income of
any Subsidiary to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is restricted
by contract, operation of law or otherwise, and (e) the net income of
any Person, other than a Subsidiary, except to the extent of the
lesser of (x) dividends or distributions paid to such
first-referred-to Person or its Subsidiary by such Person and (y) the
net income of such Person (but in no event less than zero), and the
net loss of such Person shall be included only to the extent of the
aggregate Investment of the first-referred-to Person or a consolidated
Subsidiary of such Person and any non-cash expenses attributable to
grants or exercises of employee stock options.
"Consolidated Non-Cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and
other non-cash expenses of such Person and its Subsidiaries (excluding
any such charges constituting an extraordinary or non-recurring item)
reducing Consolidated Net Income of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of the
Company or Holdings on the Initial Closing Date, (ii) was nominated
for election or elected to the board of directors of the Company or
Holdings, as the case may be, with the affirmative vote of a majority
of the Continuing Directors who were members of such board of
directors at the time of such nomination or election or (iii) is a
representative of a Permitted Holder.
"Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of July 2, 1998, among the Company, The Chase
Manhattan Bank, as administrative agent, NationsBank of Texas, N.A.,
as documentation agent, Salomon Brothers Holding Company Inc., as
syndication agent, and any other financial institutions from time to
time party thereto, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise
modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring
(including by way of adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group
of lenders (or other institutions).
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuations in currency values.
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"Default" means an event or condition that would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both.
"Disqualified Capital Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of
any event, matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof (except, in each
case, upon the occurrence of a Change of Control), in whole or in
part, on or prior to the final maturity date of the Senior
Subordinated Notes.
"DOJ" has the meaning provided therefor in Section 4.01(g).
"Dollars" and the sign "$" means the lawful currency of the
United States of America.
"Elcom" means Elcom of Ohio, Inc., a Delaware corporation.
"Elcom Acquisition" means the purchase by STC and its
Subsidiaries of substantially all the assets of Elcom constituting
television station WUPW-TV, Toledo, Ohio, pursuant to the terms of the
Elcom Acquisition Agreement.
"Elcom Acquisition Agreement" means that certain Asset
Purchase Agreement, dated as of July 24, 1998, by and between the
Company and Raycom America, Inc., successor-in-interest to Elcom, as
amended, in respect of the Elcom Acquisition.
"Engagement Letter" means the Engagement Letter dated as of
February 5, 1999 from the Arranger, Credit Suisse First Boston
Corporation and Xxxxxxx Xxxxx Xxxxxx Inc. to STC and Holdings which is
in the form attached hereto as Exhibit D.
"Escrow Agreement" means the certain Escrow Agreement dated
as of February 5, 1999, between STC and The Chase Manhattan Bank, a
New York banking corporation. and which is in the form attached hereto
as Exhibit C.
"Event of Default" means any one of the events specified in
Section 7.02.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
"FCC" means the United States Federal Communications
Commission or any similar agency having jurisdiction over the
purchase, sale and operation of broadcast licenses and related assets.
"Financial Monitoring and Oversight Agreements" means,
collectively, the Monitoring and Oversight Agreement among the
Company, Holdings and Xxxxx Muse Partners, as in effect on the Senior
Subordinated Notes Issue Date, and the Financial Advisory Agreement
among the Company, Holdings and Xxxxx Muse Partners, as in effect on
the Senior Subordinated Notes Issue Date.
"FTC" has the meaning set forth in Section 4.01(g).
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"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Senior Subordinated
Notes Issue Date.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Xxxxx Muse" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a
Delaware corporation.
"Xxxxx Muse Partners" means Xxxxx, Muse & Co. Partners, L.P.,
a Texas limited partnership.
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P.,
a Delaware limited partnership.
"Holdings" means Sunrise Television Corporation, a Delaware
corporation.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii)
evidenced by bonds, debentures, notes or other similar instruments,
(iii) constituting Capitalized Lease Obligations, (iv) incurred or
assumed as the deferred purchase price of property, or pursuant to
conditional sale obligations and title retention agreements (but
excluding trade accounts payable arising in the ordinary course of
business), (v) for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (vi) for
Indebtedness of others guaranteed by such Person, (vii) for Interest
Swap Obligations, Commodity Agreements and Currency Agreements and
(viii) for Indebtedness of any other Person of the type referred to in
clauses (i) through (vii) which is secured by any Lien on any property
or asset of such first-referred-to Person, the amount of such
Indebtedness being deemed to be the lesser of the value of such
property or asset or the amount of the Indebtedness so secured. The
amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations
described above, as such amount would be reflected on a balance sheet
prepared in accordance with GAAP, and the maximum liability at such
date of such Person for any contingent obligations described above.
"Indenture" means the Indenture in respect of the Senior
Subordinated Notes, dated as of March 25, 1997, as in effect on the
date hereof, between STC, on the one hand, and the Trustee, on the
other hand.
"Initial Closing" has the meaning provided therefor in
Section 3.02.
"Initial Closing Date" means February 5, 1999
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement, interest rate futures contract, interest rate option
contract or other similar arrangement or agreement to which the
Company is party, designed to protect the Purchasers against
fluctuations in interest rates.
"Interest Swap Obligations" means the obligations of any
Person under any Interest Rate Agreement.
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"Investment" means (i) any transfer or delivery of cash,
stock or other property of value in exchange for Indebtedness, stock
or other security or ownership interest in any Person by way of loan,
advance, capital contribution, guarantee or otherwise and (ii) an
investment deemed to have been made by the Company at the time any
entity which was a Subsidiary of the Company ceases to be such a
Subsidiary in an amount equal to the value of the loans and advances
made to, and any remaining ownership interest in, such entity
immediately following such entity ceasing to be a Subsidiary of the
Company. The amount of any non-cash Investment shall be the fair
market value of such Investment, as determined conclusively in good
faith by management of the Company unless the fair market value of
such Investment exceeds $1,000,000, in which case the fair market
value shall be determined conclusively in good faith by the Board of
Directors of the Company at the time such Investment is made.
"Investment Company Act" has the meaning provided therefor in
Section 4.01(n).
"Leverage Ratio" shall mean, as to any Person, the ratio of
(i) the aggregate outstanding amount of Indebtedness of the Company
and its Subsidiaries as of the date of calculation on a consolidated
basis in accordance with GAAP plus the aggregate liquidation
preference of all outstanding Disqualified Capital Stock of the
Company and of all outstanding Preferred Stock of Subsidiaries of the
Company to (ii) the Consolidated Cash Flow of the Company for the four
full fiscal quarters (the "Four Quarter Period") ending on or prior to
the date of determination.
For purposes of this definition, the aggregate outstanding
principal amount of Indebtedness of the Person and its Subsidiaries
for which such calculation is made shall be determined on a pro forma
basis as if the Indebtedness giving rise to the need to perform such
calculation had been incurred and the proceeds therefrom had been
applied, and all other transactions in respect of which such
Indebtedness is being incurred had occurred, on the last day of the
Four Quarter Period. In addition to the foregoing, for purposes of
this definition, "Consolidated Cash Flow" shall be calculated on a pro
forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries (and the application
of the proceeds therefrom) giving rise to the need to make such
calculation and any incurrence (and the application of the proceeds
therefrom) or repayment of other Indebtedness, other than the
incurrence or repayment of Indebtedness pursuant to working capital
facilities, at any time subsequent to the beginning of the Four
Quarter Period and on or prior to the date of determination, as if
such incurrence (and the application of the proceeds thereof), or the
repayment, as the case may be, occurred on the first day of the Four
Quarter Period, (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of such Person or one of its
Subsidiaries (including any Person that becomes a Subsidiary as a
result of such Asset Acquisition) incurring, assuming or otherwise
becoming liable for Indebtedness) at any time on or subsequent to the
first day of the Four Quarter Period and on or prior to the date of
determination, as if such Asset Sale or Asset Acquisition (including
the incurrence, assumption or liability for any such Indebtedness and
also including any Consolidated Cash Flow associated with such Asset
Acquisition) occurred on the first day of the Four Quarter Period and
(iii) cost savings resulting from employee terminations, facilities
consolidations and closings, standardization of employee benefits and
compensation practices, consolidation of property, casualty and other
insurance coverage and policies, standardization of sales
representation commissions and other contract rates, and reductions in
taxes other than income taxes (collectively, "Cost Savings Measures"),
which cost savings the Company reasonably believes in good faith could
have been achieved during the Four Quarter Period as a result of such
Asset Acquisition (regardless of whether such cost savings could then
be reflected in pro forma financial statements under GAAP, Regulation
S-X promulgated by the Commission or any other regulation or policy of
the Commission), less the amount of any additional
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expenses that the Company reasonably estimates would result from
anticipated replacements of any items constituting Cost Savings
Measures in connection with such Asset Acquisition; provided, however,
that both (A) such cost savings and Cost Savings Measures were
identified and such cost savings were quantified in an officer's
certificate delivered to the Arranger at the time of the consummation
of the Asset Acquisition and (B) with respect to each Asset
Acquisition completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by the Company
within 90 days of such Asset Acquisition to effect the Cost Savings
Measures identified in such officer's certificate (regardless,
however, of whether the corresponding cost savings have been
achieved). Furthermore, in calculating "Consolidated Interest Expense"
for purposes of the calculation of "Consolidated Cash Flow," (i)
interest on Indebtedness determined on a fluctuating basis as of the
date of determination (including Indebtedness actually incurred on the
date of the transaction giving rise to the need to calculate the
Leverage Ratio) and which will continue to be so determined thereafter
shall be deemed to have accrued at a fixed rate per annum equal to the
rate of interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined
on a fluctuating basis, to the extent such interest is covered by
Interest Swap Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such
agreements.
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the
nature thereof and any agreement to give any security interest).
"License" has the meaning provided therefor in Section
4.01(m).
"Market Effect" has the meaning provided therefor in Section
5.01(l).
"Material Adverse Change" has the meaning provided therefor
in Section 5.01(m).
"Material Adverse Effect" has the meaning provided therefor
in Section 4.01(a).
"Net Cash Proceeds" means, with respect to any Asset Sale,
the proceeds in the form of cash or Cash Equivalents (including
payments in respect of deferred payment obligations when received in
the form of cash or Cash Equivalents) received by the Company or any
of its Subsidiaries from such Asset Sale net of (i) reasonable
out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, title insurance
premiums, appraiser's fees and costs reasonably incurred in
preparation of any asset or property for sale), (ii) taxes paid or
reasonably estimated to be payable (calculated based on the combined
state, federal and foreign statutory tax rates applicable to the
Company or the Subsidiary engaged in such Asset Sale) and (iii)
repayment of Indebtedness secured by assets subject to such Asset
Sale; provided, however, that if the instrument or agreement governing
such Asset Sale requires the transferor to maintain a portion of the
purchase price in escrow (whether as a reserve for adjustment of the
purchase price or otherwise) or to indemnify the transferee for
specified liabilities in a maximum specified amount, the portion of
the cash or Cash Equivalents that is actually placed in escrow or
segregated and set aside by the transferor for such indemnification
obligation shall not be deemed to be Net Cash Proceeds until the
escrow terminates or the transferor ceases to segregate and set aside
such funds, in whole or in part, and then only to the extent of the
proceeds released from escrow to the transferor or that are no longer
segregated and set aside by the transferor.
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"Permitted Holder" has the meaning provided therefor in the
definition of "Change of Control."
"Permitted Indebtedness" means, without duplication, (i)
Indebtedness outstanding on the Initial Closing Date; (ii)
Indebtedness of the Company or a Subsidiary incurred under the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed the sum of the aggregate commitments pursuant to the Credit
Agreement as in effect on the Senior Subordinated Notes Issue Date;
(iii) Indebtedness evidenced by or arising under the Senior
Subordinated Notes and the Indenture; (iv) Interest Swap Obligations;
provided, however, that such Interest Swap Obligations are entered
into to protect the Company from fluctuations in interest rates of its
Indebtedness; (v) additional Indebtedness of the Company or any of its
Subsidiaries not to exceed $10,000,000 in principal amount outstanding
at any time (which amount may, but need not, be incurred under the
Credit Agreement); (vi) Refinancing Indebtedness; (vii) Indebtedness
owed by the Company to any Wholly Owned Subsidiary of the Company or
by any Subsidiary of the Company to the Company or any Wholly Owned
Subsidiary of the Company; (viii) guarantees by Subsidiaries of any
Indebtedness permitted to be incurred pursuant to the Indenture; (ix)
Indebtedness in respect of performance bonds, bankers' acceptances and
surety or appeal bonds provided by the Company or any of its
Subsidiaries to their customers in the ordinary course of their
business; (x) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or from guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of the Company or any of its
Subsidiaries pursuant to such agreements, in each case incurred in
connection with the disposition of any business assets or Subsidiaries
of the Company (other than guarantees of Indebtedness or other
obligations incurred by any Person acquiring all or any portion of
such business assets or Subsidiaries of the Company for the purpose of
financing such acquisition) in a principal amount not to exceed the
gross proceeds actually received by the Company or any of its
Subsidiaries in connection with such disposition; provided, however,
that the principal amount of any Indebtedness incurred pursuant to
this clause (x), when taken together with all Indebtedness incurred
pursuant to this clause (x) and then outstanding, shall not exceed
$7,500,000; and (xi) Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money obligations, in
each case incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property used
in a related business or incurred to refinance any such purchase price
or cost of construction or improvement, in each case incurred no later
than 365 days after the date of such acquisition or the date of
completion of such construction or improvement; provided, however,
that the principal amount of any Indebtedness incurred pursuant to
this clause (xi) shall not exceed $3,000,000 at any time outstanding.
"Permitted Investments" means (i) Investments by the Company
or any Subsidiary of the Company to acquire the stock or assets of any
Person (or Acquired Indebtedness acquired in connection with a
transaction in which such Person becomes a Subsidiary of the Company)
engaged in the broadcast business or businesses reasonably related
thereto; provided, however, that if any such Investment or series of
related Investments involves an Investment by the Company in excess of
$5,000,000, the Company is able, at the time of such investment and
immediately after giving effect thereto, to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 6.11), (ii) Investments received by the
Company or its Subsidiaries as consideration for a sale of assets,
(iii) Investments by the Company or any Wholly Owned Subsidiary of the
Company in any Wholly Owned Subsidiary of the Company (whether
existing on the Senior Subordinated Notes Issue Date or created
thereafter) or any Person that after such Investments, and as a result
thereof, becomes a Wholly Owned Subsidiary of the Company and
Investments in the Company by any Wholly Owned Subsidiary of the
Company, (iv) Investments in
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cash and Cash Equivalents, (v) Investments in securities of trade
creditors, wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement, (vi) loans or advances to
employees of the Company or any Subsidiary thereof for purposes of
purchasing the Company's Capital Stock and other loans and advances to
employees made in the ordinary course of business consistent with past
practices of the Company or such Subsidiary, and (vii) additional
Investments in an aggregate amount not to exceed $1,000,000 at any
time outstanding.
"Person" means shall mean any individual, corporation,
company, limited liability company, voluntary association,
partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemptions or upon
liquidation.
"Preferred Stock, Series A" means the 14% Redeemable
Preferred Stock of the Company, par value $.01.
"Preferred Stock, Series B" means the Preferred Stock, Series
B of the Company, par value $.01.
"Productive Assets" means assets of a kind used or usable by
the Company and its Subsidiaries in broadcast businesses or businesses
reasonably related thereto, and specifically includes assets acquired
through Asset Acquisitions.
"Pro forma" means, unless otherwise provided herein, with
respect to any calculation made or required to be made pursuant to the
terms of this Agreement, a calculation in accordance with Article 11
of Regulation S-X promulgated under the Securities Act.
"Public Equity Offering" means an underwritten public
offering of Capital Stock (other than Disqualified Capital Stock) of
the Company or Holdings (to the extent, in the case of Holdings, that
the net cash proceeds thereof are contributed to the common or
non-redeemable preferred equity capital of the Company), pursuant to
an effective registration statement filed with the Commission in
accordance with the Securities Act.
"Put and Call Agreement" means the Put and Call Agreement
dated as of February 5, 1999, among the Arranger, the Purchasers, HMTF
and, with respect to Sections 14 and 15 thereof, HM3/GP Partners,
L.P., Xxxxx, Xxxx XX Partners III, L.P. and Xxxxx, Muse Fund III
Incorporated and which is in the form of Exhibit B hereto.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Refinancing Indebtedness" means any refinancing by the
Company of Indebtedness of the Company or any of its Subsidiaries
incurred in accordance with Section 6.11 (other than pursuant to
clause (iii) or (iv) of the definition of "Permitted Indebtedness")
that does not (i) result in an increase in the aggregate principal
amount of Indebtedness (such principal amount to include, for purposes
of this definition, any premiums, penalties or accrued interest paid
with the proceeds of the Refinancing Indebtedness) of such Person or
(ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the
Indebtedness
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being refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being refinanced.
"Regulation D" has the meaning provided therefor in Section
4.01(x).
"Regulation S" has the meaning provided therefor in Section
4.01(z).
"Restricted Payment" means (i) the declaration or payment of
any dividend or the making of any other distribution (other than
dividends or distributions payable in Qualified Capital Stock or in
options, rights or warrants to acquire Qualified Capital Stock) on
shares of the Company's Capital Stock, (ii) the purchase, redemption,
retirement or other acquisition for value of any Capital Stock of the
Company, or any warrants, rights or options to acquire shares of
Capital Stock of the Company, other than through the exchange of such
Capital Stock or any warrants, rights or options to acquire shares of
any class of such Capital Stock for Qualified Capital Stock or
warrants, rights or options to acquire Qualified Capital Stock, (iii)
the making of any principal payment on, or the purchase, defeasance,
redemption, prepayment, decrease or other acquisition or retirement
for value, prior to any scheduled final maturity, scheduled repayment
or scheduled sinking fund payment, of, any Indebtedness of the Company
or its Subsidiaries that is subordinated or junior in right of payment
to the Senior Subordinated Notes or (iv) the making of any Investment
(other than a Permitted Investment).
"SAC" means Xxxxx Acquisition Company, a Delaware
corporation.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a
Subsidiary transfers such property to a Person and the Company or a
Subsidiary leases it from such Person.
"Secured Indebtedness" means any Indebtedness of the Company
or a Subsidiary secured by a Lien.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
"Senior Subordinated Indebtedness" means the Senior
Subordinated Notes and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank pari passu
with the Senior Subordinated Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Company which is not Senior Indebtedness.
"Senior Subordinated Notes" means the Company's 11% Senior
Subordinated Notes due 2007.
"Senior Subordinated Notes Issue Date" means March 25, 1997.
"Significant Subsidiary" means for any Person each Subsidiary
of such Person which (i) for the most recent fiscal year of such
Person accounted for more than 5% of the consolidated net income of
such Person or (ii) as at the end of such fiscal year, was the owner
of more than 5% of the consolidated assets of such Person.
"Xxxxxxxx" means Xxxxxxxx Communications, Inc.
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"Xxxxxxxx Acquisition" means the acquisition from Xxxxxxxx of
the assets of television stations WICS-TV, Springfield, Illinois,
WICD-TV, Champaign, Illinois, KGAN-TV, Cedar Rapids, Iowa, and
WTWC-TV, Tallahassee, Florida.
"Xxxxxxxx Acquisition Agreement" means the documentation to
be negotiated and executed between the Company and Xxxxxxxx in respect
of the Xxxxxxxx Acquisition.
"Subsequent Closing" has the meaning provided therefor in
Section 3.02.
"Subsequent Closing Date" means the date of the Subsequent
Closing.
"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a
majority of the votes entitled to be cast in the election of directors
under ordinary circumstances shall at the time be owned, directly or
indirectly, through one or more intermediaries, by such Person or (ii)
any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly,
through one or more intermediaries, owned by such Person; provided,
however, that notwithstanding the foregoing, SAC shall be deemed to be
a "Subsidiary" of the Company. Notwithstanding anything in this
Agreement to the contrary, all references to the Company and its
consolidated Subsidiaries or to financial information prepared on a
consolidated basis in accordance with GAAP shall be deemed to include
the Company and its Subsidiaries as to which financial statements are
prepared on a combined basis in accordance with GAAP and to financial
information prepared on such a combined basis. Notwithstanding
anything in this Agreement to the contrary, an Unrestricted Subsidiary
shall not be deemed to be a Subsidiary for purposes of this Agreement.
"Trustee" means U.S. Trust Company of Texas, N.A., as trustee
under the Indenture, or its successor.
"Unrestricted Subsidiary" means a Subsidiary of the Company
created after the Senior Subordinated Notes Issue Date and so
designated by a resolution adopted by the Board of Directors of the
Company; provided, however, that (a) neither the Company nor any of
its other Subsidiaries (other than Unrestricted Subsidiaries) (1)
provides any credit support for any Indebtedness of such Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness) or (2) is directly or indirectly liable for any
Indebtedness of such Subsidiary and (b) at the time of designation of
such Subsidiary, such Subsidiary has no property or assets (other than
de minimis assets resulting from the initial capitalization of such
Subsidiary). The Board of Directors may designate any Unrestricted
Subsidiary to be a Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
in compliance with Section 6.11 hereof and (y) no Default or Event of
Default shall have occurred and be continuing. Any designation
pursuant to this definition by the Board of Directors of the Company
shall be evidenced to the Arranger by the filing with the Arranger of
a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"Weighted Average Life to Maturity" means, when applied to
any Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such
Indebtedness into (b) the total of the product obtained by multiplying
(i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal,
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including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will
elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
of such Person of which all the outstanding voting securities (other
than directors' qualifying shares) which normally have the right to
vote in the election of directors are owned by such Person or any
Wholly Owned Subsidiary of such Person; provided, however, that
"Wholly Owned Subsidiary" shall also include any Subsidiary of which
in excess of 95% of the common equity securities are owned by the
Company or another Wholly Owned Subsidiary and which is organized for
the purpose of facilitating the acquisition of any broadcasting
business that, but for the formation of such Person, the Company and
its Restricted Subsidiaries could not acquire under applicable laws
related to the ownership of broadcast businesses.
Section 1.02. Interpretation. In this Agreement, unless the
context otherwise requires:
(a) headings and underlinings are for convenience only and do
not affect the interpretation of this Agreement;
(b) words importing the singular include the plural and vice
versa;
(c) an expression importing a natural person includes any
company, partnership, trust, joint venture, association, corporation
or other body corporate and any governmental authority or agency;
(d) a reference to a Section, party, Exhibit, Annex or
Schedule is a reference to that Section of, or that party, Exhibit,
Annex or Schedule to, this Agreement;
(e) a reference to a document includes an amendment or
supplement to, or replacement or novation of, that document but
disregarding any amendment, supplement, replacement or novation made
in breach of this Agreement; and
(f) a reference to a party to any document includes that
party's successors and permitted assigns.
Section 1.03. Business Day Adjustment. Where the day on or by
which a payment is due to be made is not a Business Day, that payment shall be
done on or by the next succeeding Business Day.
ARTICLE II
USE OF PROCEEDS
Section 2.01. Use of Proceeds. The proceeds of the sale of
the Preferred Stock, Series B to the Purchasers shall be used (and STC agrees
that it shall use such proceeds) only to support STC's required purchase price
payments under the Acquisition Agreements, payment of fees and expenses in
connection with such Acquisition Agreements and this Agreement, for the payment
of dividends on the Preferred Stock, Series B and for general corporate
purposes (with such amounts to be used for the payment of dividends and for
general corporate purposes to be placed in an escrow account pursuant to the
terms of the Escrow Agreement).
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ARTICLE III
ISSUE OF SECURITIES; PURCHASE AND SALE OF
SECURITIES; RIGHTS OF HOLDERS OF SECURITIES
Section 3.01. Issue of Preferred Stock, Series B. The Company
has authorized the issuance of up to $90,000,000 aggregate liquidation value of
the Preferred Stock, Series B. The Preferred Stock, Series B will have the
rights and preferences set forth in the Certificate of Designation. The
liquidation value of the Preferred Stock, Series B will increase to the extent
of accrued dividends paid in additional shares of Preferred Stock, Series B.
The Preferred Stock, Series B will be offered and sold to the
Purchasers without being registered under the Securities Act, in reliance on
exemptions therefrom.
Section 3.02. Purchase and Sale of the Preferred Stock,
Series B. Subject to the terms and conditions herein set forth, the Company
agrees that it will sell to each of the Purchasers, severally and not jointly,
and each of the Purchasers, severally and not jointly, agrees that it will
purchase from the Company at the Initial Closing and at the Subsequent Closing,
the number of shares of Preferred Stock, Series B set forth opposite the name
of such Purchaser on Schedule I hereto; provided, however, that all such
issuances of shares of Preferred Stock, Series B shall not result in issued
Preferred Stock, Series B with an aggregate liquidation value of more than
$90,000,000.
The initial purchase and sale of an aggregate 37,500 shares
of Preferred Stock, Series B pursuant to this Agreement will take place at a
closing (the "Initial Closing") at the offices of Xxxxxx Xxxxxx & Xxxxxxx, New
York, New York, at 10:00 a.m., New York time, on February 5, 1999. The
subsequent purchase and sale of an aggregate 52,500 shares of Preferred Stock,
Series B pursuant to this Agreement will take place at a closing (the
"Subsequent Closing") at the offices of Xxxxxx Xxxxxx & Xxxxxxx, New York, New
York, at 10:00 a.m., New York time on a date subsequent to the satisfaction of
each condition contained in Section 5.02.
Delivery of the Preferred Stock, Series B to be purchased by
the Purchasers pursuant to this Agreement shall be made at the Initial Closing
or at the Subsequent Closing, as the case may be, by the Company delivering
certificates representing the Preferred Stock, Series B to the Purchasers.
The Company will bear all expenses of shipping the Preferred
Stock, Series B (including, without limitation, insurance expenses) from New
York City to such other places within the United States of America or Canada as
the Arranger shall specify. Any tax on the issuance of the Preferred Stock,
Series B will be paid by the Company on the Initial Closing Date or on the
Subsequent Closing Date, as applicable.
Section 3.03. Closing Fee. In addition to all other amounts
due hereunder, the Company shall also pay to the Arranger, at the Initial
Closing, a fee of $225,000. The Company also agrees to pay the reasonable fees
and expenses of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Purchasers, which shall
be paid on the Initial Closing Date.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations, Warranties and Agreements of
the Company. The Company represents and warrants to, and agrees with, the
several Purchasers and the Arranger that (before and after giving effect to the
Elcom Acquisition and the Xxxxxxxx Acquisition):
(a) The Company and each of its Subsidiaries have been
duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing, as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not,
singularly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole (a
"Material Adverse Effect").
(b) The authorized capital stock of the Company consists
of (i) 1,000,000 shares of preferred stock, par value $0.01 per share,
of which 100,000 shares have been designated Preferred Stock, Series B
and, as of the date hereof, 300,000 shares of Preferred Stock, Series
A are issued and outstanding, and (ii) 1,000 shares of common stock,
$0.01 par value per share, of which 1,000 shares are issued and
outstanding; all of the outstanding shares of capital stock of the
Company are duly and validly authorized and issued and fully paid and
non-assessable. All of the outstanding shares of capital stock of each
Subsidiary of the Company (and, in the case of SAC, 100% of the
nonvoting stock) have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by
the Company, free and clear of any lien, charge, encumbrance, security
interest, restriction upon voting (except for SAC) or transfer or any
other claim of any third party (other than liens and security
interests created pursuant to the Credit Agreement, the Indenture or
applicable law) and restrictions on transfer imposed by the FCC
requirements.
(c) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and the other Basic
Documents and to perform its obligations hereunder and thereunder.
(d) The Basic Documents have been duly authorized,
executed and delivered by the Company and upon and after the Initial
Closing constitute valid and legally binding agreements of the
Company, enforceable against the Company in accordance with their
respective terms, except (i) to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and (ii) to the extent that the
enforceability of rights to indemnification and contribution
thereunder may be limited by federal or state securities laws or
regulations or the public policy underlying such laws or regulations.
(e) The Preferred Stock, Series B has been duly and
validly authorized for issuance by the Company and, when issued and
delivered and paid for as provided herein, will be validly issued,
fully paid and non-assessable and entitled to the rights, preferences
and priorities set forth in
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the Certificate of Designation, and the issuance of the Preferred
Stock, Series B will not be not subject to preemptive or other similar
rights.
(f) The Certificate of Designation has been duly
authorized by the Company, its board of directors and all required
stockholder action and when executed and delivered by the Company and
filed with the Secretary of State of the State of Delaware will
constitute a valid and legally binding obligation of the Company,
enforceable against it in accordance with its terms except that the
enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws now
or hereafter in effect relating to creditors' rights and remedies
generally and general principles of equity and the discretion of the
court before which any proceeding therefor may be brought. The
Certificate of Designation sets forth the rights, preferences and
priorities of the Preferred Stock, Series B.
(g) The execution, delivery and performance by the
Company of each of the Basic Documents, the issuance, sale and
delivery of the Preferred Stock, Series B by the Company and
compliance by the Company with the terms thereof and the consummation
by the Company and its Subsidiaries of the transactions contemplated
by the Basic Documents do not and will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject, except for any such
conflict, breach, violation, default, lien, charge or encumbrance that
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company
or any of its Subsidiaries; or any statute or any order, rule or
regulation (including, without limitation, the Communications Act of
1934, as amended (the "Communications Act"), and the rules and
regulations of the FCC thereunder) of any court or arbitrator or
governmental agency or body (including, without limitation, the FCC)
having jurisdiction over the Company or any of its Subsidiaries or any
of their properties or assets, except for any such conflict, breach,
violation, default, lien, charge or encumbrance that could not, singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect; and no consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental
agency or body (including, without limitation, the FCC, the Federal
Trade Commission (the "FTC") and the Department of Justice (the
"DOJ")) is required for the execution, delivery and performance by the
Company of each of the Basic Documents, the issuance, sale and
delivery of the Preferred Stock, Series B and compliance by the
Company with the terms thereof and the consummation of the
transactions contemplated by the Basic Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) that have been obtained or made prior to the
Initial Closing Date, and (ii) that from time to time, the Company or
its Subsidiaries may be required to obtain from or make with the FCC
in the ordinary course of business.
(h) The network affiliation agreements between each of the
broadcast television stations of the Company and all necessary network
affiliates, including FOX Entertainment Group, Inc., CBS Inc., ABC
Inc. and National Broadcasting Company, Inc., as applicable, have been
duly authorized, executed and delivered by the Company and constitute
valid and legally binding agreements of the respective parties
thereto.
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(i) Xxxxxx Xxxxxxxx LLP are independent public
accountants with respect to the Company and its Subsidiaries within
the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants and its
interpretations and rulings thereunder and (ii) the audited financial
statements (including the related notes) for the year ended December
31, 1997 and the unaudited financial statements for the year ended
December 31, 1998 previously delivered to the Purchasers have been
prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present in all material respects the financial condition and the
results of operations and cash flows of the entities purported to be
covered thereby for the respective periods indicated except as
otherwise disclosed therein.
(j) There are no legal or governmental proceedings
(including, without limitation, before or by the FCC, the FTC or the
DOJ) pending to which the Company or any of its Subsidiaries is a
party or of which any property or assets of the Company or any of its
Subsidiaries or affiliates is the subject which, singularly or in the
aggregate, if determined adversely to the Company or any of its
Subsidiaries or affiliates, could reasonably be expected to have a
Material Adverse Effect; and to the best knowledge of the Company, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(k) No injunction, restraining order or order of any
nature by any federal or state court of competent jurisdiction has
been issued with respect to the Company or any of its Subsidiaries
which would prevent or suspend the issuance or sale of the Preferred
Stock, Series B; no action, suit or proceeding is pending against or,
to the best knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries before any court or arbitrator
or any governmental agency, body or official, domestic or foreign,
which could reasonably be expected to interfere with or adversely
affect the issuance of the Preferred Stock, Series B or in any manner
draw into question the validity or enforceability of any of the Basic
Documents or any action taken or to be taken pursuant thereto.
(l) Neither the Company nor any of its Subsidiaries is
(i) in violation of its charter or by-laws, (ii) in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject
or (iii) in violation in any material respect of any applicable law,
ordinance, court decree, governmental rule or regulation (including,
without limitation, the Communications Act and the rules and
regulations of the FCC thereunder) to which it or its property or
assets may be subject.
(m) The Company and each of its Subsidiaries possess all
material licenses, orders, certificates, authorizations, approvals and
permits issued by, and have made all declarations and filings with,
the appropriate federal, state or foreign regulatory agencies or
bodies (including, without limitation, the FCC, the FTC and the DOJ)
that are necessary or desirable for the ownership of their respective
properties or the conduct of their respective businesses, except where
the failure to possess or make the same would not, singularly or in
the aggregate, have a Material Adverse Effect, and neither the Company
nor any of its Subsidiaries has received notification of any
revocation or modification of any such license, certificate,
authorization or permit that is generally renewable in the ordinary
course or has any reason to believe that any such license,
certificate, authorization or permit will not be renewed in the
ordinary course. The licenses issued with respect to the Company's
television broadcast stations by the FCC (the "Licenses") are validly
issued
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and in full force and effect with no restrictions or qualifications
(other than standard restrictions or qualifications usually on similar
licenses) that would, singly or in the aggregate, have a Material
Adverse Effect. No event has occurred that permits, or with notice or
lapse of time or both would permit, and no legal governmental
proceeding has been instituted or threatened that could cause, the
revocation or termination of any of the Licenses or that might result
in any other impairment or modification of the rights of the Company
or any Subsidiary thereof that in any such case would, singly or in
the aggregate, have a Material Adverse Effect. The Company has no
reason to believe that any License issued by the FCC will not be
renewed in the ordinary course.
(n) Neither the Company nor any of its Subsidiaries is
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and the rules
and regulations thereunder.
(o) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(p) The Company and each of its Subsidiaries have
insurance covering their respective properties, operations, personnel
and businesses, which insurance is in amounts and insures against such
losses and risks as are in the Company's opinion adequate to protect
the Company and its Subsidiaries and their respective businesses.
Neither the Company nor any of its Subsidiaries has received notice
from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to
continue such insurance.
(q) The Company and each of its Subsidiaries own or
possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses does not conflict in
any material respect with, and the Company and its Subsidiaries have
not received any notice of any claim of conflict with, any such rights
of others.
(r) The Company and each of its Subsidiaries have good
and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property which are
material to the business of the Company and its Subsidiaries, taken as
a whole, in each case free and clear of all liens, encumbrances and
defects other than (i) liens and encumbrances granted pursuant to the
Credit Agreement and (ii) liens, encumbrances and defects that do not
materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries or could not reasonably
be expected to have a Material Adverse Effect.
(s) No labor disturbance by or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the
best knowledge of the Company, is imminent, which could reasonably be
expected to have a Material Adverse Effect.
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(t) There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission or
other release or threatened release of any kind of toxic or other
wastes or other hazardous substances by, due to or caused by the
Company or any of its Subsidiaries (or, to the best knowledge of the
Company, any other entity (including any predecessor) for whose acts
or omissions the Company or any of its Subsidiaries is or could
reasonably be expected to be liable) upon any property now or
previously owned or leased by the Company or any of its Subsidiaries,
or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or
which would, under any statute or any ordinance, rule (including rule
of common law), regulation, order, judgment, decree or permit, give
rise to any liability except for any violation or liability which
would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; and there has
been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property
of any toxic or other wastes or other hazardous substances with
respect to which the Company has knowledge, except for any such
disposal, discharge, emission or other release of any kind which would
not have, singularly or in the aggregate with all such disposal,
discharge, emission and other release, a Material Adverse Effect.
(u) On the Initial Closing Date and the Subsequent
Closing Date, the Company and its Subsidiaries, taken as a whole
(after giving effect to the issuance of the Preferred Stock, Series
B), will be Solvent. As used in this paragraph, the term "Solvent"
means, with respect to a particular date, that on such date (i) the
aggregate fair value (or present fair saleable value) of the assets of
the Company and its Subsidiaries, taken as a whole, is not less than
their total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured in the normal course
of business and (ii) the Company and its Subsidiaries, taken as a
whole, do not have an unreasonably small amount of capital with which
to conduct their businesses. In computing the amount of such
contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(v) Except as described in Schedule 4.01(v) hereto,
there are no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or
issuance of, any shares of capital stock of or other equity or other
ownership interest in the Company.
(w) None of the proceeds of the sale of the Preferred
Stock, Series B will be used, directly or indirectly, for the purpose
of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which
might cause any of the Preferred Stock, Series B to be considered a
"purpose credit" within the meanings of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
(x) Neither the Company nor any Affiliate (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D"))
has directly, or through any agent (provided that no representation is
made as to the Purchasers or any Person acting on their behalf) (i)
sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Securities
Act) which is or will be integrated with the sale of the Preferred
Stock, Series B in a manner that would require the registration under
the Securities Act of the Preferred Stock, Series B or (ii) engaged in
any form of general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offering of the
Preferred Stock, Series B.
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(y) When the Preferred Stock, Series B is delivered
pursuant to this Agreement, none of the Preferred Stock, Series B will
be of the same class (within the meaning of Rule 144A under the
Securities Act) as securities of the Company or any Subsidiary of the
Company that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(z) None of the Company, any of its Subsidiaries, any of
their respective Affiliates (as defined in Rule 501(b) of Regulation
D) or any person acting on any of their behalf (other than the
Purchasers) has engaged in any directed selling efforts (as that term
is defined in Regulation S under the Securities Act ("Regulation S"))
with respect to the Preferred Stock, Series B; the Company and its
Affiliates and any person acting on any of its behalf (other than the
Purchasers) have complied with the offering restrictions requirement
of Regulation S.
(aa) Since December 31, 1998, (i) there has been no
material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs, management or business prospects of
the Company, whether or not arising in the ordinary course of
business, (ii) neither the Company nor any of its Subsidiaries has
incurred any liability or obligation, direct or contingent, other than
in the ordinary course of business, which would, singly or in the
aggregate, have a Material Adverse Effect, (iii) neither the Company
nor any of its Subsidiaries has entered into any material transaction
other than in the ordinary course of business and (iv) there has not
been any change in the capital stock or long-term debt of the Company,
or any dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock (other than dividends
declared in respect of Preferred Stock, Series A).
Section 4.02. Representations and Warranties of the
Purchasers. Each of the Purchasers represents and warrants to, and covenants
and agrees with, the Company that: (1) the Preferred Stock, Series B to be
acquired by it hereunder is being acquired for its own account and has no
intention of distributing or reselling such Preferred Stock, Series B or any
part thereof in any transaction which would be in violation of the securities
laws of the United States of America or any state; (2) it is an "Accredited
Investor" within the meaning of Regulation D promulgated under the Securities
Act; (3) it acknowledges that the Preferred Stock, Series B has not been or
will not be registered under the Securities Act and that none of the Preferred
Stock, Series B may be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except as set forth below; (4) it shall
not resell or otherwise transfer any of such Preferred Stock, Series B within
two years after the original issuance of the Preferred Stock, Series B except
(A) to the Company or any of its Subsidiaries, (B) inside the United States to
a "qualified institutional buyer" as defined in Rule 144A of the Securities Act
("QIB") in compliance with Rule 144A, (C) inside the United States to an
"Accredited Investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of the
Securities Act) that, prior to such transfer, furnishes (or has furnished on
its behalf by U.S. broker-dealer) to the Company a signed letter containing
certain representations and agreements relating to the restrictions on transfer
of the Preferred Stock, Series B, (D) outside the United States in compliance
with Rule 904 under the Securities Act, (E) pursuant to any other exemption
from registration provided under the Securities Act (if available) including
Rule 144 thereunder or (F) pursuant to an effective registration statement
under the Securities Act; and (5) it will give to each person to whom it
transfers the Preferred Stock, Series B notice of any restrictions on transfer
of such Preferred Stock, Series B and subject, nevertheless, to the disposition
of such Purchaser's property being at all times within its control. If any
Purchaser should in the future decide to dispose of any of the Preferred Stock,
Series B, such Purchaser understands and agrees that it may do so only in
compliance with the Securities Act, as then in effect, and that stop-transfer
instructions to that effect will be in effect with respect to the Preferred
Stock, Series B.
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ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.01. Conditions Precedent to the Initial Closing.
The obligation of the Purchasers to purchase the Preferred Stock, Series B to
be purchased by them hereunder on the Initial Closing Date is subject to the
satisfaction of the following conditions:
(a) The Purchasers shall have received an opinion,
addressed to them in form and substance reasonably satisfactory to the
Arranger and dated the Initial Closing Date, of Weil, Gotshal & Xxxxxx
LLP, counsel to the Company, substantially in the form of Exhibit E
hereto.
(b) The Purchasers shall have received an opinion,
addressed to them in form and substance reasonably satisfactory to the
Arranger and dated the Initial Closing Date, of Xxxxx & Xxxxxxx,
L.L.P., special FCC counsel to the Company, substantially in the form
of Exhibit F hereto.
(c) The representations and warranties made by the
Company herein shall be true and correct in all material respects on
and as of the Initial Closing Date, with the same effect as though the
representations and warranties had been made on and as of the Initial
Closing, the Company shall have complied in all material respects with
all agreements as set forth in or contemplated hereunder and in the
other Basic Documents, required to be performed by it at or prior to
the Initial Closing.
(d) As of the Initial Closing Date, and after giving
effect to the consummation of the transactions contemplated by this
Agreement, the Elcom Acquisition Agreement and the other Basic
Documents, there shall exist no Default or Event of Default.
(e) As to the Purchasers, the purchase of and payment
for the Preferred Stock, Series B by the Purchasers hereunder (i)
shall not be prohibited or enjoined (temporarily or permanently) by
any applicable law or governmental regulation (including, without
limitation, Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System), (ii) shall not subject the Purchasers to any
penalty, or in the Arranger's reasonable judgment, other onerous
condition under or pursuant to any applicable law or governmental
regulation (provided, however, that such regulation, law or onerous
condition was not in effect at the date of this Agreement), and (iii)
shall be permitted by the laws and regulations of the jurisdictions to
which they are subject.
(f) At the Initial Closing, the Purchasers shall have
received a certificate, dated the Initial Closing Date, from the
Company stating that the conditions specified in Sections 5.01(c), (d)
and (e) have been satisfied or duly waived as of the Initial Closing
Date.
(g) Each of the Basic Documents, except for this
Agreement and the Acquisition Agreements, shall be substantially in
the form attached hereto and the Basic Documents shall have been
executed and delivered by all the respective parties thereto and shall
be in full force and effect.
(h) All proceedings taken in connection with the
issuance of the Preferred Stock, Series B and the transactions
contemplated by this Agreement, the other Basic Documents and all
documents and papers relating thereto shall be reasonably satisfactory
to the Purchasers and their counsel. The Purchasers and their counsel
shall have received copies of such papers and documents
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as they may reasonably request in connection therewith, all in form
and substance reasonably satisfactory to them.
(i) All costs and any delay fees due and owing and
expenses (including, without limitation, reasonable legal fees and
expenses) required to be paid to or on behalf of the Purchasers on or
prior to the Initial Closing Date, pursuant to this Agreement and all
fees and expenses payable to the Purchasers' counsel shall have been
paid.
(j) The Certificate of Designation shall have been duly
filed with the Secretary of State of the State of Delaware.
(k) On or before the Initial Closing Date, the
Purchasers and their counsel shall have received such further
documents, opinions, certificates and schedules or other instruments
relating to the business, corporate, legal and financial affairs of
the Company and its Subsidiaries as they may reasonably request.
(l) There shall not have occurred (i) any general
suspension of, or limitation on times or prices for, trading in
securities on the New York Stock Exchange or American Stock Exchange
or in the over-the-counter market in the United States or the
establishment of minimum or maximum prices on any such exchange; (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of the banks in the United States or the State of New York; or
(iii) either (A) an outbreak or escalation of hostilities between the
United States and any foreign power, (B) an outbreak or escalation of
any insurrection or other armed conflict involving the United States
or any other national or international calamity or emergency, or (C)
any material disruption of or material adverse change in financial,
banking or capital market (including, without limitation, high-yield
market) conditions (collectively, a "Market Effect").
(m) There shall not have occurred a material adverse
change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs, management or business prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business (collectively, a "Material Adverse
Change").
(n) The Company shall have amended the Credit Agreement
to permit the issuance of certain Preferred Stock to finance
acquisitions which, when combined with certain debt securities of the
Company, shall not exceed an aggregate amount of $200 million, and the
Arranger shall have received a copy of such amendment duly executed by
all necessary parties thereto, which such amendment shall be in form
and substance satisfactory to the Arranger.
(o) (i) Full, complete and accurate copies of the Elcom
Acquisition Agreement shall have been provided to the Arranger. The
Elcom Acquisition Agreement and any amendments thereto shall be in
form and substance reasonably satisfactory to the Arranger, shall have
been duly authorized, executed and delivered by each of the parties
thereto and shall be in full force and effect. No term or provision of
the Elcom Acquisition Agreement shall have been modified, and no
condition to the consummation of the Elcom Acquisition shall have been
waived, in either case in a manner detrimental to any party hereto, by
any of the parties thereto. The Company and any of its Affiliates
shall have in all material respects done and performed such acts and
observed such covenants which each is required to do or perform under
the Elcom Acquisition Agreement and in order to consummate the Elcom
Acquisition on or prior to the Initial Closing Date.
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(ii) The Company shall have provided evidence
reasonably satisfactory in form and substance to the Arranger that the
Elcom Acquisition has been consummated.
(p) The Company and Holdings shall have entered into the
Engagement Letter in form and substance reasonably satisfactory to the
Arranger.
(q) Pursuant to the Escrow Agreement, $2,500,000 shall
have been placed in an escrow account (or will be placed in an escrow
account simultaneous with the Initial Closing) for the payment of
dividends on the Preferred Stock, Series B and for general corporate
purposes.
(r) The Purchasers shall have completed their financial,
legal, tax, accounting and environmental due diligence investigation
of the Company and Elcom, which such investigation shall be to the
reasonable satisfaction of the Purchasers.
Section 5.02. Conditions Precedent to the Subsequent Closing
of the Purchasers. The obligation of the Purchasers to purchase the Preferred
Stock, Series B to be purchased by them hereunder on the Subsequent Closing
Date is subject to the satisfaction of the following conditions:
(a) The Purchasers shall have received an opinion, in
form and substance reasonably satisfactory to the Arranger and dated
the Subsequent Closing Date, of Xxxxx & Xxxxxxx, L.L.P., special FCC
counsel to the Company.
(b) The representations and warranties made by the
Company herein shall be true and correct in all material respects on
and as of the Subsequent Closing Date, with the same effect as though
the representations and warranties had been made on and as of the
Subsequent Closing Date, the Company shall have complied in all
material respects with all agreements as set forth in or contemplated
hereunder and in the other Basic Documents, required to be performed
by it at or prior to the Subsequent Closing.
(c) As of the Subsequent Closing Date, and after giving
effect to the consummation of the transactions contemplated by this
Agreement, the Elcom Acquisition Agreement, the Xxxxxxxx Acquisition
Agreement and the other Basic Documents, there shall exist no Default
or Event of Default.
(d) As to the Purchasers, the purchase of and payment
for the Preferred Stock, Series B by the Purchasers hereunder (i)
shall not be prohibited or enjoined (temporarily or permanently) by
any applicable law or governmental regulation (including, without
limitation, Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System), (ii) shall not subject the Purchasers to any
penalty or, in the Arranger's reasonable judgment, other onerous
condition under or pursuant to any applicable law or governmental
regulation (provided, however, that such regulation, law or onerous
condition was not in effect at the date of this Agreement), and (iii)
shall be permitted by the laws and regulations of the jurisdictions to
which they are subject.
(e) At the Subsequent Closing, the Purchasers shall have
received a certificate, dated the Subsequent Closing Date, from the
Company stating that the conditions specified in Sections 5.02(b), (c)
and (d) have been satisfied or duly waived as of the Subsequent
Closing Date.
(f) On or before the Subsequent Closing Date, the
Purchasers and their counsel shall have received such further
documents, opinions, certificates and schedules or other instruments
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relating to the business, corporate, legal and financial affairs of
the Company and its Subsidiaries as they may reasonably request.
(g) There shall not have occurred and be continuing any
Market Effect.
(h) There shall not have occurred any Material Adverse
Change.
(i) The Company shall have received $75.0 million in
additional loans under the Credit Agreement on terms and conditions
reasonably satisfactory to the Arranger.
(j) (i) Full, complete and accurate copies of the
Xxxxxxxx Acquisition Agreement shall have been provided to the
Arranger. The Xxxxxxxx Acquisition Agreement and any amendments
thereto shall be in form and substance reasonably satisfactory to the
Arranger, and the Xxxxxxxx Acquisition Agreement shall have been duly
authorized, executed and delivered by each of the parties thereto and
shall be in full force and effect. No term or provision of the
Xxxxxxxx Acquisition Agreement shall have been modified, and no
condition to the consummation of the Xxxxxxxx Acquisition shall have
been waived, in either case in a manner detrimental to any party
hereto, by any of the parties thereto. The Company and any of its
Affiliates shall have in all material respects done and performed such
acts and observed such covenants which each is required to do or
perform under the Xxxxxxxx Acquisition Agreement and in order to
consummate the Xxxxxxxx Acquisition on or prior to the Subsequent
Closing Date.
(ii) The Company shall have provided evidence
reasonably satisfactory in form and substance to the Arranger that the
Xxxxxxxx Acquisition has been consummated or shall be consummated
contemporaneously with the Subsequent Closing.
(k) Pursuant to the Escrow Agreement, $2,500,000 shall
have been placed in an escrow account (or will be placed in an escrow
account simultaneous with the Subsequent Closing) for the payment of
dividends on the Preferred Stock, Series B and for general corporate
purposes.
(l) The Purchasers shall have completed their financial,
legal, tax, accounting and environmental due diligence investigation
of Xxxxxxxx, which such investigation shall be to the reasonable
satisfaction of the Purchasers.
Section 5.03. Conditions Precedent to Obligations of the
Company. The obligations of the Company to issue and sell the Preferred Stock,
Series B pursuant to this Agreement are subject, at the Initial Closing and at
the Subsequent Closing, as the case may be, to the satisfaction of the
following conditions:
(a) The representations and warranties made by the
Purchasers herein shall be true and correct in all material respects
at and as of the Initial Closing Date and at the Subsequent Closing
Date, as the case may be, with the same effect as though such
representations and warranties had been made on and as of the Initial
Closing Date or the Subsequent Closing Date, as the case may be.
(b) The issuance or sale of the Preferred Stock, Series
B by the Company shall not be enjoined under the laws of any
jurisdiction to which the Company is subject (temporarily or
permanently) at the Initial Closing and at the Subsequent Closing, as
the case may be.
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ARTICLE VI
COVENANTS
STC covenants and agrees with the Purchasers that:
Section 6.01. Notices of Material Events. The Company
will furnish to the Purchasers prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Company that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect; and
(c) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Section 6.02. Compliance with Laws. The Company will comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section 6.03. Use of Proceeds. The proceeds of the sale of
the Preferred Stock, Series B will be used only for the purposes contemplated
in Section 2.01. No part of the proceeds of the sale of the Preferred Stock,
Series B will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board of Governors of the
Federal Reserve System of the United States, including Regulations G, T, U
and X.
Section 6.04. Limitation on Restricted Payments. (a) Neither
the Company nor any of its Subsidiaries will, directly or indirectly, make any
Restricted Payment if at the time of such Restricted Payment and immediately
after giving effect thereto:
(i) a Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such Restricted
Payment; or
(ii) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
6.11 hereof; or
(iii) the aggregate amount of Restricted Payments made
subsequent to the Senior Subordinated Notes Issue Date (the amount expended for
such purposes, if other than in cash, being the fair market value of such
property as determined by the Board of Directors of the Company in good faith)
exceeds the sum of
(A) (x) 100% of the aggregate Consolidated Cash
Flow of the Company (or, in the event such Consolidated Cash
Flow shall be a deficit, minus 100% of such deficit) accrued
subsequent to the Senior Subordinated Notes Issue Date to the
most recent date for which financial information is available
to the Company, taken as one accounting period, less (y) 1.4
times Consolidated Interest Expense for the same period, plus
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(B) 100% of the aggregate net proceeds,
including the fair market value of property other than cash
as determined by the Board of Directors of the Company in
good faith, received subsequent to the Senior Subordinated
Notes Issue Date by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale
subsequent to the Senior Subordinated Notes Issue Date of
Qualified Capital Stock of the Company (excluding (i) any net
proceeds from issuances and sales financed directly or
indirectly using funds borrowed from the Company or any
Subsidiary of the Company, until and to the extent such
borrowing is repaid, but including the proceeds from the
issuance and sale of any securities convertible into or
exchangeable for Qualified Capital Stock to the extent such
securities are so converted or exchanged and including any
additional proceeds received by the Company upon such
conversion or exchange and (ii) any net proceeds received
from issuances and sales that are used to consummate a
transaction described in clauses (2) and (3) of paragraph (b)
below), plus
(C) without duplication of any amount included
in clause (iii)(B) above, 100% of the aggregate net proceeds,
including the fair market value of property other than cash
(valued as provided in clause (iii)(B) above), received by
the Company as a capital contribution subsequent to the
Senior Subordinated Notes Issue Date, plus
(D) the amount equal to the net reduction in
Investments (other than Permitted Investments) made by the
Company or any of its Subsidiaries in any Person resulting
from (i) repurchases or redemptions of such Investments by
such Person, proceeds realized upon the sale of such
Investments to an unaffiliated purchaser and repayments of
loans or advances or other transfers of assets by such Person
to the Company or any Subsidiary of the Company or (ii) the
redesignation of Unrestricted Subsidiaries as Subsidiaries
(valued in each case as provided in the definition of
"Investment") not to exceed, in the case of any Subsidiary,
the amount of Investments previously made by the Company or
any Subsidiary in such Unrestricted Subsidiary, which amount
was included in the calculation of Restricted Payments;
provided, however, that no amount shall be included under
this clause (D) to the extent it is already included in
Consolidated Cash Flow, plus
(E) the aggregate net cash proceeds received by
a Person in consideration for the issuance of such Person's
Capital Stock (other than Disqualified Capital Stock) that
are held by such Person at the time such Person is merged
with and into the Company in accordance with Section 6.16
hereof subsequent to the Senior Subordinated Notes Issue
Date; provided, however, that concurrently with or
immediately following such merger the Company uses an amount
equal to such net cash proceeds to redeem or repurchase the
Company's Capital Stock, plus
(F) $2,500,000.
(b) Notwithstanding the foregoing, these provisions will
not prohibit:
(1) the payment of any dividend or the making of any
distribution within 60 days after the date of its declaration if such
dividend or distribution would have been permitted on the date of
declaration;
(2) the purchase, redemption or other acquisition or
retirement of any Capital Stock of the Company or any warrants,
options or other rights to acquire shares of any class of such Capital
Stock either (x) solely in exchange for shares of Qualified Capital
Stock or other rights to acquire
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Qualified Capital Stock or (y) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock or
warrants, options or other rights to acquire Qualified Capital Stock
or (z) in the case of Disqualified Capital Stock, solely in exchange
for, or through the application of the net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company)
of, Disqualified Capital Stock that has a redemption date no earlier
than, and requires the payment of current dividends or distributions
in cash no earlier than, in each case, the Disqualified Capital Stock
being purchased, redeemed or otherwise acquired or retired;
(3) the acquisition of Indebtedness of the Company that
is subordinate or junior in right of payment to the Senior
Subordinated Notes either (x) solely in exchange for shares of
Qualified Capital Stock (or warrants, options or other rights to
acquire Qualified Capital Stock), for shares of Disqualified Capital
Stock that have a redemption date no earlier than, and require the
payment of current dividends or distributions in cash no earlier than,
in each case, the maturity date and interest payments dates,
respectively, of the Indebtedness being acquired, or for Indebtedness
of the Company that is subordinate or junior in right of payment to
the Senior Subordinated Notes at least to the extent that the
Indebtedness being acquired is subordinated to the Senior Subordinated
Notes and has a Weighted Average Life to Maturity no less than that of
the Indebtedness being acquired or (y) through the application of the
net proceeds of a substantially concurrent sale for cash (other than
to a Subsidiary of the Company) of shares of Qualified Capital Stock
(or warrants, options or other rights to acquire Qualified Capital
Stock), shares of Disqualified Capital Stock that have a redemption
date no earlier than, and require the payment of current dividends or
distributions in cash no earlier than, in each case, the maturity date
and interest payments dates, respectively, of the Indebtedness being
refinanced, or Indebtedness of the Company that is subordinate or
junior in right of payment to the Senior Subordinated Notes at least
to the extent that the Indebtedness being acquired is subordinated to
the Senior Subordinated Notes and has a Weighted Average Life to
Maturity no less than that of the Indebtedness being refinanced;
(4) payments by the Company to repurchase, or to enable
Holdings to repurchase, Capital Stock or other securities from
employees of the Company or Holdings in an aggregate amount not to
exceed $2,000,000;
(5) payments to enable Holdings to redeem or repurchase
stock purchase or similar rights granted by Holdings with respect to
its Capital Stock in an aggregate amount not to exceed $500,000;
(6) payments, not to exceed $100,000 in the aggregate,
to enable Holdings to make cash payments to holders of its Capital
Stock in lieu of the issuance of fractional shares of its Capital
Stock;
(7) payments made pursuant to any merger, consolidation
or sale of assets effected in accordance with Section 6.16 hereof;
provided, however, that no such payment may be made pursuant to this
clause (7) unless, after giving effect to such transaction (and the
incurrence of any Indebtedness in connection therewith and the use of
the proceeds thereof), the Company would be able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 6.11 such that after incurring that $1.00 of
additional Indebtedness, the Leverage Ratio would be less than 6.0 to
1;
(8) payments to enable Holdings or the Company to pay
dividends on its Capital Stock (other than Disqualified Capital Stock)
after the first Public Equity Offering in an annual
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amount not to exceed 6.0% of the gross proceeds (before deducting
underwriting discounts and commissions and other fees and expenses of
the offering) received from shares of Capital Stock (other than
Disqualified Capital Stock) sold for the account of the issuer thereof
(and not for the account of any stockholder) in such initial Public
Equity Offering;
(9) payments by the Company to fund the payment by any
direct or indirect holding company thereof of audit, accounting, legal
or other similar expenses, to pay franchise or other similar taxes and
to pay other corporate overhead expenses, so long as such dividends
are paid as and when needed by its respective direct or indirect
holding company and so long as the aggregate amount of payments
pursuant to this clause (9) does not exceed $500,000 in any calendar
year;
(10) payments by the Company to fund taxes of Holdings
for a given taxable year in an amount equal to the lesser of (x) the
Company's "separate return liability" and (y) the portion of the tax
liability of the "affiliated group" (within the meaning of Section
1504(a)(I) of the Code (as defined)) of which the Company is a member
in accordance with the method described in Treasury Regulations
Section 1.1552-1(a)(I); pursuant to (x) or (y) of this clause (10) to
the extent that the Company files a combined or consolidated income
tax return with Holdings under any state or local income tax law for a
taxable year, the payment by the Company to Holdings to fund such tax
liability for such taxable year shall be provided for in a manner as
similar as possible to that provided for United States federal income
taxes (for purposes of this clause (10) "separate return liability"
for a given taxable year shall mean the hypothetical United States tax
liability of the Company defined as if the Company had filed its own
U.S. federal tax return for such taxable year);
(11) on and after May 31, 2002, the payment of cash
dividends in respect of the Company's 14% Redeemable Preferred Stock,
par value $.01; and
(12) cash dividends in respect of the Preferred Stock,
Series B;
provided, however, that in the case of clauses (3), (4), (5), (6), (7), (8),
(11) and (12), no Event of Default shall have occurred and be continuing at the
time of such payment or as a result thereof. In determining the aggregate
amount of Restricted Payments made subsequent to the Senior Subordinated Notes
Issue Date, amounts expended pursuant to clauses (1), (4), (5), (6), (7), (8)
and (11) shall be included in such calculation.
Section 6.05. Corporate Existence. The Company shall do or
cause to be done all things reasonably necessary to preserve and keep in full
force and effect its corporate or other existence and the corporate or other
existence of each of its Significant Subsidiaries in accordance with the
respective organizational documents of each such Significant Subsidiary and the
material rights (charter and statutory) and franchises of the Company and each
such Significant Subsidiary; provided, however, that the Company shall not be
required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Significant Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company or such
Significant Subsidiary, as the case may be, shall determine that the
preservation thereof is no longer reasonably necessary or desirable in the
conduct of the business of the Company or any such Significant Subsidiary.
Section 6.06. Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon it or any of its Subsidiaries or properties of it
or any of its Subsidiaries and (ii) all material lawful claims for labor,
materials, supplies and services that, if unpaid, might by law become
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a Lien upon the property of it or any of its Subsidiaries; provided, however,
that there shall not be required to be paid or discharged any such tax,
assessment or charge, the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made or where the failure to effect such payment or
discharge is not adverse in any material respect to the holders of Preferred
Stock, Series B.
Section 6.07. Maintenance of Properties and Insurance. (a)
The Company shall, and shall cause each of its Subsidiaries to, maintain its
material properties in normal condition (subject to ordinary wear and tear) and
make all reasonably necessary repairs, renewals or replacements thereto as in
the judgment of the Company may be reasonably necessary to the conduct of the
business of the Company and its Subsidiaries; provided, however, that nothing
in this Section 6.07 shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties, if such
properties are, in the reasonable and good faith judgment of the Board of
Directors of the Company or the Subsidiary, as the case may be, no longer
reasonably necessary in the conduct of their respective businesses.
(b) The Company shall provide or cause to be provided,
for itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company, are reasonably adequate and appropriate for
the conduct of the business of the Company and such Subsidiaries.
Section 6.08. Compliance with Laws. The Company shall comply,
and shall cause each of its Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries taken as a whole.
Section 6.09. Reports. So long as any of the Preferred Stock,
Series B is outstanding, the Company will provide to the holders of Preferred
Stock, Series B, copies of the annual reports and of the information, documents
and other reports that the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act regardless of
whether the Company is then obligated to file such reports.
Section 6.10. Limitations on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries will, directly or indirectly,
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with or for the benefit of any of its Affiliates (other than
transactions between the Company and a Wholly Owned Subsidiary of the Company
or among Wholly Owned Subsidiaries of the Company) (an "Affiliate
Transaction"), other than Affiliate Transactions on terms that are no less
favorable than those that might reasonably have been obtained in a comparable
transaction on an arm's-length basis from a person that is not an Affiliate;
provided, however, that for a transaction or series of related transactions
involving value of $1,000,000 or more, such determination will be made in good
faith by a majority of members of the Board of Directors of the Company and by
a majority of the disinterested members of the Board of Directors of the
Company, if any; provided, further, that for a transaction or series of related
transactions involving value of $5,000,000 or more, the Board of Directors of
the Company has received an opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Subsidiary. The foregoing restrictions will not
apply to (1) reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder, (2) any obligations of the
Company under the Financial Monitoring and Oversight Agreements or any
employment
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agreement, noncompetition or confidentiality agreement with any officer of the
Company (provided that each amendment of any of the foregoing agreements shall
be subject to the limitations of this covenant), (3) reasonable and customary
investment banking, financial advisory, commercial banking and similar fees and
expenses paid to any of the Purchasers and their Affiliates, (4) any Restricted
Payment permitted to be made pursuant to the covenant described under Section
6.04, (5) any issuance of securities or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the board of
directors of the Company, (6) loans or advances to employees in the ordinary
course of business of the Company or any of its Subsidiaries consistent with
past practices, (7) fees to Xxxxx Muse, as described in the Note Offering
Memorandum of the Company dated March 19, 1997 relating to the Senior
Subordinated Notes and (8) the issuance of Capital Stock of the Company (other
than Disqualified Stock).
Section 6.11. Limitation on Incurrence of Additional
Indebtedness and Issuance of Disqualified Capital Stock. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur"), any
Indebtedness (other than Permitted Indebtedness) and the Company will not issue
any Disqualified Capital Stock, and its Subsidiaries will not issue any
Preferred Stock; provided, however, that the Company and its Subsidiaries may
incur Indebtedness or issue shares of such Capital Stock if, in either case,
the Company's Leverage Ratio at the time of incurrence of such Indebtedness or
the issuance of such Capital Stock, as the case may be, after giving pro forma
effect to such incurrence or issuance as of such date and to the use of
proceeds therefrom is less than 7.0 to 1.
Section 6.12. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries. Neither the Company nor any of its
Subsidiaries will, directly or indirectly, create or otherwise cause to permit
to exist or become effective, by operation of the charter of such Subsidiary or
by reason of any agreement, instrument, judgment, decree, rule, order, statute
or governmental regulation, any encumbrance or restriction on the ability of
any Subsidiary to (a) pay dividends or make any other distributions on its
Capital Stock; (b) make loans or advances or pay any Indebtedness or other
obligation owed to the Company or any of its Subsidiaries; or (c) transfer any
of its property or assets to the Company, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) the
Indenture; (3) customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Subsidiary; (4) any instrument
governing Acquired Indebtedness, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; (5)
agreements existing on the Senior Subordinated Notes Issue Date (including the
Credit Agreement) as such agreements are from time to time in effect; provided,
however, that any amendments or modifications of such agreements that affect
the encumbrances or restrictions of the types subject to this covenant shall
not result in such encumbrances or restrictions being less favorable to the
Company in any material respect, as determined in good faith by the Board of
Directors of the Company, than the provisions as in effect before giving effect
to the respective amendment or modification; (6) any restriction with respect
to such a Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets of such
Subsidiary pending the closing of such sale or disposition; (7) an agreement
effecting a refinancing, replacement or substitution of Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clause (2), (4) or
(5) above or any other agreement evidencing Indebtedness permitted under the
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are no less favorable to the Company in
any material respect as determined in good faith by the Board of Directors of
the Company than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4) or (5); (8)
restrictions on the transfer of the assets subject to any Lien imposed by the
holder of such Lien; or (9) a
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licensing agreement to the extent such restrictions or encumbrances limit the
transfer of property subject to such licensing agreement.
Section 6.13. Limitation on Asset Sales. Neither the Company
nor any of its Subsidiaries will consummate an Asset Sale unless (i) the
Company or the applicable Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by management of the Company or, if such Asset Sale involves consideration in
excess of $2,500,000, by the Board of Directors of the Company, as evidenced by
a Board Resolution), (ii) at least 75% of the consideration received by the
Company or such Subsidiary, as the case may be, from such Asset Sale is in the
form of cash or Cash Equivalents (other than to the extent that the Company is
exchanging all or substantially all the assets of one or more broadcast
businesses operated by the Company (including by way of the transfer of capital
stock) for all or substantially all the assets (including by way of the
transfer of capital stock) constituting one or more broadcast businesses
operated by another Person, in which event, to such extent, the foregoing
requirement with respect to the receipt of cash or Cash Equivalents shall not
apply) and is received at the time of such disposition and (iii) upon the
consummation of an Asset Sale, the Company applies, or causes such Subsidiary
to apply, such Net Cash Proceeds within 180 days of receipt thereof either (A)
to repay any Indebtedness of the Company or any Indebtedness of a Subsidiary of
the Company (and, to the extent such Indebtedness relates to principal under a
revolving credit or similar facility, to obtain a corresponding reduction in
the commitments thereunder), (B) to reinvest, or to be contractually committed
to reinvest pursuant to a binding agreement, in Productive Assets and, in the
latter case, to have so reinvested within 360 days of the date of receipt of
such Net Cash Proceeds, or (C) to redeem the Preferred Stock, Series A and
Preferred Stock, Series B, on a pro rata basis.
Section 6.14. Limitation on Asset Swaps. The Company will
not, and will not permit any Subsidiary to, engage in any Asset Swaps, unless:
(i) at the time of entering into such Asset Swap, and immediately after giving
effect to such Asset Swap, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; (ii) in the event
such Asset Swap involves an aggregate amount in excess of $1,000,000, the terms
of such Asset Swap have been approved by a majority of the members of the Board
of Directors of the Company; and (iii) in the event such Asset Swap involves an
aggregate amount in excess of $5,000,000, the Company has received a written
opinion from an independent investment banking firm of nationally recognized
standing that such Asset Swap is fair to the Company or such Subsidiary, as the
case may be, from a financial point of view.
Section 6.15. FCC Compliance. Notwithstanding anything in
this Agreement to the contrary, the Company shall not be required to take any
action hereunder that (i) constitutes or would represent a transfer of control
to the Company of SAC or any Subsidiary of SAC without first obtaining the
consent of the FCC to such transfer of control or (ii) constitutes a violation
of the Communications Act or the rules or regulations promulgated thereunder.
Section 6.16. Merger, Consolidation and Sale of Assets. (a)
The Company may not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or adopt a plan of liquidation unless:
(1) either (A) the Company is the surviving or
continuing Person or (B) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged or the
Person that acquires by conveyance, transfer or lease the properties
and assets of the Company substantially as an entirety or in the case
of a plan of liquidation, the Person to which assets of the
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Company have been transferred shall be a corporation, partnership or
trust organized and existing under the laws of the United States or
any State thereof or the District of Columbia;
(2) such surviving Person shall assume all of the
obligations of the Company under this Agreement pursuant to an
assignment and acceptance in a form reasonably satisfactory to the
Arranger;
(3) immediately after giving effect to such transaction
and the use of the proceeds therefrom (on a pro forma basis, including
giving effect to any Indebtedness incurred or anticipated to be
incurred in connection with such transaction), the Company (in the
case of clause (A) of the foregoing clause (1)) or such Person (in the
case of clause (B) of the foregoing clause (1)) shall be able to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
in compliance with Section 6.12; and
(4) immediately after giving effect to such transactions,
no Default or Event of Default shall have occurred and be continuing.
(b) For purposes of this Section 6.16, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of the properties and assets
of one or more Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties or assets of the Company, will be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
(c) Notwithstanding the foregoing clauses (a)(2) and (3),
subject to applicable FCC requirements, if any, (i) any Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (ii) the Company may merge with a
corporate Affiliate thereof incorporated solely for the purpose of
reincorporating the Company in another jurisdiction in the U.S. to realize tax
or other benefits.
Section 6.17. Successor Corporation Substituted. Upon any
consolidation or merger, or any transfer of assets in accordance with Section
6.16, the successor Person formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Agreement with the same effect as if such successor Person had been named
as the Company herein. When a successor corporation assumes all of the
obligations of the Company hereunder and agrees to be bound hereby, the
predecessor shall be released from such obligations.
Section 6.18. Interest Rate Agreements. The Company shall, no
later than 60 days after the Initial Closing Date and in respect of not less
than 100% of the Preferred Stock, Series B outstanding at any time, enter into
Interest Rate Agreements reasonably acceptable to the Arranger for such period
as any Preferred Stock, Series B is outstanding.
Section 6.19. Preferred Stock, Series B. The Company shall
declare and pay cash dividends on the Preferred Stock, Series B each month as
provided under the terms of the Preferred Stock, Series B during the six-month
period after the Initial Closing Date.
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ARTICLE VII
EVENTS OF DEFAULTS
Section 7.01. Actions after Default. If any Event of Default
occurs and is continuing (whether it is voluntary or involuntary, or results
from operation of law or otherwise), the Purchasers may exercise any of their
rights by operation of law or otherwise including their rights under the Put
and Call Agreement and/or the Certificate of Designation of the Preferred
Stock, Series B.
Section 7.02. Events of Default. It is an Event of Default
if:
(a) an Event of Default shall have occurred and be continuing
under the Indenture; or
(b) an Event of Default shall have occurred and be continuing
under the Credit Agreement; or
(c) a Market Effect shall have occurred and be continuing; or
(d) any representation or warranty made or deemed made by or
on behalf of STC in this Agreement, any report, certificate, financial
statement or other document furnished pursuant to or in connection
with this Agreement shall prove to have been incorrect in any material
respect when made or deemed made; or
(e) a Material Adverse Change shall have occurred and be
continuing; or
(f) STC shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement and such breach
continues for 30 days after notice thereof from the Arranger to STC;
or
(g) the Put and Call Agreement or any provision thereof shall
cease to be in full force or effect as to any party thereto, if any
party thereto shall deny or disaffirm their obligations under the Put
and Call Agreement, or any party thereto (other than the Arranger)
shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant
to the Put and Call Agreement or any representation or warranty made
or deemed made in the Put and Call Agreement by any party thereto
(other than the Arranger), any report, certificate, financial
statement or other document furnished pursuant to or in connection
with the Put and Call Agreement, shall prove to have been incorrect in
any material respect when made or deemed made; or
(h) a Change of Control shall have occurred; or
(i) cash dividends shall not have been paid on the Preferred
Stock, Series B for any month during the six months after the Initial
Closing Date and such dividends have not been paid within 5 business
days of the date on which such dividends were scheduled to be paid.
Section 7.03. Notice of Events. If any Event of Default
happens, STC shall promptly notify the Arranger by facsimile specifying the
nature of such Event of Default and any steps STC is taking to remedy it.
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ARTICLE VIII
INDEMNITY
Section 8.01. Indemnity.
(a) Indemnification by the Company. The Company agrees and
covenants to hold harmless and indemnify the Purchasers and each Person, if
any, who controls any of the Purchasers within the meaning of Section 20 of the
Exchange Act from and against any losses, claims, damages, liabilities and
expenses (including expenses of investigation) to which the Purchasers or such
controlling Person may become subject (i) arising out of or based upon any
untrue statement or alleged untrue statement of any material fact contained in
this Agreement or (ii) arising out of, based upon or in any way related or
attributed to claims, actions or proceedings relating to this Agreement or the
subject matter of this Agreement or (iii) arising in any manner out of or in
connection with such Person being a Purchaser of the Preferred Stock, Series B
and relating to any action taken or omitted to be taken by the Company;
provided, however, that the Company shall not be liable under this paragraph
(a) for any amounts paid in settlement of claims without their written consent,
which consent shall not be unreasonably withheld, or to the extent that it is
finally judicially determined that such losses, claims, damages or liabilities
arose primarily out of the gross negligence, willful misconduct or bad faith of
the Purchasers. The Company further agrees to reimburse the Purchasers for any
reasonable legal and other expenses as they are incurred by it in connection
with investigating, preparing to defend or defending any lawsuits, claims or
other proceedings or investigations arising in any manner out of or in
connection with such Person being a Purchaser; provided that if the Company
reimburses the Purchasers hereunder for any expenses incurred in connection
with a lawsuit, claim or other proceeding for which indemnification is sought,
the Purchasers hereby agree to refund such reimbursement of expenses to the
extent it is finally judicially determined that the losses, claims, damages or
liabilities arising out of or in connection with such lawsuit, claim or other
proceedings arose primarily out of the gross negligence, willful misconduct or
bad faith of the Purchasers or from a violation by the Purchasers of legal
requirements applicable to the Purchasers solely because of their character as
a particular type of regulated institution. The Company further agrees that the
indemnification, contribution and reimbursement commitments set forth in this
Article VIII shall apply whether or not the Purchasers are a formal party to
any such lawsuits, claims or other proceedings. Notwithstanding the foregoing,
the Company shall not be liable to a party seeking indemnification under the
foregoing provisions of this paragraph (a) to the extent that any such losses,
claims, damages, liabilities or expenses arise out of or are based upon an
untrue statement or omission made in any of the documents referred to in this
paragraph (a) in reliance upon and in conformity with the information relating
to the party seeking indemnification furnished in writing by such party for
inclusion therein. The indemnity, contribution and expense reimbursement
obligations of the Company under this Article VIII shall be in addition to any
liability the Company may otherwise have.
(b) Procedure. If any Person shall be entitled to indemnity
hereunder (the "Indemnified Parties"), such Indemnified Party shall give prompt
notice confirmed in writing to the party or parties from which such indemnity
is sought (the "Indemnifying Parties") of the commencement of any proceeding (a
"Proceeding") with respect to which such Indemnified Party seeks
indemnification or contribution pursuant hereto; provided, however, that the
failure so to notify the Indemnifying Parties shall not relieve the
Indemnifying Parties from any obligation or liability except to the extent that
the Indemnifying Parties have been prejudiced materially by such failure. The
Indemnifying Parties shall have the right, exercisable by giving written notice
to an Indemnified Party promptly after the receipt of written notice from such
Indemnified Party of such Proceeding, to assume, at the Indemnifying Parties'
expense, the defense of any such Proceeding, with counsel reasonably
satisfactory to such Indemnified Party; provided, however, that an Indemnified
Party or parties (if more than one such Indemnified Party is named in any
Proceeding) shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof,
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but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or parties unless: (1) the Indemnifying Parties agree to pay
such fees and expenses; or (2) the Indemnifying Parties fail promptly to assume
the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party or Parties and the Indemnifying Party or an Affiliate of the
Indemnifying Party and such Indemnified Parties, and the Indemnifying Parties
shall have been advised in writing by counsel that a conflict or potential
conflict exists between such Indemnified Party or Parties and the Indemnifying
Parties, in which case, if such Indemnified Party or Parties notify the
Indemnifying Parties in writing that they elect to employ separate counsel at
the expense of the Indemnifying Parties, the Indemnifying Parties shall not
have the right to assume the defense thereof and such counsel shall be at the
expense of the Indemnifying Parties, it being understood, however, that, unless
there exists a conflict among Indemnified Parties, the Indemnifying Parties
shall not, in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys (together with
appropriate local counsel, if any) at any time for such Indemnified Party or
Parties, or for fees and expenses that are not reasonable. No Indemnified Party
or Parties will settle any Proceedings without the written consent of the
Indemnifying Party or Parties (but such consent will not be unreasonably
withheld).
Section 8.02. Contribution. If for any reason the
indemnification provided for in Section 8.01 of this Agreement is unavailable
to an Indemnified Party, or insufficient to hold it harmless, in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnifying and Indemnified Parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying and Indemnified Parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying or
Indemnified Parties and each such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above shall be deemed to include any
reasonable legal or other fees or expenses incurred by such party in connection
with investigating or defending any such claim.
The Company and the Purchasers agree that it would not be
just and equitable if contribution pursuant to the immediately preceding
paragraph were determined by any method of allocation which does not take into
account the equitable considerations referred to in such paragraph. No Person
guilty of fraudulent misrepresentation shall be entitled to contribution from
any Person.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices. Any notice, request or other
communication to be given or made under this Agreement shall be in writing.
Subject to Section 7.03, the notice, request or other communication may be
delivered by hand or facsimile, to the party's address specified below or at
such other address as such party notifies to the other party from time to time
and will be effective upon receipt.
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For STC:
STC Broadcasting, Inc.
0000-0xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
For the Purchasers:
The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Section 9.02. Expenses. STC agrees promptly to pay (i) all
the actual and reasonable costs and expenses of preparation of the Basic
Documents; (ii) the reasonable fees, expenses and disbursements of Xxxxxx
Xxxxxx & Xxxxxxx in connection with the negotiation, preparation, execution and
administration of the Basic Documents and the sale of the Preferred Stock,
Series B hereunder, and any amendments, modifications and waivers hereto or
thereto and consents to departures from the terms hereof and thereof; and (iii)
after the occurrence and during the continuance of an Event of Default, all
reasonable costs and expenses (including reasonable attorneys fees of one
counsel to all the Purchasers and the Arranger) in enforcing any obligations of
or in collecting any payments due from STC hereunder or under the Preferred
Stock, Series B by reason of such Event of Default.
Section 9.03. Governing Law; Submission to Jurisdiction:
Venue. (a) This Agreement is governed by, and shall be construed in accordance
with, the law of the State of New York.
(b) Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or of the
United States for the Southern District of New York and, by execution and
delivery of this Agreement, STC hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. STC hereby irrevocably designates, appoints and empowers
HMTF, with offices at 1325 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent
shall lease to be available to act as such, STC agrees to designate a new
designee, appointee and
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agent in New York City on the terms and for the purposes of this provision
satisfactory to the Arranger. STC further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to STC at its address set forth in Section 9.01 above, such
service to become effective 10 days after such mailing. Nothing herein shall
affect the right of the Lender to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against STC in any
other jurisdiction.
(c) STC hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
Section 9.04. Judgment. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder in Dollars
into another currency, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Arranger could purchase
Dollars with such other currency at the Arranger's principal office in New York
City at 11:00 A.M. (New York City time) on the Business Day preceding that on
which final judgment is given.
(b) The obligation of STC in respect of any sum due from it
to the Purchasers hereunder held by the Purchasers shall, notwithstanding any
judgment in a currency other than Dollars, be discharged only to the extent
that on the Business Day following receipt by the Purchasers of any sum
adjudged to be so due in such other currency, the Purchasers may in accordance
with normal banking procedures purchase Dollars with such other currency; if
the Dollars so purchased are less than such sum due to the Purchasers in
Dollars, STC agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Purchasers against such loss, and the Dollars so
purchased exceed such sum due to the Purchasers in Dollars, the Purchasers
agree to remit to STC such excess.
Section 9.05. Benefit of Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto, all future holders of the Preferred Stock, Series B, and their
respective successors and assigns.
Section 9.06. Assignments. The Company may not assign or
delegate any of its interests or obligations under this Agreement. Other than
in connection with the Put and Call Agreement, with the written consent of the
Arranger, which shall not unreasonably be withheld, (a) each Purchaser
hereunder and each Person who after the date hereof is an assignee pursuant to
this clause (a) may assign pursuant to an Assignment and Assumption Agreement
substantially in the form of Exhibit G hereto all or a portion of its right to
purchase Preferred Stock, Series B hereunder to any person in compliance with
the restriction contained in Section 4.02(4) and who is reasonably satisfactory
to the Company, and (b) each holder of Preferred Stock, Series B, may sell or
transfer all or a portion of its Preferred Stock, Series B to any person who is
reasonably satisfactory to the Company; provided with respect to clause (b)
such sale or transfer complies with Section 4.02 and each transferee of such
Preferred Stock, Series B executes and delivers to each party hereto a joinder
agreement in form and substance reasonably satisfactory to the Arranger and the
Fund. Any assignment pursuant to Section 9.06(a) will become effective upon the
Arranger's receipt of an Assignment and Assumption Agreement duly executed by
all necessary parties thereto. Upon the effectiveness of any assignment in
accordance with Section 9.06(a), the assignee will become a "signator" for all
purposes of this Agreement and, to the extent of such assignment, the assignor
shall be relieved of its obligations hereunder with respect to obligations
being assigned. Notwithstanding the foregoing, (i) each Purchaser hereunder and
each Person who is an assignee pursuant to clause (a) above may assign all or a
portion of its right to purchase Preferred Stock, Series B hereunder, and (ii)
each
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holder of Preferred Stock, Series B, may sell or transfer all or a portion
of its Preferred Stock, Series B, in each case, to any of its Affiliates,
without the consent of the Company.
Section 9.07. Amendment. Neither this Agreement nor any terms
hereof may be changed, waived or discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the Company, the
Arranger and a majority of the holders of Preferred Stock, Series B.
Section 9.08. Counterparts; Integration. This Agreement may
be executed in several counterparts, each of which is an original, but all of
which together constitute one and the same agreement. This Agreement, together
with the other Basic Documents , constitutes the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, and as written, relating to the subject
matter hereof. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.09. Remedies and Waivers. No failure or delay by
the Purchasers in exercising any power, remedy, discretion, authority or other
rights under this Agreement shall waive or impair that or any other right of
the Purchasers. No single or partial exercise of such a right shall preclude
its additional or future exercise. No such waiver shall waive any other right
under this Agreement. All waivers or consents given under this Agreement shall
be in writing.
Section 9.10. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any Jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof, and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
Section 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVER AND CERTIFICATIONS IN THIS SECTION.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed in their respective names as of the date first above written.
STC BROADCASTING, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Secretary
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CHASE SECURITIES, INC., as Arranger
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
THE CHASE MANHATTAN CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Managing Director
SALOMON BROTHERS HOLDING COMPANY INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Attorney-In-Fact
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Schedule I
Number of Shares Number of Shares
Preferred Stock, Preferred Stock,
Series B, Series B,
Purchaser Purchased at Initial Closing Purchased as Subsequent Closing
-------------------------- ----------------------------- -------------------------------
The Chase Manhattan 18,750 26,250
Corporation
Credit Suisse First Boston 9,375 13,125
Corporation
Salomon Brothers Holding 9,375 13,125
Company Inc.
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EXHIBIT G
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Securities Purchase Agreement dated
as of February 5, 1999 (as restated, amended, modified, supplemented and in
effect from time to time, the "Securities Purchase Agreement"), among [ ]
("STC") and [ ]. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Securities Purchase Agreement.
This Assignment and Assumption Agreement between [ ], as assignor (the
"Assignor"), and [ ], as assignee (the "Assignee"), is dated as of
____________, ____________ (the "Effective Date.").
1. The Assignor hereby irrevocably sells and assigns to
the Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to the
Assignor, as of the Effective Date, all the Assignor's rights and obligations
under the Securities Purchase Agreement with respect to the right to purchase
[ ] shares of Preferred Stock, Series B (the "Assigned Obligations").
2. The Assignor (i) represents and warrants that it
owns the Assigned Obligations free and clear from any lien or adverse claim
made by the Assignor; (ii) other than the representation and warranty set forth
in clause (i) above, makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Securities Purchase Agreement or any other
instrument, document or agreement delivered in connection therewith, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Securities Purchase Agreement, or any other instrument or document
furnished pursuant thereto, other than that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of STC or the performance or observance by STC of any of its obligations under
the Securities Purchase Agreement, or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Assumption Agreement; (ii)
agrees that it will, independently and without reliance upon Assignor and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Securities Purchase Agreement; and (iii) agrees that it will be bound by
the provisions of the Securities Purchase Agreement and will perform in
accordance with its terms all the obligations which by the terms of the
Securities Purchase Agreement are required to be performed by it as the
Purchaser.
4. From and after the Effective Date, to the extent,
and only to the extent, of the Assigned Obligations, (i) the Assignee shall be
a party to the Securities Purchase Agreement and have the rights and
obligations of a Purchaser thereunder, and (ii) the Assignor shall relinquish
its rights and be released from its obligations under the Securities Purchase
Agreement with respect to the Assigned Obligations.
5. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their respective duly
authorized officers on Schedule I hereto.
[ ], as Assignor
By:
------------------------------------
Name:
Title:
[ ]
as Assignee
By:
------------------------------------
Name:
Title:
ACCEPTED:
STC BROADCASTING, INC.
By:
----------------------------------
Name:
Title:
ARRANGER
By:
----------------------------------
Name:
Title: